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The busy U.S. warehouse yards, where trucks dance a metallic ballet loading and unloading vital goods, are poised for a major shift in 2024. A wave of new regulations — from environmental mandates to labor reform — is set to reshape yard operations and demands strategic adaptation and innovative solutions. These regulatory forces are driving change in an area of the supply chain that has remained unchanged for most of the past three decades.
Let’s start by looking into some of the regulations that are driving these changes. First, we notice environmental regulations such as the Clean Air Act Amendment.
Potential stricter emission standards for trucks and equipment operating in and around yards and warehouses could increase compliance costs and require upgrades. One of those is the South Coast Air Quality Management District’s Warehouse Indirect Source Rule, which serves to reduce harmful air pollutants like nitrogen oxides and particulate matter from warehouse operations.
The rule also addresses related mobile sources of pollution, such as trucks that deliver goods to and from the facilities, yard trucks, and transport refrigeration units. Warehouse operators with more than 100,000 square feet in the greater Los Angeles area will have to begin tracking and offsetting emissions impacts from Class 2b-8 truck trips that occur at the warehouse.
Next, there are greenhouse gas reduction initiatives. Policies targeting emissions may lead to regulations on energy efficiency within warehouses, potentially requiring retrofits or a switch to renewable energy sources.
Then also, there are waste management regulations. Increased restrictions on waste disposal or requirements for recycling and composting could impact operations and costs for certain types of yards and warehouses.
Labor regulations
In addition to environmental directives, there are labor regulations such as California’s independent contractor law, Assembly Bill 5. If extended nationwide, this law could reclassify some warehouse workers as employees instead of independent contractors, impacting labor costs and scheduling practices.
Rising minimum wage requirements in various states might increase labor costs for warehouse operators. And, potential increases in unionization attempts within the logistics industry could lead to changes in labor contracts and working conditions.
Safety first
The industry is also faced with safety laws.
The Federal Motor Carrier Safety Administration implemented new hours-of-service rules for truck drivers, impacting scheduling and potentially increasing operational costs. New or revised safety standards for warehouse operations could require additional safety measures and equipment investments. Evolving regulations on drone usage in warehousing and logistics could present both opportunities and challenges depending on specific applications.
Evolving tech
Technological advancements play a crucial role in reshaping yard operations. They not only provide a way to comply with regulations but also increasingly create value in yard operations. Automation — particularly in the form of automated vehicle access in the yard, improved dock scheduling, self-driving yard trucks and robotic equipment — offers the potential for increased efficiency and reduced labor costs.
However, with all this growth in automation, a key focus remains on people. As I wrote in my article two weeks ago, people are not simply cogs in the big supply chain and logistics machine. People are the key to organizational success.
Final thoughts
Here are the three main takeaways you should consider:
- Invest in yard technology. As many yards continue to run in manual mode, a huge upside opportunity arises through technology like yard visibility, yard vision, dynamic appointment scheduling, yard automation and yard management.
- Leverage automation and data analytics to optimize operations, enhance safety and improve compliance.
- Prioritize sustainability. Adopt green practices like yard route optimization, refining workflows to reduce idling time in the yard, using cleaner fuels or renewable energy sources, and incorporating waste reduction strategies to mitigate environmental impact and comply with regulations.
- And finally, but most important, focus on worker well-being. Invest in training, safety measures and competitive compensation packages to attract and retain skilled workers in a changing labor landscape. Use data insights to understand and optimize the human experience.
Look for more articles from me every week on FreightWaves.com.
About the author
Bart De Muynck is an industry thought leader with over 30 years of supply chain and logistics experience. He has worked for major international companies, including EY, GE Capital, Penske Logistics and PepsiCo, as well as several tech companies. He also spent eight years as a vice president of research at Gartner and, most recently, served as chief industry officer at project44. He is a member of the Forbes Technology Council and CSCMP’s Executive Inner Circle.