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.

Manufacturers welcomed the news this morning that the U.S. Maritime Alliance (USMX) and the International Longshoremen’s Association (ILA) have agreed to a 30-day extension to resolve their differences to avoid a dockworkers strike of the East and Gulf Coast ports.

However, it is critical that both parties use this time wisely to reach an agreement as soon as possible to avoid a strike at the end of the 30-day extension. Manufacturers implemented costly contingency plans this month, and the last thing manufacturers need is a repeat of the same scenario in January. Even with this progress outlined today, uncertainty remains until a final agreement is reached. Due to the complex nature of manufacturing supply chains, manufacturers must plan far ahead, and the continued potential for a strike in 30 days will result in additional costs to minimize the impacts of any port disruptions.

According to the Federal Mediation and Conciliation Service, both parties have agreed in principle to resolve the royalty payment issue, and the 30-day extension will give them time to work out other differences. This is a positive development to help avoid a port strike at the worst possible time for manufacturers.

With manufacturers already facing the fiscal cliff in three days, a port strike would have been another crippling blow to our economy. A strike would likely cost our economy an estimated $1 billion a day. Supply chains would be disrupted, putting manufacturing jobs at risk and halting exports. The National Association of Manufacturers has urged both sides to come to an agreement to protect jobs. We are hopeful that a final agreement will be reached as soon as possible so we can put any additional uncertainty from a port strike to rest.

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

Recent News Coverage:

-“Ports on East Coast threatened by strike“ (USA Today)
- “Obama pressed to act as dockworker unions threan massive port strike” (The Hill)
- “Looming port strike could cost economy billions” (CNN Money)

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.

The situation of low water levels on the middle Mississippi River continues to cause great uncertainty for the nation’s industrial shippers.  If channel depths go below nine feet as is expected sometime later this month, barge traffic carrying $7 billion worth of cargo would be significantly impaired.

Any potential closure due to low water depths or other navigational hazards that prevent towboats and barges carrying agriculture products, fertilizer, steel, coal, petroleum products and other commodities will lead to lost economic opportunities and damage the competitiveness of manufacturers. Hundreds of manufacturing facilities, terminals and docks are located in the Upper Mississippi River basin which spans 858 miles from Minnesota to the Ohio River.

The impending crisis on the Mississippi has grabbed the attention of lawmakers on the Hill and forced federal bureaucrats to move faster on a rock removal project that should have been accomplished years ago. The expedited removal of these rock formations near Thebes and Grand Tower, IL is welcome news but manufacturers need a greater level of certainty from the Administration that water levels will not be allowed to reach a point that cripples waterborne commerce. Time is of the essence for the Administration to develop a comprehensive plan that will ensure the entire Mississippi River remains fully open to navigation.   

The looming emergency on the middle Mississippi River is a reminder that Congress must soon pass a long-overdue Water Resources Development Act (WRDA ). In the meantime, the Administration must take additional action beyond removal of the rock formations, including releasing appropriate levels of water, to avoid a breakdown on the river. Taking this step will promote commerce, economic growth and jobs.

Robyn Boerstling is director of transportation and infrastructure policy, national associaton of manufacturers.

By night, Washington, D.C. is a mid-sized American city of roughly 600,000 people, somewhere between Baltimore and Nashville.  By day, the population explodes to over a million.  If those commuters aren’t battling some of the worst traffic in the nation, there’s a good chance they are taking Metro, the D.C. area’s public transit system.

And, in a couple years, they’ll be riding in style in new train cars (the 7000 series, to be precise), all brought to you by manufacturing in the United States.

Yesterday, Metro unveiled its new railcar, which will made by NAM-member Kawasaki at its rail car manufacturing facility in Lincoln, Nebraska. Kawasaki has made train cars for transit systems across the country.

Among the innovations in the new Metro cars are floors composed of “a dark, nonslip vinyl colored with blue, red and white specks that focus groups favored for its patriotic feeling.” Many riders will welcome the new doors, which no longer will crush unsuspecting tourists. “The new doors will have a ‘sensitive edge’ that can determine when a rider is trapped as the doors close, the Washington Examiner reports. “The doors will spring open slightly but not all the way, said Metro’s chief vehicle engineer, Joseph Reynolds.”

And there’s more. Metro highlights some other features of the new cars and offers a sneak peak of what’s to come.

