Washington, D.C. (June 13, 2023): The Pacific Maritime Association (PMA) and the International Longshoreman & Warehouse Union (ILWU) remain deadlocked in negotiations on a new collective bargaining agreement for 22,000 workers at 29 west coast ports. The Union has been working without a contract since last July and until recently west coast ports were operating at full capacity.
Over the weekend, service disruptions at the Ports of Los Angeles, Long Beach, Seattle, and Takoma were reported by the terminal operators. In L.A. and Long Beach, workers did not show up to secure outgoing cargo. This follows previous disruptions at the Ports due to not staggering meals, effectively shutting down ports for lunch and dinner breaks, and taking key cargo handling equipment out of service due to safety concerns. The PMA reported the Port of Seattle was shut down over the weekend, the ILWU has denied there was a shutdown.
Both the PMA and the ILWU released statements regarding the negotiations pointing fingers at the other side for misinformation and failing to reach an agreement. The Chamber of Commerce added to the chorus of business interests requesting the Department of Labor intervene to ensure there are no avoidable disruptions at west coast ports during negotiations. SFIA has joined the business community on similar letters to the President.
Shippers have moved some cargo through Canadian ports to limit exposure to the volatile U.S. West Coast Ports. Vancouver is Canada’s biggest Port and a popular alternate shipping destination to avoid labor shutdowns at West Coast Ports. The Canadian port option may be ending soon, as Canadian dockworkers voted to strike as early as June 24th.
SFIA will continue to press for a resolution to the West Coast Port Labor negotiations to avoid unnecessary disruptions in the supply chain.
For more information or for questions, please contact Bill Sells, SVP, Government & Public Affairs, at [email protected].
Washington, D.C. (June 5, 2023): As West Coast Port labor talks drag on, the ports are resorting to slowdowns and stoppages for more leverage in negotiations. Following earlier moves to remove key equipment for safety reasons and no longer staggering meal breaks leading to shutdowns at terminals, the Port of Long Beach shut down over the weekend. The Port schedule for the coming week suggests more problems Monday and Friday.
The Pacific Maritime Association (PMA) and International Longshoreman and Warehouse Union (ILWU) have resolved issues around healthcare and automation but are at an impasse over benefits and pay. SFIA sent a letter to the President earlier this year requesting intervention by the Labor Department to keep the Ports open during negotiations to avoid unnecessary supply chain disruptions. Additional information on the shutdown and negotiations can be found here.
SFIA will continue to press the Administration to engage in the negotiations to endure the free flow of goods through west coast ports during labor talks.
For more information or for questions, please contact Bill Sells, SVP, Government & Public Affairs, at [email protected].
Washington, D.C. (June 2, 2023): With inflation high and consumer confidence declining, the post-pandemic economic recovery remains sluggish. Dropping China Tariffs would lower consumer prices to help with the recovery, but there has been no movement on the tariffs. Despite repeated requests from Congress, the U.S. Trade Representatives have been slow to review China tariffs and have given no indication if they will re-open an exclusion process. To help ease the inflationary pressure, SFIA joined other business interests in pressing Congress to be more aggressive in ending the Section 301 tariffs on Chinese imports or re-open a transparent exclusions process, at a minimum.
The letter to the Congressional Select Committee on the Chinese Communist Party outlines the tariff’s failure to change Chinese behavior and that the tariff cost is absorbed by U.S. companies and consumers, not Chinese manufacturers. Chinese companies continue to violate international rules on intellectual property rights, forced technology transfers, and innovation, while U.S. companies and consumers absorb the cost of the tariffs. In short, the Section 301 tariffs have made U.S. companies less competitive while delivering no results. The business community believes it is time to work with our allies on an alternative approach to reign in illegal and unethical Chinese trade practices
SFIA will continue to pursue relief from China Tariffs to help its members keep costs down to help the economy bounce back and increase U.S. competitiveness globally.
Click here to view the letter.
For more information or for questions, please contact Bill Sells, SVP, Government & Public Affairs, at [email protected].
