The ship stuck in the Suez Canal may have gotten all the attention, but it wasn’t the biggest shipping problem of the year. That honor goes to the massive traffic jam at the ports of Los Angeles and Long Beach, which has dragged on since late 2020.
As NAM Director of Infrastructure, Innovation and Human Resources Policy Ben Siegrist tells us, this bottleneck is a huge problem for manufacturers in the U.S.—one that is costing our economy many billions of dollars. Dozens of ships are waiting in the harbor for days before they are able to unload, exporters are struggling to get their goods out of the country, and other manufacturers are waiting months for parts or finished goods to arrive.
The problem: The numbers tell the tale: at one point in mid-April, there were 23 ships waiting to dock at the ports, according to The Wall Street Journal (subscription), down from around 40 back in February. For comparison, Siegrist explains, the normal number of ships waiting in harbor is somewhere between 0 and 1.
Why it’s happening: Much of the congestion results from the pandemic—there has been an uptick in e-commerce during the lockdowns, and the economic stimulus has boosted consumption. Meanwhile, the typical increase in shipments during the holiday season just made things worse.
However, other factors are making this congestion particularly hard to fix, says Siegrist. These include:
- A shortage of shipping containers: First of all, shippers don’t have enough containers in the absolute for all of these goods. But in addition, some of them are finding it cheaper to unload in the U.S. and then send the empty containers back to Asia—to the disadvantage of U.S. manufacturers that want to load those containers with exports.
- A shortage of chassis: The trucks that transport containers to warehouses require special chassis to move the containers, but the ports also don’t have enough of these.
- A labor shortage: Like many other Americans, port workers had to deal with COVID-19 infections or exposures as well as cope with family responsibilities during the pandemic.
Logistical complications: Meanwhile, the logistics of international shipping are incredibly complicated, Siegrist explains. There are fewer ocean carriers today—only nine, down from more than 20 a few decades ago—which means manufacturers have fewer competitive shipping options. And the complex relationships between the multiple carriers, port operators and equipment owners are not easy to disentangle or control.
What do we do? Thanks in large part to the complexity of international shipping, there’s no easy answer, says Siegrist. Right now, the NAM is in discussions with the many federal agencies involved in international commerce, including the Department of Transportation, the Department of Commerce, the Office of the U.S. Trade Representative and a lesser known but vital agency called the Federal Maritime Commission. “We’re trying to create opportunities for our members to have a dialogue with policymakers,” says Siegrist.
- The eventual policy options might range from fines or fees for international carriers to legislative updates to the 1984 Shipping Act.
- It will also be important to strengthen the domestic supply chain for equipment like containers—almost none of which are now made in the U.S. The NAM is “talking more holistically about supply chains with the Biden administration,” notes Siegrist.
Stay tuned: The FMC will release its investigation into pandemic-related shipping delays in the coming weeks.
Washington, D.C. – Following President Joe Biden’s first presidential address to Congress, National Association of Manufacturers President and CEO Jay Timmons released this statement:
“Thanks to the leadership of vaccine manufacturers and the Biden administration’s successful vaccine distribution efforts, Americans are getting back to the activities and the people they love. Though the capacity limits in the House chamber tonight remind us that we still have a long way to go, our future is looking brighter.
“We look forward to working with President Biden to achieve historic infrastructure investment, including the many priorities offered in our ‘Building to Win’ plan, which, in addition to identifying areas of investment, also provides multiple funding solutions.
“Manufacturers have also provided roadmaps on critical issues ranging from immigration to climate change. We’re ready to work with President Biden and members of any party to deliver bipartisan progress on these issues and more, all while ensuring we’re strengthening the manufacturing workforce, not jeopardizing manufacturing growth in the United States.
