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David Maloney, Editorial Director, DC Speed: 0:01
Will all trucks on our roads be electric cars until 2050? A lot of our states think so. With a loss of pedestrian traffic, some stores are turning their garage area into distribution centers during the last kilometer. And the proposed law may simply affect food vendors by the pandemic.
Take a seat and sign up for us as DC Velocity editors talk about those stories, as well as trends in news chains and sources, on this week’s Logistics Matters podcast. Hi, I’m Dave Maloney. I’m the editorial director of DC Velocity. Welcome.
Logistics Matters is sponsored by Fortna. Fortna is partnering with the world’s leading brands in its distribution operations to maintain speed with virtual disruption and expansion goals. Known internationally as distribution experts, Fortna designs and delivers intelligent responses through its proprietary software to optimize fast, accurate and cost-effective order processing. For more information, stop at Fortna.com.
As usual, DC Velocity editors Ben Ames and Victoria Kickham will be on display to give you a review of this week’s top articles. But to begin with today, we have Bill Van Amburg, Calstart’s executive vice president. He is here to talk about the Memorandum of Understanding between 15 states plus the District of Columbia. They recently followed this Memorandum of Understanding to place more trucks, buses, delivery trucks and other medium and heavy zero emission cars on our country’s roads. The initial purpose is for zero-emission cars to account for 30% of sales through 2030. And eventually, all new trucks and advertising buses will not have broadcasts until 2050. Welcome, Bill. Thank you for being with us.
Bill Van Amburg, Executive Vice President, Calstart: 1:54
Hello, nice to meet you. Great to be with you.
David Maloney, Editorial Director, DC Speed: 1:57
For starters, can you tell us a little bit about your organization’s paintings, Calstart?
Bill Van Amburg, Executive Vice President, Calstart: 2:01
Yes. Calstart is therefore a blank transportation non-profit organization. We are made up of some 250 members of the industry, fleet manufacturers, but also members of public bodies. Especially in North America, more and more in the world. And we have had an exclusive purpose, as a non-profit organization, and our purpose is to create positive environmental outcomes. We are an industry-focused group. Our goal is to create a blank transportation generation industry that generates smart jobs, blank air, and carbon emissions reduced by climate change. And we’ve been doing it now for about 30 years.
David Maloney, Editorial Director, DC Speed: 2:43
Why do all 15 states and the District of Columbia now meet for this initiative?
Well, you know, we’re in an attractive time for multiple pressures, not just in the U.S., but all over the world. But for those states, the main reasons are twofold.
First, they face a build-up of emissions of nitrogen oxide and particulate matter, mainly in their urban centers. And this is basically due to heavy trucks, because we clean up the commercial sectors while cleaning the power plants, the nearest vital sector for emissions of the urban criteria that cause smog, if you wish, are service trucks. and we’re getting to this sector, you know, the movement of goods continues to grow in this sector of the last kilometer and e-commerce is the engine.
But increasingly, it’s also climate change. And the expansion of this sector, the largest sector in the United States and the global sector now, the only sector, is transportation or carbon emissions. And again, for the same reasons I have just pointed out, this sector continues to grow. In fact, we are a dynamic society. We ship products worldwide. We order things online by just touching an yetton, they look like the next day or the next afternoon. And that’s how we really see this sector grow, and we really want to get it in our hands. So the states have decided: “Do we want new equipment and are we working in combination to locate tactics to achieve the cleanest technologies imaginable?” And especially in our urban areas, but also beyond them. And let’s get started on two things at once. Not only do we deal with air pollutants in our cities, but also climate change-related energy intake. And that’s why they communicate about achieving really competitive zero-emission targets, in trucks in general.
David Maloney, Editorial Director, DC Speed: 4:39
Can you point out some of them and what are your hopes for them?
Bill Van Amburg, Executive Vice President, Calstart : 4:44
Yes. So, first of all, getting 15 states to settle for anything is a pretty phenomenal step. And that also includes the District of Columbia, that is, 16 government agencies. Their high-level goals are: they will paint in combination to see what they can do to create and a market position that leads to those goals: 30% of sales of new trucks – trucks and buses, on the road – in 2030, and then one hundred percent of sales of zero-emission trucks and buses by 2050. So, your goals are, well, if those are the two strengths we found, one with the midpoint in 2030 and then 2050, now, what do we do? You want to put him in position to achieve that? So what they really agreed to do as an organization is make paintings in combination to outline policies that can be attached to each other.