Washington, D.C. (May 3, 2023): Storage fees charged by railroads at U.S. interior rail terminals is a form of demurrage, which has cost American businesses hundreds of millions of dollars in recent years. Ocean carriers rely on rail and trucking to satisfy delivery obligations. When delays at the railyard occur, rail storage fees are paid directly to the railroad to secure the release of shipments. Unlike ocean terminals, which are incentivized to improve network efficiencies by Federal Maritime Commission (FMC), rail terminals are not subject to oversight by FMC and they are exempt from Surface Transportation Board rules, which do not apply to intermodal transportation. In short, railroads are not governed by the Shipping Act, enforced by the FMC, and rail storage fees have gone unchecked.
SFIA joined 70 other business interests on a letter to Congressional Leaders requesting help in clarifying oversight of rail storage fees. The letter asks for rail storage fees to be billed through ocean carriers and subject to the detention and demurrage requirements of the Ocean Shipping Reform Act of 2022 (OSRA22) and subject to FMC oversight.
Click here to view the letter.
For more information or for questions, please contact Bill Sells, SVP, Government & Public Affairs, at [email protected].
Washington, D.C. (April 14, 2023): As contract talks on a new labor agreement drag on, the Pacific Maritime Association (PMA) has called out the largest union representing workers in the ports of Los Angeles and Long Beach for initiating new strategies to disrupt the flow of commerce through the ports. After forgoing staggered meal breaks and shutting down ports at lunch and dinner, ILWU Local 13 has unilaterally delayed the standard dispatch process and taken critical cargo equipment out of service for safety reasons. Concerns over the labor situation at West Coast Ports have contributed to the diversion of cargo to East Coast and Gulf Ports. The latest union action will result in the additional diversion of cargo as negotiations continue.
Click here to view the letter.
For more information or for questions, please contact Bill Sells, SVP, Government & Public Affairs, at [email protected].
Washington, D.C. (April 5, 2023): Today, the Sports & Fitness Industry Association joined almost 200 business interests on a formal statement to the Senate Finance Committee and House Ways & Means Committee on the President’s Trade policy. SFIA and the business community, specifically targeted the elimination of Section 301 tariffs and immediate re-opening of a more transparent “exclusion process” as the U.S. explores alternative approaches to China’s trade violations.
Manufacturers have been hit with more than $173 billion in tariffs on Chinese-made products and inputs since the tariffs were initiated. Studies have found the tariff burden has been passed onto consumers in the form of higher prices. SFIA and the business community are united in their opposition to the continuation of the tariffs due to the impact on U.S. manufacturers’ competitiveness and the increased costs they place on consumers contributing to inflation.
As China continues to threaten Taiwan, violates U.S. airspace, offers tacit support to Russia, engages in the use of forced labor, and builds man-made islands in South China Sea shipping lanes there is increasing pressure to implement policies to encourage change in direction that does not use tariffs which have been unsuccessful in changing China’s behavior to date.
SFIA will continue pushing for a new U.S. tariff policy with China and a new fair & transparent exclusion process as long as Section 301 tariffs on consumer goods remain in place.
Click here to view the statement.
For more information or for questions, please contact Bill Sells, SVP, Government & Public Affairs, at [email protected].
Quarterly Newsletter
Congress was in full mid-term election mode in 2022 with significant policy initiatives passed via the Inflation Reduction Act that was moved through Congress without a single Republican vote. Similarly, long overdue investment in U.S. infrastructure passed with support from only 21 of 262 Republicans in Congress. The year ended with a post-election budget bill to fund the government that passed Congress with support from only 28 Republicans.
With party differences on full display, the midterm elections provided an unexpected result. The President’s party traditionally suffers significant losses in midterm elections, especially in a sluggish economy with high inflation. The 2022 elections did not follow the usual script, as Republicans picked up just seven House seats for a 222-213 advantage, while Democrats added a seat in the Senate for a 51-49 advantage. With control split between the parties, partisan legislation is not an option, and compromise will be required to get bills through Congress in 2023. SFIA’s policy agenda focuses on bills to advance sports and fitness in America: improve health, supply chains, promote trade, reduce tariffs, and reasonable regulation and enforcement of existing laws. Click here to see the agenda.
