Old Dominion Freight Line Inc. has become the second less-than-truckload (LTL) carrier in little more than a month to impose a per-shipment surcharge on all shipments moving in and out of California, according to a May 2 tariff notice posted on the carrier's website.
Thomasville, N.C.-based Old Dominion imposed a $5.95 per-shipment "California compliance surcharge," effective May 2, according to the notice. It provided no additional information.
On April 1, ABF Freight System Inc., the LTL unit of Ft. Smith, Ark.-based ArcBest Corp., imposed a $5.92 per-shipment charge on movements in and out of California to offset the cost of complying with changes in the state's labor code. At the time, an ABF executive was quoted in a transport law journal saying the new language places "significant new burdens" on employers that pay employees on a piece-rate basis. Piece-rate pay is broadly defined as a category of pay that is tied to units of production or activities performed. In trucking, the most common type of piece-rate payment is pay per load, which can be calculated as either a fixed fee per load or as a payment based upon the mileage associated with a load.
The new language, which took effect January 1, requires employees to be compensated for rest and recovery periods, as well as for other "nonproductive times" that are separate from piece-rate compensation. The law does not single out any one industry or specific industries.
At this time, it is believed no other trucker has joined ABF and Old Dominion. However, other carriers may act in a similar manner since ABF made the first move, Charles W. Clowdis, managing director-transportation for consultancy IHS Economics and Country Risk said.
Gartner, Inc.