Higher Costs for California Shippers

Midway through 2016, California enacted stricter standards for LTL shipments. Higher regulatory requirements and employee re-classifications raises these costs.

Mainstream articles are reported 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 in and out of 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.