The cost and efficiency of parcel distribution depends on the location, design, and operation of warehouse facilities. The governing laws are usually set by local governments. This is no longer the case in California, where Assembly Bill 98 (AB 98), a new law intended to address truck emissions, now declares that “the movement of freight and the impact of this activity on public health and communities across the state… is a matter of statewide concern and is not a municipal affair.”

AB 98 establishes state-wide criteria for the design and location of new and expanded logistics facilities and related trucking operations. Proponents of the new law wanted to address the adverse health issues experienced by communities that are near heavily used truck corridors and logistics facilities, which they attribute in part to the boom in warehouse construction in California due to the proliferation of e-commerce and consumer expectations for rapid shipping.

AB 98 requires California cities and counties to update local truck travel routes according to new state standards. It also mandates that new and modified logistics facilities meet state standards based on the size of the facility and its proximity to residences, schools, daycare facilities, parks, nursing homes, or hospitals.

Under AB 98, as of January 1, 2026 all new logistics use developments will be required to meet new building and design standards, which include the location of truck bays; parking; signage; setbacks and buffer zones; energy efficiency; electric vehicle charging readiness; and a phased-in mandatory use of zero-emission forklifts. There are additional deadlines and standards depending on the type of facility and for communities with a heavy concentration of warehouses.

AB 98 applies to properties subject to a “logistics use,” which “means a building in which cargo, goods, or products are moved or stored for later distribution to business or retail customers, or both, that does not predominantly serve retail customers for onsite purchases, and heavy-duty trucks are primarily involved in the movement of the cargo, goods, or products.” Heavy-duty trucks include vehicles with a gross weight above 26,001 pounds.

AB 98 does not apply to publicly accessible facilities where food or household goods are sold directly to consumers or to certain rail and rail intermodal facilities. Facilities in existence or development as of September 30, 2024 are also not subject to the law, although the new AB 98 standards will apply to any existing facilities whose existing logistics use square footage is expanded by more than 20%.

AB 98 establishes new criteria on what roads can be used to service new logistics facilities and requires new facility operators to establish and submit a truck routing plan meeting these requirements before they commence operations.

Cities and counties are also required by AB 98 to update their circulation requirements regarding truck routes by January 1, 2028 to comply with the new law’s truck travel routing and signage requirements. An earlier January 1, 2026 deadline applies for regions that AB 98 designates as having a warehouse concentration. Cities and counties failing to update their circulation elements are subject to a $50,000 fine every six months.

AB 98 has multiple critics. Some want stricter standards. Others oppose the imposition of uniform statewide standards over decisions that are usually the subject of local control. Many predict that AB 98 will limit the building of new logistics facilities and increase the cost of distributing goods in California.

AB 98 may thus be modified before it takes full effect. For now, parcel shippers need to learn the details and plan for the new logistics facility and operational standards that will apply in California once AB 98 takes full effect.

Andrew M. Danas is a Partner, Grove, Jaskiewicz and Cobert, LLP, Washington, D.C. Visit www.gjcobert.com or email adanas@danaslaw.com for more information. The information contained in this article is intended to be general background information. It does not constitute and should not be relied upon as legal advice. Readers should contact a qualified attorney should they have a specific legal question.

Previous PARCEL Counsel columns, including those of regular PARCEL Counsel author, Brent Wm. Primus, JD, may be found on PARCELindustry.com. Your questions are also welcome at brent@primuslawoffice.com.

This article originally appeared in the November/December, 2024 issue of PARCEL.