California Drove Truckers Out of Business. Now Store Shelves Are Empty
Democrat regulations are holding the entire economy hostage.
After a long cross-country flight, I made it out of LAX and into an Uber. I wasn’t in the mood to talk, but the driver was. And hearing that I was a journalist, he wanted to tell me a story. I’ve heard a lot of stories over the years, but this may have been the most important one I let go.
He hadn’t always been driving an Uber at 11:30 at night. Not all that long ago he used to have his own business with 7 trucks before he was bankrupted by California’s insane regulations.
I listened, but didn’t pay enough attention. The impact of California’s Democrat legislative supermajority on truckers was just another data point alongside what was happening to freelancers of all kinds and a lot of small businesses. Stories like this were everywhere and there was little interest in them even in conservative circles outside the tarnished golden state.
Back then we still lived in a world where you could walk into a thousand stores with fully stocked shelves. People ordered from Amazon and expected its burgeoning last mile delivery service to make products magically appear overnight. Just in time inventory systems were more efficient and any day now products would be delivered by self-driving cars or aerial drones.
2020 and 2021 have given this Big Tech fantasy world and the rest of us a good kicking.
The massive supply chain mess that’s leaving stores empty and orders unfulfilled doesn’t have a single point of failure, but dozens of them. China’s energy shortages, the overhyped predictive powers of Big Data, the fragility of the global economy, fuel costs, and welfare state worker shortages are all players. But California’s truck bans are a key link in the great failure chain.
While I was riding home that night, California trucking companies were going bankrupt at a rapid rate. Few outside the industry were paying attention or understood what that might mean.
2019 was described as a “bloodbath” for the trucking industry with 640 trucking companies across the country filing for bankruptcy in just the first half of the year. Thousands of truck drivers were left unemployed. Many went into the expanding last mile delivery business, some as contractors for Amazon. But California truckers and businesses had their own special woes.
Two years ago, Governor Newsom signed the Democrat supermajority’s Assembly Bill 5 into law. While AB5 was billed as a crackdown on Uber and Lyft, forcing the companies to treat l freelance contractors as employees, the gig economy companies pushed Proposition 22 so that they were the only ones exempt from the law. (A Democrat judge has since illegally blocked the approved ballot measure while falsely claiming that it was unconstitutional.)
AB5 however was less about Uber than it was about outlawing freelance employees in order to force them into unions. The union power grab inconvenienced Uber and Lyft, but crushed freelance workers in a variety of fields including journalism. One of the fields was trucking.
Over the summer, the California Trucking Association actually went to the Supreme Court to fight AB5 and allow owners and operators to use independent contractors. The CTA listed 70,000 owner operators. In the years since AB5, Ubers have become scarcer and more expensive, which is what the law was actually designed to do, but the consequences to the trucking industry have been far worse albeit invisible to most people until now. While truckers are still protected from AB5, many in the industry are not willing to bet their future on SCOTUS.
AB5 was not only the assault on the trucking industry by California Democrats who were aggressively trying to unionize the industry and to impose environmental regulations on it.
Last year, the California Air Resources Board issued a press release boasting that it had taken a “bold step to reduce truck pollution”. The bold step required switching to electric trucks.
“We are showing the world that we can move goods, grow our economy and finally dump dirty diesel,” Jared Blumenfeld, California’s Secretary for Environmental Protection, sneered.
Jared and California certainly showed the world something.
While the ultimate truck ban was scheduled for 2045, an initial phase-in of 5% to 9% begins in 2024. Last year, California’s DMV began refusing to register thousands of trucks with an estimated 100,000 trucks under threat. With “green” trucks costing $70,000 more, this was a non-starter for already troubled independent owner-operators and even larger companies.
That was part of the plan.
California Democrats and their environmentalist special interests had set out to crush the state’s ports and trucking industry. Had everything gone as planned, this would have been a slow and gradual process. Costs would have crept up and deliveries would have fallen off without an immediate catastrophic impact. But then the pandemic and its consequences arrived.
Business at California’s ports dropped during the pandemic. The loss of traffic convinced trucking companies and owner operators who were already battered by AB5 and the green truck ban that it was better to just downsize or pull out entirely. And when port activity rebounded, there was a huge hole in the delivery infrastructure that backed up the entire system.
Biden called for ports to operate around the clock, but that’s not going to magically bring back thousands of trucks or truckers. California Democrats still haven’t changed their regulations and without that, there’s no incentive or even legal structure that would allow trucks to operate.
The resulting disaster is likely to accelerate the ongoing shift of shipping from California ports. Democrats imposed their green shakedown not only on truckers, but on shipping. With companies moving to Texas, Houston was already becoming a more appealing alternative. It’s now at capacity as everyone is looking for alternatives to the California economic disaster area.
But much of our imports and exports still depend on the California bottleneck that begins with Communist China and ends in Communist California. The red-to-red pipeline has savaged our economy and wrecked imports and exports. Newsom’s survival and the Dem legislative supermajority which passes more extreme leftist regulations every session means that things will only get worse. A radical party that actively seeks to dismantle the economy is in power in Sacramento and its regulations have the ability to hold our entire economy hostage.
What happens in California unfortunately doesn’t stay there unless it’s waiting on a ship.