EXCLUSIVE: 70,000 Trucker Owner/Operators to Be Forced Out of Business in California: Supply Chain Breakdown

Truckers are suffering under a state rule that has carved out exceptions for multiple other industries.

QUICK FACTS:
  • Roughly 70,000 truck owner-operators in the state of California are facing job loss due to state-level labor laws that could put them out of business.
  • California Assembly Bill 5, introduced by former state Assemblywoman Lorena Gonzalez (D), was signed into law in September 2019 by California Gov. Gavin Newsom.
  • AB5 defined the truckers as independent contractors and banned them from working in the state, making their jobs as they have been performed for decades, illegal.
  • The implementation of the law has been under an injunction for over two years, but that is coming to an end this week.
  • Christian Zuniga, the owner of Pacific Expressway Inc., estimates that independent contractors make up around half the truckers that move product through the ports of California. Other reports estimate that independent truckers might make up as much as 90% of trucks that serve the port on a daily basis.
  • California’s ports serve as the point of entry for around 40% of the products that enter the United States, making California’s rule potentially crippling for the nation’s already strained supply chain.
  • Zuniga, whose company owns its own vehicles and works with contractors to coordinate product movement, said the state is creating a disruption in the supply chain by enforcing AB5 on truckers and not other industries such as hairdressers, and golf instructors, etc.
  • The business owner has organized protests to fight back against what he believes is an orchestrated attack on an industry known to be heavily Hispanic and unlikely to lobby lawmakers and other groups to create a carve-out for their workers.
  • If AB5 is left untouched, trucking companies will be forced to figure out how to absorb the truckers into their businesses, in a way that allows them to move to pay additional taxes and state-required insurance on the drivers who were previously self-employed.
  • Zuniga is asking the labor commissioner to give the trucking industry the same allowances other groups have enjoyed, saying in a statement to American Faith, “Just give us an opportunity as the other industries that have lobbied to carve out their own piece to be able to be legal … [as in] If you’re able to do 123, you can work.”
TRUCKING COMPANY OWNER’S FRUSTRATIONS WITH THE CHANGE:
  • In addition to the frustration with the supply chain issues, Zuniga said this feels like an attack on the Hispanic community: “The Hispanic community has been known to keep their head down and just work. We will take all the issues and subjugation and just work because we have to take care of our families.”
  • “Now, I feel we are targeted because we won’t complain the way the real estate community did by getting an exception. Because we really just want to work, to move the goods to keep America moving,” Zuniga said during an interview with American Faith.
  • The trucking company owner said he believes lawmakers have exploited his community’s ignorance about many of the legal issues at play, as well as independent truckers’ lack of unionization, to allow this law to take effect.
  • The issue of the eradication of owner/operator truckers is also a personal one to Zuniga, who said that his family is where they are because of his father’s ability to live out the American dream through independent contracting.
  • “The reason it bothers me so much, and I’m so in support of [independent contractors], even though the bulk of my fleet is employees, is that my father started as an owner operator. And if he didn’t have that opportunity I wouldn’t be where I am and wouldn’t have the opportunities that I have.”
BACKGROUND:
  • Truckers have begun protesting at the ports, and one such event that took place Wednesday is said to have delayed the Los Angeles freeways.
  • The California Highway Patrol reported that the convoy has caused traffic problems on the highways and delayed work due to picketing the entrance to the port complex.
  • The Supreme Court previously declined to review the truckers’ appeal, allowing the industry to be subject to AB5 starting this week.
  • Another protest will be taking place at the Port of Long Beach and the Port of Los Angeles on Friday.