That represents 40% of the American population. Therefore, it is a fairly giant market sector and a fairly giant component of our product movements in the United States.
David Maloney, Editorial Director, DC Speed: 5:52
Now, when we communicate about zero-emission vehicles, are we communicating about electric vehicles?
Bill Van Amburg, Executive Vice President, Calstart: 5:57 a.m.
yes, when you really get there, well, we want two things, and we just take a step back: in fact, we want, as we go along, two things. We will have to achieve 0 emissions, which would be, for example, an electric battery or a fuel cell, anywhere we can. And where we can’t, because there will be trucks over longer distances and heavier service cycles, heavier weights that will be harder to do for a while, then we have to get to the lowest combustion engines with the cleanest fuel we can imagine. And those are really like the two big paths to go.
But when we communicate about the detail of 0 emissions they are communicating about, that 30% of trucks are 0 emissions in new sales until 2030, yes, we are communicating about a mobile fuel or an electric battery. vehicle in those cases. Or maybe something like a hybrid that can run on your battery for a while, maybe when you’re in the middle of a city, and then that can be transferred to a combustion engine hybrid when you’re on the road.
David Maloney, Editorial Director, DC Speed: 7:07
Obviously, lately we don’t have the infrastructure for that. And while there is still some time left in this initiative, what will it take for states to mobilize this type of infrastructure and what will they do to it?
Bill Van Amburg, Executive Vice President, Calstart: 7:21 a.m.
Yes, that’s a smart question. When we looked, and we’ve been very active in this area, for, as I said, almost 30 years, we just saw a radical replacement in the vehicle’s fundamental technology. I think if people, five years ago, said, “Oh, the big truck manufacturers, they won’t be able to make those zero-emission vehicles.”
Therefore, the generation has advanced so far that Volvo is providing a Class 8 tractor that will have 0 emissions for regional use later this year, early next year. The same with [] even with the Packard group, you know, the same with Navistar. So, we see genuine technologies evolving from innovators and our leading truck manufacturers.
Now, the question, as you say, is how can we make sure that the source infrastructure is enough for it to work? And now that we have to see a real improvement in the capabilities of the trucks, is that the store’s long pole is the infrastructure.
What we have noticed in some of the states that have been leaders in this domain, and in California as an example, however, we are also seeing similar things in Western Europe, similar things in China, for example, like what, first of all, we see that public facilities are beginning to weigh, getting approvals from their empowering or regulatory governments to invest in that space. Normally, the truck manufacturer would not invest in a diesel refueling station. Similarly, you won’t necessarily need them to invest and will only provide the critical capacity to use that fuel in your tanks. Therefore, involving public facilities is a big problem.
In California, for example, utilities have the strength to invest and identify a pricing base so that they can supply capacity to their new consumer base. You know, they never had transportation as a customer. Now transportation is one of your customers. So, it’s a pretty vital place.
We see that it is now expanding in other states. New York was born to see this approval materialize. We see it in Michigan, which is interesting. We see it in some other northeastern states. But it’s something you have to take a stand first. Utilities want to get involved. And then I think from a public point of view, it’s a very smart position to start thinking about where to invest. But that’s what we’re going to focus on for the next 10 years, that is, let’s make sure we start implementing and investing in enough capacity and distribution networks to get the utilities in the right position at the right time.
Let’s get competitive rates for this electrical energy that is noticeable to a fuel user. You know, maximum fleets aren’t interested in construction management. They do not know what the electricity rates are, the rates according to the consumption time. Therefore, we want to create a simplified rate design that fleets can perceive and use, and then make sure that we invest at the speed of mandatory changes.
And I think what the states have done with this signal they’re sending is to send a difficult message, not only to the vehicle production sector, but also to all other sectors, to say, “Well, this is where we want to go. Your investments will be really profitable, because that’s the requirement that will be there.” So we’re seeing the big institutional investors starting to ask: “Okay, we can invest in this area and now make a profit for infrastructure, to load capacity for the electricity grid, to put cargo facilities into service so that we can rationalize it for fleets. This area is starting to expand right now.
