Here’s Why California The Worst For Trucking Industry
If you are a trucker, dispatcher, insure fleets, or own a trucking business — big or small — take heed.
California is one state that is a veritable cornucopia as a breadbasket of the nation, and at the same time, is the entry point for a tremendous amount of cargo coming in from Asia all the time.
What does all this mean for you, as a trucking professional? Sounds like a great business opportunity to transport goods from the port out in Long Beach, or to go pick up produce, right?
In addition, you would think you could drop off goods from other states there too.
Yet, California emissions standards have gotten stricter. If you wanted to purchase a truck in today’s market that meets these CARB designated emissions standards.
You would perhaps strangle out your own business efforts. Beyond the price of a more expensive truck, the fuel is generally higher in California as well.
It means if you contract with individual drivers, you may have a hard time finding someone to willingly take to the roads of California. The same is true for farmers in California.
The trucking industry as a whole broke records in 2015, earning $700 billion in revenue. Meanwhile, the Goldengate is tarnished for many California truckers who are beset with new government regulations, and subsequent increases in associated equipment.
They are limiting their hours and are facing competition to their pay.
California is the worst state for the trucking industry. Truckers in the Golden State are struggling alongside this situation, as a Merchant Cash USA study found in 2016.
According to the bigger trucking companies who have operations running in California, it is painful all around. They parrot that the California Air Resources Board regulations are hurting truckers.
The bigger companies have more than 15 trucks, and they have the financial resources to pony up money for new trucks are saying the same about the situation.
The smaller to medium trucking companies do not have the cash to toss toward new trucks. The problem is that if truckers are unavailable or put out of business in California means that the cost of shipping would go up.
And, it would not be local to California, but would ripple to the rest of the country. Again, remember that California holds a major entry point for goods from Asia and China.
Though, California is not alone. Ohio, New Jersey, and, of course, Massachusetts made the top of the list for worst for trucking.
The survey followed costs to park overnight and regulations and fees. In addition, the survey considered how friendly drivers are to truckers.
A great place to be if you are a small trucking company or to be a trucker is Tennessee, Indiana, Washington, Oklahoma, and Texas.
Some of the other difficulties that trucking companies face go far beyond having cleaner-running trucks. The costs of insurance and meeting state employment regulations are among some of the other big concern for trucking companies.
For anyone who is new to running their own business and hires on employees, it can be a big eye opener what companies have to do for their employees.
Even California requires mandatory paid breaks for workers, as of 2014 ruling that overturned an exemption from a lower court.
It can be a rocky road for both trucking companies and drivers. Because of a class-action lawsuit brought by truckers against one company in 2008, companies are increasingly looking at trucker log books.
However, for drivers, the last place they may want to stop is in the middle of nowhere out in the desert in August. Yet, the way that the trucking industry is headed, it means that both trucking company owners and the regulatory bodies might insist.
Not to pick on California here, but they make it a bit easy. The state’s new Piece-Rate legislation launched January first. It could provide a legal headache for employers in trucking too.
AB 1513 states itemized wage statements must be reviewed and updated for employees paid on a piece-rate basis.
It means that hours, compensation and gross wages all have to be separated out according to a category, along with non-productive time, and rest and recovery periods.
Beyond having to upgrade or buy new trucks, review statements of pay and reissue statements for California, trucking companies have also had to invest in new time-tracking.
That means that many payroll systems had to be reprogrammed, which costs money, to accommodate California’s demands.
The part that is hardest for the trucking industry as a whole is that these costs as a whole are something of a potential death knell to the small family trucking business.
Younger people are shying away from trucking. Unlike past generations who just followed in their father and grandfather’s footsteps, this generation is looking for other avenues for work.
It could be all the stress of owning a small trucking outfit that is shaping the industry’s future. Right now, it looks like big is better for trucking in California.
Though, the changes in California may make a riptide for the rest of the nation. Keep on truckin’.