Date: Tuesday, July 19, 2022
Source: Freight Waves
OAKLAND, Calif. — After a slow showing early Monday morning, an estimated 400 owner-operators managed to shut down truck traffic at all three terminals at the Port of Oakland to protest California’s controversial independent contractor law, AB5.
By Monday afternoon, the SSA, TraPac and Everport terminals announced there would be no night shift hours as the protesting owner-operators were only allowing around two company trucks per hour into the terminal gates throughout the day. On average, 250 trucks an hour would flow through the terminals on a typical work day.
Matt Schrap, CEO of the Harbor Trucking Association, who was in Oakland on Monday, lauded the demonstration.
“It was very impressive to see the power of social media on display at the Port of Oakland today,” Schrap told FreightWaves. “We watched the protests grow organically in a matter of a few days and brought together hundreds of individuals who feel they are being disproportionately impacted by this law.”
He said clarification is needed about how AB5 will be enforced and how to ensure owner-operators comply with the law. AB5 seeks to limit the use of independent contractors and largely classify them as employee drivers.
The HTA is a coalition of intermodal carriers serving the three major California ports, including Los Angeles/Long Beach and Oakland.
Oakland protestors, who own their own rigs and currently choose which loads they want to take, don’t want to work as company drivers as many would be forced to do under AB5.
Ongoing legal challenges prevented AB5 from going into effect in January 2020. The law stems from the California Supreme Court’s decision against Dynamex Operations West Inc., a package and document delivery company. The court found that Dynamex had misclassified its delivery drivers as independent contractors rather than employees and that all California-based companies that use independent contractors must follow the “ABC test,” a three-pronged test to determine whether a worker is an employee.
The B prong defines an independent contractor as a worker who is engaged in “work that is outside the usual course of the hiring entity’s business.” That is problematic for motor carriers utilizing independent owner-operators to move freight.
Oakland protest gains momentum
By 8 a.m. PST Monday, the port drivers had successfully blocked the east and west gates at the SSA terminal in Oakland. While the terminal opened a back gate briefly to let company trucks in, owner-operators successfully blocked that access, too, forcing some company drivers to turn around and leave port property and try again Tuesday. Protestors gathered on foot to block company trucks from entering the terminals.
Kimberly Sulsar-Campos, vice president of Oakland-based Iraheta Bros. Trucking, said some owner-operators want to protest again on Tuesday. While the initial protest was planned for three days, nearly 200 port drivers decided on one day at a meeting near the port on Friday.
Sulsar-Campos said there’s been no official announcement that the AB5 protest will continue for two more days.
Iraheta Bros. was founded by a group of owner-operators who wanted to start their own trucking company, she said. The drayage company now has 20 owner-operators who oppose AB5 and want a choice about how to run their businesses.
“We have owner-operators who want to be able to choose when they want to work and don’t want to be company drivers and be told by a company when they will work and decide how much they will be paid,” Sulsar-Campos told FreightWaves.
Some California truckers who move containers in and out of the marine terminals at the ports of Los Angeles and Long Beach participated in a work stoppage Wednesday to protest AB5 and urged the Oakland drivers to stage their own protest as well.
AB5 is a ‘dream killer’
Rafael Quintero, owner of one of the oldest drayage companies that serve the Port of Oakland, attended the protest to support his 10 owner-operators. He called AB5 “an American dream killer” for thousands of minority drivers who immigrated to the U.S. with the dream of owning their own businesses.
He started out as an owner-operator in 1979 and built his company to nearly 80 drivers before scaling back to 10 over the past few years.
“Many port drivers come from poverty like I did and came to America to get away from being controlled by the government,” Quintero told FreightWaves. “These owner-operators are able to provide for their families and put aside money with the dream of eventually owning their own companies just like I did.”
Some protesters in Oakland held signs that said, “The 70,000+ owner-operators choose freedom over fear” and “Don’t let AB5 take our freedom.”
Joe Rajkovacz, director of governmental affairs for the Western States Trucking Association, said his members are concerned about AB5’s impact. He said WSTA members seeking legal advice have received mixed messages from attorneys about how to comply with AB5 if the law stays on the books.
“One of our members was told to split the company into a brokerage and trucking company and have their three owner-operators form S corporations,” Rajkovacz told FreightWaves.
When the company owners followed the attorney’s advice about AB5, he said the WSTA member was hit with a $180,000 tax bill because one of their owner-operators had received Pandemic Unemployment Assistance because of COVID-19 when work in the construction industry largely shut down.
“This triggered an Employment Development Department [EDD] audit,” Rajkovacz said. “We need clarification before this happens to other trucking company owners trying to comply with AB5.”
Trucks entering the Port of Oakland Monday were largely driven by company drivers from California’s Central Valley. Most owner-operators were in their rigs or personal vehicles, while others stayed home and didn’t pull containers from the port to show solidarity with those protesting AB5.
Larry Dhaliwal, owner of Sacramento-based LDT Transport, attended the protest to support his 30 owner-operators.
“They want to be free to work when they want to and not be forced to become company drivers,” Dhaliwal told FreightWaves.
Some protesters were disappointed that more owner-operators didn’t arrive before the longshoremen showed up to work at the Port of Oakland Monday.
Prior to the demonstration, some dockworkers had said they wouldn’t cross the protest line if the port truckers successfully blocked access to all of the terminal gates.
“It’s really hard to organize a protest for owner-operators,” an owner-operator, who didn’t want to be named, told FreightWaves. “Everybody has their own ideas about how we should deal with AB5.”
Robert Bernardo, director of communications for the Port of Oakland, said port officials are closely monitoring the situation. However, he disputed estimates by those on the front line Monday that the number of protesters was between 300 and 400 owner-operators. Bernardo put the number at 100 to 130 truckers.
“There is some traffic congestion at both TraPac and SSA terminals, so we are working closely with our maritime stakeholders to ensure a safe and continued flow of commerce,” Bernardo said via email to FreightWaves.
FreightWaves attended the Port of Oakland Truck Work Group meeting Monday where the truckers’ protest over AB5 was discussed.
At the meeting, Bill Aboudi, who owns Oakland-based AB Trucking, urged a port official in attendance not to downplay the disruption and economic effects the protest was having on the terminals’ business operations at the port.
The in-gates at the terminals were largely empty Monday, whereas on a normal day he said drayage trucks would be lined up for miles waiting for their turn.
Downplaying the impact will upset the owner-operators more, Aboudi said, citing examples of how the Port of Oakland has responded to protests in the past.
“Just be open and honest with us about the impact,” he said.