As if a looming war with Iran and the sight of Australia’s outback going up in flames weren’t enough to lower your spirits this new year, the media is full of reports of coming gloom in the transportation sector.
Trucking, in particular, seems set for a challenging year, as cyclical market swings and possibly an incipient recession are exacerbated by new legislation and the entry of Amazon into the delivery business. All of these factors are likely to drive already-low rates lower still.
The California Trucking Association last month filed a lawsuit challenging a new labor law that offers wage and benefit protections to workers in the so-called gig economy, including rideshare drivers at companies such as Uber and Lyft and, of course, truck drivers.
A Superior Court judge in Los Angeles ruled last week that independent truck drivers are exempt from the law, which went into effect January 1, because it conflicts with a federal statute regulating interstate commerce. However, the decision will be appealed by Los Angeles City Attorney Mike Feuer.
The interstate argument may hold for now, but the tide is turning in favor of putting gig workers into the employment mainstream across the nation. Last year, at least 15 states introduced bills related to worker classification, and they are now law in Delaware, Illinois and Nevada. In the future, it will be more expensive to hire a trucker, whether independent or not.
Meanwhile, Amazon took the gloves off last year in its emerging bid to dominate the delivery market. After canceling its contract with FedEx in August last year, it announced in December that it is blocking its third-party sellers from using FedEx’s ground delivery network for Prime shipments, too. Amazon Logistics has meanwhile extended a warm invitation to join its Amazon Delivery Partner network — presumably at highly competitive rates. This comes after an already notable uptick in trucking company bankruptcies in 2019. All this adds up to what some are calling a “bloodbath” in the trucking industry.
Meanwhile, are we really headed into a general recession? Forbes says “maybe.” Fortune says, no, but there’s likely to be a semi-recession. The Washington Post says the economy is actually in positive turnaround since last August, when all this talk of recession got serious. So maybe a healthy economy will continue to benefit the trucking industry.
Much depends on the ongoing trade negotiations with China, along with the unsettled situation in the Middle East. In other words, it’s completely out of our hands.
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