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American ShipperContainerNewsTrucking

AB 5 protest planned in California by owner-operators

Originating with truckers serving construction and agriculture industry, there are concerns that some port drivers also may become involved.

A grassroots protest over AB 5, the California law aimed at limiting the use of independent contractors, is being planned by truckers for November 4-6.

While the planned protests originated with truckers hauling construction materials and agricultural products, some flyers promoting the protests also have been posted around the ports of Oakland, Los Angeles and Long Beach so that drayage drivers may also become involved and ports may be affected.

It was unclear whether the protest would gain traction with drayage drivers at those ports.

“We don’t anticipate any disruption to normal cargo flow at this point,” said Lee Peterson, a spokesman for the Port of Long Beach.

A planned protest over California’s AB 5 law which is aimed at limiting the use of independent contractors is being planned by some truckers who move construction and agriculture products.

Debbie Ferrari of MAG Trucking in Hayward, California said there is no group in charge of the planned shutdown, but a number of truckers have “decided they would take time off” on those days.

Ferrari, who has been in the trucking business for 38 years, said that many truckers in the agriculture and construction businesses are frustrated that an exemption was not made for them in AB 5.

These include not only drivers moving material such as aggregate, block, hot asphalt, soil and other construction material – “integral work to keep California moving,” she stated. She also noted that some of these drivers are involved in emergency clean-up and repairs or moving the harvest from California farms and orchards.

“The shutdown is a grassroots effort of many firms making a personal choice. Some will be demonstrating at designated areas that will be disclosed each day on the day prior,” said Ferrari.

“In our community, owner-operators are prevalent because work is seasonal and the cost of living is higher. A lot of people prefer to be owner-operators,” she said.

“There are a lot of truckers that are misclassified, but there are quite a lot that are not,” she added.

When AB 5 was being discussed, Ferrari said that she spent dozens of days in Sacramento speaking to legislators and lobbyists about the concerns of truckers serving the construction industry.

“The whole thing has been unreal – the treatment, taking away the freedom, taking away the living of people who have invested in clean trucks,” she said.

Ferrari expects additional protests and visits to legislators to have the law modified. “We have a great, clear case and they are treating us very badly and controlling us. They are shutting us down for the wrong reasons – mischaracterizing the people who hire the owner-operators and the owner-operators.”

Weston LaBar with the Harbor Trucking Association, which represents port drayage companies, said his organization is following the planned protest, but said “it is being organized by the construction brokerage community, it’s not being organized by anybody that has to deal with drayage.”

LaBar added, “I don’t know what level of participation you’re going to see in ports. That being said, obviously there ares many owner-operators in the drayage industry and they’re very upset about AB 5.” 

He also said, “We want the drivers to absolutely reach out and let people know their opinions and the fact that they don’t appreciate AB 5. We definitely want elected officials and legislators to be educated on the viewpoints of these drivers and the fact that they have no interest in being employees.”

But he also said the Harbor Trucking Association is not promoting the protest because of concerns that it could impact cargo.

“We always have concerns with anything that disrupts the flow of cargo in and out of the ports on the West Coast. We deal with a good percentage of the nation’s discretionary cargo… every time there is a major disruption it affects discretionary cargo and market share on the West Coast.” 

LaBar also said, “The sad part is, this is the type of engagement we were hoping we would get from drivers before AB 5 was voted on so that legislators could actually understand the points of view of truck drivers. But there was a large level of apathy in the sense that they didn’t think something like this would ever happen and that their livelihoods might be threatened. And so now they’re on the defensive after the fact.”  

“This law is stupid, this law is disruptive to our industry. The word is starting to get out to the owner-operators about AB 5,” says Bill Aboudi, the owner of a small drayage company in Oakland who is also president of Oakland Maritime Support Services, which provides parking and other services for truckers.

 “AB 5 was billed as a gig economy law, so nobody paid attention on the owner-operator side to it even as their associations were fighting it,” he said.

 “Now the trucking companies have to basically make a decision what they’re going to do, and they’re starting to communicate with their owner-operators. That’s why you see these flyers going around.”

