CA’s AB5 is about to throw another major wrench in the supply chain, and 70,000 truckers are in limbo

The US Supreme Court on June 28 declined to review a challenge by truck drivers to California’s controversial labor law AB5, meaning that it now goes into effect. The decision will throw up to 70,000 California truckers into legal limbo and further pressure the already-stressed supply chain.

AB5 labor classification law was created to make gig-economy firms like Uber, Lyft and DoorDash classify employees as employees instead of independent contractors. This would allow them to be eligible to receive benefits. However, the lobbyists for these tech companies managed to exempt their businesses.

RedState reported on AB5 extensively in the past.

Truckers were not as fortunate as Uber or Lyft and must now comply with the law. Bloomberg reports on the serious implications to the state’s huge number of truck owner-operators:

Nearly a dozen truckers spoke out to Bloomberg News to say they are unsure of how to adhere to California’s Assembly Bill 5. The bill requires that workers pass a three-part assessment to qualify as independent contractors or be treated like employees and entitled to benefits. Trucking relies heavily on contractors, who have been able to work on their terms for many years.

Almost all state goods are shipped by truck. Any disruption of the system will be severe and likely to affect the supply chain. The truckers don’t know how to go about it. Norita Taylor (director of public relations, Owner-Operator Independent Drivers Association) stated that they have not received any clear answers from California officials on how to enforce this law or how their members can comply.

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Per Bloomberg:

More than 70% of truckers serving some of the country’s largest ports — including Los Angeles, Long Beach and Oakland — are owner-operators, and AB5 will govern their relationships with carriers, brokers and shippers in most cases, according to the CTA.

Be free California… there will be nothing for you to buy, and it won’t make you happy. Although starting a trucking business in CA was a nightmare, I am glad to be able to purchase land in another state so that it can all go again. There will be no more freight to/from CA.

— Nostopin (@Nostopin1) July 9, 2022

The timing of the Supreme Court decision will cause chaos. Eric Sauer (CTA senior vice president, government affairs), said that “this denial could not have been at a better time.” We are in peak harvest season. Peak construction season is also underway. This is also peak season for holiday imports to the ports .”

There’s a high chance that you will soon be seeing empty shelves at your grocery store.

Flock Freight vice president for carrier sales, Kevin McMaster told Bloomberg that many carriers would have to reduce their workforce because it is too expensive to hire all of these truck-owners. He continued:

This would have a major impact on the industry. It could push many drivers, who aren’t interested in applying for their authority to lease out, to do so in Arizona and Nevada. Some may even be forced to retire due to market pressures. California will see an increase in capacity, which could worsen an already difficult environment that places drivers at risk.

One of the main problems with this nanny-state law: many truckers like being independent. Owner-operators prefer to own their vehicle. They have more flexibility about their work hours, what they do, and, most importantly, freedom. Owner-operator Hedayatullah Abrahami takes pride in his ownership: “Oh, yeah, why not?” he said. “Yeah. It’s mine, and I’m the driver. That’s great. That .”

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is a joy!

I bet he leaves the state along with many others. Life may soon become more difficult everywhere though, as the Biden Administration–never passing on a chance to punish people–is also reportedly taking a hard look at what California’s doing so they can impose something similar on a national level.

There are many unknowns when the impact of AB5 begins to feel across the trucking sector. CBS News wrote, “Now that it’s law, nobody seems to know how or who it will be enforced.” It’s not possible to know the answer. One thing is certain though, California is going to experience a lot more disruptions to its supply chain. California is also home to three large cargo ports that could impact everyone.

AB5 – Another progressive and do-gooder law that is supposed to protect workers, but it’s actually a subtle push to increase state unionization. This law will have “unexpected” and profound negative consequences for us all.

If you live in #California and you aren’t actively pushing #Democrats out of office, I don’t want to read your tweets bellyaching about the cost of food here. #inflation #ab5 70,000 Self-Employed Truckers in California Face Shutdown Under New State Law

— Tammy Quackenbush (@Koreafornian) July 9, 2022

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