“To that point, raising taxes on manufacturers—including many small businesses that pay at the individual rate—would stop our recovery in its tracks; we would lose 1 million jobs in just the first two years alone. Small manufacturers would be especially hard hit at this critical juncture, restricting their ability to raise wages and benefits, hire more workers and invest in their communities. Similarly, changes to the longstanding tax rules on the transfer of family businesses to the next generation of manufacturers would cost American jobs.
“Returning to archaic tax policies and one of the highest business tax rates in the developed world is not the way to build our future, nor are federal policies to force workers to join a union. Anti-worker policies like the PRO Act would inject uncertainty by driving a wedge in established employee–employer relationships and curtail future manufacturing investments that support our communities and families.
“As we continue to get armed against COVID-19, manufacturers are focused on building the next, post-pandemic world—one that affords even greater opportunity for all Americans.”
The NAM continues to put forward commonsense proposals to educate and inform policymakers on ways to strengthen manufacturing in America while achieving our shared objectives.
- Tax Policy Protecting Manufacturing Jobs
- “Building to Win” Infrastructure Plan
- “The Promise Ahead,” Taking Action on Climate
- “A Way Forward” on Immigration
- “Strengthening the Manufacturing Supply Chain”
The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs 12.3 million men and women, contributes $2.35 trillion to the U.S. economy annually and has the largest economic multiplier of any major sector and accounts for 63% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the NAM or to follow us on Twitter and Facebook, please visit www.nam.org.
Though most policymakers agree that America needs to invest in its aging infrastructure, they disagree about how to pay for it. The NAM has its own recommendations on the best way to reform infrastructure funding and spend infrastructure dollars. NAM Director of Infrastructure, Innovation and Human Resources Policy Ben Siegrist recently spoke to us about that plan.
The big idea: The manufacturing industry not only depends on infrastructure to support its supply chains and operations, but in many cases helps to build that infrastructure and employs the people who put it all together. That’s why the NAM has called on policymakers to upgrade our roads, bridges and much more in its “Building to Win” plan, which includes a comprehensive list of infrastructure fixes.
The hitch: The Biden administration has called for increased taxes on corporations to pay for new infrastructure projects and other broad recovery programs, which would make it more difficult for manufacturers to grow. To avoid such a harmful policy, the NAM has been working on alternative funding options, says Siegrist. These include:
- Private investment: Private-sector and industry investment through public infrastructure bonds and municipal infrastructure bonds offers an opportunity for the government and industry to work together. It will allow the industry to access funds with appropriate municipal oversight and creates a system of both shared risk and shared benefits.
- National infrastructure bank: Under this proposal, an institution backed by federal dollars would share some of the risk of infrastructure investment, while providing much-needed capital for the development of projects with public benefit. As private industry draws loans from the bank, it can take on the risk, with revenue going back to the infrastructure bank’s coffers for future development opportunities.
- User fees: The NAM has proposed different ways to update the user fee model, which lets users of surface transportation systems pay their fair share. These updates might include an increase in the fuel tax that is indexed to inflation, or a vehicle-miles-traveled tax that allows people to pay for their specific use of roads and other infrastructure.
The last word: “The only way the economy is going to grow is by having more efficient systems than we have now. ‘Building to Win’ offers a real opportunity for bipartisan cooperation without imposing harmful taxes on businesses,” said Siegrist. “We will continue to convey that message to the Hill. This will be a long process, and we intend to work with the administration and with our members to make sure manufacturers get the support that they need.”
Washington, D.C. – Following the unveiling of Senate Republicans’ infrastructure framework, National Association of Manufacturers President and CEO Jay Timmons released the following statement:
“Manufacturers applaud Senate Republicans’ proposal for infrastructure investment, just as we welcomed the release of President Biden’s bold infrastructure plan. This type of give-and-take is how we reach bipartisan consensus, and this is a chance to continue the conversation and restore trust between the parties after months of partisanship.
