By Jennifer Cohen, PMSA Vice President, Government Relations
On October 1st the final legislative session of Governor Gavin Newsom’s administration concluded with his signature and veto on multiple pieces of legislation. In many respects, this was a typical year with new issues arising and some old retreads. Also typical, looking at the overall disposition of bills from this session demonstrates that even the most seasoned legislators still do not recognize the importance of goods movement to the state or the high stakes associated with vulnerabilities.
Despite enduring harrowing supply chain disruptions from COVID, tariff price hikes, and geopolitical impacts on fuel prices, Sacramento still underestimates how vital the goods movement sector is to the state economy. As we head into 2027, with a new legislative session and with a new governor for the first time in 8 years, the sustained need for vigilance in advocacy across the supply chain is clear.
Overall, 2026 was a mixed bag for the trade community. We prevailed in battling fierce, existential threats from a statewide indirect source rule (ISR) on all freight facilities and extreme anti-automation restrictions for cargo handling equipment. We also defeated efforts to impose new vessel fees and to put freight planning at a disadvantage relative to other transportation modes. These were important wins for the waterfront and the entire supply chain. But we also saw two industry sponsored bills, SB 1019 (Grove) Cargo Theft Task Force and SB 1113 (Valladares) Shipping Tonnage Tax Option fail to move out of committee despite having little to no opposition. And Governor Newsom signed two bills with negative impacts to goods movement, AB 40 (Bonta) CEQA (California Environmental Quality Act) Requirements for Coal Transport and SB 719 (Durazo) Fees for Local Ordinance Violations.
A variety of legislative outcomes is typical, but it is astounding that the state continues to gamble with the 3 million jobs and $38 billion in tax revenue generated annually by the goods movement industry. Governor Newsom’s tenure coincided with a tumultuous era in this sector, including COVID challenges which provided indisputable proof of the importance and vulnerability of the supply chain to serve local needs and to support the state’s economy.
Meanwhile, California has continued to heap new fiscal, regulatory, and physical burdens upon the maritime industry, warehouses, distribution centers, and trucking sectors while East and Gulf Coast ports poach industry with the allure of reduced regulatory burden and greater public investment in infrastructure. The data is undeniable—California’s market share has shrunk. Yet despite having a front row seat to the strains on supply chain, the state continues to propose and pass legislation that takes industry and the supply chain for granted.
The November election brings a more immediate challenge: the end of one administration means the loss of years of rapport with staff and institutional memory. While some seasoned staff may stay on in Sacramento, it will be difficult to impart their lived experience of ISR fights, land use minutiae, funding negotiations, and the controversial histories of regulations while teaching the ins and outs of the Capitol to new colleagues. Issues that had previously been addressed may suddenly reappear and prior solutions may be met with blank stares by green staffers or added to a stack of issues in the proverbial inbox.
Whether the next legislature and governor will have the foresight to invest in freight and goods movement infrastructure or address unfinished business is yet to be determined. The presumed Governor has not made definitive statements on goods movement issues and there are few obvious selections for key leadership positions in the new administration. The only thing that is known is that there is no end in sight for many of the issues plaguing industry; the weight of geopolitics, environmental regulations, and competition will not be magically lifted with changes in leadership in Sacramento or Washington D.C.
While frustrating, this is not a call for despair. It is a reality check for how PMSA and our supply chain partners must approach 2027. We have the dual challenge and opportunity of educating a new governor, his staff, and new members of the legislature. This multi-tasking requires strategic, nimble, and present engagement in Sacramento. We are ready for it.