Locked up and out
Labour relations need to be transparent to all the parties involved, explains Martin Rushmere
Telling everyone involved and keeping them informed is essential to port authorities for handling and minimising disruptions when labour relations go sour.
“Don’t keep the problems locked up in a safe that only the unions and the managers/employers have the key to,” says one industry analyst. “Be forthright and frank right from the word go, keeping everyone informed.’
This is endorsed by a UK consultant who has advised in expansion projects in the US and Europe. “You certainly need to be upfront about what’s happening but avoid the trap of negativity. The worst situation is to get into the blame game, which is unfortunately typical in our business. Move toward something along the lines of ‘the shipping lines will make sure they arrive on time and the stevedores will make sure they handle the boxes more efficiently.’ In other words, emphasise some common ground to be gained from an agreement, such as sharing of benefits."
Shipping lines now have the opportunity to switch ports easily, a new option that 20 years ago was the exception rather than the norm and which poses a challenge to the continual pressure to increase throughput and improve business.
Ports now have to tout their ease of connection with the hinterland along with efficiency of throughput, to reassure carriers that labour is happy and working in synch with the latest technological developments.
International terminal operators can go one further and use this shift to their advantage when it comes to labour negotiations. Some are starting to tell fractious labour groups that there is no alternative but to advise carriers to go to another port where the operator is also represented and where there is harmony between operators and labour.
Here, industry executives note that terminal operators with multiple ports have greater leverage than those anchored to just one or two ports.
But the situation becomes complicated with the different types of ownership models. In general, the most vulnerable ports are seen as those where the port and terminals are owned and operated by the same authority. Management has less leeway to control disgruntled labour, apart from resorting to the mutually destructive tactic of a lock out.
Carriers are likely to lose patience quickly and shift to other ports, and are certain to protest if congestion surcharges are imposed early on.
A cardinal rule emphasised in the industry is for owners/operators to conform to legal and contractual requirements without hesitation the moment there is discord, but not to be hidebound by them to the extent that management becomes too timid to do anything.
APM Terminals has been careful to follow this principle over the disruptions at Aqaba, Jordan. A company executive tells Port Strategy that negotiations for a “standard collective bargaining agreement” began in the first quarter of the year, but the two parties could not agree after three months of discussions and the dispute was then taken to arbitration. “Some of the members of the union refused to agree to it, even though the union has agreed to respect the bargaining process.”
The executive points out that the union members are paid three to four times the amount of the average wage in the country. “We are investing $140m in the terminals,” he says and cites one of the main challenges to greater efficiency as being the inflexibility of the fixed gang system allocated to working cranes.
APM Terminals has kept the government and the industry informed of the latest developments and responded quickly after the International Transport Federation made a statement about a strike at the port. APMT said some of the ITF facts and allegations were false.
The UK consultant says labour flexibility is key to both happier relations with management and operators – “so that they can move quickly and easily between jobs and allow the size of crane workforces to be adjusted to the needs of the vessel being worked on.
“There also needs to be more flexibility for terminal operators to hire labour directly,” the consultant says.
The rise of industrial nerves and labour agitation has matched the widespread trend in greater automation, particularly in ship-to-shore cranes. And this is seen as more than just a coincidence. Analysts have been warning ports for years to be prepared for unions getting more recalcitrant as automation increases.
A US analyst notes that a higher degree of automation is essential with the advent of 18,000+ teu vessels. “As we have been telling the ports for ages, bigger vessels equals fewer calls, equals more intense strain on handling and movement, equals carriers wanting to get better turnaround times."
While no one will comment, it seems that this simple fact of commercial life is not being impressed on the workers on the dockside.
More attention is being focused on Key Performance Indicators at times when capacity and labour problems surface. The debate centres on which KPIs should be maintained and which temporarily set aside.
Says a US port consultant and economist: “Globally with congestion, the average dwell time and vessel berthing time metrics are of less use, when the on-terminal congestion becomes the binding constraint - and what matters to a shipper is how fast their cargo can move between the ship and the gate. If chassis availability is the binding constraint, then knowing that there are available chassis becomes a more important metric than whether ships can berth on time.
"If drayage driver availability is the constraint,” says the US consultant, “then gate queue length and in-gate to out-gate turn time metrics may be more important, terminal by terminal. STS crane productivity metrics of lifts/hour are useful in comparing terminals or ports in how fast they are working ships, especially as the ships get larger, but one may also need to know how many STS cranes are being deployed against the vessels to get a better idea of how productive the terminals can be in working the ships.
“When congestion increases, another metric that becomes important is how many vessels are at anchor awaiting berths, where the change up or down in that number helps indicate if conditions are deteriorating further or improving, no matter what the terminal operating-specific metrics are showing,” says the consultant.
“When smaller ships were in service, with consignments of perhaps 2,000 boxes, you might have been able to get away with less than optimal handling," says a shipping line analyst. “Now, when consignments are 6,000 boxes, places like Los Angeles have to be up to scratch.”
When two sides go to war
The US West Coast dockworker impasse and linked vessel congestion is being held up as a prime example of the culmination of unwise, outdated labour/ trade union policies and procedures. The industry is in unanimous agreement that the system is jammed, with very little room for manoeuvre. So much so that the outside view is one of derision.
A UK consultant says that while the industry views the West Coast and US dock labour relations in general as being inferior to other parts of the world, particularly South East Asia, western hemisphere countries have a much longer history of trade unionism. “It’s newer in many other countries, which have developed systems unencumbered by the issues that have carried over in the west. In places like Shanghai and Singapore there is a lack of pre-existing labour relations, which in the UK, for example, pre-dated containerisation. “
Particularly worrying to the industry is the use of expressions in November such as “a bold-faced lie” used by the dockworkers’ union to counter a claim from the terminal operators of an agreement for normal operations to continue until a new six-year contract is negotiated.
Shipping lines had been told privately much earlier in the year that the “normal operations” agreement had been concluded, which the dockworkers did not deny.
Says one commentator: "The sad fact is that the same tactics and problems have resurfaced, which most people had thought were settled years ago. It’s as though the commitments to take a completely fresh approach are thrown away every six years - and meanwhile the world has moved on.”
In contrast, the situation at Maasvlakte is seen as a case of unplanned volume of demand clashing with more random vessel arrivals. “It’s a case of cranes moving from laminar flow to chaotic flow,” according to an industry analyst.
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