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October 1 2018

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30 The Journal of Commerce | October 1 2018 www.joc.com Government STARTING NEXT YEAR, beneficial cargo owners (BCOs) shipping through Cal- ifornia's ports will share joint liability with harbor trucking companies that have been found guilty of labor viola- tions if Gov. Jerry Brown, as expected, signs recently passed legislation. Although initially opposed by cer- tain shipper and trucking associations, S.B. 1402 — which is intended to clamp down on violations such as driver mis- classification and wage theft — ended up with fairly broad acceptance. "This is not a gotcha bill," said Barry Broad, legislative director at the California Teamsters Public Affairs Council. "A lot of the opposition was removed by the end of the process." Alex Cherin, executive director of the California Trucking Association's (CTA) intermodal conference, said the CTA withdrew its opposition when certain ambiguities in the bill were re - moved. As for its impact on members, Cherin said the CTA believes its mem- ber companies attempt to follow the law. He doesn't believe the bill will inconvenience CTA member drayage companies, or their customers. Brown had until Sept. 30 to sign the legislation. The California Labor Commissioner by Jan. 1 will publish a list of drayage companies that have failed to pay final judgments they were assessed for labor violations. After Jan. 1, retailers or other BCOs that con- tract directly or indirectly with drayage companies found to be in violation would be jointly liable for future labor or employment law violations the drayage companies commit. A common example of such violations in harbor trucking involves companies that classify what should be employee drivers as independent contractors. The companies do this to avoid paying overtime, vacation time, and other benefits companies would be required to pay if the drivers were classified as employees. The Teamsters charge that labor violations in the drayage industry, and avoidance of paying judgments rendered against violators, are com - mon. The California Division of Labor Standards has won cases totaling more than $45 million on behalf of 400 drivers that have gone unpaid, Broad said. A normal evasion tactic is for a company that loses its case to close its doors and then reopen under A 'yea' for drayage bill A new law expected to be enacted in 2019 would make shippers jointly liable for California labor violations By Bill Mongelluzzo No piling on US federal regulators seek middle road in complaints on detention and demurrage By Ari Ashe WHILE US SHIPPERS can take solace that their frustrations with detention and demurrage are heard by the Federal Maritime Com- mission (FMC), they shouldn't bank on an agency rulemaking to solve the matter, but a measured response that puts the onus on private industry. Based on conversations with stakeholders, the FMC's history, and an examination of the agency's recently released report, the two commissioners will seek to enlist the industry in clarifying the terms of detention and demurrage. At press time Sept. 19, the report was scheduled to be discussed at a commission hearing. The Coalition for Fair Port Practic- es, a group representing shippers and truck- ers, petitioned the FMC in December 2016 to adopt a rule to interpret what constitutes "just and reasonable rules and practices" for assessing detention and demurrage. The commission received more than 110 com- ments and conducted two days of hearings in January. Commissioner Rebecca Dye was charged in March with investigating the matter and issued a draft report Sept. 5. The agency is scheduled to issue a final report this December. Much of the language in the draft seems to validate the shippers' concerns, although Commissioner Rebecca Dye carefully chose her words on the issues. If one were to imag- ine a football field where ocean carriers and marine terminal operators (MTOs) stood in one end zone, and shippers in the other, Dye seems to be positioning the FMC near 30-, 40-, or 50-yard line. The shipping community seems pleased that Dye found evidence to support their complaints, while the ocean carriers and MTOs remain cautious about some language and encouraged on her tone on other suggestions. Dye's strongest language was on estab- lishing an industrywide common definition for the terms "detention" and "demurrage." Dye wrote there are a number of different, often-conflicting ways the terms are used in the industry. She concluded there is a "need for unambiguous, standard terminology." Note the word is "need," not guidance. International | Washington | Customs | Security | Regulation

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