David Maloney, Editorial Director, DC Speed: 11:06
At the end of the day, what will this mean for the trucking industry and the chain in general?
Bill Van Amburg, Executive Vice President, Calstart: 11:12 a.m.
Well, I think we’re in an attractive time, right?
We’re dealing with Covid right now. Covid has had a really desirable effect on the movements of our products. Because they are essential services, we have not really noticed that this sector will fall like the rest of the economy, at least not to the same extent. But I think what’s true for trucks in general, and that’s why it’s such an attractive industry for paints, this industry is looking for the next, more productive business case. If you can help me with my prices of offering those services, I’ll take care of them, I’ll take a look at it.
And I think the transportation industry is starting to realize, Wow, you know, for urban service cycles, whether for delivery or services, or for a variety of purposes, and especially now in the next five to 10 years. – In urban areas, those trucks would possibly have greater functionality than the diesel truck I’m replacing. Now they are a little more loved today, and that is an impediment that we will overcome in the coming years. But operating prices tend to be particularly lower than diesel prices. There’s less brake wear. There is less maintenance due to the operation of those autocellulars and at least cellular portions on board. And fuel prices are less expensive because it’s a fundamentally more effective driving formula that absorbs energy and how you use it. So I think a lot of truckers will be surprised that this will lead to a bigger and more effective business case for them.
But it’s going to be a moment of turmoil. People want to get, get a start and get delight in this domain quickly. It’s a new type of fuel we want to delight in. And I believe that the more we can attract service providers, I think one of the answers that will exist is to provide transportation or infrastructure as a service. This means that if you are a fleet, it is as if I have to do my homework, and this vehicle is a tool for me. If someone can also provide me with this vehicle, and it is electric, and the infrastructure is included in the package, and the fuel I know is at a rate I can manage, and I only pay you per month, or I do it through a leasing structure, which fits me well. As long as that truck is out there and I can do the homework every day and deploy it. I think that’s where we’re going to get going by seeing some new and attractive approaches. Leasing has become a major tool in the freight movement sector. And I think it would possibly be better to start getting even more pronounced as other people are encouraged to say, “My company is moving those things. This truck is a tool for me. You supply the tool at a competitive price.” I’m going to hire him and I’m not worried about anything else.” This can also be an exciting new model. But it’s a moment of turmoil. There’s no doubt about that.
David Maloney, Editorial Director, DC Speed: 14:12
We spoke to Bill Van Amburg, vice president of Calstart. Bill, thank you for joining us today.
Bill Van Amburg, Executive Vice President, Calstart: 14:18
You are welcome.
David Maloney, Editorial Director, DC Speed: 14:19
Now let’s move on to some of the other news from the source network of the week. Well, he’s written about the number of developing corporations that handle orders at the back of a retail store or who absolutely turn the retail site into a last mile center. Is this a developing trend?
Ben Ames, Chief News Editor, DC Speed: 14:35
It’s Dave. This comes from an examination through the CBRE corporate real estate facility, which produces many numbers and we have reported at DC Velocity about some of its statistics. Right now, they’re talking about e-commerce, which, as we’ve heard over the years, remains attractive and continues to represent a higher percentage of all retail sales. This has never been more true than during those times of coronavirus, staying at home and paintings of the house.
So, under this kind of tension, many corporations are looking to find a way to make paints easier and more efficiently. And this is driving a growing number of corporations to convert low-performing retail outlets into commercial operations, such as last mile distribution centers for online processing. Historically, there have been drawbacks to this. You want very accurate stock visibility, to know exactly what’s in your store, if you’re going to run processing. And also, retail store affiliates earn more cash in terms of wages than warehouse employees, which may mean they have a harder time enforcing them. However, in this pandemic, we see what CBRE has called a giant volume of dead malls, that is, in the Midwest region. And, therefore, there is a lot of unused garage area, retail area, while there is increasing tension to meet those online orders. So when everything goes up, CBRE has 59 retail-to-commercial conversion projects that have been underway or completed since 2017. And that’s a big leap since the 24, up from the 59, who had only 18 months ago.
