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AB5 protests pick up pace as truckers strike across LA/Long Beach and Oakland

Update: 26th July 2022

Following the stoppage of freight traffic at the Port of Oakland, full operations resumed yesterday (25th July), which saw cargo once again move freely throughout the terminals.

The protests, which began in Los Angeles on 13th July and transferred to Oakland on 20th July, blocked the port's terminals and restricted any loading or unloading of vessels, leading to idle ships, large offshore queues and a rise in dwell times of around 4-5 days.

The stoppage across Oakland's terminals caused challenges for many exporters operating out of the port, with around two thirds of exports from Oakland being perishable goods and Los Angeles' ports being unable to cover the shortfall.

With heavy investments planned, and record agricultural exports expected for July, the Oakland protests have come at an inopportune moment, carrying a heavy price for those producing perishables such as almonds, meat and dairy.

Although the stoppages have been lifted, some truckers say that unless real headway is made against the AB5 impasse.

If you have any questions about your North American shipments please contact our team here.

Advisory update - 07-21-22

Cargo operations at California’s Oakland port, one of the United States' largest ports, shut down yesterday as a result of hundreds of independent truckers protesting Assembly Bill 5. The law was passed in 2019 and has seen companies find it harder to classify workers as independent contractors instead of employees. While this law was welcomed by many at the time as a way to reduce exploitation of drivers, the California Trucking Association argued it could make it harder for independent drivers who own their own trucks to make a living by forcing them to be classified as employees.

Protests over the law commenced Monday this week, and shut down operations on Wednesday, 20th with demonstrations planned to continue all the way through Thursday, 21st July after receiving no response on Wednesday from California Gov. Gavin Newsom, who signed AB5. The impact on local and nationwide supply chains has been considerate; Over 2,100 trucks go through the port of Oakland every day and the lack of movement of goods has increased wait times for containers and reduced productivity. With some dock workers refusing to enter the terminal as the protests block the terminal gates, full closures of operations have been the result. 

Initial advisory - 07-13-22

Truckers across the twin ports of LA and Long Beach will today (Wednesday, 13th July) begin industrial action in protest against the AB5 state law

AB5 is a state law that aims to limit the use of independent contractors and mostly classify them as employees, however, most truck drivers involved have made it known that they would prefer to remain as contractors. In June, the California Trucking Association attempted to challenge the law at the US Supreme Court but was ultimately refused a hearing and saw the case returned to the 9th US Circuit Court of Appeals instead.

According to AB5, all California-based businesses that use independent contractors must satisfy a three-pronged ‘ABC Test’ to quantify whether they are an employee or not, similar to the UK’s IR35 rule.

The challenge, in this instance, is that the ‘B’ prong defines an independent contractor as someone whose work sits “outside the usual course of the hiring entity’s business”, something that truckers and freight movers will struggle to justify against and that could adversely affect over 70,000 owner-operators.

Truckers at the Port of Oakland are also looking to take evasive action against the AB5 law, with planned work stoppages for Monday, 18th July. According to the President of AB Trucking, Bill Aboudi, many owner-operators are looking for moves away from the trucking industry or California in itself as a preferable option.

We will keep this page up to date with the latest developments.

If you have any questions about your North American shipments please contact our team here.

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