 He said some trucking companies are telling owner-operators that they will have to become employees and drive company trucks if they want to be dispatched.

 Other companies are telling drivers they need to get their own operating authority, and others are planning to do nothing to change how their companies work believing “somebody’s going to duke it out in court and hopefully it will get cleared up,” said Aboudi.

 “Some will go to the two check system, which will cost a lot of money. But it’s got risks too, because now the owner-operator has a truck, they’re going to make payments on the truck lease and then you’re going to pay him partially as an employee,” he said. “How do you figure that out? In the drayage business, you get paid by the move. How do you convert that to hourly? It’s a lot of paperwork.”

 “I’m talking to drivers on the street and they’re pissed off. I had one owner-operator, he was so depressed, I almost felt I had to call a suicide hotline. He had just upgraded his truck, he has a truck payment and was saying ‘What do I do? I’m going to be out of business, I can’t pay for this truck.’ ”

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Chris Dupin

Chris Dupin has written about trade and transportation and other business subjects for a variety of publications before joining American Shipper and Freightwaves.

26 Comments

  1. Allow me to share my opinion based upon my perspective . First I would like to quote a few points stated in the article and then proceed from there .

    Quote:
    1-“A grassroots protest ”

    2-“Debbie Ferrari of MAG Trucking in Hayward, California said there is no group in charge of the planned shutdown, but a number of truckers have “decided they would take time off” on those days.”

    And based on the “Flyer”

    3-“AB-5 Steals your freedom of choice ”

    4-“AB-5 Will destroy the independent owner operator/contractor ”

    5-“Please shut down ”

    ………………………………………………………………………………………………………………………………………………………

    Allow me to begin with those 5 points .

    Point 1- “A grassroots protest ”

    Let’s begin by just looking up what that actually means

    Quote:
    “Grassroots means at the most basic level. A grassroots movement is one which uses the people in a given district, region, or community as the basis for a political or economic movement. … Grassroots movements utilize a variety of strategies from fundraising and registering voters, to simply encouraging political conversation.

    Ordinary people in a society. ”

    And allow me to combine Point 2 with Point 1 :
    Quote:
    Point 2-“Debbie Ferrari of MAG Trucking in Hayward, California said there is no group in charge of the planned shutdown, but a number of truckers have “decided they would take time off” on those days.”

    Therefore , A very “basic” attempt at gathering ordinary people who are deemed to be ” Independent owner operators/contractors ” in the trucking industry , are going to attempt to implement a strategy in the form of a “protest” , in an attempt to encourage political conversation with politicians concerning the AB-5 legislation which is deemed to come into effect January 1 2020 .

    However, there is no “group” in charge of the “planned” shutdown , it’s simply a number of truckers who decided to take time off .

    I beg to differ . There is a “leader” in that group who managed to persuade others into taking a form of unified action

    In other words , nobody coaxed you , you have no leader(supposedly) , you’re disorganized , and you each individually chose to assemble and form a “group” based on your combined interpretation of what the AB-5 law represents and implies .

    The attempt to cause a disturbance in your attempt to draw attention towards “your cause” concerning something you totally miscomprehend ,while using a cop out of it being based on just a few truckers who “just decided” to take some time off greatly demonstrates you’re green horns .
    Point 3 :

    Quote:

    “AB-5 Steals your freedom of choice ”

    This is debatable since the statement is based on a bias misinterpretation of what AB-5 actually implies . AB-5 actually offers you more choices and protects you from being exploited .

    Point 4:
    Quote:
    “AB-5 Will destroy the independent owner operator/contractor ”

    That interpretation is ill founded and absurd . What is actually destroying independent owner operators/contractors are low rates/wages , exploitation due to massive competition , lack of creativity , and a lack of legal understanding of what a true independent contractor implies .

    Point-5 Indicates that you’re desperately attempting to persuade others into following your beliefs based on your lack of AB-5 comprehension .

