Costco drops Pacific 9 as port carrier over alleged violations

Costco is one of several companies that have ended relationships with some port trucking companies over a USA Today report of alleged labor violations.

Following allegations of unfair treatment to port truck drivers, Pacific 9 Transportation is getting dropped by Costco as a supplier of transportation over the potential labor violations, USA Today reported. The paper’s earlier reporting by Brent Murphy found that several trucking companies violated labor laws, placing their drivers in debt traps.

The report was based from accounts given by about 300 drivers. Murphy checked their claims against contracts and shipping manifests.

Murphy uncovered a scheme whereby drivers shouldered the burden of costs to operate the trucks but were forced to work long hours, often in violation of hours-of-service laws, to deliver shipments from the ports to warehouses.

Samuel Talavera Jr. was one of the truck drivers that Murphy referred to as “a modern-day indentured servant.” Talavera shipped Kumho tires or LG dishwashers to Los Angeles warehouses. Murphy reported that Talavera made payments on his truck, but when he couldn’t afford to make necessary repairs, the company repossessed the truck and fired Talavera, refusing to refund any of the $78,000 he had paid toward ownership of the truck.  

USA Today identified  Home Depot, Target, Costco and the aforementioned companies like Kumho and LG Electronics that benefit from this shipping arrangement, that sees some drivers working up to 16 hours a day.

Washington-based Costco Wholesale, one of the major retailing companies that hired Pacific 9, has quit doing business with the carrier. Goodyear has also ceased working with Pacific 9, USA Today reported.

Hewlett-Packard, on the other hand, was reported to have “sent an auditor to investigate the company’s labor practices” without explicitly stating whether the company has cut ties from the beleaguered trucking company or not.

USA Today also reported that toy manufacturer Hasbro has a working relationship with Pacific 9. A report by Retail Dive named several other companies of working with carriers accused of violating labor standards. These are Amazon, Walmart, Neiman Marcus, Steve Madden, JC Penney, LG Electronics, TJX, Ralph Lauren, UPS, J. Crew, Home Depot and Target. The same list also mentioned Costco, Goodyear and Hewlett-Packard were among the companies facing Senate pressure as earlier reported here on FreightWaves.

Home Depot spokesperson Stephen Holmes said the company was “investigating this issue directly with carriers.” He mentioned that the company has switched to other carriers not named in the USA Today report.