California is in the midst of improving its freight system. The California Sustainable Freight Action Plan (CSFAP) established the goal of reaching a 25% increase in freight efficiency, the use of 100,000 zero emission vehicles and equipment (and maximize the number of near-zero emission vehicles) in the system, and improving economic competitiveness. Although there are multiple strategies and approaches to help achieve these goals, this study focuses on the urban component of the freight system. The urban freight system and the associated last-mile distribution operations are usually understudied and overlooked when trying to improve freight efficiency. However, research findings suggest that this is a key segment where operational and efficiency improvements are needed, and more importantly, last-mile distribution patterns and requirements align with zero and near-zero emission vehicle technologies’ capabilities. Consequently, this research seeks to contribute by analyzing the behavioral responses of freight stakeholders (i.e., carriers and receivers) to operational performance and non-financial incentive-based programs to foster sustainable urban freight operations and the adoption and use of zero and near zero emission vehicles in last-mile distribution to urban areas. It is expected that these types of incentives complement existing financial based strategies.