Bottlenecked Los Angeles, Long Beach, and Oakland ports sent shockwaves across America’s supply chain in 2021. With dockworkers and longshoremen at 29 ports hashing out a new labor agreement, the U.S. Supreme Court denying an appeal by the California Trucking Association couldn’t come at a worse time. Now thousands of owner-operators must decide to become employees or leave a state where almost all of the goods and materials are transported by truck.
“There are 9,000 trucks that serve the port on a daily basis, and 90 percent of them are independent contractors. So, this is a big, big impact,” Bill Aboudi, owner of AB Trucking in Oakland, reportedly said. “It just doesn’t work. You own your own truck. It’s your truck. I can’t take possession of it and start using it. In a case like my company, we just eliminate owner-operators and just reduce the workload.”
The high court’s decision to deny an appeal of the state’s AB5 law prohibiting self-employment in the trucking sector has already begun percolating in the state’s lower courts. Lawmakers appear determined to enforce the prohibition on independent truckers from negotiating rates and fee structures immediately.
“The injunction that has been in place for roughly two years will be lifted quickly, and complying with AB5 will be a reality for trucking companies in California. Motor carriers should immediately evaluate their California operations to determine what steps, if any, should be taken to respond to the changed backdrop for trucking,” transportation law firm Scopelitis, Garvin, Light, Hanson, and Feary, P.C. reportedly stated. “This will exacerbate the driver shortage and supply chain disruption in California, which is one of the most active areas of supply chain and transportation activity. Meaningful numbers of drivers will leave the state, some motor carriers will no longer serve the state, and some small business contractors will decide it’s no longer in their interest to operate there.”
Lawmakers may have grossly miscalculated the desire of some industries to end self-employment status in favor of employee protections. Truckers typically go out on their own to earn six-figure salaries and gain autonomy over work-life endeavors. Punching a clock and meeting company mandates is not necessarily for everyone. Independent truckers who value self-employment benefits are likely to relocate, exacerbating an already troubling truck driver shortage at the country’s two busiest container ports, among others.
California truckers like Hedayatullah Abrahami worked hard to earn enough to spend tens of thousands of dollars to own their own rig. Working for himself has become a source of pride, one he may not be inclined to lay down.
“Yeah. That’s my own truck, working for myself, that’s really good. I’m happy for that,” he reportedly said, frustrated over the ruling.
His life in California has become complicated, and the solution may require moving to another state. It’s very likely others will follow, leaving West Coast ports even more short-handed than in 2021. Last year, more than 100 container vessels were stuck idling off the coast of Los Angeles and Long Beach, unable to dock and offload.
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