Motor carriers and third-party logistics companies see California’s new AB 5 law on employee classification as completely negative for intermodal / drayage trucking, forcing further costs on an industry running on thin margins.
Even so, carriers are still being advised to not yet change their business model until challenges to the law get their day in court.
Moving contractors to company drivers is certain to raise costs significantly throughout the supply chain.
AB5’s impact will be heavy for port trucking and truckers. It is estimated about 80% of the 16,000 trucks that pick up at the local ports are owner operators, either working under their own operating authority or another’s.
Carriers will either raise their rates or simply leave the market.
