The Port of Oakland’s website boasts that it’s “one of the ten busiest container ports in the U.S.” and vital to keeping Northern California provisioned. Last year, Oakland handled “the equivalent of 1.05 million 20-foot import containers,” the port reported.
That works out to about 2,875 containers a day. A significant portion of that daily container haul was stopped on July 20 when the port shut operations down over a trucker protest of a California law called Assembly Bill 5.
“The cargo won’t flow / until AB5 goes!” chanted some protesters, according to the trade publication FreightWaves.
Many truckers and industry observers say that people who rely on such shipments will experience more delays and stoppages if the law goes into effect. AB5 regulates contractors by vastly curtailing their numbers via criteria called the “ABC Test.” California enacted the law in 2019, and it has proven so hard to make work that the legislature has carved out exceptions for about 100 industries — but not trucking.
“Courts using this test look at whether a worker meets three separate criteria to be considered an independent contractor,” the Legal Information Institute explains. Those criteria are that the worker is “free from the employer’s control or direction in performing the work,” that the work “takes place outside the usual course of the business of the company and off the site of the business,” and that the worker “is engaged in an independent trade, occupation, profession, or business.”
The California Trucking Association had used the Federal Aviation Administration Authorization Act of 1994, with its preemption of some state regulations of the transportation of goods under federal law, to win an initial judgment against applying such a test to trucking. Then, the 9th U.S. Circuit Court of Appeals weighed in against that interpretation. That decision was then stayed, pending Supreme Court review.
When the Supreme Court declined to take up the case on June 30, the stay was lifted. That put an estimated 70,000 owner-operators of trucks who currently do business in California into a precarious legal position.
Absent action by the California Legislature, Gov. Gavin Newsom’s government has promised to enforce the law rigorously. Yet in light of what that could do to California’s and broader American supply chain problems, Newsom’s administration hasn’t done anything yet and hasn’t said when it will.
“We understand the frustration expressed by the protestors at California ports,” said Danny Wan, executive director of the Port of Oakland, after the stoppage in a statement. “But, prolonged stoppage of port operations in California for any reason will damage all the businesses operating at the ports and cause California ports to further suffer market share losses to competing ports.”
He added a caution to the state government. “We trust that implementation of AB5 can be accomplished in a way that accommodates the needs of this vital part of the supply chain,” Wan said.
R Street Institute’s western region director, Steven Greenhut, who lives in California, is not convinced that his state’s current government will be up to fixing the problem. “California lawmakers exempted more than 100 professions from their misguided ban on independent contracting, Assembly Bill 5,” he told the Washington Examiner. “But they never bothered to address the impact of their law on trucking, which is one of the most important functions in our economy.”
Greenhut said it was “astounding” that lawmakers didn’t act on this “given the ongoing supply chain disruptions and the backlog at the LA area ports.” He also had some sympathy for the protesters. “I don’t blame the truckers for protesting,” Greenhut said, though he qualified that by saying, “I don’t support halting traffic.”
He added, “The state also has imposed tough diesel emission rules that have already reduced the number of truckers. Instead of running political ads in Florida, perhaps Gov. Gavin Newsom should address these severe problems here in California.”
