Contributing Editor Toby Gooley is a freelance writer and editor specializing in supply chain, logistics, material handling, and international trade. She previously was Editor at CSCMP's Supply Chain Quarterly. and Senior Editor of SCQ's sister publication, DC VELOCITY. Prior to joining AGiLE Business Media in 2007, she spent 20 years at Logistics Management magazine as Managing Editor and Senior Editor covering international trade and transportation. Prior to that she was an export traffic manager for 10 years. She holds a B.A. in Asian Studies from Cornell University.
In 2021, DC Velocity reported on a proposed California state regulation that would require most forklift fleets to phase in zero-emission forklifts (ZEF) over a period of years. Three years later, in a public hearing held in Riverside, California, on June 27, 2024, the California Air Resources Board (CARB) unanimously approved a revised version of that proposal. The regulation will require most fleets to phase in zero-emission forklifts between 2028 and 2038. Restrictions on the purchase of certain new forklifts with internal combustion engines, however, begin much earlier, in 2026.
The mandate is designed to comply with Gov. Gavin Newsom’s Executive Order N-79-20, which requires that off-road vehicles in California transition to zero-emission models by 2035, “where feasible.” The definition of “feasible” animates some of the pushback against the regulation. Some stakeholders have also expressed concerns about the likelihood of job losses and economic burdens, even as they generally support the rule’s ultimate objectives of lowering greenhouse gas emissions and reducing health hazards for California residents.
The 70-page regulation, which includes a number of exemptions and exceptions, applies to certain categories of large spark ignition (LSI) forklifts fueled by propane, natural gas, or gasoline (diesel-powered forklifts are exempt). They include all Class IV forklifts, and Class V forklifts with a rated capacity of 12,000 lbs. or less. CARB estimates that some 89,000 LSI forklifts will be phased out under the new rule.
Beginning in 2026, manufacturers cannot make or sell targeted categories of LSI forklifts in California, and end users cannot purchase or lease them. Exceptions to this prohibition include: Dealers and manufacturers may sell model year (MY) 2025 inventory through the end of 2026, so they will not be left with unsold equipment; they can sell MY 2026, 2027, and 2028 Class V trucks to rental agencies; and they can sell LSI trucks to customers whose trucks are exempt (such as dedicated emergency-use forklifts) or who have obtained an extension of the compliance deadlines from CARB.
From Jan. 1, 2028, through Dec. 31, 2037, existing targeted forklifts must be phased out by model year and can be replaced with only zero-emission equipment. According to CARB staff, the dates were designed so that no forklift will be required to be phased out before it is at least 10 years old. The compliance deadlines are staggered based on fleet size, truck class, capacity, and, in some cases, application:
For large fleets (more than 25 forklifts, including zero-emission forklifts), phaseout of Class IV trucks rated at 12,000 lbs. or less begins in 2028 for MY 2018 and older. Additional deadlines based on model year are 2031, 2033, and 2035. For small fleets (25 forklifts or less) and trucks used in agricultural crop preparation, the deadlines run from 2029 to 2038. Phase-out of Class IV forklifts with capacities exceeding 12,000 lbs. begins in 2035 for large fleets and in 2038 for small fleets and crop prep applications.
For all fleets, Class V trucks rated for 12,000 lbs. or less begin phaseout in 2030 for MY 2017 and older. Additional deadlines based on model year are 2033, 2035, and 2038; the 2038 deadline also applies to rental agencies for some model years. The required phaseout does not apply to Class V forklifts rated for 12,000 lbs. or more, but fleets that voluntarily choose to replace such trucks with electrics of the same or greater capacity can earn credits that allow them to postpone the replacement of an equal number of other LSI forklifts until 2038.
To limit the financial impact on end users, the required turnover of forklifts on the firstcompliance date only is capped at 50% of a fleet’s total number of targeted LSI trucks for large fleets and 25% for small fleets and those used in crop prep.
