As the finale to the AASA Q1 media call on Feb. 21, Catherine Boland, MEMA vice president, legislative affairs, talked about the many initiatives going on in Washington, D.C., that are impacting aftermarket businesses, and how AASA and MEMA are advocating on behalf of suppliers.
Editor’s note: to read Part 1, click here.
Speaking to the crisis in the supply chain, Boland pointed to mid-February 2022 numbers coming out of the Department of Labor indicating transportation and warehousing goods prices are at record highs. From 2020 to 2021, truck shipping costs were up 18.3% and ocean freight costs were up 29%. “That’s the largest 12-month increase on record since the government has been tracking ocean rates,” said Boland.
To help ease tensions related to price increases, Boland said one of the Federal maritime commissioners issued a statement providing guidance to shippers who are seeing increases and have complaints about demurrage and detention rates. “The Federal Maritime Commission is trying to make it easier for companies that are shipping goods to bring their complaints to its attention, so we are seeing active attention from the agencies that oversee shipping.”
America COMPETES Act
On the legislative front, Boland discusses key provisions of The America COMPETES Act of 2022, which passed the House earlier this month, aimed at revitalizing America’s research, innovation, and manufacturing sectors to make our nation’s economy more prosperous overall.
Following are some of the primary provisions in the America COMPETES Act:
• It includes $52 billion in funding for chips, $2 billion of which is set aside for auto-grade chips. “The passage of this critical funding to get additional semiconductor chip manufacturing in the U.S. requires the House and the Senate to come together, reconcile the differences between their two bills and bring a package together that they can both agree on,” said Boland.
• The creation of a new Office of Manufacturing, Security and Resilience at the Department of Commerce—a new $46 billion program focused on monitoring supply chains and predicting the next crises before one happens to avoid the snowball effect that our industry and other industries are seeing and provide support to manufacturers.
• Ocean Shipping Reform Act —Legislation focused on stopping anti-competitive practices and pricing by the major shipping lines.
• A legislative focus on intellectual property and anti-counterfeiting with two bills; the Shop Safe Act and the Informed Consumers Act. Both provide greater transparency to consumers who are buying goods, including auto parts, via online third-party marketplace platforms, such as Amazon, eBay and Walmart, to ensure they are getting the genuine parts or genuine goods for which they’re paying.
EVs and Net-Zero Fleets
Boland also discussed what’s happening on the electric vehicle front and the transition to EVs and net-zero transportation fleets. “It’s critically important for the aftermarket that they are participating in some of the programs that are out there,” she said, pointing to the Infrastructure, Investment and Jobs Act, part of the Surface Transportation Bill signed into law in late 2021, that included funding for charging stations and additional work that needed to be done to transition to a net-zero fleet.
This bill will help the aftermarket transition from ICEs to EVs and other net-zero and zero-emission vehicles and includes provisions and programs on battery recycling. “So, what Congress has done is they’ve asked the Department of Energy to create a program that includes grants to companies that are working on or working toward ways to recycle these batteries,” Boland explained. The funding opportunity announcement by the DOE will come out in April or May 2022.
“We’re looking at opportunities and advocating on behalf of the aftermarket to ensure that a transition to electric vehicles isn’t just focused on the original equipment manufacturers and suppliers,” said Boland. “The aftermarket needs to be part of this to ensure that these vehicles can continue to be repaired and that consumers have options and choices when it comes to repairing their vehicles in the future, whether they’re EVs, ICEs, PHEVs, or the like.”
Other opportunities for such funding have been included in the “Build Back Better Reconciliation Bill,” which is stalled in Congress, added Boland. “We are talking to folks and following the conversations that are happening in Washington about pulling out the $500 billion climate piece and considering that separately. There are a lot of things in Build Back Better that are of importance to the aftermarket. It’s further funding on charging stations, electric vehicle manufacturing, and electric vehicle component manufacturing. And, we’re hoping that we can see some things in there also on workforce training,” she said.
The DOL and Overtime Rules
Shifting to the Department of Labor (DOL), Boland said there is legislation still pending before Congress (it has passed the House, but not the Senate) that will make it easier for groups of workers to unionize.
There is also talk at the DOL about changing the overtime rules. Currently, for an employee to be eligible for overtime, he/she needs to make less than $37,500 a year. But, House Democrats are calling for an increase up to $82,000. So, anyone making less than $82,000 a year would be required to get overtime under the Fair Labor Standards Act, explained Boland.
“Obviously, that would have a huge impact on many businesses throughout the country,” Boland said. “MEMA and AASA did join over 100 other trade associations in the last couple of weeks asking the Department of Labor, ‘before you take any action on this amendment to the overtime rule, meet with stakeholders, including business groups, to understand the impact that this increase would have on businesses throughout the country.’ This is something that would be incredibly difficult in the time of inflation for businesses to shoulder these increased costs. So, it’s something we’re advocating on and continuing to represent the industry.”
Supply Chain and Operations Forum & Vision Conference
Chris Gardner, AASA senior vice president, rounded out the presentation announcing AASA’s new Supply Chain and Operations Forum. Participants will include individuals from the association’s member companies who manage supply chain procurement and sourcing operations, transportation, logistics, warehousing, and customer demand planning, among other things, he said.
The executive committee has just been formed to plan the forum’s direction for 2022. “We’re going to address things like labor challenges, container management, automated warehousing, use of analytics, what the government is doing and how the government can help us identifying creative solutions, and a whole lot more,” Gardner added.
Gardner also provided highlights of the upcoming AASA Vision Conference, April 5-6 in Dearborn, Michigan, where winners of the 2022 Channel Excellence Awards will be presented, as well as the results of a research project detailing the future of ADAS safety systems.