California is facing a growing supply chain crisis as strict labor and environmental regulations like AB5 push independent truckers out of the industry, shrinking hauling capacity, driving up prices, and leaving businesses and consumers anxiously paying the cost of policies that may have gone too far.

Sacramento — What began as a regulatory adjustment has quietly evolved into a full-blown crisis rippling through California’s freight corridors, and now the state’s trucking industry is sounding the alarm with unusual urgency.

Over the past two years, thousands of independent truck drivers have exited the market, warehouses report delayed shipments, and businesses across the western United States are bracing for higher prices — all consequences, industry leaders say, of California’s enforcement of Assembly Bill 5 and a wave of overlapping environmental mandates.

At the center of the controversy is AB5, a labor law passed in 2019 but aggressively enforced in the trucking sector beginning in early 2023.

The law reclassifies many independent contractors as employees, fundamentally altering how owner-operators can legally work.

While supporters argue it protects workers from exploitation, trucking groups say it has dismantled a business model that once powered California’s ports, farms, and retail supply chains.

“This didn’t happen overnight,” said Carlos Mendoza, a 22-year veteran owner-operator based in Riverside County, who parked his truck for the last time in August.

“They told us it was about fairness.

But what it really did was make it impossible for small guys like me to survive.

” Mendoza explained that being forced into employee status would have required him to surrender control over routes, schedules, and equipment — effectively ending his independence.

“I didn’t leave trucking because I wanted to,” he said.

“I left because there was no legal way left to work.”

State data and industry estimates suggest tens of thousands of independent drivers have either left California, shifted operations out of state, or exited trucking altogether since enforcement intensified.

The impact is most visible at the Ports of Los Angeles and Long Beach, where container dwell times have increased and trucking availability has tightened during peak shipping windows.

Port officials, speaking privately, acknowledge that fewer independent drivers mean less flexibility during surges — a vulnerability that did not exist a decade ago.

Governor Gavin Newsom’s office has defended AB5 as a necessary reform, arguing that companies must adapt rather than rely on what they describe as misclassification.

“California will not roll back worker protections to accommodate outdated business practices,” a spokesperson said in a written statement.

Yet behind closed doors, lawmakers are fielding mounting complaints from agricultural exporters, retailers, and manufacturers who say hauling costs have risen sharply.

Environmental regulations have added another layer of strain.

California’s Advanced Clean Fleets rule, which accelerates the transition to zero-emission trucks, has imposed steep compliance costs on carriers.

While large logistics firms can absorb or pass on these expenses, small operators cannot.

“You’re asking drivers to buy six-figure electric rigs, install charging infrastructure, and comply with AB5 at the same time,” said Megan Wright, the investigative journalist who has tracked the issue for months.

“For independents, that combination is fatal.”

The consequences extend beyond trucking yards.

Grocery distributors report higher freight rates feeding into food prices.

Construction firms face delays as materials arrive late or at elevated cost.

In the Central Valley, farmers warn that fewer available haulers during harvest season could leave crops stranded.

“If trucks don’t show up, produce rots,” said one Fresno-area grower.

“This isn’t theoretical.”

Legal challenges to AB5 continue to move through the courts, but recent rulings have largely upheld the state’s authority.

Meanwhile, neighboring states like Arizona and Nevada are actively recruiting displaced California truckers, offering looser regulations and tax incentives.

The result, critics say, is a slow export of capacity — and jobs — across state lines.

What troubles industry leaders most is the lack of a clear contingency plan.

“We’re being told the market will adjust,” said Linda Park, a logistics coordinator for a regional retailer.

“But adjustment takes time, and shelves don’t wait.”

As pressure mounts, the trucking industry is no longer whispering its concerns.

Associations are organizing coordinated protests, port slowdowns, and public campaigns aimed squarely at Sacramento.

Whether those warnings translate into policy changes remains uncertain, but one reality is becoming harder to ignore: California’s supply chain is operating with less margin, less resilience, and fewer drivers than ever before — and the cost of that fragility is starting to reach everyone.