ports Archives - Shopfloor

Yes, Indiana Has a Port System

By | Infrastructure, Shopfloor Policy | No Comments

From the crossroads of America, Indiana Ports and the American Association of Port Authorities (AAPA) hosted an important session with manufacturers, truckers, engineering firms and thought leaders as well as state and local officials about maximizing infrastructure investments and strategically positioning and advocating infrastructure in ongoing national debates.

Indiana is a top manufacturing state in the nation representing the highest manufacturing employment in the United States17 percent of the Hoosier workforce. With manufacturing well represented in Indiana’s economic footprint, investment in roads, rails, Burns Harbor on Lake Michigan and two inland ports on the Ohio River could not be more important. Fifty-seven percent of the state’s border is water.

Due to complex supply chains of manufacturers and just-in-time inventory principles, leading manufacturers like ArcelorMittal and Subaru of Indiana need Indiana infrastructure to perform and to perform second to none. The good news is that the state has made significant investments, raised revenues and supported projects that the business community needs to keep competitive. It has a vibrant supply of rail, trucking and waterway services. But these sectors do not operate in isolation.

The challenge, however, remains projects of regional and national significance that make a system-wide impact on the movement of critical materials and goods throughout the country and world. In Indianapolis, roundtable participants raised the genuine concern about the long-term condition of the Soo Lock System and especially the Poe Lock in Michigan. The current Poe Lock was built in 1969 and is at risk of failure. It handles more than 90 percent of U.S.-flag vessel cargo passing between Lake Superior and the lower Great Lakes, including more than 40 million tons of iron ore and coal destined for steel mills.

The status quo of the Poe Lock and the aging locks on the inland waterway system is a threat to manufacturing because a catastrophic failure will harm the economy and jobs. According to a 2015 U.S. Department of Homeland Security report, an unanticipated six-month closure of the Poe Lock would likely result in widespread bankruptcies and dislocations throughout the economy. More than 10 million people in the United States and 2 million to 5 million more in Canada and Mexico would lose their jobs. North American economies would enter a severe recession. The U.S. recession impacts would be concentrated in the Great Lakes region, though California and Texas would experience some of the largest job losses. Entire manufacturing industries would be debilitated, including automobiles; appliances; construction, farming and mining equipment; and railcars and locomotives.

Indiana and others states are competing against industrial behemoths like China, Japan and Germany. Competition between states will always be around, but the focus on edging out the international competition is even more acute. These competitors do not even think twice about robustly investing in infrastructure to support industry. Productivity growth in the United States is central to expanding the U.S. economy, and while it’s bigger than one industry or one state, more efficient transportation and infrastructure systems are necessary to create an environment that fosters increased productivity. The Infrastructure Week message to the president, House of Representatives and the Senate: #TimeToBuild is vital now. The NAM has produced an infrastructure toolkit to provide manufacturers the resources to amplify this Infrastructure Week message.

PORTS Act – A Thoughtful Approach

By | Infrastructure | No Comments

Today, Senator Cory Gardner (R-CO) introduced the “Protecting Orderly and Responsible Transit of Shipments” (PORTS) Act, which creates an option to avoid economic disruption demonstrated by recent events on the West Coast. The NAM applauds Senator Gardner for introducing this bill which give state governors the option to intervene in labor disputes at seaports to prevent disruptions. Read More

Talks to Resume to Avoid Costly Port Strike

By | Transportation | No Comments

Contract negotiations between the U.S. Maritime Alliance (USMX) and the International Longshoremen’s Association (ILA) are scheduled to resume this week. Manufacturers urge both sides to reach a resolution to these talks ahead of the February 6 deadline.

The looming threat of a work stoppage in the beginning of February continues to cast a dark cloud over manufacturers who rely on the nation’s East and Gulf Coast ports to export products and receive goods. The economy cannot afford the consequences of any work stoppage at the ports and manufacturers will feel the full impact if both sides cannot come to an agreement.

The $1 billion per day cost of the 10-day West Coast port lockout in 2002 and the months it took to recalibrate the ports from this major disruption needs to be more than a reminder, but an incentive for both sides to soon reach an agreement. 

While manufacturers have planned for a potential disruption and continue to implement costly contingency arrangements in advance of February 6, concluding negotiations with an agreed upon contract before the deadline is the best solution.

Forward exporting, diverting cargo, increasing inventories and renting additional warehouse space do not position manufacturers for growth. Manufacturers will need greater assurances and a strong signal this week that a contract is an achievable goal in order to move beyond this palpable uncertainty.  Global customers need to know now that we will be open for business. 

Robyn Boerstling is director of transportation and infrastructure policy, National Association of Manufacturers.

Port Work Stoppage Will Hurt Economy

By | Transportation | No Comments

It is good news for manufacturers that the Office Clerical Unit Local 63 (OCU) and the marine terminal employers at the ports of Los Angeles and Long Beach reached an agreement this week that ended an eight-day work stoppage.

However, more trouble looms on the other side of the country at the East and Gulf Coast Ports as the International Longshoremen’s Association (ILA) continues its contentious negotiations with the United States Maritime Alliance (USMX). While these talks are being held under the auspices of the Federal Mediation and Conciliation Service, the outlook does not appear to be positive.

The longshore labor unions, especially on the West Coast, have used work stoppage and slowdown tactics successfully during contract talks to make gains in their contracts, ranging from as far back as the 1971 International Longhshore Warehouse Union (ILWU) strike that Nixon ended after 134 days, to this week’s events with the OCU.  In 2002, the ILWU lockout came at a cost of $1 billion a day to the U.S. economy and eventually delivered to the union what one leader described as “the richest contract we’ve ever negotiated.”   

The maritime industry has often noted the difference of style and culture between ILA and the ILWU, but Mr. Daggett, the current President of the ILA, has made strong statements and new commitments to maritime labor solidarity that show a willingness to be more pugnacious. The success of the ILA in negotiating its contracts with management going back to 1977 without any interruption is likely to be challenged in the next few weeks.

Just as with the West Coast ports, manufacturers need the East Coast ports to be open for business.  With a weak economy and a fiscal cliff on the horizon, manufacturers need the ports to ship and receive critical commodities and finished products in order to keep businesses running and people employed.

The ripple effect of a strike or slow-down would lead to curtailed economic growth, lost jobs and higher prices on goods for all Americans. Manufacturers have faith in the federal mediation process and hope when the parties sit down at the table next week, they keep this in the forefront of their minds. Also, today a group of industry groups, including the NAM, sent a letter to both the ILA and USMA to continue negotiating with the goal of finalizing an agreement without disrubtions to the supply chain.

Robyn Boerstling is director of transportation and infrastructure policy, National Association of Manufacturers.