One of the best reasons to support the ECA and be an active Member, is the access to local policy makers that we can facilitate. Much better to go before a lawmaker as a group, rather than as an individual firm. The ECA can enable our members to speak with a unified voice and that voice is heard much more clearly by our legislators.
On 12/4/19, there was a meeting between State Senator Mike McGuire, Miguel Lemus from Ghilotti Bros., Tom Smith from Ghilotti Construction, Debbie Ferrari from MAG Trucking, Raul Valdivia from Valdivia Trucking, and me to discuss the impacts from a horrendous piece of legislation that becomes law on January 1, 2020.
Assembly Bill 5 basically eliminates the ability for trucking brokers to dispatch independent truckers to General Contractor jobs. The analogy would be that consumers would have to go shop straight to the farmer or supplier every time they need groceries. It is ridiculous.
This law is included here by clicking on the link here—
If you have not already had meaningful discussion with your attorney and your workers comp carrier, you should have them right now.
If you have not had a discussion with your estimating department, you should do so immediately. Trucking prices will be all over the “board” and GC’s will have to make certain they are safe from future claims for non-compliance. Keep in mind, the labor board of California will probably not go after the individual truckers that fail to comply, they will probably, out of necessity for “volume effect”, have to go after the brokers or GC’s that “cut corners”.
If you are thinking there is going to be a “quick fix” to this horrible bill, think again.
I really do want to thank Senator McGuire for hearing us out on 12-4-19. Man-did he get an earful! Miguel, Tom, Debbie and Raul were respectful but clear on the effects that AB5 will have on our industry. Senator McGuire heard that trucking brokers serve an important purpose (or did) to our GC’s in providing the trucks when needed, making sure the pricing was uniformly applied to a project’s estimator and project manager, helping to solve disposal problems, and on and on and on. McGuire also heard that estimators hate uncertainty, and AB5 is making things uncertain. Given a project schedule that GC’s cannot extend, having fewer trucks to perform the work will cost GC’s money. They cannot extend the time of completion, but they can pay a premium to get the necessary trucks and skilled trades to work in a compressed time due to the lack of trucks delaying certain aspects of the projects. Senator McGuire also heard that many of the estimated 70-80% of independent truckers in our industry, do not want to go to work as an employee of somebody else. They are independent because they choose to be independent. Some will sell their equipment and retire. Some will keep hiring themselves out but will probably not see as much work since nobody is brokering the work for them anymore. Some will move to another State that does not have such asinine laws as California. Senator McGuire also heard that our tax dollars will not go as far because of the dramatic increases that the trucking industry will see in 2020 and moving forward. Again-pricing for trucking is all over the board, and estimators hate risk, so as they bid work for 2020 and beyond, the customer will bear the higher price of their putting costs in the estimate to handle the uncertainty of the trucking industry moving forward.
Kudos to Miguel, Tom, Debbie and Raul for explaining all the above (and much more) to Senator McGuire. He listened, asked many questions, and in the end, had some painful but clear messaging for us.
Senator McGuire was not pleased that the Teamsters were unwilling to discuss “fixing” this legislation with CTA or anybody else. I suspect he will apply some persuasion. Although all of us acknowledge this is primarily a Federal “stance” the Teamsters are taking, Senator McGuire is a powerful man. His persuasion should matter.
Senator McGuire will also have a discussion with a few others that are in positions of power and will report back to us before our next ECA meeting with Senator Dodd on December 17. Senator McGuire was painfully honest-he said not much was going to happen anytime soon as legislators do not even come back to Sacramento until January 6, 2020. Prior to that time, he was willing to assist but was not hopeful or promising that much would happen.
So why am I so upbeat about ECA Advocacy? Even though this meeting did not garner instant “fix it” steps that will ease our collective pain, the ability to have frank discussions with such powerful Senators in a small setting is invaluable. Senator McGuire now knows about what effects AB5 will have on funding transportation projects. He knows that the bidding of cost estimates will be higher. He knows that the American Dream of starting out with one truck and doing well enough to eventually own a trucking broker company and employ hundreds, is severely curtailed. He knows the names of the four people that spent 45 minutes with him today. Face to face matters. Being unified matters. It is much more powerful to speak to how AB5 will impact the industry by being a group rather than one company writing a letter or even meeting one on one with the Senator.
I am proud to have played a small part in enabling this meeting today. And I am proud of our ECA Board of Directors who were wise enough to direct me to focus on this State issue rather than the very localized issues we usually deal with. I am proud that we are trying to help “Joe Q Citizen” with their tax dollars as well as standing up for our ECA Member firms that are trucking brokers.
I will provide updates as they happen on this important issue. In the meantime, the law is the law on January 1, 2020. I urge you to have a frank conversation with your attorney on the pragmatic way to avoid compliance issues with this new set of rules. We are all smart enough to realize that the State will have a tough time handling compliance issues quickly, but remember-the incidents can occur tomorrow and be dealt with 4 years from now by the State. It is a risk. You need to be aware of it.
Stay unified and please, write to your representatives-on our website, www.nceca.org, you can find who your local Senator and Assemblyman is, and the links to their contact info are right there. Emails and phone calls matter. If you are not willing to message those folks, then we will get what we get and that won’t be much.
The SQUEAKY WHEEL GETS THE GREASE!
That’s All Folks