California often sets the regulatory pace for the rest of the nation. It’s more comparable to the European Union than the federal government or the other states. It has promulgated regulations on consumer data privacy, agricultural labor, gig workers (still wending its way through the courts three years later), EVs, and, of course, the environment.
For years, carmakers have produced vehicles engineered to meet California’s stricter emission standards, while some foods, additives, and flavored e-cigarettes available in the rest of the country are restricted in the Golden State.
California’s Warehouse Indirect Source Rule (ISR) was driven by concerns over idling truck engines in the Inland Empire east of Los Angeles. The area has a huge concentration of e-commerce fulfillment centers, and ISR requires large warehouse operators to offset pollution from the commercial traffic they attract.
A related regulation, the Clean Truck Check (CTC) from the California Air Resources Board (CARB), is set to go into effect on Dec. 31.
ISR could be a bellwether for regulatory pushes in other parts of the country with large concentrations of e-commerce warehouses, such as Columbus, Ohio, and northern New Jersey.
ISR: Understanding California’s Trucking Emission Rule
ISR, aka Rule 2035 or the Warehouse Actions and Investments to Reduce Emissions (WAIRE) program, was passed by the South Coast Air Quality Management District (SCAQMD) on May 7, 2021. The area covers more than 6,700 square miles in Orange, western San Bernardino, western Riverside, and southern Los Angeles counties, home to more than 17 million people, about 44% of the state’s population.
Under ISR, warehouse operators within the district with more than 100,000 square feet of space are required to offset emission impacts from medium- and heavy-duty trucks. It’s the first measure to regulate facilities rather than truck operators. Warehouses must earn a specified number of WAIRE points annually, calculated based on total truck visits. Fines for violations start at $1,000 per point and can add up to millions.
Before ISR, no specific regulations in California focused solely on pollutants from idling trucks at warehouses. However, there were broader environmental regulations in place, including local guidelines.
ISR Compliance Requirements
Similar to offset programs where businesses can pay for carbon credits, ISR uses a system whereby warehouse operators are required to earn a set amount of WAIRE points to offset their truck-generated emissions, based on the number of annual truck trips.
Operators can earn points by any combination of the following: acquiring or using low- or no-emission vehicles or handling equipment, including yard trucks; installing charging/fueling infrastructure; installing solar panels; developing onsite energy generation (i.e., hydrogen production and/or fuel cells); implementing energy management programs for cold storage warehouses; or installing particulate filtration systems to protect nearby sensitive land uses. They can also create a custom site plan or pay a mitigation fee. Funds from those fees are used to incentivize purchases of low/no-emission vehicles and charging stations in their community.
Warehouse operators also must file annual reports on their facility and tenants, including any changes or expansions. A separate report details the number of annual truck trips and verifies they met their obligation to earn WAIRE points. The first deadline for these reports was in January 2023 for facilities in excess of 250,000 square feet, with smaller warehouses required to file reports in the succeeding two years.
ISR’s Impact on Warehouse Operations: What Warehouse Managers Need to Know
Clearly, the implementation of ISR will significantly impact day-to-day warehouse operations in the Inland Empire, one of the busiest logistics corridors due to its proximity to the port of Los Angeles/Long Beach. And as noted, similar regulations may eventually be enacted in other areas of California or the rest of the country. Recently, the Environmental Protection Agency (EPA) proposed an approval of ISR, which in effect would make it federally enforceable.
At a base level, warehouse operators need to be familiar with ISR/WAIRE requirements, including deadlines, exemptions, and compliance options. They also need to determine which vehicles in their fleet – or those used by suppliers and partners – fall under the regulation’s jurisdiction.
Warehouse managers also have to consider the amount of daily, weekly, and annual truck and trailer traffic to their facility and, if possible, find ways to reduce it. This can be done either through internal fleet management/optimization or in collaboration with suppliers and carriers. It’s also important to track and document truck traffic in order to ensure ISR compliance and reporting. The challenge here is that many companies don’t have measures and/or systems in place to keep an accurate, detailed, and verifiable count of truck trips at their warehouse.
Leveraging Technology for ISR Compliance
Fortunately, modern technology, such as artificial intelligence (AI), can be leveraged to track vehicle flow. These systems can integrate with existing software such as yard management systems (YMS) and warehouse management systems (WMS) to seamlessly manage tracking for compliance purposes.
These AI-driven solutions, like those offered by EAIGLE, help warehouse executives optimize operations, improve efficiency, and ensure security. Our Automated Vehicle Access Control (AVAC) system connects with existing assets like security cameras to provide comprehensive vehicle data collection, registration, and validation. This not only ensures that only authorized vehicles are entering and exiting – maintaining accuracy for shipping/receiving and inventory management – but also helps verify truck traffic and reporting for ISR compliance.
By embracing innovative solutions like EAIGLE’S AVAC, warehouse executives can stay ahead of regulatory requirements and position themselves as industry leaders. Collecting and submitting vehicle traffic reports now happens in an automated fashion. This advanced technology enables real-time monitoring, predictive analytics, and streamlined processes. In this way, EAIGLE helps companies not only achieve the sustainability goals of ISR and CARB/CTC compliance but also maintain facility security and asset tracking.
Regulatory Compliance, Enabled By AI
With ISR and CARB in place, California is demonstrating it means business when enforcing sustainability and environmental standards. And warehouse operations, especially in busy logistics hubs, have been singled out by activists as major contributors to carbon emissions.
EAIGLE employs cutting-edge technology that addresses a number of challenges faced by warehouse operators needing to meet these new regulatory standards. Greater sustainability, security, and operational efficiency are now possible within a single platform.
Join us for a live webinar to discuss this topic further. Register now for “Staying Ahead of Compliance Curves in the Yard: Innovative Approaches to Security and Environmental Regulations,” scheduled for noon (CST) on January 30.