    Here is a suggestion . Obtain legal counsel . Have the AB-5 law explained to you in very simple terms which a child could understand . Don’t rely on just any legal counsel . Obtaining a degree isn’t what renders one an expert , competent , or intelligent . I think you have experienced this with people who have a CDL . It doesn’t render them competent simply based on the fact that they followed a prearranged curriculum that was deemed to be acceptable , and based on it that they managed to pass a test deemed to be adequate .

    Asking people to shut down equates to enduring monetary losses . Asking them to shut down doesn’t guarantee they will achieve success . Asking them to protest by shutting down is equivalent to a child throwing a tantrum and pouting . There are more reasonable and powerful ways to achieve success and prosperity . And it first begins with comprehension .

    Attempting a “shut down” is equivalent to going on strike . However, going on strike when one is dissatisfied is Labour Union/employee mentality . Though YOU don’t want to be considered as “employees” .

    Do your due diligence . Then PONDER ! Then plan . Then act ! That being said , there is no excuse for ignorance .

    Stop following ! Start innovating !

    AB-5 is extremely clear . It doesn’t prevent truck drivers from becoming “independent” owner operators(business owners) .

    In my extremely lucid humble opinion …………..

    1. You and others making negative comments about truckers standing up for their rights either aren’t educated on the subject or have something to gain if people go out of business. I’m guessing the latter.

      1. You just proved my point . You lack comprehension and due to that fact you misinterpreted my “opinion” as “negative” . Furthermore you assume that my “opinion” is based on a desire for a gain according to the rules you have set for your belief . ie; if not because of “this”, then it’s because of “that” , LOL !

        If it were simply up to me , I would revolutionize this whole can of worms of a trucking industry and hand it over to you(truck drivers) on a silver platter .

        However, let’s simply agree to disagree .

        If you’re going to take a “stand” then first you need to “understand” . Then you need to be wise in regards to where you will “stand” and what that “stand” implies . From my perspective you are clearly demonstrating that you lack understanding . I’m not saying this in an attempt to denigrate you . I’m simply making a very astute point .

        AB-5 has been created to defend and protect “your rights” ! It also removed all ambiguity in regards to what defines an employee/employer relationship !

        You can still be a “broker” , however, your “relationship” will define if you are an independent one or a dependant one(employee) .

        AGAIN ! And based on that “relationship” you will be defined as either a business or as an employee.

        You need to make the relationship choice that suits “your” desire and needs , and position yourself accordingly . That’s it ! No need to make a mountain out of a molehill !

        In my humble opinion ……….

  2. Furthermore : DEFINE “BROKER” !

    The statement stated on the “flyer” presupposing that owner operators will be out of work due to no longer being allowed to transact with a “broker” starting January 1st 2020 is extremely misleading and extremely suggestive !

    In fact it is quite the contrary . One option which deems you to be a true independent owner operator(business) is to transact through a “Freight Broker” , and not through a carrier directly whom has “control” over you and in the “same” business . A “Freight Broker” isn’t in the same business as the OO’ & Carrier . A true OO should have their own authority , independent insurance, and pay for their own plates ,tolls , and fuel unrelated to the “Carrier” etc. ie; A carrier has no right in having a say on who drives the OO’s truck to haul the goods being transported . An authentic OO is an “independent business” , not a “dependant contractor”

    Another choice would be to transact directly with the “shipper” and bypass the “freight Broker” .

    No “independent” business “controls” another business per se . A business can control its employees , not another “independent” business .

    In my humble opinion ………..

  3. I find this so funny . Truckers are now complaining about the best law created and handed to them on a silver platter for their benefit .

    Politicians are going to get a good laugh out of this one . No wonder truck drivers are continuously getting the short end of the stick . They’re sleeping .

    Rather than using this law at their advantage and compete with carriers which have been low balling them for decades , they want to cry to government to leave them “depend” on those who have been fleecing them , LOL !

    To bad now , that “loop hole” has been closed .

    However, carriers will maneuver around it and serve your desires once again at your expense . The last thing carriers want are costly employees along with a labour union ! Oh they want labourers/drivers , the type they can get cheap with no brains that will bend over at their will .

    What this law is offering you is a genuine wake up call !

