Rising Transportation Costs for California Shippers

  • Rising Transportation Costs for California Shippers

    California is enacting stricter standards for LTL shipments. Higher regulatory requirements and employee re-classifications raises costs.

    Mainstream articles are reporting that new fees will apply to shipments moving in and out of California: California Compliance Surcharge are being added to offset the state’s higher operating costs and stricter regulations. The surcharge (for now) does not apply to volume LTL shipments, truckload, or Guaranteed shipments. Under this principle, any shipments typically weighing over 4000 lbs are potentially not applicable to the change in fee structure

    Findings indicate that in recent years, truckers have had to meet increasingly higher emissions standards in California. Additionally, the state’s courts upheld the state’s meal and rest break rules for truckers and ordered carriers to reclassify independent contractors as full time employees in several high-profile cases.

    Some carriers have already began charging shippers extra to move freight in and out of California with an additional fee around $6-per-shipment surcharge. Trucking companies typically pay their drivers per mile driven, but also have to incorporate California specific wage laws to the already elevated cost of moving freight (inter/intra) California. Many carriers in today’s economy often operate under single digit operating margins and cannot absorb the additional cost. Thus many carriers will follow suit and began adding California specific fees.

    For shippers the surcharges are “just part of ongoing concerns over the increasing cost of doing business in California,” said Jonathan Gold, supply chain and customs policy lobbyist for the National Retail Federation. He said retailers’ costs are also raised by congestion at California’s seaports.

    For any questions on California Specific Surcharges email sales@pnglc.com or call 717-626-1107X3

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