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Goods Movement Alliance enters California supply chain advocacy scene

‘Association of associations’ formed as groups realize they have overlapping interests

Between the docks and warehouses of Southern California and the state’s AB5 law on independent contractors, California plays an outsized role in the U.S. logistics sector.

And now a lot of once disparate groups that were exposed to supply chain issues but had never worked together on shared interests have a new umbrella under which to stand.

It is called the Goods Movement Alliance. Formed in August, the alliance was described by Matthew Hargrove, its co-chair, as mostly an association of associations that has come together because of their interests in supply chain issues in the Golden State.

Hargrove himself is the president and chief executive officer of the California Business Properties Association (CBPA), which includes such supply chain-focused companies as warehouse operators. 

“Some of our main members are some of the largest commercial real estate companies,” he said. 

While the supply chain events of the past year or two may have been the catalyst for the final push to create the Goods Movement Alliance, Hargrove said in an interview with FreightWaves that the momentum is not new. 

“We were getting hit with transportation issues,” Hargrove said of recent events that impacted his members with CBPA. “We were asked by the California Trucking Association to pay more attention to the trucking and greenhouse gas issues coming together.”

Trucking, through the state’s Clean Fleet rules, and warehouses, through a variety of regulations, were both beginning to feel the weight of California’s push to reduce greenhouse gas emissions in the state. 

And the state’s AB5 rule governing independent contractors “was a huge issue impacting the space,” Hargrove said. 

But even with issues like that looming, “a lot of our members didn’t see the natural reason to jump in with both feet in some of the goods movement issues,” Hargrove said. 

That was before the pandemic. When COVID arrived, Hargrove said, “we saw how fragile the supply chain sector was and how it actually impacted members. And we really started paying more attention.”

One of the things that got the attention of the warehouse sector was AB 2840, which ultimately was not approved by the California Legislature. But Hargrove, in a statement in June that praised the death of AB 2840, decried the potential law as one that “would have broken a key line in the state’s supply chain, killed jobs and hurt housing.”

AB 2840 would have put restrictions on building a warehouse within 1,000 feet of a set of facilities that have come to be known as “sensitive receptors,” which include schools, hospitals and senior citizen housing. The original author of the bill, Assemblywoman Eloise Gomez Reyes, seeing opposition even in her own caucus to the bill, tried to dial it back to just applying to Riverside and San Bernardino counties (which includes her district), the two counties comprising most of the Inland Empire and the site of significant warehouse construction in recent years. 

In a statement published by the California Chamber of Commerce and endorsed by a bevy of associations, the bill was described as a “job killer.”

“Prohibiting local governments from approving any new or expansion of existing logistic use projects within 1,000 feet of sensitive receptors will jeopardize tens of thousands of jobs in the region (and) exacerbate the existing supply chain problems across the state,” the organizations brought together by the Chamber said in their statement. 

Hargrove described the bill as “a huge wake-up call for us.”

“So we started talking to retailers, to our own members and we really saw there was a need for a coalition that started bringing together different parts of the business community to focus specifically on the goods movement issue,” Hargrove said. 

Individual groups had been focusing on the issue of goods movement — it isn’t precisely clear whether there is much difference between an issue involving “goods movement” and “supply chain” — but Hargrove said the goal of the alliance is “to have a clearinghouse for anybody who feels the goods movement issues are important and should be talked about at the state level.”

But this is not going to be an organization of bomb throwers on the issues. “Our plan is not to start taking positions on legislation,” Hargrove said, again using the term “clearinghouse” to describe the group’s goals. 

The membership rolls are not expected to be just companies with obvious supply chain involvement. For example, Hargrove said the Goods Movement Alliance would seek out members such as local chambers of commerce that “understand the importance of advocating for infrastructure projects.” 

“We’re open to everybody,” he said. 

The Goods Movement Alliance made its first foray into advocacy last week, albeit on an issue hardly controversial — preventing the railroads from striking.

A letter was sent to the four leaders in the House and Senate. It did not say it was from the Goods Movement Alliance, but the signers are the types of associations that one would expect to be in such an organization. Hargrove’s CBPA is there, but so are more than a dozen others, including the California Retailers Association, several regional chambers of commerce and the California Business Roundtable. 

On the group’s inaugural call last week, Hargrove said a consensus emerged that California’s attorney general’s office needs to be a focus of its activities. Actions taken by the attorney general’s office regarding greenhouse gas emissions and warehouse issues, particularly in the Inland Empire, make it clear that it has a larger role in supply chain issues than previously believed. 

The current attorney general is Rob Bonta (who coincidentally is the lead defendant in the ongoing litigation regarding AB5 brought by the California Trucking Association.) “We need to try to have an audience with the attorney general and talk to him about why goods movement is important and what we’re doing to become more green and efficient,” Hargrove said. 

Hargrove said representatives from the CTA were on the call last week. “They do a great job talking with the AG constantly,” he said of the trucking organization.

The distinction between the alliance’s activities and outright advocacy might be a thin one. Hargrove said the finer point of defining the alliance’s activity is that it “will be providing information on policies.” 

“You’re not going to see a letter to the Legislature that we oppose a bill,” Hargrove said. But the organizers of the Goods Alliance Movement say they believe that their most productive role is to provide its members with information on regulations or legislation, such as AB 2840, “and that we hope your companies will engage on this issue.”

That isn’t that much different from what Hargrove said he does now in his role with CBPA. There is a group call every Monday with organizations that have similar interests, Hargrove said, “and we never take a position collectively as a coalition.” 

But other groups can join together to take on advocacy.

“If you start taking hard-line measures on issues, you quickly get to a point where you start conflict,” said Hargrove, who has spent many years in Sacramento, California, as a lobbyist. The goal is to create a “huge, broad base so we can get feedback from across the board.”

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John Kingston

John has an almost 40-year career covering commodities, most of the time at S&P Global Platts. He created the Dated Brent benchmark, now the world’s most important crude oil marker. He was Director of Oil, Director of News, the editor in chief of Platts Oilgram News and the “talking head” for Platts on numerous media outlets, including CNBC, Fox Business and Canada’s BNN. He covered metals before joining Platts and then spent a year running Platts’ metals business as well. He was awarded the International Association of Energy Economics Award for Excellence in Written Journalism in 2015. In 2010, he won two Corporate Achievement Awards from McGraw-Hill, an extremely rare accomplishment, one for steering coverage of the BP Deepwater Horizon disaster and the other for the launch of a public affairs television show, Platts Energy Week.