June 29, 2022
Trucking News: SCOTUS Supply Chain Ruling, Annual Logistics Report, and More
Ask a veteran owner-operator about the good ol’ days and you won’t hear a peep about the waiting for a payphone or fretting over a lost shipping document. The fact is, writes Verlen Larsen in Overdrive, today’s technology makes it easier for drivers to stay in touch and manage tasks with speed and accuracy.
Verlen outlines five areas where tech has made great leaps in taking pressure off operators:
Electronic bills of lading (AKA eBOL) and other digital documents make exchanging information among carriers, brokers, shippers, receivers, and other parties faster, more secure, and with less risk of errors.
ELDs are a driving factor in the adoption of telematics. With GPS, cellular networks and cloud computing, telematics systems can reduce the need for check-calls and generate automated exception alerts.
Drivers want one app with one point of access for everything they need: navigation, hours of service, track and trace, document scanning, fueling options, weigh station bypass and even centralized communication with text-to-speech capability for hands-free operation.
Digital freight matching apps and “book now” options provide one-touch tendering of loads posted to load boards.
Digital brokers are using automation and machine learning to serve up loads based on driver preferences. When the system knows the driver has the right equipment in the right location, and ample hours on the clock, it can generate a rate and terms the operator will like.
As these systems mature, Verlen says, owner-operators can save time and keep supporting the business and the family back home. Read more.
Industry still waiting for Supreme Court decision on AB5
This week the Supreme Court is weighing whether to review California Trucking Association v. Bonta, a decision that will determine whether California’s independent contractor law applies to trucking.
An injunction blocking enforcement of Assembly Bill 5 (AB5) has been in effect since April 2021 when the Supreme Court asked the U.S. solicitor general to assess whether the Federal Aviation Administration Authorization Act (F4A) could preempt the state law. Last month, the solicitor general recommended that the Supreme Court not review CTA v Bonta.
If there is no federal case, AB5 will immediately become law. AB5 makes it harder for companies to qualify workers as independent contractors rather than employees where the following conditions are met:
The worker must be free from control and direction of the hiring entity.
The work performed must be outside the usual course of the hiring entity’s business.
The worker must be engaged in an independently established trade, occupation, or business.
The second requirement is virtually impossible for an owner-operator to meet because trucking is part of its core business.
AB5 codifies a 2018 California Supreme Court decision involving Dynamex Operations West, a parcel-delivery company that reclassified its employees as independent contractors. Proponents say the law gives workers previously classified as contractors minimum wage, overtime, sick leave, unemployment, and other benefits. This would also allow the state to collect an estimated $8 billion in additional payroll taxes.
Dozens of professions have won exemptions from AB5, usually on the grounds that the workers set or negotiate their own rates, among other factors.
SCOTUS denies hearing on broker liability
The U.S. Supreme Court declined to consider C.H. Robinson’s challenge to a split Ninth Circuit Court of Appeals decision reviving a personal injury suit alleging the broker negligently hired an unsafe trucker involved in a highway accident.
Miller v. C.H. Robinson Worldwide stems from a collision involving a carrier with a history of safety violations and Allen Miller, who was severely injured in the crash. Miller sued C.H. Robinson, saying it breached its “duty to select a competent contractor to transport.”
C.H. Robinson argued that a finding of negligence liability violates the Federal Aviation Administration Authorization Act (F4A), which preempts personal injury claims against freight brokers arising from accidents involving independently contracted motor carriers.
The district court agreed with C.H. Robinson. However, on appeal, the Ninth Circuit reversed the ruling and held that the core service of a freight broker—arranging for transportation of property by motor carriers—falls within the plain meaning of the F4A preemption provision but Miller’s negligence claim was exempt because it falls within the “safety regulatory authority of a state.”
The Supreme Court’s refusal to hear the case leaves the Ninth Circuit opinion intact. Essentially, that decision allows negligence claims against C.H. Robinson to proceed. If those claims succeed, brokers will be considered liable for the actions of motor carriers.
State of logistics: Supply chains ‘out of sync’
The Council of Supply Chain Management Professionals (CSCMP) has released its annual State of Logistics report, a snapshot into a $1.85 trillion industry representing 8% of 2021’s $23 trillion GDP. Among the findings:
Higher costs: Inventory-carrying costs rose by 25.9% in 2021, and transportation costs jumped 21.7%. This led to uneven supply chains and inconsistent product availability for consumers (both in-person and online).
Proximity to customers: Companies want to move their operations closer to the U.S., to respond quicker to fluctuating market demands.
Last-mile delivery volume is growing: E-commerce sales grew 10% last year (to $871 billion), accounting for 14% of U.S. retail sales.
Truck freight dominates: Road freight accounts for the largest segment of the U.S. supply chain spend, up 23.4% to $831 billion.
The report added that residual challenges of the pandemic remain, with some disruptions continuing to deliver damaging effects on capacity. The report is free to CSCMP members.
Dockworkers, ports say they’ll keep working without a deal
The International Longshore and Warehouse Union and the Pacific Maritime Association say they will work without disruption even after the existing contract for thousands of dockworkers across 29 West Coast ports expires on July 1. Such a commitment would avoid a repeat of the delays and congestion that hampered ports during the 2014 talks that extended into 2015.
The labor talks take place as ports on both coasts report record volume in May. The nation’s busiest facility, the Port of Los Angeles, had its third busiest month on record, processing 967,900 twenty-foot-equivalent unit (TEU) containers. Five months into 2022, Los Angeles has processed more than 4.5 million TEUs, equal to last year’s record-setting pace.
Port Houston, Port of Savannah, Port of Charleston, and the Port of Virginia all recorded year-over-year increases in container traffic.