23 July 2022

3 minute read

North America

Independent truckers protesting California's new "gig worker" law blockaded California's No. 3 seaport for the third straight day on Friday, stranding cargo at the state's top agricultural trade hub and adding to US supply chain headaches, reported Reuters.

Truck gates at all four Port of Oakland marine terminals remain closed to truck traffic on Friday. Oakland International Container Terminal (OICT), which handles about 70% of port cargo, restarted some work on ships, a port spokesperson said.

Oakland port truckers began actions against the law formally known as AB5 on Monday. They picketed and parked tractor-trailers to choke terminal gate access, grinding trade through the eighth-busiest US container seaport to a virtual halt on Wednesday.

Idling the 2,100 trucks that ferry goods at the Northern California seaport each day is hindering exports of fresh beef and pork, dairy products and nuts as well as imports like green coffee, electronics and construction materials.

Commodity traders told Reuters coffee and cocoa are stuck on ships at the port, putting the quality of those imports in peril.

"Due to the strike, we have not been able to move cargoes from the port," the director of one of the largest coffee importers in the United States told Reuters.

Import container dwell time, one measure of port efficiency, has climbed to 17.5 days, up 41% from 11 July, according to supply chain data provider Project44.

Trucking industry legal challenges have put enactment of the law on hold for more than two years. The US Supreme Court declined to take up a lawsuit from California Trucking Association on 30 June, clearing the way for AB5 to go forward.

The law, which aims to clamp down on labour abuses, sets tougher standards for classifying workers as independent contractors.

Backers say it will stop companies from using those workers to avoid paying minimum wage, workers' compensation and other employee-related expenses. The independent drivers that AB5 aims to protect say the law would force them to shoulder hefty rental equipment and insurance costs that were formerly borne by the trucking companies that contract them for jobs.

Supporters of the law, including the Teamsters and the International Longshore and Warehouse Union (ILWU), say AB5 would push companies to hire drivers as employees. Those company drivers could then join unions and collectively bargain for better pay and working conditions.

Trucking organizations including the Harbor Trucking Association and the Owner-Operator Independent Drivers Association (OOIDA) have called on Governor Gavin Newsom to delay enforcement of the law. Newsom's office has twice rebuffed those appeals.

Meanwhile, drivers like Carlos Flores say they will continue protesting until Newsom exempts port truckers from AB5.

Flores, who uses his own tractor to haul port freight, told Reuters the law would burden him with up to $30,000 per month in rental costs for chassis and other port equipment.

"AB5 would shut me down. I don't have the resources to pay that kind of money," said Flores, 42.

"I've invested too much into my business to go to a company and work for hourly wages," he said.

Source: Reuters