“Manufacturers’ future depends on historic investment that will empower America to lead the world in modern infrastructure. Building the next, post-pandemic world requires investing in roads, bridges, pipes, waterways, 5G, the electric grid and so much more. As manufacturers have laid out in our ‘Building to Win’ plan, we not only have a vision of where to invest but also how to pay for it without harming manufacturers’ competitiveness. So, we look forward to working with both parties to finally get this done.”
The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs 12.3 million men and women, contributes $2.33 trillion to the U.S. economy annually and has the largest economic multiplier of any major sector and accounts for 63% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the NAM or to follow us on Twitter and Facebook, please visit www.nam.org.
Washington, D.C. – National Association of Manufacturers President and CEO Jay Timmons released the following statement on President Joe Biden’s infrastructure framework.
“The President’s proposal for historic levels of infrastructure investment reflects many of the investment priorities in the NAM’s ‘Building to Win’ plan, and we look forward to reviewing the details. President Biden’s clear focus on strengthening manufacturing and the workforce of the future shows that he is truly committed to building the next post-pandemic world—one that is stronger and more resilient than in pre-pandemic times.
“Manufacturers have played a leading role in the fight against COVID-19, and we will continue to play a leading role in our economic recovery. When manufacturing is strong, America is strong.
“One thing is clear for our industry, though. Raising taxes on manufacturers would fundamentally undermine our ability to lead this recovery. Our industry fought for decades to achieve a tax system that includes competitive rates and modern international tax provisions. As a result of the 2017 reforms, manufacturers kept our promises: we raised wages and benefits, we hired American workers, and we invested in our communities. Raising taxes on manufacturers here at home would jeopardize all of that and make it more difficult for them to compete in the global economy—putting investment, jobs and livelihoods at risk. We believe strongly in bold infrastructure investment, and we know it can be achieved through a combination of revenue sources like those we identified in the NAM’s ‘Building to Win,’ which includes user fees and bond financing for capital projects. We also know that making the men and women who make things in America pay for the infrastructure projects that will benefit all Americans just doesn’t make sense and would harm their future. Let’s keep moving forward and not turn back the clock to the archaic tax policies that gave other countries an advantage over America.
“To be sure, President Biden’s proposal on infrastructure investment is strong, necessary and welcome. Achieving our shared goals will be the result of debate, discussion and collaboration with the administration and both parties in Congress. We can achieve the President’s investment objectives while holding firm against financing proposals that would severely harm the ability of manufacturers to invest and hire workers here in the U.S. We look forward to engaging with all stakeholders to achieve an outcome that benefits all economic sectors and all Americans.”
Background on manufacturing growth following the enactment of tax reform in 2017:
- In 2018, manufacturers added 263,000 new jobs. That was the best year for job creation in manufacturing in 21 years.
- In 2018, manufacturing wages increased 3% and continued going up—by 2.8% in 2019 and by 3% in 2020. Those were the fastest rates of annual growth since 2003.
- Manufacturing capital spending grew by 4.5% and 5.7% in 2018 and 2019, respectively.
- Overall, manufacturing production grew 2.7% in 2018, with December 2018 being the best month for manufacturing output since May 2008.
The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs more than 12.3 million men and women, contributes $2.32 trillion to the U.S. economy annually and has the largest economic multiplier of any major sector and accounts for 63% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the NAM or to follow us on Twitter and Facebook, please visit www.nam.org.
As President Biden pushes for a majority of elementary schools to be open five days a week by the end of his first 100 days in office, the Federal Communications Commission is engaged in an important effort to ensure students learning remotely are still connected to their classrooms.
The big shift: The FCC is updating the E-Rate program, which supports broadband access for schools and libraries, to allow funds to be used for at-home learning—and the NAM has advocated for this change.
Why it matters: While President Biden is aiming to send more kids back to school soon, it’s clear that they need more assistance while they are still at home. In addition, high school students may stay home for longer than elementary school kids (due to higher risks of contagion among older students) and thus require longer-term support.