Trade-Tariffs, Forced Labor & Supply Chains
Shipping has improved, but popular tariff relief remains lapsed as China tariffs remain in place. Congress enacted legislation to address excessive detention and demurrage charges and facilitate the flow of commerce through U.S. Ports to address the challenges importers faced during the pandemic. Popular tariff relief programs lapsed at the end of 2020. Both the MTB and the GSP enjoy bipartisan support but remain stalled over ideological differences as pressure builds for action. As tensions with China rise due to geo-political issues, the USTR has indicated tariffs will remain in place, and a recent court ruling on tariffs sides with the government.
Long-Standing Tariff Relief Programs Await Congressional Action
The Miscellaneous Tariff Bill (MTB) provides tariff relief on products no longer made in the U.S. The International Trade Administration (ITA) recommended 80 SFIA petitions for inclusion in the MTB, providing up to $40 million in tariff relief on industry products. The Generalized System of Preferences (GSP) offers duty-free entry into the U.S. for products made in eligible countries with developing economies.
Both tariff relief programs expired at end of 2020 and Congress failed to move these traditionally non-controversial bills over the past two years. A Republican House is likely to pass MTB and GSP and send the bill to the Democratic Senate for consideration. Republicans will point to Democrats if the tariff relief bill is not passed to lower prices in an inflationary economy. Click here for more on SFIA’s work on MTB and GSP.
No End in Sight for China Tariffs
Section 301 Tariffs on Chinese-made products and inputs have cost U.S. consumers and companies more than $160 billion since they were initiated. Originally put in place by President Trump, the tariffs remain in place under President Biden, who has given no indication he will rescind them.
With tensions building over China’s Taiwan policy, support for Russia’s war, the intelligence balloon over the U.S., the expansion of presence in the South China Sea, and the failure to meet all the terms of the Phase One trade agreement, the USTR has indicated the tariffs on Chinese imports will remain in place and potentially expand.
A General Accountability Office (GAO) review of the USTR Section 301 Exclusion process found it to be seriously flawed; failing to justify many exclusion denials and not maintaining documentation on their decisions. The GAO urged the USTR to re-open a more transparent Exclusion process, but to date, it has only collected comments on harm caused by (or benefits of) the tariffs. SFIA has joined the business community in pressing for a new exclusion process. SFIA will alert membership to any opportunity to get products off the Section 301 tariff list.
On March 17, the Court of International Trade ruled the Section 301 Tariffs on Chinese consumer goods can remain in place. This is a blow to the efforts to toss out the tariffs as illegal due to USTR failure to follow guidelines set by the U.S. and World Trade Organization. The plaintiffs have announced they plan to appeal the ruling to the U.S. Court of Appeals in Washington, D.C.
CBP Seizes $500 Million in Products Suspected of Forced Labor
The Uyghur Forced Labor Prevention Act (UFLPA) went into effect on June 22, 2022, and Customs & Border Patrol (CBP) began detaining shipments of Chinese goods suspected of using forced labor in production. The CBP seized more than 1,500 shipments, valued at $500 million in the first three months of UFLPA. Importers must provide extensive documentation proving that no forced labor was used in the production of goods, including inputs and raw materials.
Cotton harvested in the Xinjiang region was a major target. Small shipments of cotton products avoided the new law using the ‘de minimus’ shipment exemption. Online orders valued under $800 qualify as ‘de minimus’ shipments and do not require reporting on forced labor. At the end of 2022, this fueled an effort to lower the ‘de minimus’ dollar threshold for international shipments.
Supply Chains Improve but Remain Fragile
Shipping has improved over the past year with fewer back-ups at ports and fewer COVID disruptions in Asia. The Ocean Shipping Reform Act (OSRA) has helped reign in excessive detention and demurrage charges and lowered the number of empty or partial containers leaving U.S. ports to facilitate U.S. exports.
President Biden urged Congress to pass the Railway Labor Act (RLA) to avoid a nationwide rail strike late last year. Congress passed the RLA to force the four holdout unions to accept the terms of the deal, negotiated with the help of Labor Secretary Walsh, to avert a nationwide rail strike that would have crippled U.S. supply chains.
West Coast Port Labor Unions have been working without a new contract since last July as labor talks drag on. The International Longshoreman and Warehouse Union (ILWU) and Pacific Maritime Association (PMA) recently issued a joint press release that they have a tentative agreement on health benefits and other elements of an agreement, but issues remain to be resolved. The ILWU has kept port workers on the job during the talks, but recent “meal breaks” have led to slowdowns at the Port Of Los Angeles. SFIA has asked President Biden to ensure west coast ports remain open in a March 24 letter signed by more than 200 business interests.
