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California AB5 Ruling May Disrupt All West Coast Truck Shipments

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California ruled that independent drivers are employees not contractors. The US Supreme Court refused the case. The ruling creates a huge potential for a massive truck shipping logjam.

A Tweet Chain by Freight Waves spells out the problem.

Half of the Industry is Impacted

Supreme Court

Breaking News: SCOTUS denies certiorari; California’s trucking sector braces for AB5

Working Entrepreneur Screwed

Blame the Unions

Expect Illinois and New Jersey to Follow

Not Just Trucking

Converting to a New Model

Converting to an employee isn’t as simple as you think. Independent truckers are small businesses and finance their trucks through cash flow. If they shut down their business, they risk bankruptcy.

CTA vs California

BackupTheTruck reports CTA vs California AG denied certiorari – AB5 goes into effect in 7 days.

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The Owner-Operator and Independent Driver Association (OOIDA) has released comments about the court’s refusal to hear the argument:

“AB5 is so wide ranging that knowing how to comply is impossible for many directly working in trucking. With AB5 now set to go into effect, thousands of owner-operators driving in California face an uncertain future. California has provided no guidance to owner-operators about how they can work as independent contractors under this new scheme, and truckers will be at the mercy of the courts to interpret how the law will be applied. “

California Trucking Association responds:

“In addition to the direct impact on California’s 70,000 owner-operators who have seven days to cease long-standing independent businesses, the impact of taking tens of thousands of truck drivers off the road will have devastating repercussions on an already fragile supply chain, increasing costs and worsening runaway inflation.”

AB5 Ruling Enters Trucking Into the Inferno

Please consider AB5 Ruling Enters Trucking Into the Inferno

What’ll this do to rates in California? Chris Gonzalez with Clean Harbors says, “Drivers will either have to run on their own authority, be with a true OO company or become a company driver. This affects the port OOs mostly.”

For 70,000 independent owner-operators in Cali, they now have to get compliant with the law or get out. Rooster sees the most immediate impacts being a jump in rejects and escalating rates to match payroll increases.

More Fat for the Recession Fire

Hey, why not throw more fat on the stagflation fire so Powell will have to keep those rate hikes coming.

For discussion, please see GDPNow Forecast Dives to -1.0 Percent Following Income and Spending Data.

Article posted with permission from Mish Shedlock


The Washington Standard

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