In The Wake Of Costly Port Dispute, Senate Leaders Have An Idea
Senate leaders proposed a bill Wednesday to prevent the type of labor disputes that caused an almost yearlong disruption along West Coast ports that cost the economy up to $2.5 billion per day.
“A labor dispute at one of our ports can cause significant damage to U.S. employers and to our economy,” Senate Committee on Health, Education, Labor & Pensions Chairman Lamar Alexander, a Republican, said in a statement.
The hope is the proposal would help lawmakers identify port disruptions caused by labor disputes, or other factors, before they cause serious damage to the economy. Simply put, the proposal will create a new level of transparency and accountability for ports.
This past labor dispute was incredibly costly and put significant burden on the economy, especially those industries reliant on importing and exporting goods such as the auto industry, retail and many types of farms. According to a report by the National Retail Federation, cargo moving through West Coast ports represents an economic value of 12.5 percent of U.S. Gross Domestic Product.
The report details how the port disruptions and work stoppage that resulted from the dispute didn’t just cost $2.5 billion a day, with changes of daily cost increasing if the stoppages went longer, it also impacted employment numbers, loss of overall GDP and caused significant strain on families of port workers and related industries.
Additionally, the committee notes the dispute as a contributing cause to the anemic 0.2 percent annual growth rate of the U.S. economy in the first quarter of 2015. The proposal by Alexander as well as Sens. John Thune, Deb Fischer and Cory Gardner is designed to make sure a future labor dispute is detected before it gets anywhere near as bad.
“The recent nine-month dispute at the West Coast ports made it difficult for auto manufacturers and suppliers in Tennessee to keep production lines running,” Alexander continued. “This bill will help shine a light on what’s happening at our nation’s ports before a labor dispute erupts and threatens our economy.”
Under the proposal the Bureau of Transportation Statistics (BTS) will have to establish a port performance statistics program and report annually to Congress. Additionally, port authorities that are subject to federal regulation or that receive federal assistance will have to report annually to BTS. The secretary of transportation will have to report to Congress on how ports are performing before and after labor agreements expire.
The dispute began in May when the Pacific Maritime Association and the International Longshore and Warehouse Union were unable to agree on a new labor contract. The inability to come to a deal and the resulting port congestion prompted economic problems in many industries. It wasn’t until pressure from the president and a visit from Labor Secretary Tom Perez on Feb. 20 that the two sides were able to reach an agreement.
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