The rule creates exemptions for low-use trucks (fewer than 200 hours per year) until 2030, but a “microbusiness” can keep one low-use forklift indefinitely; for dedicated emergency equipment; and for forklifts being held for out-of-state delivery. It also includes exemptions for in-field use for agriculture and forestry, because charging infrastructure generally is not feasible in those locations. Fleets can apply for a deadline extension, thereby postponing the phase-out, if they experience significant delays in the delivery of ZE forklifts, in electrical infrastructure construction or upgrades, or in site electrification, or because no ZE forklifts currently available can meet their needs. In the last-mentioned case, an LSI forklift that has reached the end of its life substantially before its phase-out date may be replaced with a newer forklift, inheriting the replaced forklift’s phase-out date. The onus is on fleets to apply for and justify exemptions and extensions and most extensions must be renewed each year. If circumstances have changed—for example, if new models of ZE forklifts could meet an end user’s performance requirements—then the exemption would not be renewed.
Stakeholders Air Their Concerns
Over the past three years, CARB’s staff researched various forklift applications, capabilities, and availability. They also sought stakeholders’ feedback through public workshops; meetings with fleet operators, forklift manufacturers and dealers, rental agencies, fuel providers, and related industry groups; and site visits. Based on that and other feedback, as well as on submissions during two rounds of public comments, the staff modified the original proposed regulation to address some of stakeholders’ concerns.
While many of the agriculture, construction, labor, small business, and propane industry representatives who commented at the June 27 board meeting praised the CARB staff’s outreach and responsiveness, they still had plenty of strong criticisms. Among the biggest concerns for agriculture and and construction was the high cost of replacing equipment; two to three electrics would be required for each LSI model eliminated, several commenters asserted. Also high on their list was the feasibility of providing battery charging infrastructure on construction sites and in agricultural fields. Both typically have limited or no electrical service and are in operation only for limited periods. Multiple speakers questioned whether the utilities would be capable of providing enough reliable capacity to support a long-term increase in battery-powered equipment. Ag industry and small business representatives also wanted more generous caps on the percentage of trucks that must be replaced by the first compliance deadline and/or to have caps apply to every compliance deadline, not just the first one.
For providers of propane fuel—often family-owned small and medium-size businesses—the likely loss of jobs and, potentially, their businesses altogether, were their biggest worries. They reiterated their longstanding argument that propane is a low-emission fuel, therefore, propane-powered forklifts should be considered “part of the solution, not the problem,” as more than one speaker put it. Following the board’s decision to approve the regulation, the Western Propane Gas Association (WPGA) issued a statement slamming it as “costly, infeasible, and flawed.” WPGA charged that CARB’s estimate of the number of forklifts and businesses that would be affected is too low, highlighting its own projections for the cost of adding electrical infrastructure and replacing existing equipment. The group is instead supporting its own alternative proposal, which it contends will meet the state’s air-quality goals with less disruption and expense.
CARB Responds and Moves Forward
CARB’s staff responded to those and other criticisms by asserting that the propane industry’s estimate of the number of forklifts that would be affected relies on an incorrect methodology and is greatly overblown. Staff and two of the board members also noted that powerful, high-performance battery-powered forklifts are now on the market, so replacements are technically feasible. They are economically feasible as well, staff said: They expect fleets will save $2.7 billion in net fleet operating costs through 2043, primarily from lower fuel and maintenance costs, even given the higher upfront acquisition cost for ZEF and the possibility of higher electricity rates in the future. As for electrical service, they urged forklift operators to begin discussions with local utilities by early 2026 to plan for installations or upgrades that may be needed. And they emphasized that the various exemptions and deadline extensions built into the regulations were designed to address the very concerns being expressed by stakeholders and provide them with an unusual degree of flexibility.
The board voted unanimously to approve the adoption of the regulation, with an amendment requiring staff “to evaluate the effectiveness of implementation of the rule and report back to the Board by 2028 . . . and propose any adjustments in the compliance schedule as necessary."
What’s next? Assuming no substantive changes, which are not expected, the final regulation will now move to California’s Office of Administrative Law (OAL). Once OAL determines that it complies with the state’s administrative laws, the regulation will be filed with California’s Secretary of State. The effective date of the regulation (which is separate from the compliance date) will likely be in October or January, depending on when OAL completes its review.
Because the regulation relates to emissions from off-road vehicles, which is covered by the preemption provisions of the federal Clean Air Act, CARB must seek authorization from the U.S. Environmental Protection Agency (EPA) to fully implement the rule. Without that authorization, California will not be able to enforce the law. While authorization by EPA is routinely granted, the timing is uncertain, leading to the possibility that the regulation could officially become effective but not yet enforceable.