Activity Matters – Lowering Cost Barriers, Improving Access & Active Lifestyle Economy
Alcohol and substance abuse spiked during the pandemic as lives were disrupted, highlighting the mental health benefits of active lifestyles. The new appreciation for activity has led to increased attention on policies to address the cost and access barriers to active lifestyles.
Activity Cost Barrier Grows Post-Pandemic
The Aspen Institute reports it costs $883/year for a child to participate in a youth sport. Schools have adopted pay-to-play policies and out-of-school sports programs come with costs. Sports programs suffered during the national shutdown and the industry contracted. Likewise, gyms closed due to legislative & regulatory actions during the pandemic and did not re-open. Simply put – supply does not meet demand post-pandemic and activity prices have increased.
The Personal Health Investment Today (PHIT) Act, would lower consumer costs by allowing the use of pre-tax dollars to pay for activity expenses. PHIT was under consideration for the year-end Omnibus bill, but unfortunately was cut at the 11th hour. PHIT enjoyed broad bi-partisan support from more than 90 members of Congress in 2022 and was re-introduced in the House and Senate in March 2023. With a new appreciation for activities’ role in mental health, PHIT was re-introduced in the House and Senate on March 14 with bipartisan support. SFIA continues to lead the effort to pass PHIT to lower the cost barrier to active, healthy lifestyles. Click here to learn more about PHIT.
Youth Sports Grants
The American Rescue Plan included youth sports grants for local communities and organizations. Grants can be used for equipment and staffing but targeted to fund free and/or affordable youth sports opportunities. St. Paul, MN used ARP grants to remove all sports fees for kids 10 and under for three years and youth sports registrations jumped 40 percent. For-profit organizations or leagues are not eligible for ARP grants.
Congressman Colin Allred (D-TX) introduced the PLAYS in Youth Sports Act to create a $75 million grant program for community youth sports programs. CDC grants would focus on national organizations offering sports in underserved communities. The Department of Health & Human Services may establish a companion grant program for municipalities, counties, and states to increase youth sports participation.
PLAYS Grants would be used for coaching certification, training in youth development, retaining coaches and volunteers, emphasizing participation over outcome, and including background checks for coaches. The bill also authorizes the CDC and National Institutes of Health to conduct research to prevent sports injuries and advance youth sports safety. The PLAYS Act had five Democratic co-sponsors in the House last Congress and will be re-introduced.
Gaming Revenue Funding Youth Sports
New York became the first state to tap into gaming revenue to help support youth sports programs. The New York mobile sports betting law dedicates a portion of the gaming tax revenue to youth sports programming. Grants were distributed to every county using a population formula, with New York City receiving $299,000. Grant preference is given to programs in underserved communities. Ohio, Massachusetts, and Minnesota have passed similar measures and other states are expected to follow suit.
The federal government collects a .25 percent excise tax on gaming revenues, generating $25 million from sports betting and $100 million overall. As more states turn to sports betting revenue for youth sports, there will be increased interest in tapping federal gaming revenue to support youth programs.
Invest in “Activity Deserts”
America reduced ‘Food Deserts’ during the “Let’s Move” campaign, but learned during COVID the dangers of inactivity to mental health and the shortage of places to play. With the new focus on mental health, investment in parks and recreation facilities is part of the solution. The government is making an investment and providing grants to local communities for infrastructure development and improvements.
Park & Recreation Grants
The Great American Outdoors Act (GAOA) provides funding for park maintenance and guarantees funding for the Land & Water Conservation Fund (LWCF) to create and upgrade park space. GAOA includes the Legacy Restoration Fund (LRF) to provide almost $2 billion annually to help alleviate the backlog of maintenance and repair projects on public lands. LRF is funded through energy development revenues from oil, coal, gas, and renewable energy development on federal lands.
The LWCF received $900 million from offshore oil leases for competitive grants to fund park creation and upgrades. LWCF funds parks nationwide and includes the Outdoor Recreation Legacy Partnership specifically for park and recreation development in underserved urban areas. Local communities and county governments are eligible for LWCF grants to improve existing and create new recreational spaces.