    Yeah but , but , but carriers have capacity . NO THEY DON’T ! YOU’RE THEIR CAPACITY ! Without you they have NOTHING ! All those trailers and trucks mean nothing without a driver , for now until they manage to automate . Once they get there , do you think for a second that they’ll care about YOU ??? You’re a burden , a huge cost that keeps on wanting more and more and more ! You’re a “liability” and a HUGE ONE ! As long as they can make millions off of you’re back they may make you feel like an asset , however , you’re more likely to be treated like an a$$ rather than like an asset .

    Now rather than thinking like an “employee” , why not think like entrepreneurs ? You keep saying that you want to be “owner operators” , so then act like business owners and operate YOUR business without depending on those who take advantage of you and make a killing off of you in the process .

    That’s what you should be contemplating rather than “protesting” . Contemplate cutting out the “middlemen” in YOUR “business” !

    That’s what Amazon did ! And there are a heck of a lot of online book stores . However, none of them thought to do and act like Amazon did ! NONE ! And Jeff Bezos became the first publicly reported Centi-Bilionaire in the process !

    Don’t just be another “bookstore”(driver) , Think and become an AMAZON in your field COLLECTIVELY , rather than to remain in diapers and depend on a third party !

    Thank goodness for AB-5 !!! The kick in the butt truck drivers need to set themselves free from leeches !

    In my humble opinion ………….

  4. Perhaps you should look into this :

    Then perhaps you’ll understand where potential wage increases are actually going rather than in your pockets !

    Quote:
    “Examining Corporate Priorities: The Impact of Stock Buybacks on Workers, Communities and Investors
    Posted by Lenore Palladino (Roosevelt Institute), on Tuesday, October 22, 2019 ”

    “Lenore Palladino is a Senior Economist and Policy Counsel at the Roosevelt Institute. This post is based on her recent testimony before the United States House of Representatives’ Committee on Financial Services. Related research from the Program on Corporate Governance includes Short-Termism and Capital Flows by Jesse Fried and Charles C. Y. Wang and Share Repurchases, Equity Issuances, and the Optimal Design of Executive Pay, by Jesse Fried . ”

    Quote:
    Feb 28, 2017, 01:40pm
    The Ugly Truth Behind Stock Buybacks ”

    Quote:
    “Stock Buybacks are Deadly. It’s Time to End Them.”
    Research & Commentary
    June 26, 2019
    by Luisa Galvao Porter McConnell

    Quote:
    “7 Reasons Stock Buybacks Should Be Illegal ”
    History tells us that investors would survive without them
    By Will Ashworth, InvestorPlace Contributor Jun 6, 2019, 9:01 am EDT

    As a recent example go look at what TFI International has been doing recently in regards to share buybacks since October 15 2019 ! They bought back 295,000 shares within 16 days . They spent an equivalent of approximately $12,239,776.90 to buyback shares on the open market rather than use those capital corporate “earnings” to increase truck driver wages while they are complaining about driver inc being a cancer because driver inc offers a higher “wage” which competes with them !!! Look at both sides of the coin rather than only the TFI “version” TFI is ranting about .

    Go look at the amount of share buybacks since 2019 , and how many options were issued and then exercised by the CEO ! Look at the millions he has been pocketing !

    Quote:
    ” The case for banning stock buybacks ”
    By Rita McGrath for CNN Business Perspectives
    Updated 12:50 PM ET, Tue February 26, 2019
    GOOGLE IT !

    Quote:

    “Money that flows out of organizations to shareholders is money that could have gone toward worker pay. One recent analysis found that the top five companies in the restaurant industry spent so much on buybacks from 2015 to 2017 that they could have afforded pay increases by an average of 25% for ordinary workers without changing anything else about their operations. Starbucks, for instance, could have given every one of its workers a $7,000 raise if it reallocated funds from buybacks to compensation. ”

    Quote:
    “But we should care more. The bulk of executive pay is now tied to a company’s stock price, creating an incentive to make that price as high as possible. Prior to a 1982 SEC rule change, buybacks were illegal, as they were seen as a form of stock price manipulation. You don’t have to be a genius to realize that if the bulk of executive compensation is tied to a company’s stock price and buybacks make that price go up, that there will be powerful incentives for executives to put money into buybacks. ”

    Quote:
    “Stock Buybacks Were Once Illegal. Why Are They Legal Now?”
    Quote:
    “If This Isn’t Stock Manipulation, I Don’t Know What Is”

    Get googling !