Editor’s Note: Gary Cross, of Dunaway & Cross, contributed to this report.
Specifically, the new global average robot density has reached a record 162 units per 10,000 employees in 2023, which is more than double the mark of 74 units measured seven years ago.
Broken into geographical regions, the European Union has a robot density of 219 units per 10,000 employees, an increase of 5.2%, with Germany, Sweden, Denmark and Slovenia in the global top ten. Next, North America’s robot density is 197 units per 10,000 employees – up 4.2%. And Asia has a robot density of 182 units per 10,000 persons employed in manufacturing - an increase of 7.6%. The economies of Korea, Singapore, mainland China and Japan are among the top ten most automated countries.
Broken into individual countries, the U.S. ranked in 10th place in 2023, with a robot density of 295 units. Higher up on the list, the top five are:
The Republic of Korea, with 1,012 robot units, showing a 5% increase on average each year since 2018 thanks to its strong electronics and automotive industries.
Singapore had 770 robot units, in part because it is a small country with a very low number of employees in the manufacturing industry, so it can reach a high robot density with a relatively small operational stock.
China took third place in 2023, surpassing Germany and Japan with a mark of 470 robot units as the nation has managed to double its robot density within four years.
Germany ranks fourth with 429 robot units for a 5% CAGR since 2018.
Japan is in fifth place with 419 robot units, showing growth of 7% on average each year from 2018 to 2023.
Progress in generative AI (GenAI) is poised to impact business procurement processes through advancements in three areas—agentic reasoning, multimodality, and AI agents—according to Gartner Inc.
Those functions will redefine how procurement operates and significantly impact the agendas of chief procurement officers (CPOs). And 72% of procurement leaders are already prioritizing the integration of GenAI into their strategies, thus highlighting the recognition of its potential to drive significant improvements in efficiency and effectiveness, Gartner found in a survey conducted in July, 2024, with 258 global respondents.
Gartner defined the new functions as follows:
Agentic reasoning in GenAI allows for advanced decision-making processes that mimic human-like cognition. This capability will enable procurement functions to leverage GenAI to analyze complex scenarios and make informed decisions with greater accuracy and speed.
Multimodality refers to the ability of GenAI to process and integrate multiple forms of data, such as text, images, and audio. This will make GenAI more intuitively consumable to users and enhance procurement's ability to gather and analyze diverse information sources, leading to more comprehensive insights and better-informed strategies.
AI agents are autonomous systems that can perform tasks and make decisions on behalf of human operators. In procurement, these agents will automate procurement tasks and activities, freeing up human resources to focus on strategic initiatives, complex problem-solving and edge cases.
As CPOs look to maximize the value of GenAI in procurement, the study recommended three starting points: double down on data governance, develop and incorporate privacy standards into contracts, and increase procurement thresholds.
“These advancements will usher procurement into an era where the distance between ideas, insights, and actions will shorten rapidly,” Ryan Polk, senior director analyst in Gartner’s Supply Chain practice, said in a release. "Procurement leaders who build their foundation now through a focus on data quality, privacy and risk management have the potential to reap new levels of productivity and strategic value from the technology."
Businesses are cautiously optimistic as peak holiday shipping season draws near, with many anticipating year-over-year sales increases as they continue to battle challenging supply chain conditions.
That’s according to the DHL 2024 Peak Season Shipping Survey, released today by express shipping service provider DHL Express U.S. The company surveyed small and medium-sized enterprises (SMEs) to gauge their holiday business outlook compared to last year and found that a mix of optimism and “strategic caution” prevail ahead of this year’s peak.
Nearly half (48%) of the SMEs surveyed said they expect higher holiday sales compared to 2023, while 44% said they expect sales to remain on par with last year, and just 8% said they foresee a decline. Respondents said the main challenges to hitting those goals are supply chain problems (35%), inflation and fluctuating consumer demand (34%), staffing (16%), and inventory challenges (14%).
But respondents said they have strategies in place to tackle those issues. Many said they began preparing for holiday season earlier this year—with 45% saying they started planning in Q2 or earlier, up from 39% last year. Other strategies include expanding into international markets (35%) and leveraging holiday discounts (32%).
