MARC's ANGle - Recently, I explored Emily Hibard’s grandfather’s business being forced to sell their old functional trucks to meet increasingly stringent environmental regulations.
With over 80 container ships sitting idly at the Los Angeles ports, the lack of trucks was one part of the problem. But there are many more government-created issues including labor shortages, a battering of the trucking industry over the decades, the AB-5 regulation and the holiday season bringing all of this to the perfect storm of a crisis.
With President Joe Biden warning that this will be the most expensive Christmas yet, he neglects to pinpoint the government’s part in this problem. Shipping for Christmas and Thanksgiving, as well as the Jewish holidays prior, and the buildup prior to holiday season were contributors but in previous years, we hardly ever had an idle ship. At one point, a few weeks ago, there were more than 100.
But let’s explore one of the key contributors: the driver shortage. This was especially evident in the last 4 to 5 years. I chatted with Pete Amundson, Director of Sales at Minuteman Transportation, who is responsible for recruiting and training new hires. The company itself works with independent contractors that operate refrigerated vehicles with cold storage components, transporting and handling cheese, deli meats, and even sensitive medication and COVID vaccine vials that need to be kept at certain temperatures, ambient or frozen.
Pete agrees with the crippling regulations around old trucks and the push for electric vehicles and its expenses. But he says that’s just one of the many issues. The first is a decades-long push against blue collar work, seeing it as “less than”.
He says that the trucking industry has increasingly been ignored as a career path for many, as our society keeps pushing white collar trades and four year liberal arts degrees. So the net effect of this is a shrinking truck workforce that is not replenishing fast enough with younger people. Yet, Pete argues that this should be one of the most attractive industries, especially for first-generation of immigrants: one that offers young professionals a six figure income, flexibility over their hours and routes, and within just a few years, they could save up enough for a house.
AB5 legislation, requiring most industries to classify their 1099 workers as W-2’s, has also intensified the problem and is a big reason for the delay in processing the ships and the cargo. The job-killing and entrepreneur-squashing sweeping legislation has made many young men who would have flocked to this industry easily, suddenly reticent. AB-5 was passed into law early 2020, initially targeting Uber and Lyft drivers to be classified as W-2’s instead of independent contractors. This was then used to create a law that affected over 300 industries, including the trucking industry.
Eventually the California voters through Prop 22, voted to give Uber and Lyft drivers an exemption, but many industries like trucking were not included in this decision, and are still affected adversely. The trucking industry is in limbo, sitting without an exemption, most likely until next year with the backlogs of court cases and the California Supreme Court bouncing this issue back and forth. Lawsuits are bringing this all the way up to the Supreme Court.
“A lot of drivers are drivers because they want to be owner-operators. AB5 eliminates that desire for independence and space. AB5 makes this industry unattractive because they don’t know when an actual decision will be coming down the pike. Right now, it’s on hold by court order. The logistics industry is struggling right now as we depend on trucking for everything in life. We can’t fix the American economy without this being addressed. The ports are backlogged due to difficulty in getting freight to and from the ports, because of trucking, labor and regulations.” Pete says.
Pushing electric vehicles and the expenses around that are adding to the problem, and this even affects the chassis and containers. The bigger issue, however, is a disdain towards blue collar and manual labor that is especially prevalent in California. This elitism needs to stop and it’s actually good to see this affect many people and maybe it will wake them up to the golden rule in life: Don’t mess with the people who prepare your food.
(Marc Ang ([email protected]) is a community organizer in Southern California and the founder of Asian Industry B2B who works with many supply chain businesses, and specializes in race relations and the minority conservative experience. His book “Minority Retort” will be released in late 2021.)