California’s supply chain stands at the precipice. On June 30, 2022, the Supreme Court denied a petition for certiorari (a writ or order by which a higher court reviews a decision of a lower court) in California Trucking Association v. Bonta, which means the future of California’s nearly 70,000 independent truckers are now in doubt.
ECA has signed on to a letter to Governor Newsom asking for critically needed relief from this situation. Independent truckers service all parts of California’s economy, including but not limited to, providing seasonal capacity to support agricultural harvests, specialized construction equipment and aggregate hauling, transportation of refrigerated food commodities, port and intermodal rail delivery, home deliveries and all points in between.
An Industry Wide Plea
The 73 organizations that signed the letter urged the Administration to provide space for negotiation to avoid the calamitous effects of the Supreme Court’s failure to review the application of AB 5 to truckers by:
- Providing a short term pause in enforcement via Executive Order.
- Immediately calling labor and industry to the table to negotiate a path forward to preserve small business trucking in the State of California and prevent further disruptions to the supply chain.
Forgoing this narrow window of opportunity for compromise risks an economic and inflationary crisis that the State can ill afford and whose impact will not be unfelt by Californians.
In terms of total truck capacity, fleets of 3 or fewer represent 37.16% of all the California registered Class 7-8 trucks.
It is these small business truckers who will be most directly impacted by AB 5 as, under the “ABC” test, an individual providing a service within a business’ usual course will not generally be considered an independent contractor.2 Because of the complexity of the goods movement system, freight is tendered through a host of channels and intermediaries, many of whom will likely face significant liability under the “ABC” test. Therefore, as these intermediaries look to mitigate the risks posed by enforcement of AB 5, opportunities for small business truckers to haul freight will contract significantly, if not completely disappear.
We appreciate the Administration’s continued recognition of ongoing supply chain disruptions. Failure to forge a reasonable compromise on this issue would be among the greatest threats the State’s supply chain has faced to date.
By Garrett Francis, ECA President Email: [email protected]