This afternoon the National Association of Manufacturers joined a broad based coalition of 15 industry groups in filing an amicus brief challenging the Federal Motor Carrier Safety Administration’s (FMCSA) Hours of Service final rules for commercial truck drivers. The brief supports the American Trucking Association’s legal challenge to the 34-hour restart change in the regulation.

The restart provisions will place a significant burden on manufacturers, causing a negative impact throughout the supply chain and distribution operations. It will drive up costs, hurting jobs and our competitiveness. Manufacturers rely heavily on trucking for the transport of supplies and finished products. Due to this regulation, more trucks will be placed on the road during peak driving times, adding to the already congested highways across our country and increasing shipping costs.

This is just another regulation that adds to the unfavorable business environment facing manufacturers. We will continue to work with our industry partners to change this burdensome regulation to protect jobs and our competitiveness.

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

Yesterday, the Senate passed a bill to reauthorize the Federal Aviation Administration bill by a vote of 75-20. The bill is funded through 2014.

The bill’s passage is major news after four years of trial and error, resulting in 23 temporary extensions. It will provide infrastructure improvements, next generation air traffic control and common sense regulatory reforms that won’t hinder growth. This is great news for American manufacturers.

Job creation and infrastructure investment are two of the NAM’s top priorities and this legislation takes important steps toward accomplishing them. The House passed the bill on February 3, by a margin of 248-169. The bill now awaits President Obama’s signature.

Furthering its commitment to sustainability, NAM member Bayer Corporation last week opened an electric vehicle charging station for employees at its U.S. headquarters in Pittsburgh. The Bayer charging station is one of the 45 stations that will be built along Pennsylvania Interstate 376 as part of the “Energy 376 Corridor” project. The project’s goal is to create one of the most extensive charging station networks in the country. The station is located next to Bayer’s EcoCommercial Building Conference Center, which is a net-zero energy facility.

Dan Santmyer, Director of Operations at the Bayer Pittsburgh site, said in a press release, “the installation of the EV charging station is part of the company’s global commitment to sustainability. We are proud to provide our employees with the infrastructure that supports their efforts to drive, rent or purchase EV’s and reduce their personal footprint on the environment.”

Learn more about Bayer’s comprehensive sustainability program here.

Today was another historic day for the future of the avaition industry in the United States as the first Boeing 787 Dreamliner made its very first commercial flight. The All Nippon Airways flight was a charter flight from Narita to Hong Kong that last about four hours.

The Dreamliner is the most advanced and fuel efficient commercial jetliner ever produced.

Boeing 787 Dreamliner

The aerospace industry is extremely important to innovation and manufacturing in the United States. Yet companies like Boeing are continuing to face regulations and headwinds that make it difficult to compete in the global marketplace. The National Labor Relations Board’s complaint against Boeing is creating uncertainty throughout the economy for manufacturers and has put at risk thousands of jobs in the production of the Dreamliner.

Manufacturers are looking for policies out of Washington that will help them create jobs and foster innovations like the Dreamliner. More regulations just continue to dampen job creation and growth.

Additional media coverage of the Dreamliner’s first commercial flight:

• Associated Press, “Boeing 787′s inaugural flight lands in Hong Kong“
• CNN, “A step forward on Dreamliner flight“
• Washington Post, “Review: Boeing’s 787 won’t fix the chair-kicking kid, but it improves almost everything else“

Manufacturers fully support the request made this week by House Speaker John Boehner and Majority Leader Eric Cantor to the President to withdraw the Department of Transportation’s proposed changes to the trucking hours of service rules.  Citing a $1 billion  regulatory burden imposed by these changes and specific impacts to small business, the two House leaders identified this proposed rule as a “helpful first step toward lowering the $1.75 trillion annual cost of federal regulations.”

Manufacturers are heavily dependent on a healthy and competitive trucking sector.  Approximately 80 of shipments measured by value move by truck in the United States and the added costs of the proposed hours of service rule will create unwelcome challenges during a time of high fuel costs and continued economic recovery.  

The federal data shows that current rules have proven successful in achieving reductions in truck-related fatalities and truck accidents.  As we have noted in a comment submitted to the Federal Motor Carrier Safety Administration earlier this year, the proposed hours of service rule changes will undermine manufacturers’ competitiveness, harm productivity and translate to higher consumer prices. 

The proposed rule is inconsistent with the President’s Executive Order on improving Regulation and Regulatory Review and manufacturers encourage the President and House leaders to work together to relieve this anticipated burden on our economy.     

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