    In my humble opinion ………….

    …….

  5. That being said ,

    If you want to “organize” and I mean really “organize” , then you should focus on creating a ,ie: a “Truck Driver Alliance Co-Op conglomerate “.

    Under such a “corporate umbrella” you become the “carrier ” ,the “broker” ,the “employer”, the “owner, and you reap all the proceeds COLLECTIVELY which are distributed among ALL members equally !

    Innovate and cut out the middlemen/leeches ! NOW THAT WOULD BE A TRUCK DRIVER “ORGANIZATION” WORTH CONTEMPLATING !

    In my humble opinion ……….

    Best of luck !

  6. …..

    That being said ,

    If you want to “organize” and I mean really “organize” , then you should focus on creating a ,ie: a “Truck Driver Alliance Co-Op conglomerate “.

    Under such a “corporate umbrella” you become the “carrier ” ,the “broker” ,the “employer”, the “owner, and you reap all the proceeds COLLECTIVELY which are distributed among ALL members equally !

    Innovate and cut out the middlemen/leeches ! NOW THAT WOULD BE A TRUCK DRIVER “ORGANIZATION” WORTH CONTEMPLATING !

    In my humble opinion ……….

    Best of luck !

    ….

  7. The problem is truck drivers haven’t been paying enough taxes to cover their cost to the government. In Quebec Canada a study was done in 2005 and if found that local truck drivers needed to make 1.6 time the minimum wage on payroll.Long distance truck drivers and camp construction workers needed to make 1.9 times the minimum wage plus overtime after 10 hours per day. The large trucking companies fought this and stopped this wage from becoming law. In 2018 a study was done in both B C and Quebec it said that incorrect classification of truck drivers was costing the government almost $10,000 cd or $7,700 U S per truck driver in lost tax money. California needs the tax money also. The study last year said a O T R truck driver with 5000 hours experience should make $28.65 cd per hour ( or $22.00us per hour) plus time and half after 10 hours per day plus disability insurance plus 5 percent matched pension contributions . The large trucking companies fought this and made large (donations) to get permits to bring large numbers of cheaper drivers from low wage companies. This was because in Canada almost 20 percent of the experienced truck drivers quit with E-logs coming in. Pay a fair wage and drivers will go on payroll the other can get their own authority and join a captive insurance group. Some of the captives insurance groups will insure owner ops getting $2.00 plus trailer rent and dispatch and plates fees(1.53) per mile. As poorly paid owner ops have too many claims.

    1. Concerning truck driver wages from my perspective .

      The main wage problem is the lack of an established structure . The one in the construction trade which addresses divergence would be an example to follow . If you don’t establish a structure then wage divergence such as we see in the trucking trade becomes the norm .

      I once spoke with a highly ranked union official in a very popular labour union concerning what I have described above and he agreed . However, he told me that we most likely wouldn’t see such a structure be created and implemented during his existence , in the trucking industry . And that’s precisely the answer that made me realize a labour union was not the answer and or he certainly wasn’t the right candidate which would be part of the solution .

      In simple terms : A well structured wage decree needs to be created ,implemented ,and legislated into the trucking industry . Currently the only “wage decree” that is implemented in the trucking industry is minimum wage ,and from my perspective that “decree” is disproportionate to the skills required to perform the duties in the truck driving trade as a “professional” truck driver .

      Rather than reinvent the wheel , a good example to follow would be the construction wage decree structure .
      I’ve written about this numerous times . Such a structure would set a new standard in the trucking industry . Without such a properly structured decree we have chaos due to variance .

      That’s the simple solution .

      My personal choice in regards to a solution is a little more complex and revolutionary . However, it bypasses limitation .

      In my humble opinion ……….

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