Spotlight
Another California drayage carrier goes under
A second major California-based drayage operator has closed its doors in less than a month, raising renewed concerns that the cost of the state’ s push for low and zero-emission trucks might be hastening the demise of these companies. TGS Logistics shut down its operations in Northern and Southern California in early August, following GSC Enterprises’ announcement in mid-July that it ceased operations in the Oakland area. Robert Loya, chief operating officer at TGS, said drayage operators in California rely upon“ layered grants” from the state and the ports of Los Angeles and Long Beach. A harbor-wide clean-truck program reimburses drayage providers partly for electric truck purchases, but much of the revenues collected through the $ 10-per-TEU fee on laden containers goes toward building electric charging infrastructure. Drayage operators are also struggling in an environment marked by stagnating pricing and rising operational costs.“ These market developments haven’ t spared drayage operators in California, who also face the additional cost of approximately $ 500,000 per zero-emission truck,” said Matt Schrap, CEO of the Harbor Trucking Association. Drayage operators in California have been upgrading their fleets with clean-diesel trucks and, more recently, with the purchase of zero-emission trucks. Those purchases have“ exacerbated” current market conditions, he said.
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Chinese investor joins Hutchison terminal deal
CK Hutchison is in talks with a“ major strategic investor from China” to join the BlackRock-Terminal Investment Limited( TiL) consortium in its planned $ 23 billion purchase of Hutchison’ s non-China terminals. Hutchison, whose businesses include ports, telecoms, real estate and retail, did not provide details on the Chinese investor, although it is widely thought to be Cosco Shipping Holdings. Cosco’ s potential involvement follows speculation the Chinese government was pushing for a Chinese shipping group to join the consortium as a condition of Beijing giving regulatory approval to the deal. TiL is the terminals division of Gianluigi Aponte’ s Mediterranean Shipping Co. The deal would also make MSC / TiL the world’ s biggest terminal operator, with throughput volumes of more than 130 million TEUs, according to Drewry. Hutchison’ s comments about Chinese involvement were made in a statement to the Hong Kong stock exchange following the weekend expiry of the 145-day exclusive negotiating period Hutchison had with BlackRock-TiL. Despite the end of the exclusivity period, Hutchison said it“ remains in discussions with members of the consortium with a view to inviting a major strategic investor from [ China ] to join as a significant member of the consortium.”
NJ takes second pass at trucker classification rule
A second attempt at requiring New Jersey employers to test whether their workers are employees or independent contractors is again raising concerns about the impact on port truckers. This time, though, legislators are readily joining with drayage carriers to question potential economic harm under the proposal. The New Jersey Department of Labor and Workforce Development finished a 90-day comment period over a proposed rule that would require use of the so-called ABC test for determining whether a worker is
a full-time employee or an independent contractor. The ABC test, which looks at factors such as the kind of work, how it’ s done and who supervises it, undergirds California’ s AB5 law passed in 2019. AB5 imposed a higher hurdle on the state’ s trucking industry for using independent owner-operators as drivers. That same year, New Jersey’ s legislature failed to pass a similar law codifying use of the ABC test. However, the state Labor Department proposed in May adding a rule that would require using the ABC test, saying the rule was necessary due to recent court cases of misclassification. The Labor Department did not say how many comments it received about the rule. But one group— Save Independent Work— said it received 18,000 comments for submission opposing the rule. New Jersey has about 1.7 million independent contractors.
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6 Journal of Commerce | September 1, 2025 www. joc. com