European labour costs typically represent between 40% and 75% of a general cargo terminal\u2019s operating costs and, even in the capital-intensive container handling industry, they can be as high as 50% of total operating costs, according to \u2018Dock labour and port-related employment in the European seaport system\u2019 a report recently written by Professor Theo Notteboom for the European Sea Ports Organisation.<\/p>\n
This is an industry in which bonuses and wage supplements are widespread: \u201cIn quite a number of cases, the base or guaranteed wage of a dock worker is only a fraction of the monthly income he can generate by collecting a wide range of bonuses and miscellaneous compensations linked to the nature, complexity and timeframe of his task.\u201d<\/p>\n
However, the organisation of port labour and the associated dock labour systems varies considerably throughout Europe, says Prof Notteboom of the Institute of Transport and Maritime Management Antwerp (ITMMA). \u201cPorts across Europe are different in the way the dock labour system tries to provide an answer to the market needs in terms of flexibility, productivity, quality and cost efficiency of dock workers. Ports can depend on a dock labour scheme based on a centrally managed pool of registered dock workers. The use of registered dockers through a pool can be mandatory or not. This obligation can be de facto or imposed by law.\u201d<\/p>\n
However, he highlights a general trend towards open and autonomous pool systems with back-up of temporary employment agencies and a general tendency from the employers\u2019 side towards continuous working, flexible start times and variable shift lengths.<\/p>\n
The use of agency workers can provide valuable flexibility but ports that rely heavily on this solution need to be ready for the impact of the European Agency Worker Directive.<\/p>\n
In the UK, the new Agency Workers Regulations, based on the Directive, come into force this October. \u201cThese regulations will give agency workers the entitlement to the same basic employment and working conditions as if they had been recruited directly by the port, if and when they complete a qualifying period of 12 weeks in the same job,\u201d says Ian Roots, managing director of Drake International, the parent group of Drake Ports Distribution Services.<\/p>\n
\u201cImagine the scenario where a port employs 20 casual workers, probably not on comparable conditions to those in full-time employment; perhaps they are paying \u00a330,000 to their permanent workers, but the casual workers don\u2019t get that. The legislation is moving towards giving agency workers parity in more areas.\u201d<\/p>\n
However, Mr Roots emphasises, it is important to make the distinction between \u2018agency\u2019 and \u2018outsourced\u2019. DPDS is outside of these regulations because it employs the workers it provides on formal contracts.<\/p>\n
\u201cDPDS was set up in the UK in the early 90s to address the needs of some of our customers within the ports industry who wanted a viable alternative to directly employed, heavily unionised labour,\u201d he says.<\/p>\n
\u201cDPDS does not operate as an \u2018agency\u2019 which would use traditional temporary staff or \u2018casuals\u2019, as they are better known in the ports industry, but employs all of its staff on contracts of employment with guaranteed weekly pay, holiday pay, sick pay, pensions, etc. We offer full employment contracts with associated benefits, plus we are responsible for their training, management, direction, control and supervision. We have a loyal, productive, well-trained and cost-effective workforce.\u201d<\/p>\n
DPDS provides workforces to major ports in the UK and also in Ireland and the Middle East, and has ambitions to expand in Europe: \u201cSome European ports have the same issues relating to highly unionised workforces and often the management simply cannot run the port because of these issues,\u201d says Mr Roots.<\/p>\n
The general principle of outsourcing is that it is ultimately more cost-effective, allowing ports to focus on their core activity, he says. \u201cPorts\u2019 core activity isn\u2019t necessarily management of labour \u2013 and there is a huge amount of employment legislation, directives, etc., to consider. More and more ports are asking whether they really want to be involved in the intricacies of this, or do they really just want the labour. And outsourcing is much more flexible.\u201d<\/p>\n
DPDS has a fixed workforce, with employees guaranteed and paid for a 40-hour week but with flexibility built into their contracts. \u201cSo maybe they will work 30 hours in week one but we need them to do 50 in week two, within the constraints of health and safety and employment law.<\/p>\n
