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January 6 2020

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74 The Journal of Commerce | Januar y 6 2020 Government 2020 ANNUAL REVIEW & OUTLOOK AFTER YEARS OF debate over the classification of owner-operator truck drivers as either independent contractors or employees, trucking companies in California anticipate that 2020 will produce clarity in this contentious issue. With 70,000 owner-operator truck- ers in the state and 350,000 indepen- dent contractors nationally, according to statistics from the California Trucking Association (CTA), a decision this year by the US Southern District Court in a challenge filed by the CTA could have national implications. The trucking association is seeking declara- tory and injunctive relief involving the so-called "employment test" for classi- fying owner-operators as independent contractors or employees. Meanwhile, across the country in New Jersey, similar legislation is being advanced in the state legislature and could reach Gov. Phil Murphy's desk by the end of 2019. Last year was tumultuous for the trucking industry, especially for dray- age companies, which have treated most of their drivers as independent contractors since the Motor Carrier Act of 1980 deregulated the industry. California Gov. Gavin Newsom on Sept. 11, 2019, signed into law Assem- bly Bill 5 (AB 5), which codified the employment test as the standard for classifying owner-operators. The employment test is the second of three prongs laid out by the judgment in the 2018 case Dynamex Operations West vs. Superior Court, which states that a person is con- sidered an independent contractor if that person performs work that is shipping supply chain to cut their carbon footprints. There are enough carbon calcula- tors and sustainable tools available to give shippers a choice between using higher- or lower-emission services, but Andersen said cargo owners are disincentivized from purchasing those more environmentally friendly offer- ings because they are more expensive. "I hope that one day these green solutions will be the most cost- effective on offer. In some of the Nor- dic countries, there is a willingness to pay a slightly higher rate for a green product, and it is the same in the United Kingdom. But in many other countries, there is a more limited appetite to pay for green services," he said. Few shippers will admit pub- licly that they are reluctant to pay more for a sustainable service, but some have raised concerns over the accuracy and verifiability of available carbon emissions data. "Don't use doubts over data quality as an excuse to postpone taking action to reduce the carbon footprint of the supply chains," was the blunt response to this sentiment from Paolo Mon- trone, senior vice president and head of global trades at forwarder Kuehne + Nagel. "We need to be careful not to fall into a loop of saying the data is not good enough. Data will never be good enough. We can always argue that, but it can quickly become an alibi for postponing action." Clean Cargo is leading the way in providing emissions data, and Angie Farrag-Thibault, the nonprofit's pro- gram director as well as the director of transportation and logistics at Busi- ness for Social Responsibility, pointed out that one of the most difficult challenges in decarbonizing ocean shipping is business continuity. "While consolidated and compre- hensive emissions data is one key part of this effort, system change through value-chain collaboration is also crit- ical," she said. "Clean Cargo enables shippers, carriers, forwarders, and ports to work together, along with a network of other initiatives and solution providers, on developing and scaling transformative solutions for a sustainable cargo shipping industry." K+N, a member of Clean Cargo, is pushing sustainable solutions, and Montrone said there is increasing interest in carbon calculators and green logistics from customers, some - thing echoed by Bang at Maersk. "In 2019 we have seen signifi- cant increasing customer interest in investing in new low-carbon solutions, and we have sold carbon-neutral transport of contain- ers with a price premium to some cus- tomers already," he told The Journal of Commerce. Kathrin Brost, global head cus- tomer intelligence and GoGreen at DHL Global Forwarding, said her com- pany is seeing growing demand for green logistics solutions as customers begin putting individual sustainability targets in place in their companies. "We strongly believe that this demand will even pick up in future. So, from our point of view, it's a question of having the right solutions and services in place, rather than one of cost readiness." While regulation will inevitably come down from the top and force shippers to adopt more sustainable logistics practices, growing aware - ness is also coming up strongly from consumers, said Pia Meling, vice president sales and marketing for Massterly, an operator of autonomous vessels jointly owned by Kongsberg Maritime and Wilhelmsen. "Society, and particularly the younger generation, has a growing awareness of environmental issues and the need for sustainable solu- tions," she said. "Those that do not address their carbon footprint will struggle to recruit and retain new talent, [and] they may actively be punished when it comes to consum- ers exerting influence in terms of purchasing goods and services." JOC email: twitter: @greg_knowler Categorical imperative Trucking industry seeks clarity on driver classification issues By Bill Mongelluzzo "We need to be careful not to fall into a loop of saying the data is not good enough."

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