Increased Access to Parks & Recreation
The Bi-partisan Infrastructure bill passed in 2022 and includes $1.4 billion in funding for the Transportation Alternatives Program (TAP) for on and off-road pedestrian and bike facilities, bike lanes, recreational trails, and safe routes to school projects. TAP funds are limited to non-motorized transportation projects to increase access to recreational spaces; recreation and park facilities, playgrounds, and sports fields are not eligible to use of the funds.
The Recreation Economy for Rural Communities (RERC) provides assistance for small and rural communities to grow their outdoor recreation economies. RERC projects build trail systems and bike lanes, repurpose abandoned structures, and create new park and recreation amenities with the goal of increasing access by connecting communities to recreational spaces. RERC is a competitive grant program for rural local governments.
Investment in Sports & Recreation Spaces
Senator John Ossoff (D-GA) drafted legislation to fund the development of youth sports infrastructure. The “Youth Sports Facilities Act” would provide Department of Education grants for the development and improvement of youth sports infrastructure in and outside of schools. The bill has not been introduced as the Senator searches for a Republican partner. SFIA has worked with the Senator to appeal more to Republicans in rural areas. A companion bill is expected in the House after its introduction in the Senate.
The U.S. Department of Agriculture’s “Community Facilities Direct Loan and Grant Program” offers loans and grants for essential community facilities in rural areas. Funds may be used to purchase, construct, enlarge, or improve facilities. Grants and loans are limited to municipalities, counties, communities with populations under 20,000, and nonprofit organizations serving these areas. Lower-income areas are given priority. The program currently does not cover recreational facilities. SFIA supports the expansion of the program to cover recreation.
SFIA Supports Improved Protocols for Student-Athlete Head Injuries
There is growing concern with sports injuries, especially concussions and other head injuries. SFIA supports Senator Dick Durbin’s (D-IL) “Protecting Student Athletes from Concussions Act” to improve diagnosis, treatment, and return-to-play/classroom protocols for improved student health after sustaining a head injury. Congress has not pursued sports concussion legislation in previous Congresses.
States Propose Bans on Youth Tackle Football
New York, Illinois, California, New Jersey, Massachusetts, and Maryland all have seen bills to ban youth tackle football introduced over the past five years. None of the bans on youth football bills have progressed far in state legislatures, but the head injury issue continues to fuel the debate.
In 2023, bills to ban tackle football for children under 12 have been reintroduced in California and New York. The threat to the game posed by these bills is real, but past efforts have failed due to opposition from coaches and families of youth football players
Congress United on Need for National NIL Standard
In response to concerns over the negative impact a patchwork of state Name, Image & Likeness (NIL) laws will have on college sports, Congress is ready to step in with a national standard to level the playing field and better serve student-athletes.
Economic Impact of Sports, Fitness & Recreation
The active lifestyle industry is present in every community across the country. Youth Sports, Adult Fitness and Outdoor Recreation make up this diverse industry and contribute to local economies. Understanding the size of the active lifestyle industry and its economic impact in states and on the national level will elevate the importance of the industry beyond health and wellness benefits.
Securing funding for a Bureau of Economic Analysis report on the economic impact of these industries is an SFIA priority in the upcoming Congress.
Congress Returns to Sports
After a year off due to COVID protocols, Congressional Sports returned strong in 2022. More than 120 members of Congress participated in at least one sport, with many playing on multiple teams. SFIA members support Congressional Sports with equipment donations to enhance the player experience in these charity games. The Congressional baseball, football, hockey, basketball, soccer, and golf matches raised more than $2 million for charity in 2022.
Washington, D.C. (March 29, 2023): Congress jumped into the Name, Image, Likeness (NIL) debate today with a House hearing on the challenges faced by student-athletes and colleges/universities under the current model of different NIL laws from state to state. Republicans and Democrats do not agree on much these days, but they do agree on the need for a national standard of uniform NIL laws with greater transparency to protect student-athletes, preserve non-revenue sports, help smaller schools maintain broad sports options, and reign in improprieties by “Collectives” in their pursuit of recruits.
