Today's Pickup: Interstate 5 Hit By California Owner-Operator Ruling; Brits Map Shipping Noise

Good Day,

Trucking outfits serving the Interstate 5 market may suffer more than most from the controversial California ruling limiting the use of independent owner-operators. That's because I-5, the main highway on the West Coast, has a high proportion of flatbed trailers, said Lee Clair, managing partner of Transportation and Logistics Providers, and the flatbed model is better served by independent operators than employee drivers. "You need a lot of skill and knowledge about how to secure the freight," Clair said, "and the drivers who are experienced enough to handle flatbeds don't like being employees. They don't like driving a gajillion miles per year."

In related news, the California rule has many carriers rethinking their business models, said Burke Smith, managing director in transportation and logistics with Headwaters MB, an investment banking firm. Independent owner-operators are terminating their carrier lease agreements, then signing on to a new relationship with the carrier's brokerage. "We see quite a lot of people pulling out of the market saying they are not going to continue, or they are going to more of a broker model," Smith said.

Quotable

"You'll see enormous changes from where the bulk of people find jobs and employment. The first worry is what does that transition look like. That intervening transition is super painful."

— LinkedIn co-founder Reid Hoffman, likening the future of artificial intelligence to the shift from the agricultural age to the industrial age. (New York Times)

Did you know?

A new regulation by the International Maritime Organization (IMO) to cut sulfur emissions from ship stacks will increase shipper costs by about one-third. To break even, ships on the main Asia-to-Europe trade route will need to boost freight rates by 40 percent, and 33 percent for trans-Pacific trades.

— AlixPartners (The Wall Street Journal)

In other news

Illegal delivery a thorn in the side of Detroit medical marijuana dispensaries

Weed delivery in Michigan is prohibited, but brick-and-mortar centers say to-go operations are flourishing. (Detroit News)

Union Pacific in the hot seat over Oregon air pollution

AmeriTies, a rail tie manufacturer, is under investigation for operating a plant in The Dalles, Oregon that emits toxic air pollutants. The factory is located on property owned by Union Pacific, and the railroad is AmeriTies' primary customer. (OregonLive)

Uber, Waymo…and now Malaysia

Malaysia is getting into the flying car business, and plans to unveil a prototype this year. (Bloomberg)

Scientists have created the first United Kingdom map of underwater noise made by ships

The loudest areas were busy shipping lanes like the Strait of Dover. Routes to Felixstowe, the second busiest container port in Europe, were likened to a motorway. (BBC)

Final Thoughts

Everyone knows that California is its own country (with Oregon and Washington serving as colonial outposts). Truck drivers crossing into the Golden State have to deal with a host of labor and environmental regulations that do not match national laws. The California rule limiting carriers' use of independent owner-operators is a recent example, and it won't be the last. On March 21 the California Air Resources Board (CARB) will hold a public meeting on new agency actions aimed at reducing community health impacts from freight. The update will cover regulatory development and guidance activities, with a focus on programs for ships at berth, transport refrigeration units and the state's freight facility handbook.

Hammer down, everyone!

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