More strike action threatens logistics operations in the US. A long-standing issue around the classification of truck drivers has brought the port of Oakland in San Francisco to a halt.
The issue of AB5 employment regulations was supposed to deal with the problem of large employers, especially those in the logistics sector, classifying employees as independent contractors. However, it has succeeded in annoying many truck drivers who are independent contractors yet are obliged under AB5 to prove that they really are independent. Such drivers suspect that their insurance and regulation costs will increase under the AB5 regulations.
A recent case at the US Supreme Court affirmed the regulations, suggesting that the laws passed in 2020 will start to be implemented for road freight providers who so far have not applied them. The prospect of enforcement has prompted a number, possibly several hundred, self-employed truck drivers to stage a protest at the entrance to the Port Oakland. This seems to have had two effects. The dock workers from the International Longshoreman’s Union refused to cross what they perceived to be a union picket-line resulting in a halt to operations at the container terminals. In addition, the flow of containers in and out of the terminals was interrupted. It appears that all three container terminals at Oakland, SSA, Everport and TraPac, have been brought to halt. Although reports vary, it seems that most of the rest of the port has also seen operations halted including intermodal terminals and warehousing. It is unclear how long the protest will continue for. It is also unclear if such protests will appear elsewhere in California, notably at the terminals of Los Angeles and Long Beach.
Road movement of containers in and out of the West Coast ports has proven a major vulnerability and is a key factor in the congestion seen at container terminals over the past two years. Any further disruption could create serious problems as, although the congestion problems have eased somewhat since their height in 2021, many of the underlying conditions remain.
Source: Transport Intelligence, 21th July 2022
Author: Thomas Cullen
GLOBAL SUPPLY CHAIN INTELLIGENCE (GSCi)