California Trucks
It is amazing how much harm can be done if facts don’t matter when laws are written
Thomas Sowell has been pushed aside and largely ignored by the fashionable people because he insists on asking what will happen after they pass their “feel-good” legislation. Will it do what they want? Will it have side effects? Will it create new problems?
In the Ten Commandments movie, the Pharaoh repeatedly says, “So let it be written, so let it be done!” California’s government thinks it can make the world perfect by writing a law, and there will never be any negative consequences. They are also certain that, being the moral center of the universe, they can set themselves up as a “sanctuary state” and ignore any federal law that doesn’t meet their higher moral guidelines.
California has taken many recent steps that have put the trucking industry in turmoil. If the harm were limited to that state, it would be bad enough. It isn’t. A YouTube producer called Inspector James produced a video on the subject and noted that, in Los Angeles,
the San Pedro Bay Port Complex stands as the largest gateway for trade in North America. Each year, more than $500 billion in goods pass through these docks, feeding supply chains that reach every corner of the country. One out of every three containerized imports to the United States arrives here, supporting three million jobs across warehousing, retail, and manufacturing. The sheer scale of this operation means even small disruptions can ripple far beyond state lines.
There are three levels of movement to consider: drayage, in-state, and interstate. Drayage is the term for moving a container from the docks to either local storage or to a location outside the harbor area. If there aren’t enough drayage vehicles, the ships back up in port because they can’t be unloaded. The difference between in-state and interstate is clear, but it creates different issues in certain respects.
There are three immediate issues causing trouble.
On January 1, 2026, AB 692 took effect, blocking “stay or pay” provisions. Employers felt it was reasonable to protect themselves when they paid to train a new employee. They included a provision in the contract that required repayment of some of the training costs if the employee quits before a certain date. I don’t know if the provisions were abusive. I know the U.S. service academies have this arrangement for students once they stay into their third year.
I read a discussion of AB692 that mentioned a 2-year window with pro rata charges. I’m not sure if that applies to training or when the clock starts. The trucking companies need to figure out how to get trained drivers, or they’ll end up training people who walk away as soon as they get their license.
The biggest problem, and the one with the most potential nationwide impact, was signed in 2019 and tied up in the courts. AB5 is designed to prevent companies from treating people as contractors when, in practice, they are employees. Yet there are professions where this is common, and those fields have been given an exemption. Trucking has many owner-operators who want to choose assignments. They may always work with one company, but they have more control.
The bill was passed in 2019, and the court action ended in 2022. No fines were imposed for a while. In his video, Inspector James notes:
On October 30th, 2025, a citation from the California Labor Commissioner landed like a shockwave across the state’s freight corridors. Three companies, Mega Nice Trucking, Rider Last Mile, and Costco, received a combined penalty of $868,128.00 for misclassifying fifty-eight delivery drivers in San Diego.
An excellent internet article discusses the history and impact of AB5. It is too complicated to repeat here. It will be the end of the owner-operator model for interstate freight from California ports. The distance from San Pedro to Nevada is more than 240 miles or almost five hundred miles round-trip. Moving goods from California ports to the eastern edge of the state will have to be done by trucks that meet the new rules. It will increase the cost of those goods for everyone everywhere in the country.
Another problem stems from California’s Sanctuary State status. They were sloppy or indifferent about the licensing of non-citizens.
In late 2025, the Federal Motor Carrier Safety Administration launched a nationwide audit targeting commercial driver’s licenses held by non-citizens.
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Immigrant drivers make up about 20% of California’s trucking workforce, many playing vital roles in port drayage and regional freight.
These issues will raise the cost of imported items in California and wherever they go. Perfection is a wonderful idea. If you’re rich enough, it is a fine way to live. The rest of us always balance priorities.