Our view: “Ensuring the FCC’s current programs for schools and libraries are adapting to meet these new remote needs is of critical importance, and the cost of not responding to the changing environment is high,” said NAM Director of Innovation Policy Stephanie Hall in a comment letter to the FCC. “The FCC should coordinate with the Department of Education on necessary revisions to the E-Rate program or to build consensus on new alternatives that can close the digital divide.”
In related news, the FCC held a roundtable last Friday to discuss how to quickly implement the Emergency Broadband Benefit Program—another important initiative for manufacturing communities. Established late last year, the initiative allocates $3.2 billion for discounts on internet service for people who are struggling financially during the COVID-19 pandemic.
- What it includes: The program offers up to $50 per month for eligible consumers and up to $75 per month for eligible consumers on Tribal Lands. Some eligible participants can also receive discounts on personal computers or laptops.
The last word: As Hall says, “Manufacturers recognize that enhanced broadband investment and the growth of next generation wireless networks are critical both for the current challenges in COVID-19 and to support continued U.S. technological leadership.”
Union Pacific is seeking a more diverse workforce as it strives to continue “building America,” as it says. To do so, it is partnering with The Manufacturing Institute, the NAM’s workforce development and education partner, on a $3 million three-year joint initiative. Beth Whited, who serves as executive vice president and chief human resource officer at Union Pacific, recently told us more about these ambitious plans.
The details: The initiative, called Careers on Track, will work to inspire more women and youth to pursue modern industry careers. The funding supports workforce development and career solutions that will include:
- A new digital STEM curriculum;
- A virtual STEM experience—in which participants can “choose their own adventure” while exploring interactive 3D models of a real facility, locomotive and more;
- A STEM micro-grant program for young people; and
- A digital campaign showcasing industry career opportunities for underserved women in select regions.
Ultimately, Union Pacific intends to double the number of women in the UP workforce within the next 10 years.
Why partnerships matter: “These types of partnerships are important for us because they broaden our reach,” says Whited. “We run pilot programs of our own, but it’s difficult for us to make those available in every school in our served territory. With the MI’s broad reach and established programs, we can reach more women and youth than we could on our own.”
The scope: Whited likes to remind people that nearly everything in their homes moves by rail at some point, whether as a raw material or as a finished product. That also means there is a wide range of jobs involved, from skilled roles in transportation and manufacturing to civil, electrical and computer engineering—jobs that involve designing more fuel-efficient locomotives or building the freight cars of the future.
The tech: “People who don’t know much about railroads are always surprised by the level of high tech that’s employed,” says Whited. “Railroads have been around for 160 years plus, and so people think about it as old technology, but it absolutely isn’t.
- “You’ve got unbelievable signaling systems run everything safely, next-level optimization tools that determine how and when trains run, sophisticated technology in the 4,500 horsepower locomotives that we use to haul freight and so much more. The level of tech and advanced analytics and machine technology is usually quite startling to people.”
The pitch: Whited has advice for women who are unsure about working in a traditionally male-dominated field. “I would tell people to challenge their own thinking,” says Whited. “There aren’t jobs that are for men and jobs that are for women; there are jobs—and these are great jobs with great benefits that will help you fulfill your goals and give you a sense of pride. Come try it.”
The last word: As MI Executive Director Carolyn Lee said about this partnership, “There are nearly 500,000 job openings right now in manufacturing and millions more expected over the next decade. Closing the gender gap and building awareness with young people are critical to meeting this incredible need.”
The new president’s actions on his first day included some policies that the NAM endorsed and some it didn’t. But thanks to a longstanding and warm relationship with President Biden, the NAM is looking forward to productive conversations with the new administration.
Those conversations now center on a list of executive orders that NAM President and CEO Jay Timmons sent to the transition team—some of which manufacturers support, some of which they want overturned.
Two main ideas: First, the NAM advocated policies that support manufacturing growth in the United States, including some that the previous administration had already put into place.
