SoCal Port Drayage Drivers Push Back on AB5 legislation

Truckers and workers staged protests and work stoppages on July 11 in three major  California ports as commercial drivers took to highways in their rigs, intentionally slowing traffic in a symbolic act of defiance against a state law that restricts the use of owner-operators in carrierMaersk truck operations.

Opponents of the law, Assembly Bill 5 (AB5), filled the ports and highways of Los Angeles, Long Beach, and Oakland to raise awareness of and denounce the law, according to a statement from the Harbor Trucking Association.

AB5 provides a legal test for independent contractors that, if not met, requires employers to hire these contractors as employees. Critics of AB5 argue that the law is an overly broad restriction that prohibits workers—the same workers the law supposes to protect—from earning a living.

The law, enacted in 2020, was challenged by the California Trucking Association (CTA)

The U.S. Southern District Court of California issued a preliminary injunction keeping the law from being applied to owner-operators, based on a CTA lawsuit, which then moved to the 9th Circuit court. But when the U.S. Supreme Court subsequently declined to consider the lawsuit, AB5 went into force and applied to trucking, forcing carriers to add owner-operators as employees.

Many opponents of the bill, which is not industry-specific, criticize it for not outlining paths by which owner-operators can comply with the law.

Reshoring – Not as Simple as It Might Seem

In the aftermath of the indiscriminate lockdowns in major manufacturing hubs in China, most western companies are examining reshoring and other alternative sourcing options. Reliability in supply chains is now a major priority, despite the cheap labor that once made many manufacturers prefer China.

Unfortunately, however, some consumer industries are finding the hurdles associated with shifting out of China insurmountable.

Between March and April 2022, McKinsey conducted a survey of supply chain executives, and 20 percent revealed they had brought some production back to a nearby country in the past year. What are apparent though is that there are still multiple limits and roadblocks to re-shoring. Hence, companies with narrow profit margins can find betting against China a risky move.

Other obvious hurdles in shifting supply chains, specifically for US based companies, is the high cost of labor and real estate. Further, the varied regulatory environment between states can prove difficult for manufacturers keen to have all their suppliers based in the US.

ILWU Study Proposes Surcharge Penalties for LA-LB Terminal Automation

According to a report commissioned by the International Longshore and Warehouse Union (ILWU), the cities of Los Angeles and Long Beach should establish a “displaced working impact fee” on any new automation projects to offset the public costs resulting from dockworkers job losses caused by automation.

The study indicated that revenues generated by the proposed fees be directed to communities near the ports that suffer economic harm from the loss of dockworker jobs due to automation.

The report comes as the ILWU and West Coast marine terminal employers remain in negotiations for a new labor contract.

Major Shipping Reform Act Signed into Law

The first major update to U.S. shipping laws in nearly a quarter-century was signed into law by President Biden on June 16th. The bill gives the Federal Maritime Commission (FMC) new tools to eliminate unfair shipper charges, prevent unreasonable denial of U.S. exports, and improve the oversight and enforcement tools needed to crack down on unfair practices.

The law is expected to establish additional requirements and prohibited conduct for ocean carriers and require the FMC to issue rules related to certain fee assessments, prohibited practices, and the establishment of a shipping registry.

Self-Driving, Hydrogen-Powered Long-Haul Trucks Could be On Road by 2024

Hydron Inc., is a manufacturer of self-driving, hydrogen-powered long-haul trucks based in Southern California. The firm was started this year by Mo Chen, the co-founder of San Diego-based TuSimple, a leading firm on autonomous, driving technology used in long-haul trucks.hydrogen long haul trucks According to Mr. Chen, the biggest challenge in bringing autonomous driving to the market at scale is not software development, but access to reliable mass-production hardware.

The trucks that Hydron will eventually build come with an array of sensors, cameras, radar, and lidar. Several redundancies in the steering and braking systems are also part of the process.

Hydron has two working prototypes that it is currently testing on roads in closed environments and in some open settings. It expects to have the first vehicles in the hands of customers in late 2024.

Where the Supply Chain Recovery Now Stands

Two years into the crisis that disrupted global supply chains, the busiest port complex in the U.S. is still battling bottlenecks across the board. The hubs of Los Angeles and Long Beach are dealing with an influx of cargo as retailers stock up on back-to-school and holiday goods that are coinciding with the easing of lockdowns in China. All of this is happening just as railroads and warehouses remain clogged and thousands of dockworker contract across the West Coast is being negotiated. Supply Chain industry experts estimate the congestions and delays are likely to continue into 2023.

New Port Envoy Seems to Have a Good Understanding of the Issues

Retired General Stephen R. Lyons, who previously served as 13th commander of the United States Transportation Command,  told a press conference in Los Angeles that congestion at inland rail ramps caused by cargo interests failing to retrieve their containers in a timely manner, labor shortages at warehouses, and asset-stressed transportation companies are creating bottlenecks throughout the nation’s supply chain.

“Cargo in motion should stay in motion,” he said. “Transportation conveyances must be in constant movement.”

Lyons also said that because private sector transportation providers and cargo interests operate independently, the US supply chain is fragmented, and a bottleneck that surfaces in one sector spreads quickly to other sectors.

“We must get all sectors of the supply chain together,” he said. “The supply chain has to be collaborative. There is no integrator.”

U.S. Imports from Asia Highest Ever for Month of June

US imports from Asia rose 12.7 percent in June year over year- making it the busiest  June ever on the eastbound trans-Pacific – as retailers front-load fall merchandise tocontainership-at terminal stay ahead of supply chain bottlenecks and as a hedge against possible disruptions during longshore labor negotiations now underway on the West Coast.

The higher imports for June and the first half of 2022 show that consumer spending has so far not been muted by rising inflation and three months of COVID-19 lockdowns in Shanghai, the world’s largest container port.

The Port of Los Angeles, which released its June cargo figures Wednesday, July 13, reported its busiest June ever for total container volumes.