Premium Transportation Services Inc., known locally as Total Transportation Services Inc. (TTSI), one of Southern California's largest port trucking companies, filed for chapter 11 bankruptcy protection on Monday in federal court in Delaware. The company said in a court filing that "downward pricing pressure from some of its major clients over the past year" along with mounting costs of litigation with independent drivers had proven more than it could manage.
TTSI has lost nearly a dozen misclassification claims before the California Labor Commission and 14 lawsuits in state court, which amounted to roughly $3.5 million in awards and damages. Legal fees for those cases, along with several other lawsuits currently proceeding before the commission and the courts, have cost the trucking company an additional $4 million, according to the bankruptcy filing.
Like most trucking companies hauling goods to and from Los Angeles and Long Beach ports performing the service known as drayage, TTSI works primarily with independent truckers. That model has come under attack in recent years, particularly at the Southern California ports, which are served by more than 10,000 local drayage drivers. Backed by the International Brotherhood of Teamsters, drivers working with several local companies have filed wage claims, arguing that they were misclassified as independent contractors and that they're owed overtime pay and other benefits.
In light of those issues, TTSI parent company Saybrook has experimented with a full-time employee model at TTSI's sister company Eco Flow Transportation, the port area's first all-employee trucking firm, which opened last year.
Editors Insight: The advent of mega-ships, shifting carrier alliances and marine terminal automation have all contributed to a loss of jobs, which has raised pressures in labor negotiations.
On Tuesday, a coalition representing 113 local, state and federal trade associations of beneficial cargo owners urged the International Longshore and Warehouse Union and Pacific Maritime Association to begin early discussions on a contract extension to prevent the stoppage that occurred last year.
Food Logistics has noted that growing port congestion, stiffer emissions regulations and higher operating costs (fuel, insurance, etc.) have taken a big bite out of that income.
Both management and labor need to recognize that new technology is changing port economics. Management should recognize that jobs are being lost and support efforts to transition workers to new jobs. Labor should recognize the market changes and offer some bargaining flexibility. 3-17-16 By Elliot Maras