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California AB5 Ruling May Disrupt All West Coast Truck Shipments

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70 comments on California AB5 Ruling May Disrupt All West Coast Truck Shipments

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A Tweet Chain by Freight Waves spells out the problem.

https://twitter.com/FreightAlley/status/1542698730834612225

 Half of the Industry is Impacted 

https://twitter.com/FreightAlley/status/1542719016606769153

Supreme Court

Breaking News: SCOTUS denies certiorari; California’s trucking sector braces for AB5 

https://twitter.com/FreightAlley/status/1542722452450676738

Working Entrepreneur Screwed

https://twitter.com/FreightAlley/status/1542721328637255680

Blame the Unions

https://twitter.com/FreightAlley/status/1542723270931275776

Expect Illinois and New Jersey to Follow

https://twitter.com/FreightAlley/status/1542728136177209344

Not Just Trucking 

https://twitter.com/ichimatter/status/1542722424059219969

Converting to a New Model 

https://twitter.com/FreightAlley/status/1542719596620390401

“Converting to an employee isn’t as simple as you think. Independent truckers are small businesses and finance their trucks through cash flow. If they shut down their business, they risk bankruptcy.“

 CTA vs California 

BackupTheTruck reports CTA vs California AG denied certiorari – AB5 goes into effect in 7 days.

The Owner-Operator and Independent Driver Association (OOIDA) has released comments about the court’s refusal to hear the argument:

“AB5 is so wide ranging that knowing how to comply is impossible for many directly working in trucking. With AB5 now set to go into effect, thousands of owner-operators driving in California face an uncertain future. California has provided no guidance to owner-operators about how they can work as independent contractors under this new scheme, and truckers will be at the mercy of the courts to interpret how the law will be applied. “

California Trucking Association responds:

 “In addition to the direct impact on California’s 70,000 owner-operators who have seven days to cease long-standing independent businesses, the impact of taking tens of thousands of truck drivers off the road will have devastating repercussions on an already fragile supply chain, increasing costs and worsening runaway inflation.”

AB5 Ruling Enters Trucking Into the Inferno

Please consider AB5 Ruling Enters Trucking Into the Inferno

What’ll this do to rates in California? Chris Gonzalez with Clean Harbors says, “Drivers will either have to run on their own authority, be with a true OO company or become a company driver. This affects the port OOs mostly.”

For 70,000 independent owner-operators in Cali, they now have to get compliant with the law or get out. Rooster sees the most immediate impacts being a jump in rejects and escalating rates to match payroll increases.

More Fat for the Recession Fire

Hey, why not throw more fat on the stagflation fire so Powell will have to keep those rate hikes coming. 

For discussion, please see GDPNow Forecast Dives to -1.0 Percent Following Income and Spending Data.

This post originated at MishTalk.Com.

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70 Comments
Newest
Oldest Most Voted
SleemoG
SleemoG
4 years ago
Bring on the robot trucks.
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Lisa_Hooker
Lisa_Hooker
4 years ago
Reply to  SleemoG
Nah. Bring on robot legislators.
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SleemoG
SleemoG
4 years ago
Reply to  Lisa_Hooker
Be careful what you wish for … automated law enforcement would be dystopian.
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Matt3
Matt3
4 years ago
It’s another attack on small business and individuals. It’s difficult to control so many people if they can run their own independent business and support themselves.
For government to dominate as it wishes, we must all be a part of larger organizations upon which government influence can be maintained.
If you have a small business or or an independent contractor of any type, they hate you and will crush you. Individuality is the obstacle of conformity.
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Lisa_Hooker
Lisa_Hooker
4 years ago
Reply to  Matt3
Ah, independence! Truck drivers! Reminds me of Terry Gilliam’s Brazil [1985].
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JackWebb
JackWebb
4 years ago
Reply to  Lisa_Hooker
First rule: Make sure they get your name right.

– Mr. Buttle

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Lip
Lip
4 years ago
Reply to  Matt3
For government to dominate as it wishes, we must all be a part of larger organizations upon which government influence can be maintained.
Sounds a bit like the Unions and corporations in fascist Italy. https://www.britannica.com/topic/corporatism:

According to corporatist theory, workers and employers would be organized into industrial and professional corporations serving as organs of political representation and controlling to a large extent the persons and activities within their jurisdiction. However, as the “corporate state” was put into effect in fascist Italy between World Wars I and II, it reflected the will of the country’s dictator, Benito Mussolini, rather than the adjusted interests of economic groups.

