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Focus: Transportation Management

Feature Article from Our Transportation Management Subject Area - See All

From SCDigest's On-Target E-Magazine

May 19 , 2011

 

Logistics News: Efforts to Unionize Drayage Drivers Continues, as California Assembly Prepared to Pass Law Effectively Eliminating Independent Drivers from State Ports

 

Teamsters Efforts Are "Dogged," ATA's Whalen says; Law would be Challenged if Passed under Same Arguments as LA Clean Truck Program Legal Battles

SCDigest Editorial Staff

 


The multi-year battle over drayage drivers at California ports took another turn last week as a bill in the state that would effectively ban independent owner-operators from operating drayage trucks at the state's ports passed a key committee and appears headed for passage in the state assembly.

Given that some 80-90% of port drayage drivers are believed to be independents, eventual passage of such a law could have a big impact on costs and other issues in moving containers from ports to import warehouses and transloading facilities.


California assembly bill AB 950 (the Truck Driver Employment and Public Safety Protection Act) would deem drayage truck operators to be statutory employees for employment purposes of the firms hiring them to move the containers.

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This specific bill cannot be seen in isolation, but rather as part of a multi-pronged effort to get the Teamsters union into port operations not only in California but other areas of the country as well.
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Specifically, the bill:


(1) Provides that for purposes of state employment law (including workers' compensation, occupational safety and health, and retaliation or discrimination) a drayage truck operator is an employee of the entity or person who arranges for or engages the services of the operator.

(2) Defines "drayage truck operator" as the driver of any vehicle with a specified gross vehicle weight rating operating or transgressing through port or intermodal rail yard property for the purpose of loading, unloading, or transporting cargo.

A full description of AB 950 can be found here: Analysis of the Truck Driver Employment and Public Safety Protection Act.

The bill is sponsored by Assembly Speaker John Perez (D-Los Angeles) and Assemblyman Sandre Swanson. Perez is a former labor organizer.


The bill would in effect eliminate the now dominant independent drayage trucks from working California's ports. In turn, this would lead to larger trucking firms controlling drayage operations, firm which might currently be unionized, or be targets for unionization efforts not possible with the current dominance of independent drayage operators.

The bill is expected to pass the full Assembly now that it is out of committee, with a vote expected imminently. A similar bill would then have to pass the also Democrat-controlled state Senate, and then signed into law by Governor Jerry Brown.

This specific bill cannot be seen in isolation, but rather as part of a multi-pronged effort to get the Teamsters union into port operations not only in California but other areas of the country as well. The most notable is the union-backed measure called the Clean Ports program at the port of Los Angeles, which under the banner of improving air quality through regulation of drayage trucks would have effectively eliminated most independent drivers from operating there. Many observers think the program has little to do with the environment, and all to do with eventual unionization. (See Port of LA, Clean Trucks, Owner-Operators, and You.)

In June, the federal 9th Circuit Court of Appeals in California will hear the American Trucking Associations' (ATA) appeal of a trial judge's ruling last August that said the program can go forward. The ATA argues that allowing the port to regulate trucking is not legal because a local regulator cannot supersede federal law that govern freight transportation. If such authority were allowed, shippers and truckers would have to deal with a patchwork of local regulations across the country, putting a big hit on transportation effectiveness and raising costs substantially.

"When it comes to port operations, you are not only talking about general freight transportation, but the flow of international trade," Curtis Whalen, head of the ATA's intermodal council, told SCDigest this week.

The trial judge who ruled in favor of the port in August also accepted the ATA's motion for an injunction against the program being put into place awaiting the Appeal's court ruling, acknowledging that her reasoning in the case to decide in favor of the port was "novel."

The California bill would accomplish much the same result if ultimately passed. There is also legislation supporting such local trucking regulation in the name of environmentalism floating around the Capitol in Washington DC.

"If these efforts in California are successful, you can expect many more such local actions across the country," Whalen added. He also said that while the bill is almost certain to pass the Assembly, in part because the Assembly Speaker is the co-sponsor, its fate in the Senate there is less certain, as opposition to the bill grows.

(Transportation Management Article Continued Below)

 

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Whalen also said even if it does pass, it would be challenged in court on largely the same grounds that the Clean Trucks program has been challenged, namely that local authorities cannot trump federal regulation of the trucking industry and interstate commerce law.

Dozens of shipper and business-related groups have come out against the bill. For example, NASSTRAC, a shipper-focused organization, says in a press release that "Today, thousands of independent owner-operators provide critical goods movement services at each of California's ports. Container activity at the ports varies daily by as much as 30 percent and annually such activity is closely tied to state, national and international economic conditions."

NASSTRAC added that "Owner-operators provide necessary capacity and flexibility to meet the varying demands of port drayage. To impose an employee drive mandate on the companies who arrange for drayage services is simply not consistent with reality of port activity and places California ports at another financial disadvantage to other North American ports."

The NRF, ATA, the Owner-Operator Independent Drivers Association, and many other groups have also issued statements objecting to the bill.

While the legislation is nominally focused on safety, and the objections of shipper groups frequently is around the rights of independent truckers, the real issues concern unionization, trucking costs and workers rights - though in the latter area it is not clear which way independent operators would vote on the issue.

A 2008 study by economist Dr. John Husing of Los Angeles found that the shift away from independents to larger trucking firms for drayage could increase service costs by as much as 167%. A similar study by Boston Consulting Group found costs would increase by at least $500 million annually from LA area ports.

On the other hand, the left-leaning Coalition for Clean and Safe Ports says the clearing of the bill from committee "brings port truck drivers one step closer in their fight to rightfully be recognized as employees of the trucking or shipping companies that arrange for or engage these workers’ services. AB-950 would bring justice to port truck drivers by extending them the rights to workers’ compensation, disability insurance, Social Security, and minimum wage protection."

The Appeals Court decision on the Clean Trucks program, and potential appeal to the Supreme Court, will be a critical event in this battle. A ruling in favor of the port with no injunction pending appeal to the Supreme Court could end independent drayage operators there very quickly, and embolden other ports to take similar actions, even though a variety of programs both in Los Angeles and elsewhere have led to dramatic improvements in air quality already.

On the other hand, a ruling against the port could indicate the AB 950 would also not withstand a court challenge. Following the brief Appeals Court hearing June 10th, the 9th Circuit could issue a ruling within days or as long as several months.

"Don't underestimate the Teamsters. They will doggedly pursue every way they can to get what they want, which is unionized drayage operations," the ATA's Whalen added.

Are you keeping up with or concerned about the new California bill of the court action on the Clean Trucks program? Is it an important issue, or overblown? Let us know your thoughts at the Feedback button below.


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