New port trucking company launches with employees, not independent contractors

Days after the end of picketing against port trucking companies that classify their drivers as independent contractors, a new firm launched Monday vowing to treat its drivers as employees. 

Eco Flow Transportation has started in Los Angeles with 50 trucks and about 100 drivers at what company chairman Jonathan Rosenthal calls "ground zero in the change of the port drayage model."

"Eco Flow will serve as the new model for port trucking," said Rosenthal. He described the plan as "a model in which drivers have a vested interest in the future success of the company while providing a stable and productive workforce that the company and its partners can rely upon." 

Around 14,000 truck drivers haul cargo in and out of the ports of Los Angeles and Long Beach. Industry estimates say there are about 600 companies in a range of sizes.  Many of these companies classify their drivers as independent contractors, and organizers with the Teamsters Union have sought to change that. Some drivers say they make less than minimum wage as independent contractors because they are paid per haul, instead of by the hour.

"The independent owner-operator model is very challenged because it naturally generates a very fragmented industry," Rosenthal told KPCC.  "If somebody is not able to feed their family, then you have an unstable workforce."

(Caption: Eco Flow chairman Jonathan Rosenthal. Photo by Brian Watt/ KPCC)

Rosenthal is a general partner with Saybrook Capital, a parent company to Eco Flow and other transportation and logistics companies.  One of Eco Flow's sister companies is Total Transportation Services, Inc.  (TTSI), a drayage firm that operates with independent contractor drivers. TTSI has been the target of Teamsters-organized work stoppages and pickets.

Los Angeles Mayor Eric Garcetti joined Rosenthal, about a dozen Eco Flow drivers, and Teamsters officers at a news conference in a parking lot at Dodger Stadium.  "The misclassification of port truck drivers is not the gripe of a few drivers but a battle cry of a systemic problem that must be addressed," Garcetti said. 

Weston LaBar, executive director of the Harbor Trucking Association, which represents drayage companies at the Ports of L.A. and Long Beach estimates well over 60 percent of the truckers at the ports are independent contractors and most would like to remain that way. "There's a greater opportunity to make a good living, and there's a lot more flexibility over hours," he said. "However, if there are companies that want to explore an employee model, I'm sure there are drivers out there that would like to work 9-5, but that's not the case for everybody."    

"It's hard to know what each of the drivers is thinking," says Dan Smith, a specialist in drayage firms with The Tioga Group, a freight transportation consulting company.  "There ought to be more than one way of doing the business."

Smith added that away from the ports, the rest of the trucking industry is seeing the importance of offering drivers a choice.

"As you drive down the highway and you look at the back of the trucks in front of you, a fair number of them are advertising that they want both employee drivers and owner-operators," he said.