As we’ve all seen - it appears that AB5 is here to stay, for better or worse. The CBS News division in the Bay Area reported on July 5th that the industry is ‘scrambling for a solution’. In Oakland, CBS also quoted that 90% of the 9,000 trucks that visit the Port of Oakland on a daily basis are owned by independent contractors - the core & heart of California trucking. There’s a valid concern that AB5 won’t just force some of these contractors to an employee model, it will force them out of the industry, exasperating a plethora of other issues realized over the last several years. These issues include equipment shortages, congestion, clean truck compliance, and a driver shortage (although the last one is a hotly debated topic and some - us included would say it's more of a throughput, equipment, and capacity issue). The short of it is that AB5 is here to stay and the legislation is going to force the industry towards tough choices. Not everyone will have an easy time with the transition.
Independent Operators are no doubt among those affected the most. Many of these drivers don’t want to be employees - they run their own businesses and choose to be owner operators for the upside of owning a truck and a small business provides. To be sure, these owner operators work closely with trucking companies and brokers - from whom they get their work, but alongside that relationship is a supportive partnership; in most cases.
Drayage trucking companies, brokers, forwarders, and expediters are all going to have to make concessions and transitions in their business model as well to adapt to the changing landscape where working relationships will be closely monitored. So - how can this be done easily and as close to seamlessly as possible? Change and evolution are never easy, and nobody at PortPro pretends to be a public policy expert; but what we are is a group of technologists looking to help an industry we’re all fond of.
The solution, then, is technology. However, single solutions won’t cut it. An integrated network of products, acting as a platform for drivers, brokers, BCO’s, and drayage trucking companies is what’s going to be key. For Independent Contractors to stay independent, they're going to need better tools that help them run their business. These things include reminders for CHP inspections, the ability to receive tendered loads, and the ability to send and receive payments.
A single, adaptable, iteration of a ‘TMS’ could be provided that seamlessly integrates with operating software used by the trucking company or broker alongside track & trace functionality. For what it’s worth, at PortPro, we’re working on all four components and allowing BCO’s to seamlessly integrate and communicate with brokers who then can do the same with drayage carriers who then in turn can do the same (yet again) with drivers. Our mission? Increase throughput, capacity, and enhance the businesses operating within the supply chain on all levels. Most importantly - we’re working with drivers to ensure we’re building something tangible that will allow them to continue operating as they do today with support from simple, meaningful, powerful, and integrated software that picks up where carriers will be forced to leave off because of AB5.
Check out what we’re working on to see if you agree with our philosophy on operating software and how it can be transformative for California’s logistics providers.
Sources:
https://www.cbsnews.com/sanfrancisco/news/ab5-independent-california-truckers-scramble-scotus-refuses-to-hear-challenge
https://www.freightwaves.com/news/truckers-plan-lalong-beach-work-stoppage-wednesday-to-protest-ab5
https://www.joc.com/regulation-policy/transportation-regulations/california-legislators-ask-gov-newsom-exempt-truckers-ab5_20220711.html
