Update: Latest labor action brings attention to drayage drivers as NFI says union is trying to “force” representation on drivers.
Drayage drivers serving Southern California plan to strike on Monday, a move that could slow transits out of the U.S. two busiest ports.
The action planned by Teamsters Local 848 in Long Beach highlights what the drivers see as unfair employment practices by two of the region’s largest players, XPO Logistics (NYSE: XPO) and NFI industries.
The strike at the Ports of Los Angeles and Long Beach takes aim at XPO and NFI over ongoing legal claims from many drivers that have been classified as independent contractors, not as full-time employees.
The classification of drivers as independent contractors rather than full-time employees has been a simmering issue in the California market. In many instances, drivers lease tractors from drayage companies and must cover the truck’s operating expenses. But the drivers typically have to work at the direction of the drayage company.
The Teamsters say the classification has resulted in disputes over unreimbursed expenses, tractor lease costs, fuel and maintenance costs, along with the failure of the drayage companies to provide meal and rest breaks.
Since 2011, drivers have filed 987 claims with California’s Department of Industrial Relations in wage and other disputes related to their status as independent contractors. As of last May, the state’s Department of Labor Relations has awarded $48.5 million in 454 of those cases.
In its last annual report, XPO said its drayage drivers have won $5.7 million in judgements in California related to wage disputes.
AN XPO representative was unavailable to comment by press time.
New Jersey-based NFI said the Teamsters are looking to “force representation” on drayage drivers through having them classified as employees.
“We respect their desire to operate as independent business people and not as employees of our companies or the hundreds of other trucking companies that are currently looking to hire employee drivers,” NFI said.
A Teamsters representative was unable to estimate the number of drivers that would participate in the action. But the union says XPO Logistics and its subsidiary XPO Cartage has some 440 drivers misclassified as independent contractors throughout Southern California. NFI has about 600 drivers in the Southern California market that the union says.
The action is also expected to affect operations at the NFI-owned Cal Cartage Container Freight Station in nearby Wilmington which employs about 500, the Teamsters says.
NFI said the majority of employees at the Cal Cartage Wilmington facility have voted against union representation.
“Even though the Teamsters have failed on several occasions to organize these warehouse workers, the Teamsters have been unwilling to accept the voice and the vote of the employees, who have the absolute right to determine whether or not to organize,” NFI said.
In a statement, the Teamsters says the strike, its 16th action in five years, will bring attention to the issue of drayage drivers to two of the ports’ big customers, Toyota Motors (NYSE: TM) and Amazon (Nasdaq: AMZN).
“Despite the unwillingness of America’s largest port complex to ban law-breaking trucking and warehouse companies from doing business on public property, port drivers and warehouse workers will not recede into the shadows and accept the rampant abuse and illegal working conditions they have endured and contested for decades,” the Teamsters said in a statement.
Drayage drivers scored a victory this month with the passage of a state law that will hold beneficial cargo owners liable for any claims filed by drayage drivers against their employers. The law, which goes into effect January 1, 2019, also requires that the Department of Industrial Relations to publish a list of drayage carriers that have outstanding claims against them.
The representative was unable to give a timeline for the strike, except that it starts Monday “and continues for much of the week.”
The strike comes at a tough time as importers ramp up inventories ahead of the holidays. Through August, the Port of Los Angeles has seen 5.9 million twenty foot equivalent unit (teu) of containers move through there year-to-date, a 2.5% dip from a year ago.
The Port of Long Beach has seen better growth with 5.3 million teu in containers moving through there year-to-date, a 9% increase over the same time last year.
Through July, the dollar value of imports into the Port of Los Angeles reached $146.6 billion, up 5% from a year ago, according to U.S. Census figures. The Port of Long Beach has seen $36.8 billion in imports over the same time, up 18% from a year ago.