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Billy
Billy
4 years ago
Amazon has exploited this for a long time. I wouldn’t doubt that huge corporations are behind this and somehow they will remain exempt from paying worker’s comp, SDI, safety programs, ect.
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Six000mileyear
Six000mileyear
4 years ago
The lawyers needed to argue the commerce clause in the Constitution to get the Supreme Court to hear the case. Laws passed in one state are not allowed to impact commerce in others. I could agree that California can suspend contract drivers for all cargo that has a California origin (dock) and California destination, but not for cargo entering or leaving California.
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Zardoz
Zardoz
4 years ago
Well at least nobody’s buying much, so there won’t be so much to ship.
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Tony Bennett
Tony Bennett
4 years ago
Well, looks like the “smartest guys in the room” (finally) figured out a recession “on”.
Bond yields tanking US + Asia + Europe*
despite Euro zone just releasing cpi for June:
prior … +8.1%
expected … +8.5%
actual … +8.6%
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MPO45
MPO45
4 years ago
Reply to  Tony Bennett
Here you go Tony….
I am gonna feed you what you love, more grim news…
Seems people can’t pay their credit cards anymore 🙁
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MPO45
Tony Bennett
Tony Bennett
4 years ago
Reply to  MPO45
Great time to be a landlord with rental properties … I guess
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MPO45
MPO45
4 years ago
Reply to  Tony Bennett
Absolutely, it all depends on the economics, costs of house/maint./fees and rental rates in the area but you know this given all the analysis you do every day.
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Lisa_Hooker
Lisa_Hooker
4 years ago
Reply to  Tony Bennett
Great time to be a landlord with – paid off – rental properties.
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MPO45
MPO45
4 years ago
If this supreme court is moving towards “state’s rights” precedents and policies such as the decision with abortion and AB5 then you can expect each state to start creating all sorts of crazy laws. SCOTUS also ruled that EPA doesn’t have jurisdiction over certain regulations so states will step in and fill the gaps with whatever they want and SCOTUS will let them. Be careful what people wish for because the results may not be what they think they will be. In Texas, crazy is already starting: “involuntary relocation.”
It won’t be long before people start begging for federal standards. We’ll see how long that takes but I suspect 5 years or less.
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TexasTim65
TexasTim65
4 years ago
Reply to  MPO45
That’s the whole point. The Supreme court is essentially saying that as 9 unelected officials they have no business deciding what the entire country can and can not do. They are shouting in as loud a voice as possible for Congress to either pass laws at the federal level or leave things up to the individual states. The problem is Congress is so busy infighting over stupid things like Jan 6th or Russian interference in elections or Hunter Bidens laptop or some other silly thing that they aren’t doing anything meaningful and haven’t for quite some time.
Quite frankly I prefer things at the State level. As someone living in Florida, I don’t want to have to conform to NY or California standards which is essentially what happens when things get decided at the Federal level.
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MPO45
MPO45
4 years ago
Reply to  TexasTim65
“Quite frankly I prefer things at the State level. As someone living in Florida, I don’t want to have to conform to NY or California standards…”
In a few years, Florida will largely be Hispanic. You want Florida to be converted to a Catholic church only state because they already ruled that religion in schools is ok with SCOTUS. It will start with school prayers and work it’s way up through thru the system. What about making Spanish the official language of Florida? Hablas espanol??
Like I said, there is no way to know where crazy will begin and where it will end but you will reap what you sow.
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TexasTim65
TexasTim65
4 years ago
Reply to  MPO45
When I grew up there were school prayers as I recall both the Lords prayer and the national anthem being played every morning. Didn’t seem to cause the end society.
As for language, we’ll just have to wait and see. Plenty of other states will reach that tipping point long before Florida does. Anyway, even if it does adopt Spanish as an official language, so what. Quebec has French as its official language and it hasn’t caused the end of the world in Canada.
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MPO45
MPO45
4 years ago
Reply to  TexasTim65
You are missing the point, the “prayers” you listened to were likely the same ones from your religion. Imagine if your school prayers were all Muslim prayers and you’re a christian or Jewish or Hindu or the prayers are from the church of Satan. Do you think your parents would be cool with that? You want that for your kids?
One dimensional thinking boomer republicans think that all prayers across all schools will now be THEIR religion but the population has changed since 1950 so that’s not going to be the case. When reality hits, they will be begging to go back or they will be reciting prayers from other religions to comply.
No it won’t be the end of the world, it will be the start of whole new fights that could have been avoided with some forethought.
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MPO45
MPO45
4 years ago
Reply to  TexasTim65
