California's shipping backlog is, in part, caused by a 'California Truck Ban which says all trucks must be 2011 or newer and a law called AB 5 which prohibits Owner Operators.
As hordes of ships wait to unload at California ports and elsewhere, some are shifting blame to the Golden State's regulations on the trucking industry. 'The NEWS says the California port situation is caused by a driver shortage,' one viral post on Facebook said. 'Not so fast: It is in part caused by a California Truck Ban, which says all trucks must be 2011 or newer, and a law called AB 5, which prohibits Owner Operators.' The post was flagged as part of Facebook's efforts to combat false news and misinformation on its News Feed. (Read more about our partnership with Facebook.) The post is referring to real California policies. But while experts say these rules have likely had some impact on supply chain disruptions, this post overstates their role. Many factors have contributed to the shipping backlog, including a lack of warehouse space and equipment shortages. Most issues can be traced back to the COVID-19 pandemic, experts said, which resulted in factory closures and employee layoffs that crippled production worldwide. The delta variant of the virus that causes COVID-19 further shocked systems that were just starting to recover from the earliest phases of the pandemic. The post points to two separate California policies: a law called AB 5 that was passed in 2019 and aims to give independent contractors more employee rights, and the state's longstanding clean air regulations on heavy-duty vehicles. What is AB 5? Commonly referred to as the 'gig worker bill,' Assembly Bill 5 codified and expanded a 2018 California Supreme Court decision that set a strict new test for employers to determine whether a worker is an employee or an independent contractor. It went into effect on Jan. 1, 2020. Under the measure, all workers are considered employees unless the hiring business demonstrates that the worker meets three conditions: They should be free to perform the work as they wish, or free from the control and direction of the hiring entity; in a different line of work from the company contracting with them; and operating their own business. The law is intended to require employers to treat more workers as employees entitled to rights and benefits like a guaranteed minimum wage, employee benefits, expense reimbursements, rest or meal breaks and overtime pay. Critics, however, say the measure makes it nearly impossible for truck drivers to be independent contractors because they inevitably work in the same line as the companies they contract with. The Los Angeles Times reported in 2019 that out of approximately 13,000 truckers who serve the ports of Los Angeles and Long Beach, just a few hundred are classified as employees. Most are considered 'owner operators' who often lease their rigs from trucking companies, drive under those companies' permits and rely on them for work. They are paid by the load and get an annual 1099 tax form, which some freelancers and independent contractors use to report income. But it's hard to quantify what role this law could be playing in California's shipping backlog. That's because the California Trucking Association quickly filed a federal lawsuit challenging the law, and the trucking industry remains under a temporary injunction exempting them from its confines. After a circuit court denied its appeal for a rehearing, the association petitioned the Supreme Court to hear its case. If the high court denies the petition, the injunction will be lifted immediately. At the time AB 5 passed, industry experts said that some owner-operators sought work elsewhere. Some fleets, too, chose to stop doing business with owner-operators in California. Danielle Inman, a spokesperson for the National Retail Foundation, which has lobbied for California to overturn AB 5, told PolitiFact that the state's regulations on trucking impact the availability of drivers and trucks, but many other issues are also disrupting the movement of goods through U.S. ports. 'The overwhelming increase in volume, lack of available equipment such as chassis, empty container return policies, lack of available warehouse space are all contributing to the ongoing congestion issues at the ports,' Inman wrote in an email. (Chassis are wheeled equipment that help move shipping containers.) What is the 'California Truck Ban'? The 'truck ban' cited in the post refers to California's Truck and Bus Regulation, administered by the California Air Resources Board, which attempts to reduce emissions of greenhouse gases and diesel exhaust particulate matter. To meet the current clean air regulations, the state Department of Motor Vehicles blocks new registrations of any oversized vehicles older than 2011 - or those with engines manufactured before 2010. By 2023, nearly all trucks and buses will be required to have 2010 or newer engines. But this policy has been on the books since 2008. Some trucking companies have used the regulations to pressure drivers to buy newer rigs, and some in the industry have claimed that, while not necessarily the cause of the backlog, this kind of policy doesn't help. 'There is simply no evidence to support any claims that the current congestion at our ports has any connection to the state's efforts to clean up California's trucks,' said Stanley Young, the communications director of the California Air Resources Board. 'Port congestion is currently a worldwide problem and there are many contributing factors.' '96% of the trucks' that serve the ports are already compliant with the state's Truck and Bus Regulation, he added. What's causing the supply chain to buckle Experts say that while these regulations may provide some pressure, current port congestion and larger supply chain disruptions are the result of factors that are far more complex than this post suggests, with the issue extending much further than California and its laws. The COVID-19 pandemic triggered factory shutdowns and worker layoffs early-on and exacerbated an already precarious system. 'We had a series of smoldering issues that had been around for a while, and then COVID was kind of the needle that broke the camel's back,' said Robert Handfield, a professor of operations and supply chain management at North Carolina State University. 'Unfortunately, it's a bit of a mess, and it's going to take some time to address.' The global demand for goods bounced back fast as the COVID-19 vaccines became available and restrictions eased in various parts of the world. But that quick rebound left processing plants, manufacturers and businesses struggling to keep up, leading to global supply chain problems. Containers are limited, and semiconductors and critical raw materials like rubber, lumber and steel are running low. The driver shortage has been an issue in the trucking industry for years, experts have said, and COVID-19 made it worse. The average age of the American truck driver is around 48, and officials say the problem will likely get worse in coming years as they begin to retire. Focusing on new recruitments is one answer, and the American Trucking Associations is pushing for the DRIVE-Safe Act in Congress, which would allow 18-year-olds to obtain a commercial driver's license. Currently, federal law dictates that drivers must be 21 and older. Countries have also fallen out of sync during the pandemic, the Wall Street Journal reported, with some nations still enduring lockdowns and other restrictions, and thereby constricting factories and making transportation and logistics more expensive. While the shipping pileups and the broader supply chain disruption show no signs of dissipating, the Biden administration has announced a series of measures to try to relieve the system, including that private companies like UPS and FedEx would expand their business hours and that the Port of Los Angeles would start operating 24 hours a day, seven days a week.
Our ruling Facebook posts claim that the shipping pileups at California ports are being driven, in part, by two policies affecting long-haul truck drivers in California. Truck drivers have been exempt from the gig worker bill since it was passed and the state's clean air regulations have been in place since 2008. While the rules may have had some impact on trucking decisions in the state, the post overstates how much and omits the major role the pandemic has played. The COVID-19 pandemic has caused widespread layoffs and factory closures that haven't yet bounced back to meet the surging consumer demand. For a statement that contains an element of truth but ignores critical facts that would give a different impression, our rating is Mostly False. RELATED: High prices and depleted shelves: Here's why the supply chain is a mess - and will be for a while
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