Schrader, Newhouse Introduce Legislation to Prevent Future Port Slowdowns

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Washington, November 5, 2015 | Liz Margolis (202-225-5711) | comments

During a press conference today, Representatives Kurt Schrader (D-OR) and Dan Newhouse (R-WA) announced the introduction of legislation in the U.S. House of Representatives, H.R. 3932 the Ensuring Continued Operations and No Other Major Incidents, Closures, or Slowdowns (ECONOMICS) Act. This legislation would create new economic safeguards to prevent future port slowdowns such as the West Coast ports slowdown that devastated families, businesses, and agriculture producers west of the Mississippi. H.R. 3932 is also cosponsored by Reps. Tom Cole (R-OK), Doug LaMalfa (R-CA), Cathy McMorris Rodgers (R-WA), Dave Reichert (R-WA), Steve Stivers (R-OH), Fred Upton (R-MI), and Greg Walden (R-OR).

“We must take the lesson of the most recent ports slowdown to heart: that two parties cannot hold hostage the nation’s economy,” said Rep. Newhouse. “Under the status quo, the national economy—which depends on a stable supply chain—is subject to the threat of ongoing disruptive activity at our ports. This legislation will create an impetus to act to resolve disputes before they drag on for months with catastrophic effects. By establishing objective economic standards that require the federal government to form a Board of Inquiry, we can reduce the threat of an economic bottleneck at our ports that causes costly delays and lost opportunities. Family farms and businesses in Washington simply cannot afford another slowdown. I am grateful for my colleagues’ support for this legislation.”

“The West Coast Port crisis cost Oregon jobs, millions of dollars in economic growth and productivity and, eventually, the loss of its largest container shipper Hanjin from the Port of Portland—a hit that we will not know the full magnitude of for a few years,” said Rep. Schrader. “Another dispute of this magnitude cannot and should not happen. It only makes sense, given the irreparable economic harm and market loss from West Coast Port strife, that we establish a Board of Inquiry to push for a resolution before conditions worsen.” 

“The success of American agriculture is tied to our ability to dependably export our farm and ranch goods to overseas buyers,” said American Farm Bureau Federation President Bob Stallman. “Safeguards, such as those included in the ECONOMICS Act, would help prevent widespread disruption of our ability to deliver goods to our customers. The ability to ship agricultural products should not be held hostage by either side when disputes occur between shipping firms and labor. Measures included in this bill would help prevent damaging disruptions to our flow of agricultural commerce, which continues to be one of the brightest spots in our nation’s balance of trade.”

Background:

The prolonged contract negotiations and slowdown of cargo handling at the West Coast ports late last year and earlier this year caused significant disruptions throughout the economy, both nationally and across the States of Washington and Oregon. From May of 2014 through February of 2015, the Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union (ILWU) engaged in lengthy negotiations of a multi-year contract covering the 29 West Coast container ports. On May 20th and 22nd, the PMA and the ILWU finally ratified the agreement reached in February. According to the Federal Reserve, exports from West Coast ports dropped by 20.5% in the first quarter of 2015.

From November 2014 through February 2015, the dispute drastically slowed import and export traffic at 29 West Coast ports, paralyzing the economy west of the Mississippi River. Agricultural producers, retailers, manufacturers, and countless other businesses and consumers suffered, and were unable to reliably transport goods through the ports. The impact on American businesses equated to billions of dollars in damages, impacting thousands of jobs, and causing lost market share to foreign competitors.

The ECONOMICS Act: Under existing law, the President has the emergency authority to appoint a Board of Inquiry to recommend whether a judicial injunction should be sought in a dispute. The Ensuring Continued Operations and No Other Major Incidents, Closures, or Slowdowns Act – or The ECONOMICS Act – puts in place specific “triggers,” so that when certain economic impacts surrounding a dispute occur, a Board of Inquiry must be convened, and the Board is required to report to the President and the public to recommend whether there should be a judicial injunction. Additionally, the legislation directs the Secretary of Transportation to divide the nation’s maritime ports geographically into 4 major Port Metric Identification Regions (PMIR) – the West Coast, East Coast, Gulf Coast, and Great Lakes.

These triggers include:

  • Number of Ports: When a labor dispute occurs at 4 or more port facilities.
  • Number of Employees: When the number of affected employees at ports totals 6,000 or more.
  • Drop in Export or Import Vessel Value: When in one month U.S. imports/exports drop 20% or more.

The ECONOMICS Act also widens the definition of “strike” throughout U.S. labor law to clarify that the President has broad authority to intervene in a variety of disruptions – including slowdowns, strikes, lock-outs, or threatened strikes or lock-outs. This change in definition will also apply to economic impact triggers. The measure directs the Director of the Bureau of Transportation Statistics to develop “Additional Conditions” for appointing a Board of Inquiry within two years of enactment and report appropriate conditions numbers to Congress.

The ECONOMICS Act would require an objective standard that defines when a dispute has reached a level of economic impact to require an Administrative inquiry and/or possible intervention. Currently, in the heat of an ongoing dispute, this threshold can be difficult to determine or agree upon. By requiring an objective standard for economic impact before a dispute takes place, disputes can be prevented from paralyzing our economy, costing jobs, and harming businesses and consumers alike.

Click here for the text of the legislation.

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Tags: Trade