The California Chamber of Commerce has joined a large coalition of manufacturers, farmers and agribusinesses, wholesalers, retailers, importers, exporters, distributors, and transportation and logistics providers, to support federal legislation to ensure that port disruptions due to labor contract negotiations do not have a negative impact on the U.S. economy.
The bill was introduced recently by U.S. Senator Cory Gardner (R-CO) as the “Protecting Orderly and Responsible Transit of Shipments Act of 2015” (PORTS Act).
While the coalition supports the collective bargaining process, the coalition believes the negotiating process should not threaten the national economy.
The PORTS Act amends the National Labor Relations Act (NLRA) to provide governors a mechanism under federal law to mitigate the destructive impact of a port labor dispute on the economy in their state and nationally. The bill explicitly includes slowdowns as a trigger for Taft-Hartley emergency powers. Coalition members believe this approach correctly reforms the Taft-Hartley process to promote government action in response to the great harm these disputes cause the national economy. Most important, the bill clearly defines and expands situations in which Taft-Hartley can be invoked, preventing legal ambiguity from causing inaction.
U.S. ports are essential to the economy and provide the gateway for imports and exports. Ports should not serve as a barrier to trade, preventing companies from reaching foreign consumers. The coalition believes this bill will provide an important tool to ensure ports remain open and cargo continues to flow during future negotiations.
Recent Labor Disputes
The contract negotiations and related labor disputes between the longshoremen and management at U.S. ports on both the East and West coasts have become increasingly complex and contentious over the last decade. The strikes, lockouts and slowdowns that frequently accompany contract negotiations have caused significant harm to the U.S. economy and the millions of businesses and jobs that rely on the efficient movement of cargo through the ports.
West Coast Ports
The most recent West Coast port labor negotiations had a significant and costly impact on the U.S. economy.
Companies are still reporting effects on their business from the year-long ordeal. Retailers had delays in getting goods to store shelves. Manufacturers had to slow and even stop production lines when components were unavailable due to being delayed at the ports. The disjointed production created high levels of uncertainty for workers and employers aiming to deliver products to domestic and global customers.
All segments of agriculture, including potato farmers, apple growers and pork, poultry and meat producers, as well as others, missed shipments to overseas markets, potentially closing those markets to future sales.
All these businesses and sectors experienced significant financial burdens, including increased transportation costs. The West Coast ports have finally cleared the backlog created by the congestion and slowdowns during the negotiations, but the economic damage has been done. The operational meltdown just experienced is a chief cause of the negative growth in the nation’s gross domestic product (GDP) in the first quarter.
The recent scenario is not uncommon. There is a long history of disruptions during port labor negotiations. The 2002 West Coast ports lockout at these same ports cost the U.S. economy $1 billion a day, by some estimates, while re-establishing normal operations took more than six months. Although there weren’t any disruptions during the 2012 East/Gulf Coast negotiations, the constant threat of labor action forced companies to institute costly contingency plans to avoid threatened disruption.
The coalition believes the PORTS Act is a tool that will help provide certainty to future negotiations.
CalChamber is urging businesses to contact members of the California congressional delegation and urge them to support the “Protecting Orderly and Responsible Transit of Shipments Act of 2015” (PORTS Act).
Staff Contact: Susanne Stirling