From Washington

On June 14, the International Longshore & Warehouse Union (ILWU) and the Pacific Maritime Association (PMA) broke their media blackout with a joint statement saying negotiations continue in good faith but will not be completed by the July 1 expiration of the current contract. However, “Cargo operations continue beyond the expiration of the contract. Neither party is preparing for a strike or a lockout, contrary to speculation in news reports. The parties remain focused on and committed to reaching an agreement.” On June 14, the ILWU also laid out their concerns in the negotiations. On June 8, TGA joined two other groups in urging President Biden to engage in the West Coast port labor negotiations. Congress has also started to weigh in, with a June 8 Republican letter to President Biden and work happening on a bi-partisan Congressional letter to the ILWU and PMA. Many believe the negotiations will turn on the issues of pay and the future of automation at West Coast ports.

On June 13, the U.S. House of Representatives approved the TGA-supported Ocean Shipping Reform Act of 2022 (S. 3580) by a vote of 369-42. The legislation now goes to President Biden, who is expected to sign the bill into law today, June 16. This bipartisan bill will strengthen the overseas supply chain and ensure fairness in the global ocean shipping industry by bolstering the Federal Maritime Commission (FMC), the U.S. government agency that oversees ocean carriers, and requiring the FMC establish and enforce rules to prevent excessive and unjust detention and demurrage fees and stop refusal/denial of service. These commonsense reforms will be instrumental in combatting the current shipping crisis and preventing the next shipping crisis.

Over the last few months, dozens of new California Proposition 65 (Prop 65) “60-day” notices have been issued alleging that brands and retailers sold luggage (Notice 1), totes (Notice 1), backpacks (Notice 1, Notice 2, Notice 3, Notice 4), handbags (Notice 1, Notice 2, Notice 3, Notice 4, Notice 5, Notice 6, Notice 7), fanny packs (Notice 1), smartphone case (Notice 1), wallets (Notice 1, Notice 2, Notice 3), and travel/garment cases/messenger/crossbody/carry bags (Notice 1, Notice 2, Notice 3) in California that contained di (2-ethylhexyl) phthalate (DEHP), Bisphenol A (BPA), Di-n-butyl phthalate (DBP), or diisononyl phthalate (DINP) in violation of a California law known as Proposition 65 (Prop 65). The notices serve as intent to bring lawsuits against the companies that made and sold these products. Check out TGA’s member-only California Proposition 65 (Prop 65) Best Practices Guidance on the Prop 65 page on the TGA website at https://www.travel-goods.org. This member-only guidance details best practices in developing your company’s Prop 65 testing and warning label protocol, including recommendations on which warning label text to use, where to place the warning label text, and how to test for Prop 65 listed chemicals in your products. For more information on Prop 65, please contact TGA’s Nate Herman, nate@travel-goods.org, 301-775-7633.

Every day, our industry faces a shipping crisis that has delivered us contract breaches, stubbornly high shipping rates, excessive and unjust fees, constant delays, and ongoing uncertainty on whether our product will ever arrive or even be moved. We are an industry of small companies who have no bargaining power with the big foreign-owned ocean carriers we rely on to move our product. This reality has translated into empty store shelves and much higher prices at the cash register, spurring inflation to historic levels. And that shipping crisis is now driving rampant inflation, which further threatens travel, and our industry. But there is hope. READ MORE

On June 6, TGA urged Congressional conferees working to reconcile the House and Senate versions of competitiveness/anti-China legislation to ensure any final legislation includes key U.S. travel goods industry priorities, including renewal of the Generalized System of Preferences (GSP) program, passage of the Ocean Shipping Reform Act, and restart of the China Section 301 tariff exclusion process. Congressional leaders hope to reach agreement on a final competitiveness bill by July 4, although that timeline could slip.

On June 8, TGA urged President Biden to put guardrails on the ongoing West Coast port labor contract negotiations to ensure they do not lead to a work slowdown, strike, or lockout, and to encourage any resulting agreement to increase the productivity and efficiency of the ports. The two sides returned to the negotiating table on June 1 after the International Longshore & Warehouse Union (ILWU) left the negotiating table on May 20 and put negotiations towards a West Coast port labor contract on hold with no explanation. The current contract expires July 1, 2022.

On May 23, TGA confirmed press reports that the International Longshore & Warehouse Union (ILWU) has left the negotiating table and put negotiations towards a West Coast port labor contract on hold until at least June 1. On May 13, Harold Daggett, President of the International Longshoremen’s Association (ILA), the dockworkers union at the East and Gulf Coast ports, issued a video strongly supporting the ILWU and strongly opposing automation at the ports. Many believe the negotiations will turn on the issues of pay and the future of automation at West Coast ports. TGA will ratchet up its ringing of the alarm bells on this issue and urge the White House to impose guard rails on the negotiations. Among the ideas discussed is assembling another company letter to President Biden. The current contract expires July 1.

TGA has drafted a letter to Congressional conferees working to reconcile the House and Senate versions of competitiveness/anti-China legislation. The draft letter urges the conferees to ensure any final legislation includes key U.S. travel goods industry priorities, including renewal of the Generalized System of Preferences (GSP) program, the Ocean Shipping Reform Act, and restart of the China Section 301 tariff exclusion process. Congressional leaders hope to reach agreement on a final competitiveness bill by July 4th, although that timeline could slip. Please provide any feedback/edits on the draft letter by Friday, June 3.

On May 3, TGA and TGA members joined with other industry groups and companies to urge Congress to include a long and robust extension of the Generalized System of Preferences (GSP) program in any final competitiveness/anti-China legislation approved by Congress. The House and Senate are moving to conference to reconcile differences between the House and Senate versions of the competitiveness/anti-China bill. The Senate-passed bill included a long-term extension of GSP (through 2027) with some new requirements. The House-passed bill includes only a short extension of GSP with numerous new requirements that would make it hard for almost any country to remain in the GSP program. Neither bill includes much needed fixes that would allow U.S. travel goods imports to grow under the program. GSP expired on January 1, 2021. When in place, GSP allows U.S. travel goods imports from most developing countries (NOT China or Vietnam) to enter the U.S. duty-free. Thanks to GSP, U.S. travel goods imports have been able to start to move away from China.

On May 3, in response to repeated calls from TGA and many others, the Office of the U.S. Trade Representative (USTR) finally launched a review of the China Section 301 tariffs. But it remains unclear whether the end result of the Biden administration’s review will lead to the removal of the 25% punitive tariffs on U.S. travel goods imports from China, or when the Biden administration will make a final decision. According to the timelines in yesterday’s announcement, no decision will be made until Fall 2022, at the earliest. Growing inflation fears seem to be the driver behind the decision.