Bristol Port Co directly employs all of its own staff in terms of handling operations, marine, office and engineering.<\/p>\n
\u201cWe went down that track because we felt in terms of handling cargo, whether it is driving your own cranes or handling customers\u2019 cargo, people who are employed every day have a much greater interest in ensuring the equipment is driven correctly from a safety and efficiency basis,\u201d says chief executive Simon Bird.<\/p>\n
\u201cBy employing our workforce, we are minimising damage to equipment and cargo, and maximising customer service. You can certainly motivate people by putting them on the payroll rather than picking them up one day and putting them down the next.\u201d<\/p>\n
This is an issue highlighted by Prof Notteboom, who says \u2018hidden costs\u2019 can take different forms. \u201cCargo damage incidents can generate high hidden costs and negatively affect the reputation of a terminal or port. A high incidence of damage cases might point to a lack of training or a low commitment of the dock worker \u2013 absence of a \u2018we care\u2019 attitude,\u201d he says.<\/p>\n
Bristol has four groups within its workforce: port operatives, who are highly skilled and can operate any piece of plant in the port; the car force team, less skilled in terms of variety but highly efficient in moving cars on and off ships and also able to drive mobile plant; the warehouse operations team; and the part-time car force. \u201cIn the past we did use agency labour to supplement [the car force] at peak times but we found that damage levels increased to a level we were not comfortable with,\u201d says Mr Bird. \u201cThe part-time car force is on the books, so we have that control and they are motivated by being employed.\u201d<\/p>\n
The common theme at Bristol is that the port guarantees 39 hours\u2019 work every seven-day period for all of its full-time operational workers. Again, flexibility is essential: \u201cShipping is variable and there can be extremely busy or quiet times,\u201d he says. \u201cWe could find that the first three days of the week are very quiet and some staff are not required; then we get busy towards the end of the week. Our model provides efficiency in keeping costs under control and also giving vital flexibility at the same time as maintaining extremely high standards for the customer.\u201d<\/p>\n
The full-time car force has been on contracts for 13 years, but the arrangement is more recent for port operatives. \u201cWe recognised three years ago that we had to have greater flexibility on our labour arrangements. We talked to the union and negotiated a change to the employment contracts, which was recommended by the union. Given the downturn in 2009, it was a good decision.<\/p>\n
\u201cSure, using agency labour will offer lower costs \u2013 perhaps in some respects no more than the minimum wage. But if you look at some of the accidents that have occurred at other ports, often it is the use of agency labour that has contributed to these incidents.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
High labour productivity and high flexibility often come at a high price. Felicity Landon reports<\/p>\n","protected":false},"author":8,"featured_media":8230,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[16],"tags":[],"sponsor":[],"class_list":["post-8229","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-concessions-investments"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.portstrategy.com\/greenport\/wp-json\/wp\/v2\/posts\/8229","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.portstrategy.com\/greenport\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.portstrategy.com\/greenport\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.portstrategy.com\/greenport\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/www.portstrategy.com\/greenport\/wp-json\/wp\/v2\/comments?post=8229"}],"version-history":[{"count":0,"href":"https:\/\/www.portstrategy.com\/greenport\/wp-json\/wp\/v2\/posts\/8229\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.portstrategy.com\/greenport\/wp-json\/wp\/v2\/media\/8230"}],"wp:attachment":[{"href":"https:\/\/www.portstrategy.com\/greenport\/wp-json\/wp\/v2\/media?parent=8229"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.portstrategy.com\/greenport\/wp-json\/wp\/v2\/categories?post=8229"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.portstrategy.com\/greenport\/wp-json\/wp\/v2\/tags?post=8229"},{"taxonomy":"sponsor","embeddable":true,"href":"https:\/\/www.portstrategy.com\/greenport\/wp-json\/wp\/v2\/sponsor?post=8229"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}