Sixty percent of respondents said they will prioritize personalized customer service as a way to enhance customer interactions and loyalty this year. Still others said they will invest in enhanced web and mobile experiences (23%) and eco-friendly practices (13%) to draw customers this holiday season.
That challenge is one of the reasons that fewer shoppers overall are satisfied with their shopping experiences lately, Lincolnshire, Illinois-based Zebra said in its “17th Annual Global Shopper Study.” While 85% of shoppers last year were satisfied with both the in-store and online experiences, only 81% in 2024 are satisfied with the in-store experience and just 79% with online shopping.
In response, most retailers (78%) say they are investing in technology tools that can help both frontline workers and those watching operations from behind the scenes to minimize theft and loss, Zebra said.
Just 38% of retailers currently use artificial intelligence-based prescriptive analytics for loss prevention, but a much larger 50% say they plan to use it in the next one to three years. Retailers also said they plan to invest in self-checkout cameras and sensors (45%), computer vision (46%), and RFID tags and readers (42%) within the next three years to help with loss prevention.
Those strategies could help improve the brick-and-mortar shopping experience, as 78% of shoppers say it’s annoying when products are locked up or secured within cases. Part of that frustration, according to consumers, is fueled by the extra time it takes to find an associate to them unlock those cases. Seventy percent of consumers say they have trouble finding sales associates to help them during in-store shopping. In response, some just walk out; one in five shoppers has left a store without getting what they needed because a retail associate wasn’t available to help, an increase over the past two years.
Additional areas of frustrations identified by retailers and associates include:
The difficulty of implementing "click and collect" or in-story returns, despite high shopper demand for them;
The struggle to confirm current inventory and pricing;
Lingering labor shortages; and
Increasing loss incidents.
“Many retailers are laying the groundwork to build a modern store experience,” Matt Guiste, Global Retail Technology Strategist, Zebra Technologies, said in a release. “They are investing in mobile and intelligent automation technologies to help inform operational decisions and enable associates to do the things that keep shoppers happy.”
The survey was administered online by Azure Knowledge Corporation and included 4,200 adult shoppers (age 18+), decision-makers, and associates, who replied to questions about the topics of shopper experience, device and technology usage, and delivery and fulfillment in store and online.
Census data showed that overall retail sales in October were up 0.4% seasonally adjusted month over month and up 2.8% unadjusted year over year. That compared with increases of 0.8% month over month and 2% year over year in September.
October’s core retail sales as defined by NRF — based on the Census data but excluding automobile dealers, gasoline stations and restaurants — were unchanged seasonally adjusted month over month but up 5.4% unadjusted year over year.
Core sales were up 3.5% year over year for the first 10 months of the year, in line with NRF’s forecast for 2024 retail sales to grow between 2.5% and 3.5% over 2023. NRF is forecasting that 2024 holiday sales during November and December will also increase between 2.5% and 3.5% over the same time last year.
“October’s pickup in retail sales shows a healthy pace of spending as many consumers got an early start on holiday shopping,” NRF Chief Economist Jack Kleinhenz said in a release. “October sales were a good early step forward into the holiday shopping season, which is now fully underway. Falling energy prices have likely provided extra dollars for household spending on retail merchandise.”
Despite that positive trend, market watchers cautioned that retailers still need to offer competitive value propositions and customer experience in order to succeed in the holiday season. “The American consumer has been more resilient than anyone could have expected. But that isn’t a free pass for retailers to under invest in their stores,” Nikki Baird, VP of strategy & product at Aptos, a solutions provider of unified retail technology based out of Alpharetta, Georgia, said in a statement. “They need to make investments in labor, customer experience tech, and digital transformation. It has been too easy to kick the can down the road until you suddenly realize there’s no road left.”
A similar message came from Chip West, a retail and consumer behavior expert at the marketing, packaging, print and supply chain solutions provider RRD. “October’s increase proved to be slightly better than projections and was likely boosted by lower fuel prices. As inflation slowed for a number of months, prices in several categories have stabilized, with some even showing declines, offering further relief to consumers,” West said. “The data also looks to be a positive sign as we kick off the holiday shopping season. Promotions and discounts will play a prominent role in holiday shopping behavior as they are key influencers in consumer’s purchasing decisions.”