David Maloney, Editorial Director, DC Speed: 16:21
Can you give examples of corporations [that] are involved in the strategy?
Ben Ames, Chief News Editor, DC Speed: 16:25
I can, of course. There was a big name, which also said this week that they were going in that direction, and that’s Walmart. Walmart, Canada, that’s it. It was an initiative that they announced spending $2.6 billion, which is a lot of cash even for Walmart, to make their omnichannel, whether retail and online, more efficient. Part of that, they put more robotics and automation on their CDs, which is a constant trend we’ve noticed in many companies. They also review their retail outlets, install electronic labels, robotics and PC vision. But in terms of this trend, what Walmart Canada is doing is driving what they call hybrid places. And it becomes behind the scenes of some of its giant retail supercenters that many of our listeners have probably turned to at some point or another, turning them into services that run microdistribution centers at the back of the retail store. Therefore, this was expected to spread to Walmart retail outlets in Canada to allow more BOPIS, which comes to buy online in the store, or on the street, or, especially vital coronavirus period, contactless collection, up to 70% of its places at the end. of the year. So it’s definitely something that happens quickly.
David Maloney, Editorial Director, DC Speed: 17:48
Well, that’s a trend we’ll continue to follow. Thank you Ben
Victoria, lawmakers filed a law this week to grant tax credits to food and beverage distributors. Can you percentage with us the main points of this invoice?
Victoria Kickham, Senior Editor, DC Speed: 18:01
Yes. Thanks Dave. Professional associations representing the restaurant industry this week welcomed the advent of an invoice that, as you say, will help food vendors offset the bad debts they incurred as a result of the closure of Covid-19’s business. So it’s a bipartisan bill called a liquidity offer for the Bad Sales Act, or PLUS Act, and was filed this week through Rep. Darin LaHood, an Illinois Republican, and Jimmy Panetta, a California Democrat. Essentially, the law grants tax credits for food and beverage vendors who cannot pay off the debts of food institutions (you know, places to eat, hotels, bars, schools) that were forced to close this spring. The bill, as I said before, is backed by food industry associations. The three teams we heard from were the United United Produce Association, the International Food Distributors Association and the National Fisheries Institute.
David Maloney, Editorial Director, DC Speed: 18:58
So how precisely would these corporations be in the food supply chain?
Victoria Kickham, Editor-in-Chief, DC Speed: 19:03
Yes, a very clever question. Just to save, a little history: so the food distribution industry says it has jointly experienced more than $12 billion in unpaid debts due to the closure of pandemics. It is now for products that were shipped to food institutions before the Covid-19 closures, however, they had not been paid. So, those distributors, you know, supply their products on credit. For example, seafood distributors reported that they had a debt of about $2.2 billion. Fruit and vegetable distributors reported an additional $5 billion debt. And large-scale food distributors have declared more than $5 billion in debt.
So, necessarily what this PLUS act does, would give those sellers a 100 percent tax credit for bad debts from institutions ordered to close for at least 30 days between March 25 and July 15. So what they’re saying is that it’s helping to fill the gaps that the industry has also found because of the CARES Act, which was passed in March. The organization says CARES does not take this type of debt into account, it has helped protect paychecks and other problems. This did not help them recover the credits they had given to those customers. So, it’s a big step in the right direction as suppliers continue, you know, to keep the source lines open and running, especially as businesses and restaurants recover.
David Maloney, Editorial Director, DC Speed: 20:31
And we will continue to address this bill as Congress passes. Thank you, Victoria.
Victoria Kickham, Editor-in-Chief, DC Speed: 20:36
You are welcome.
David Maloney, Editorial Director, DC Speed: 20:37
And thank you, Ben, for sharing your news this week.
Ben Ames, Chief News Editor, DC Speed: 20:40
Yes, thanks. It’s a laugh talking.
David Maloney, Editorial Director, DC Speed: 20:41
And our thanks to Bill Van Amburg of Calstart for being our guest today. We inspire your feedback on this and other stories. You can email us at [email protected].
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