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Focus: Global Supply Chain and Logistics

Our Weekly Feature Article on Topics Related to Global Supply Chain & Logistics

From SCDigest's On-Target e-Magazine

- July 8, 2014 -


Global Logistics News: Behind Drayage Driver Strike at LA and Long Beach, Bigger Union Issue Looms Large

No Picket Line that Could Lead to Port Closures Yet, as Teamsters Continue Efforts to Organize Independents

SCDigest Editorial Staff


Some 120 truck drivers walked off the job at the ports of Los Angeles and Long Beach Monday morning, launching an indefinite protest against what they say are widespread workplace violations.

The move of course comes as the contract between the International Longshore and Warehouse Union (ILWU), which represents dockworkers, and the Pacific Maritime Association, representing West Coast ports and terminals, has expired. Union members for now are continuing to work as negotiations between the two sides continue.

SCDigest Says:


Of Southern California's roughly 12,000 short-haul truckers, only 10% are directly employed by companies, industry experts estimate.

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There were fears that the truck drivers, who are not union members but are supported in the action by the Teamsters, would set up picket lines at the ports, which ILWU members might then refuse to cross, threatening a shutdown of most port operations.

But as of now, the truckers and Teamsters are only distributing flyers accusing harbor trucking companies of misclassifying drivers, but they not blocking access to the terminals.

At a noon rally near the ports Monday, drivers charged that three port trucking companies - Total Transportation Services, Pacific 9 Transportation, and Green Fleet Systems - were misclassifying them as independent contractors. They claim they should be classified instead as employees and should be thus receive the benefits of company employees. The drivers also claimed that the companies are harassing them for engaging in union organizing activities.

"We are fed up," Alex Paz, a former driver with Total Transportation Services, told MSNBC yesterday. "When the company misclassifies you, you're denied Social Security, you're denied medical, you're denied workers' comp."

It is the fourth such truck driver protest in the last year. Previously, the labor actions ran just 24 to 48 hours, while this one has been positioned as lasting indefinitely. Drivers plan to picket at the firms' trucking yards and then follow the rigs to port terminals.

The issue of independent owner-operators being classified as company employees, and thus subject to unionization if the firm has a union, is a huge one for both drivers and shippers, not only at the ports but in the general freight market as well.

The actions in recent years by the Port of LA to place a variety of requirements on drayage drivers under the banner of improving the environment was seen by many, for example, as a union-backed strategy that would have made it very difficult if not impossible for independents to operate, moving the drayage business to larger trucking firms that are often unionized. Ultimately, the American Trucking Associations largely prevailed in a series of court cases challenging those requirements and leaving the status quo mostly in place.

(Global Supply Chain Article Continued Below)



Of Southern California's roughly 12,000 short-haul truckers, only 10% are directly employed by companies, industry experts estimate.

But the issue much broader than just drayage drivers.

FedEx Ground and its drivers have been at the center of the independent contractor misclassification issue for many years, with the company having won and lost a number of state-level court cases.

Early this year, New York state passed a bill requiring that independent contractor truck drivers used by shipping firms and other companies be classified as employees, based on a series of criteria. While this likely will have a large impact on transportation firms in the state, curiously in the final version of the bill there was an exception for companies that pay an independent operator that buys its own routes and then purchases or leases its own trucks and hires workers.

Which is how FedEx operates, exempting it from the requirement.

Many of the largest truckload companies have been increasing the percentage of their total fleets that are operated by independents. There are currently some 350,000 independent owner-operators in the US, according to the Owner-Operator Independent Drivers Association.

Some experts have said that if independents were reclassified as employees and became union members, the cost per driver would increase about 30% annually – costs that in the end would have to be borne by shippers.
So what appears to be a relatively minor labor action at the ports of LA and Long Beach can fairly be seen as another move in the Teamsters long game to unionize independents everywhere.

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