Second, the NAM advised President Biden to get rid of some policies that violated manufacturers’ most important values, such as individual liberty and equal opportunity.
What’s on the agenda? Here are some of the changes the NAM proposed:
- Already done: President Biden took action on three EOs yesterday in accordance with the NAM’s recommendations. He reversed the ban on immigrants from certain Muslim-majority countries and took steps to provide certainty under the DACA program to people brought to the U.S. as children. In addition, he moved to reverse the ban on diversity trainings.
Here are a few more NAM recommendations that President Biden has not yet acted on:
- Increasing the number of refugees offered admission to the U.S.—a key component of the compassionate immigration policy that the NAM has long promoted.
- Reversing the Trump administration’s restriction of nonimmigrant visas, which is hurting manufacturers’ ability to recover from the pandemic.
And here are some policies and programs the NAM is asking President Biden to maintain:
- The Presidential Advisory Council on Infrastructure, a crucial instrument for enacting the reforms that manufacturers need.
- The American Workforce Policy Advisory Board, whose members include Timmons. The Board has brought public- and private-sector leaders together to address manufacturers’ greatest long-term problem: the shortage of skilled workers.
- The Trump administration’s focus on eliminating counterfeits.
The last word: As Timmons put it in his letter to the transition team, “For decades, we have worked with policymakers from across the ideological spectrum to craft policies that encourage the growth of manufacturing in the United States. Now more than ever, America needs leaders in Washington who are focused on increasing American jobs, wages and investment.”
You can read the full list of policy recommendations here.
Washington, D.C. – The National Association of Manufacturers called on President-elect Joe Biden to help ensure the future strength of manufacturing in America by extending key executive orders into the new administration and rescinding those that have harmed manufacturing.
“For decades, we have worked with policymakers from across the ideological spectrum to craft policies that encourage the growth of manufacturing in the United States,” said NAM President and CEO Jay Timmons in a letter to the incoming administration. “Now more than ever, America needs leaders in Washington who are focused on increasing American jobs, wages and investment.”
The letter outlines executive orders that have had a significant impact, positive or negative, on manufacturers over the past four years, and it urges the president-elect “to reverse the most harmful of these orders and keep or expand those that create an environment that is conducive to growing America’s manufacturing sector.”
The NAM’s recommendations will help manufacturers continue to respond to the devastating pandemic and will also power the United States’ economic recovery by setting the stage for manufacturing growth.
To read the full letter, click here.
The NAM has requested President-elect Biden repeal the following executive orders and consider executive orders for extension.
- “Rescission of the Deferred Action for Childhood Arrivals Program”
- E.O. 13950 – “Combating Race and Sex Stereotyping”
- E.O. 13672 – “Revocation of Federal Contracting”
- E.O. 13769 – “Protecting the Nation from Foreign Terrorist Entry into the United States”
- “President’s Report to Congress on the Proposed Refugee Admissions for FY 21”
- Presidential Proclamation 10052 – “Suspending Entry of Aliens Who Present a Risk to the U.S. Labor Market Following the Coronavirus Outbreak”
- E.O. 13944 – “Ensuring Essential Medicines, Medical Countermeasures and Critical Inputs Are Made in the United States”
- E.O. 13948 – “Lowering Drug Prices by Putting America First”
- E.O. 13957 – “Creating Schedule F in the Excepted Service”
- E.O. 13771 – “Reducing Regulation and Controlling Regulatory Costs”
- E.O. 13805 – “Establishing a Presidential Advisory Council on Infrastructure”
- E.O. 13766 – “Expediting Environmental Reviews and Approvals for High-Priority Infrastructure Projects”
- E.O. 13845 – “Continuing the President’s National Council for the American Worker and the American Workforce Policy Advisory Board”
- E.O. 13932 – “Modernizing and Reforming the Assessment and Hiring of Federal Job Candidates”
- E.O. 13777 – “Enforcing the Regulatory Reform Agenda”
- E.O. 13806 – “Assessing and Strengthening the Manufacturing and Defense Industrial Base and Supply Chain Resiliency of the United States”
- E.O.s – “Strengthening the Federal Government’s Anti-Counterfeiting Efforts”
The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs more than 12.3 million men and women, contributes $2.32 trillion to the U.S. economy annually and has the largest economic multiplier of any major sector and accounts for 62% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the NAM or to follow us on Twitter and Facebook, please visit www.nam.org.