Wrote long comment and got eaten by moderation, to surmise, the prayers you heard won’t be the same moving forward. They will be from other religions, population has changed and will continue to change.
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TexasTim65
TexasTim65
4 years ago
Reply to  MPO45
You might be correct. But if your (and by your I mean plural as in me, you, someone else etc) against all that it means you are against change or can’t handle change.
Things have changed dramatically since I was a kid in the 60’s and 70’s. It’s going to continue to change dramatically going forward. Some change for better, some for worse. It’s how you adapt that matters.
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Lisa_Hooker
Lisa_Hooker
4 years ago
Reply to  MPO45
MPO, sounds like you haven’t spent enough time around southern California.
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Zardoz
Zardoz
4 years ago
Reply to  MPO45
The Christ-free christians are already pushing for nationwide bans on abortion and birth control. Didn’t take long to forget all about state’s rights.
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TexasTim65
TexasTim65
4 years ago
Reply to  Zardoz
They’ve always been pushing for that. They are just doing it louder now. It won’t happen of course so there is nothing to worry about.
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Zardoz
Zardoz
4 years ago
Reply to  TexasTim65
I give it a year before the Supreme Court takes up the cases. The repubs need the religious crazies, and will continue to cater to them. Govies and Richies are above the law, so they don’t care about the fallout.
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KidHorn
KidHorn
4 years ago
Reply to  Zardoz
Who are these alleged Christ-free Christians doing this?
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Zardoz
KidHorn
KidHorn
4 years ago
Reply to  Zardoz
OK. So anyone with a gun is trying to make abortions and birth control illegal. I think you’re watching way too much CNN.
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Zardoz
Zardoz
4 years ago
Reply to  KidHorn
Reconcile the prosperity gospel AND the AR15 with the teachings of Jesus for me.
Don’t change the subject.
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JackWebb
JackWebb
4 years ago
Reply to  Zardoz
I have two AR-15s. One named Hillary, the other named Beto. Praise the Lord and pass the ammunition! LOL
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JackWebb
JackWebb
4 years ago
Reply to  Zardoz
Scary scary scary! The liberal is scared scared scared! I guess the liberal hates change? LOL
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Zardoz
Zardoz
4 years ago
Reply to  JackWebb
Something trigger you? You seem to have lost track of the conversation again.
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JackWebb
JackWebb
4 years ago
Reply to  Zardoz
I’m laughing at you. LOL
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JRM
JRM
4 years ago
Reply to  Zardoz
Well if you love abortion just move to a state that allows it!!
End of discussion..
Or get out a vote to change your legislators…
Majority of state legislators ran on anti-abortion platform and won..
Then the left throws a hissy fit when the legislators pass what they promised to do on the state level!!
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JackWebb
JackWebb
4 years ago
Reply to  JRM
Funny how “the left” was all for liberal Supreme Court when they liked the rulings. Once they lost cases, they declared the Supreme Court “illegitimate.” Gee, and then they think they have any standards or principles? LOL
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Lisa_Hooker
Lisa_Hooker
4 years ago
Reply to  JackWebb
Current “Democrats” are the old Federalists. Today’s Republicans are the old democrats.
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JackWebb
JackWebb
4 years ago
Reply to  Lisa_Hooker
There’s a whole lot of truth in that!
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JackWebb
JackWebb
4 years ago
Reply to  MPO45
Congress should overrule it. Interstate commerce, baby.
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Lisa_Hooker
Lisa_Hooker
4 years ago
Reply to  JackWebb
Yes, widely interpreting the interstate commerce clause has done wonders for the growth of the regulatory agencies. Jobs for everybody!
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KidHorn
KidHorn
4 years ago
Reply to  MPO45
The EPA ruling had to do with the EPA greatly over stepping what they’re allowed to do. Had nothing to do with state vs federal rights.
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SleemoG
SleemoG
4 years ago
Reply to  MPO45
It’s clear the USSC is guiding the US toward dissolution.
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JackWebb
JackWebb
4 years ago
Reply to  SleemoG
Why, because they didn’t give you what you wanted?
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SleemoG
SleemoG
4 years ago
Reply to  JackWebb
No, because that’s what I observe silent. Or is it greatest?
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Lisa_Hooker
Lisa_Hooker
4 years ago
Reply to  SleemoG
I would say towards a federation, as opposed to continuing towards a fascist state.
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JackWebb
JackWebb
4 years ago
I say this is not inflationary, but contractionary. Yes, it’ll cause prices to rise, but by means of reduced productivity. It’s just tragic to see what has happened to California. The state is bent on self destruction.
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Mish
Mish
4 years ago
Reply to  JackWebb
It can be both – more Stagflation
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BDR45
BDR45
4 years ago
Reply to  JackWebb
