A truck at the entrance to the Port of Oakland in Oakland, California, USA, on Thursday, July 14, 2022. Trucks servicing some of the busiest ports in the United States are creating another bottleneck in the tense US supply chain.David Paul Morris / Bloomberg via Getty Images
David Pablo Lith | Mayor Bloomberg | Fake Photo
Oakland International Container Terminal (OICT) management shut down operations at Oakland Port on Wednesday due to an independent truck driver’s protest against California’s Temporary Workers Act, known as AB5.
The Port of Oakland told CNBC that the other three maritime terminals at the port were also effectively closed to trucks while ship labor operations were underway.
Truck drivers protested California’s temporary labor law, which began with the rise of gig-saving platforms such as Uber, Lyft, and DoorDash, on the third day. The two-year legal stay was recently lifted when the Supreme Court decided not to hear a case that would protect truck drivers from the effects of the law.
AB5 requires companies that employ independent contractors to reclassify them as employees, with some exceptions to the laws of all industries. Most truck drivers in California are owner-operators, and many of this profession are worried about their future. Approximately 70,000 truck drivers who own and drive their own trucks are subject to this law and do not want to become employees or join trade unions.
Thursday, July 14, 2022, Port of Oakland, Oakland, California, USA. Truck drivers servicing some of the busiest ports in the United States protest as national Labor Standards Acts that change status are beginning to come into force, creating another bottleneck. The point of struggling in the US supply chain.Photographer: David Paul Morris / Bloomberg via Getty Images
David Pablo Lith | Mayor Bloomberg | Fake Photo
These are the biggest truck driver protests ever against the law.
One of those protests is Bill Aboudi, the owner of AB Trucking. “So far, we haven’t contacted the Governor’s Office. The Governor doesn’t seem to care about depriving American workers of their rights,” Abowdy said. “These are small independent companies that choose to run their own trucks, and their rights are now deprived of them. They pay taxes and insure them. They do so. Is the choice. “
CNBC contacted Governor Gavin Newsom’s office to ask when enforcement would begin and if there was a way for truck drivers to remain independent under the law. In an email to CNBC, Dee Dee Myers, director of the Governor’s Bureau of Business and Economic Development (GO-Biz), said, “Step up, comply with the law, and cooperate after a federal court dismissed an appeal from the truck industry. It’s time to create it. ” A fairer and more sustainable industry for everyone.
Governor Newsom’s office wrote in another email to CNBC:
West Coast Trucking and Supply Chain
At Oakland Port, more than 2,100 trucks pass through the terminal daily. It is the 8th largest port in the country and imports a wide range of items from Australian wine and meat to Korean aluminum, Chinese furniture, clothing and electronics.
Protests that blocked the terminal gates forced some cargo handling workers not to navigate the crowd for fear of their safety. Port workers may be denied entry to the marine terminal if they feel “unsafe” or in some way unsafe.
“If the condition of the terminal poses a danger, our contract allows workers to stay away from health and safety,” said Farless Daily III, President of ILWU Local 10.
Oakland port officials told CNBC that it was closed due to a shortage of stevedores working at the terminal. ILWU workers went to work at the SSA terminal this morning, but upon arrival some ILWU members chose not to enter the terminal. Due to lack of complete complement, SSA has decided to close its operations today.
The International Longshore and Warehouse Union and the Pacific Maritime Association continue to negotiate a new contract to replace the contract that expired on July 1, and the two have not promised a strike or suspension of work.
The Port of Oakland has three other marine terminals that continue to operate on the waterfront, but with minimal or closed track gate activity.
According to Project44, CNBC supply chain heatmap data provider, protests have resulted in a plunge in productivity and increased container latency.
Sources told CNBC that the protests at the Port of Oakland would continue until Friday.
Last week, 100 truck drivers protested at the ports of Los Angeles and Long Beach, but due to the size of the ports, the impact was not as serious as in Auckland. Approximately 15,000 trucks pass through these ports each day, more than seven times Auckland’s truck capacity. However, despite its huge size, the ports of Los Angeles and Long Beach are heavily congested, and confusion for truck drivers only adds to the congestion of large containers.
The problem with these west coast ports is that trains have a waiting time of about 11 days. Truck containers accounted for less than 40% of all long-term containers in the port. Due to the accumulation of rail containers, the land capacity of Los Angeles Harbor is now 90%. Delays in trucks collecting containers only increase congestion.
Due to container congestion, boxes are removed from the supply chain for reuse, reducing the number of available containers and increasing the price of containers.
Correction: Approximately 70,000 truck drivers who own and drive their own trucks are subject to the Self-Employment Act. Earlier versions of this article misrepresented this figure.
CNBC’s supply chain heatmap data provider is Freightos, a global cargo booking platform that is the creator of the Freightos BalticDry Index. Logistics Provider OLUSA; FreightWaves Supply Chain Intelligence Platform. Bloom Global Supply Chain Platform; OrientStar Group, a third-party logistics provider; Marine Traffic, a marine analytics company; Project44, a marine visibility data company; MDSTransmodal UK, a shipping data company; Xeneta, a sea and air cargo benchmarking and analysis company; supplier. Crane Worldwide Logistics, and SEKO Logistics and Everstream Analytics, an aviation and freight logistics provider.