Why Truckers avoid California
It's no secret that California has made itself one of the hardest states to run a truck in, depending on who you are. With AB5 now in play, the heart burn for truckers with California has renewed. What gives? Why is California getting a bad rap with one of the most necessary resources in our economy? Find out why the Golden State has developed a sour reputation among some drivers.
The importance of California in the shipping and logistics industry
With the largest port in the U.S. and one of the largest in the world, logistics and shipping make up most of the economy in California. Because of this there is a lot of attention given to the resources in the industry, including trucking.
With goods that first touch American soil and distributed across the country, all starting in the Los Angeles and surrounding ports, much of the U.S. relies on these ports to keep their businesses moving.
“The [Los Angeles] port stretches for more than 43 miles along the coast, taking up almost 8,000 acres of land. The sheer size and efficiency of the port have cemented its spot at the top of the biggest ports in the US list for the past two decades. CSA's distribution center in greater Los Angeles continues to help importers bring their products to market.” – CSA Transportation
Because of how essential this port is and its size, there is a heavy focus on regulations both environmental and safety matters for everyone involved. Some of these have caused riffs in the trucking industry for years and has made it difficult for businesses to do business in the state.
What has made California a difficult state for truckers to work with?
While primarily regulations and policies have made it difficult for drivers in the past to work with the state, a combination of events have led to a perfect storm that is making trucking companies big and small reevaluate their entire business and some even leaving the state.
The California Air Resources Board (CARB) has put into place updated regulations regarding tractors and the specifications required to register the truck within the state:
“Nearly 10 years ago, the California Air Resources Board's Truck and Bus Regulation banned the use of all trucks powered by 2006 and older emissions-spec engines, with some narrow exceptions, and beginning in 2023, the rule, along with the similar Drayage Rule for dray operators, takes vehicle bans a step further. If the deadline stands as currently written in the rule, use of all 2007-2009-emissions-spec engines will be prohibited.
Part of CARB's enforcement mechanism this go-around is to prevent registration or renewal of any such vehicle — the default CARB and the California Department of Motor Vehicles will use in that regard is an assumption that truck model years 2008 through 2010 are powered by by 2007-2009 engines. Unless owners take steps with the agencies to prove otherwise, registrations/renewals will be blocked.” - overdriveonline.com
What this means is starting January 1st, nearly 80,000 trucks (17% of California’s fleet)will be noncompliant and no longer be able to operate in the state of California. There are various loopholes that companies will have to utilize in order to keep running but there is not much else that can be done other than purchasing new trucks, which in itself has become it’s own issue.
With lingering supply chain issues and shortages, buying new trucks has become the last thing small business owners want to consider. With prices still at an all-time high and availability low, some business will have to go without and take the hit. Smaller companies though cannot afford to take a hit and could face a grim reality.
This is just one example of how the state’s regulations affect drivers. AB5 is another oncoming policy that will hinder a specific category of drivers. Owner operators are now on the chopping block as the way they work will be comprised.
“These drivers have traditionally been hired as independent contractors. The majority of the work done by the carrying company is transporting goods; thus these drivers might not be considered independent contractors under AB5. This entire business structure is threatened by the new ABC-test.” – topclassactions.com
The ABC test:
“According to AB5, every owner-operator, ranging from carriers, shippers or brokers, needed to pass an ABC test to be classified as independent contractors. This test has three stages of verification:
The worker should remain free from the control of the company, both on paper and in reality.
The worker shouldn’t perform any task that falls under the main business objectives of the hiring company and should undertake only those tasks that are indirectly linked to the business.
The worker should have a separate business entity, trade or occupation, which is similar to the tasks performed for the hiring company.
Only after meeting all three conditions, would a worker be deemed an independent contractor. Otherwise, the worker would be considered a part of the hiring company’s workforce.” – truckx.com
Though not as detrimental as CARB’s previously mentioned policy, this will complicate operating practices for carriers who use primarily independent contractors to do their business.
How has the impact made on drivers affects the state’s economy?
As we know there is an ever-current driver shortage and California has felt it’s pains the hardest. From the ongoing restrictive legislation to general attitudes towards the industry itself, it looks like that shortage isn’t going any where any time soon.
We can assume that these policies are well intended to help both the trucker and the economy, but many believe that those making these are out of touch and haven’t invested enough time into investigating better solutions.
As new regulations come into effect, adapting is the key component for survival, and we feel the trucking industry is no stranger to doing so.
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