The witnesses spanned all aspects of college sports, with an HBCU School Administrator, a Pac-10 Athletic Director, the Patriot League Commissioner, a former college and NFL football player, a current softball player, and an advocate for unionizing college athletes. With the exception of the union advocate, the panel was unanimous in their agreement on the need for federal intervention with national standards to level the playing field for athletes and schools. All parties agreed that education was the single biggest benefit of playing college sports, but that schools need to do more on financial literacy to help athletes make informed NIL decisions.
Primary concerns raised during the hearing included the threat to non-revenue sports, especially Title IX sports; recruitment abuses by “Collectives”, including tampering with athletes currently enrolled in other schools; use of the “Transfer Portal” to seek better NIL deals; potential loss of amateur status from NIL; and the negative impact of NIL on small schools’ sports programs. The witnesses also acknowledged that the NCAA is unable to enforce recruitment rules under the current model. Congressional members in the hearing and all witnesses, except the union advocate, agreed that student-athletes should never be employees of the school.
The union advocate took the opposite position on most issues – saying no national NIL standards are needed and advocating for the creation of athlete unions for direct negotiations with schools/conferences on a collective bargaining agreement for student-athletes. The union advocate also took a contrary position on student-athletes being employees of the school and believes athletes should be part of a revenue-sharing agreement with schools.
With the parties in agreement, Congress will work on a national NIL standard, but it will not be easy with so many competing interests and certain states benefitting more than others under the current system. It may take time, but the current system of 30 states having a variety of NIL laws with 20 having no NIL laws will eventually be replaced by a national standard drafted by Congress.
For more information or for questions, please contact Bill Sells, SVP, Government & Public Affairs, at [email protected].
Washington, D.C. (March 30, 2023): The Sports & Fitness Industry Association (SFIA) is thrilled to have Senator John Thune (R-SD) leading the movement to pass the PHIT Act to increase activity by lowering costs for better health. Senator Thune is a true champion of fitness and appreciates the many physical and mental health benefits of active lifestyles. Please click here for Senator Thune’s comments promoting PHIT on the Senate Floor below.
For more information or for questions, please contact Bill Sells, SVP, Government & Public Affairs, at [email protected].
Washington, D.C. (March 21, 2023): Despite recent assurances that commerce would flow through west coast ports without labor disruptions, a new policy by dock workers has led to work slowdowns. As West Coast Port workers enter month 10 without a new contract, unions at Long Beach and Los Angeles have stopped staggering meal breaks. The International Longshore and Warehouse Union (ILWU) does not recognize PMA’s right to assign staggered meal breaks for workers as agreed to in the previous labor agreement since it expired last July.
The new dock worker meal policy has forced ports to shut down for an hour during lunch and dinner, resulting in avoidable back-ups at ports. With 40 percent of U.S. seaborne imports flowing through 29 west coast ports, this disruptive action could push more shipments away from west coast ports. Importers are reluctant to commit to west coast ports during protracted labor negotiations between the Pacific Maritime Association (PMA), representing ports and shippers, and the ILWU representing 22,000 dockworkers at 29 west coast ports. The two sides announced a tentative agreement on healthcare and other benefits in February but have made little progress since.
Slowdown tactics have been employed during previous labor talks to expedite negotiations on a new contract. Freight delays cost individual importers millions of dollars in increased expenses and lost sales. The current sticking points for a new contract center around the assignment of jobs and the use of automated handling equipment on the docks to increase efficiency and lower labor costs.
With long-term shipping contracts typically finalized by mid-April, the timing of the slowdown coincides with a critical period for importers and retailers. The contracts will determine the volume of imports destined for U.S. ports on the West Coast, East Coast, and Gulf Coast. Many importers have already opted to rely more on East and Gulf Coast ports due to the uncertainty created by ongoing West Coast Labor talks. As more shipments are directed to alternative ports, market share at west coast ports has dropped, with a 43 percent decline in shipments to the Port of Los Angeles and a 32 percent drop at Long Beach year-over-year from February 2022.
Negotiations to resolve outstanding issues continue and quick resolution would avoid additional disruptions at west coast ports. SFIA has joined other business interests in a letter to President Biden, urging him to intervene in the talks to keep ports operating at full capacity during contract negotiations.
Click here to view the letter.
For more information or for questions, please contact Bill Sells, SVP, Government & Public Affairs, at [email protected].