The price of everything is going up, and it affects nearly every business, including the state’s maritime industry. Even California ports are struggling to stay competitive when it comes to leasing space. One of the primary reasons is the Clean Air Action Plan.
Energy prices continue to rise, especially herein California. As of Oct. 2019, diesel fuel costs here in the state were around 37.8% more than anywhere else in the country. As of the end of August, prices for industrial electricity were up to 102.9% higher and commercial electricity was approximately 63.6% more. It is difficult to sell space for cargo in a port where tenants will pay more due to these costs.
Working toward zero emissions when it comes to trucks and ports may be necessary, but it is also having an effect on how cargo owners do business. They need to make a profit as well, and using several ports across the country instead of just one is one way in which they are keeping costs lower. The phrase, “it takes a village” applies more and more to this industry since everyone must work together in order to keep it alive and competitive.
California ports need to continue evolving in order to meet with the demands of laws, regulations and customers. This may require a delicate balance that could take some time to find. When attempting to comply with law and negotiate leases with cargo owners, it may help to work with an attorney who can help make sure that both goals are met in the most advantageous way possible.