I left California 5 years ago. The taxes and pollution (central valley, Sacramento) finally did me in. I would loved to have stayed, but when supposedly one’s property taxes are capped at 2% rise per year, but on your tax bill, there are dozens of “fees” adding up to about 5+% increases in taxes. And when the franchise tax board keeps threatening to lien your bank account and house because they determined your tax attorney didn’t figure your taxes correctly (interestingly, for nearly 14 years in a row) and force you to pay 10 to 15% more, you know there is no hope. The state is doomed because of petty bureaucrats and corrupt politicians, and regulations. I find Florida to be sane in contrast.
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amigator
amigator
4 years ago
Fewer and fewer in Government understand how things really work. They are career politicians and have never actually lived within the laws they make.
Make a law we can fix it. It worked so well with Drugs??
Is this law because of Uber drivers?
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HippyDippy
HippyDippy
4 years ago
Reply to  amigator
The problem is that they do understand how to ruin businesses. This is not bad law. This is another prong in the attack on the economy. The conspiracy theorists, whom everyone calls crazy despite the fact that its study is really called history, are running out of theories as so many have become facts. Only half kidding.
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Zardoz
Zardoz
4 years ago
Reply to  amigator
Law is the software civilization runs on, and our software is built on a 250 year old API that knew nothing of the telegraph, let alone the internet.
It’s like a buggy old server daemon that never got updated and is subject to hundreds of exploits.
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TexasTim65
TexasTim65
4 years ago
Reply to  Zardoz
That server gets updated plenty. That’s what constitutional amendments are for. The founding fathers knew that the original document would need to be updated and that’s why they provided for that via amendments.
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Zardoz
Zardoz
4 years ago
Reply to  TexasTim65
Sure the law gets updated, but the API hasn’t changed in 30 years.
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KidHorn
KidHorn
4 years ago
Reply to  Zardoz
Our 250 year old software is a lot better than every other countries. And a hell of a lot better than what the woke is trying to install.
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Zardoz
Zardoz
4 years ago
Reply to  KidHorn
How? Becuz ‘murica?
You aren’t that dumb. Stop pretending to be.
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RonJ
RonJ
4 years ago
Reply to  Zardoz
Because it actually works.
Marxism has always failed. Marxists are tyrants and the Bill of Rights, for one, stands in their way.
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Zardoz
Zardoz
4 years ago
Reply to  RonJ
You don’t even know what marxism is, nor do you understand what this conversation is about. Back to the kid’s table with you.
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JackWebb
JackWebb
4 years ago
Reply to  Zardoz
Next comes the “No True Scotsman” fallacy. Communism doesn’t work because no one has tried it. LOL
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Lisa_Hooker
Lisa_Hooker
4 years ago
Reply to  Zardoz
Right on. What we need is neural net software where we blindly follow what the output tells us to do and we don’t have a clue as to how the software arrived at it’s conclusions. 😉
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Tony Bennett
Tony Bennett
4 years ago
Ripple Effect
A stone in the lake. Wonder how Asian exporters feel? … as they stare at their pile of debt (some denominated in $US) … with currencies already tanking??
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KidHorn
KidHorn
4 years ago
Reply to  Tony Bennett
They probably feel like shipping their goods to Seattle, Vancouver, or Mexico.
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Tony Bennett
Tony Bennett
4 years ago
Reply to  KidHorn
Feasible?
LA + Long Beach ports handle massive amount.
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KidHorn
KidHorn
4 years ago
Politicians must be intentionally trying to make everyone suffer. In their minds, we deserve it for criticizing them.
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HippyDippy
HippyDippy
4 years ago
Reply to  KidHorn
They definitely are doing this intentionally. Trump set a lot of the wheels in motion, and Biden (or whoever does his thinking for him) is just finalizing the destruction. Mandated destruction of the oil industry. Mandated destruction of birds because of avian flu even though if the eggs are consumed and the meat is cooked as poultry should be cooked, you’d be just fine. The pension funds Blackrock and Vanguard buying up huge swaths of single family homes, driving up home ownership costs due to their paying above market prices on a wholesale level, thereby displacing thousands of families through the higher rents. Also, let’s not forget the state chipping in by cashing in on the higher property values through their property taxes. Taxes which only prove you don’t actually own the land. Biden’s move to shift a large percentage of farmland into conservatorship during our time of government mandated shortages via their ridiculous shutdowns of all “non-essential” workers. Personally, I think the only non-essential workers are the ones who work for the government, but that may just be me. The list goes on. It’s not an accident.
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Zardoz
Zardoz
4 years ago
Reply to  KidHorn
Our puritan heritage demands we suffer for being sinful little monkeys.
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