Monday, July 6, 2015

Employee drivers trend up at Port of Los Angeles

At the largest combined port complex in the United States, owner-operators are losing market share to company drivers.

And it may be a good thing.

According to the Wall Street Journal, some motor carriers are hiring port drivers as employees, buying trucks and creating driver shifts to run round the clock to move freight between ports, rail yards and warehouses.

The arrangement helps fill a critical gap in the retail goods supply chain, and allows companies to avoid labor issues.

Congestion at the ports has cost the economy billions. Labor problems only resolved this spring were partly to blame, though clogged ports seem to habitually carry the blame of catch-all smoke monsters that can’t quite be defined individually. Port congestion is usually blamed on driver shortage, chassis problems, and long lines for drayage haulers.

New companies backed by private equity firms are popping up and hiring truck drivers to work full-time hauling containers between ports, warehouses, and shipping yards.

“While all-employee drayage companies account for less than 5 percent of the more than 10,000 drivers at Southern California ports, that’s double their share a year ago, according to the International Brotherhood of Teamsters, which is working to organize employee drivers,” the Journal reported. “Some trucking experts see the domestic drayage market, estimated by research firm FTR Transportation Intelligence as generating $12 billion in annual revenue, as ripe for a shakeup.”

Companies that can offer reliable labor and trucks that comply with strict emissions rules will help freight movement be more efficient, the argument goes.

Drivers in California have won several recent court victories, including an independent driver misclassification lawsuit that cost FedEx $228 million and a California state labor commission ruling that Uber car drivers are employees and not independent contractors.

Owner-operators nationally often build their businesses by finding a niche and offering competitive advantages over large, bureaucratic companies. At ports, some owner-operators seem like victims.

OOIDA members typically are not port regulars. In fact, members who worked the ports in Southern California are mostly long gone.  Some of them have described owner-operators at ports as typically running the oldest trucks and often being forced to comply with the most difficult conditions.

Port drayage haulers are often an entryway into trucking for some, and the capitalist economy has both allowed them job opportunities and kept some rates lower than they would be without independent drivers in the mix.

But some companies have made a lot of money off the backs of these drivers, even while forcing them to wear company logos, drive what appear to be company trucks and meet other conditions that should be accompanied by a salary and other employee benefits.

If more employee drivers means more drayage haulers are less likely to be abused and working conditions will improve, here’s hoping the trend continues.