The passage of California’s Assembly Bill 5 (AB-5) makes employing owner operators more difficult for companies, such as Uber and Lyft, but its impact on the trucking industry “creates more questions than answers,” according to Weston LaBar, CEO of the Harbor Trucking Association (HTA), representing harbor trucking companies at the Ports of Los Anegles, Long Beach and Oakland.
In an interview with AJOT, LaBar said that the full impact of AB-5 on trucking in California cannot be fully known at this time due to several factors:
Uber and Lyft have raised $100 million to place a measure on the California ballot that could negate the impact of AB-5. At the same time, Uber and Lyft are lobbying the Governor and the California legislature to enact follow up legislation to “carve-out” or negate the impact of AB-5 on the ride-sharing industry.
The California Trucking Association has filed a law suit in federal court that challenges California’s right to restrict owner/operator truck drivers in California, “because the trucking industry engages in interstate commerce and so federal law pre-empts California law.” For example, the contents of some containers unloaded at a California port will find its way in a store or distribution center in another state. As a result, LaBar says the issue could go to the United States Supreme Court and take years to resolve.
There is a greater concentration of import containers accessing the Ports of Los Angeles and Long Beach that is increasing the volume of trucking both out of state and to Northern California along the I-5 corridor. “There are 21 ocean carrier services that make their first port of call at Los Angeles/Long Beach, whereas none make their first port of call at Oakland,” LaBar observed, “if Oakland had one service that made its first port of call at Oakland, it would increase its business by 10%.”
Other factors include:
- Bigger ships carrying 14,000 teus, and soon 20,000 teus, (twenty-foot unit containers) are arriving at the two Southern California ports.
- The ships discharge 80% to 90% of their cargo at Los Angeles/Long Beach, which can amount to as much as 9,000 containers per ship.
- Federal “hours of service” rules restrict how far a driver can take a load before a rest period is required. The result is that one driver takes a container from the port to a warehouse and a second driver takes the load, often mixed with other cargoes, from the warehouse to a store or distribution center.
- Demands for next day or same day deliveries require more trucking and more drivers.
- The result is more cargoes are delivered outside of California and to Northern California.
- HTA has noted that 91.8% of all trucking companies in California operated five or fewer trucks in 2017.
LaBar concluded by saying: “The demands for same day and next day deliveries require more trucking and more drivers. The challenge is for companies to improve the driver experience. The appointment system at container terminals means less waiting. Federal “hours of service” rules support more rest periods. Drivers in the harbor are already getting better paid…Companies such as Next Trucking are using technology to allow drivers to decide which loads to pick up so they can make more money as owner/operators.”