Congress’s new funding package, which covers COVID-19 relief and much more, will provide Americans with much-needed security during this holiday season. Manufacturers are among the major beneficiaries, as Congress recognized that the sector is essential to keeping our country healthy, fed and functional throughout the pandemic.
The NAM’s policy team reports that legislators closely followed the NAM’s recommendations in a wide variety of policy areas. Here are a few highlights.
The Paycheck Protection Program: This program was reauthorized with $284 billion in new funding and extended through March 31, 2021. It also lets businesses choose when to spend the loans, expands the list of acceptable uses for the loans and simplifies loan forgiveness.
Taxes: The last round of stimulus, called the CARES Act, included a payroll tax credit for “eligible employees” affected by the virus. This new package extends that credit through June 30, 2021, while also upping the percentage from 50% to 70%. Meanwhile, it increases the amount of workers’ pay that qualifies for this tax credit from $10,000 for the year to $10,000 per quarter.
And that’s not it for taxes. This package also extends or makes permanent many other provisions. For example, it extends the deadline by which workers must pay back deferred payroll taxes, while also extending the temporary, refundable tax credit for small and medium-sized employers that are providing required paid leave.
Labor: As you’ve probably read by now, the package gives workers on unemployment $300 per week on top of their state benefits. These payments will last until March 14, 2021.
Vaccines/COVID-19 care: And now for the measures that will help end this pandemic for good. The package includes $20 billion for the purchase of vaccines, making them free for all who need them; $8 billion for vaccine distribution; $20 billion to assist states with testing; and a $20 billion distribution from the existing provider relief fund.
And we’re still not finished . . .
Long-term fixes: Congress also included manufacturing priorities that predate the pandemic and remain absolutely crucial.
- Energy: This is the big one—the first comprehensive modernization of U.S. energy policy in well over a decade, and an upgrade that the NAM has long fought for. We can’t cover all of its many provisions here, but they include everything from energy storage to nuclear development to carbon capture to renewable energy. It’s a major victory for manufacturers and the NAM.
- Environment: The legislation also includes a provision for phasing down hydrofluorocarbons—greenhouse gases used in refrigeration. Relatedly, it creates new R&D programs for technologies that can reduce greenhouse gas emissions in the power sector. Both are high priorities for manufacturers’ sustainability efforts.
- Anti-counterfeiting measures: These measures are designed to protect manufacturers’ intellectual property, and they include the empowerment of the Federal Trade Commission to take action against bad actors exploiting the pandemic.
- Transportation: As part of this package, Congress passed the bipartisan Water Resources Development Act, which provides a two-year authorization for ports, inland waterways and important water infrastructure investments.
- Broadband: And lastly, the package funds the improvement of digital infrastructure and broadband access, including for underserved and rural populations. It also includes a support program for those experiencing hardship due to COVID-19.
What’s missing? Since you ask, the package does not include the liability protections that the NAM advocated. But the NAM will continue working on this priority next year.
The last word: NAM President and CEO Jay Timmons said of the legislation, “Some are stirring up controversy over aspects of the spending text to drum up ratings or score political points. But the bottom line is manufacturers—and all Americans—need relief now. This package gives manufacturers and many other Americans a lifeline in the face of the disaster this pandemic continues to wreak on lives and livelihoods. There is unfinished work for sure. But it makes no sense to hold up an action that can bring real relief to this country.”
You can read a more expansive list of policy wins here.