CA’s AB5 About to Throw Another Major Wrench in the Supply Chain, and 70,000 Truckers in Limbo – Opinion

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. It will place up to 75,000 truck drivers in California into legal uncertainty and add further stress on the already stretched supply chain.

AB5 is a labor classification law that was designed to force gig-economy companies like Uber, Lyft, and DoorDash to classify workers as employees, instead of as independent contractors, meaning they’d be eligible for benefits. However, the lobbyists for these tech companies managed to exempt their businesses.

RedState previously reported extensively on AB5 issues.

Truckers weren’t as lucky as Uber and Lyft, and they now must come into compliance with the law. Bloomberg reports on the serious implications to the state’s huge number of truck owner-operators:

Almost a dozen truckers told Bloomberg News they’re unsure how to comply with California’s Assembly Bill 5, which requires workers satisfy a three-part test to be considered independent contractors, or else be seen as employees entitled to job benefits. The trucking industry relies on contractors — who until now have had flexibility to operate on their own terms — and has fought to be exempt from state regulations for years.

Nearly all the state’s goods are transported by truck, so any disruption to the system is certain to be profound—and likely to spill over into the nation’s supply chain. Truckers aren’t even sure how to proceed. “We have never gotten any good answers from anyone official in California on how this is supposed to be enforced or how our members can comply,” said Norita Taylor, the director of public relations at the Owner-Operator Independent Drivers Association.


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.

The timing of the Supreme Court’s decision will also create chaos. “This denial couldn’t have come at a worse time,” said Eric Sauer, senior vice president for government affairs at the CTA. “We’re in peak harvest season. We’re also in peak construction season. And this is the time for peak holiday imports coming into the ports.”

There’s a good chance you’ll be looking at some empty shelves in your grocery store soon.

Bloomberg heard from Kevin McMaster of Flock Freight’s vice president for carrier sales that many carriers are going to have to scale back because it would cost too much to employ all of these own-operated trucks. He continued:

This would cause a ripple effect in the industry, pushing many drivers who don’t want to apply for their own authority to lease out of state, likely in Arizona or Nevada, and even force some into retirement due to increased market pressures. California will see increased capacity, which could worsen an already difficult environment in which drivers are scarce.

Truckers are one of the biggest problems in this nanny-state law Similar to being independent. Owner-operators prefer to own their vehicle. They have more flexibility over 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. That’s my own truck, working for myself, that’s really good. I’m happy for that.”

He will likely move with other people, my guess. 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 is still much to learn as the impacts of AB5 start to affect the trucking industry. As CBS News writes, “Now that it is law, no one seems to know how it will be enforced or who will enforce it.  But there isn’t much time to figure that out.” One thing is sure though: there are going to be a lot of disruptions in the supply chain in California, and since the state is home to three massive cargo ports, that will affect everybody.

AB5 is yet another progressive, do-gooder law supposedly designed to protect the working man—but it’s really a thinly-disguised push to increase unionization in the state. It will have profound “unforeseen” negative effects for all of us.

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