Here are 2 contrasting situations on the overseas trade front:
Scenario No. 1
In Singapore, Benson Koh, a crane driver is moving more cargo than ever these days at this busy seaport, this too, without breaking a sweat.
Mr. Koh works at the Pasir Panjang ship terminal. He can shuffle the huge cargo containers stacked in the terminal’s yard as easily as if they were building blocks. Computers help him make sure that each container gets on to the right truck at the right time. Mr. Koh rarely has to leave his air-conditioned control room. He just uses a joystick and video monitors.
Scenario No. 2
Move across half a world away. A crew of 4:2 drivers, employed in each of the terminals at the sprawling Global Gateway South Terminal in the port of Los Angeles, are taking turns at the control, who take turns at the controls, also, there is a clerk to coordinate their tasks and a signalman, who acts as the driver’s eyes and ears. However, some work still is done manually. A typical example: Clerk Gary Butterbaugh writes the container number on the truck’s bed in bright yellow chalk to tell his crew which container to load onto a waiting truck.
Living in the past
Quite contrasting scenarios! It shows why U.S. ports, which handled more than $400 billion of containerized cargo last year, up from $250 billion a decade ago, are losing the battle to keep up with the brisk growth in world trade. Over the last 10 years, many ship terminals in Europe and Asia have invested in new technologies to speed trucks through their gates and move cargo to and from ships faster and more cheaply. However, during this same period, most major U.S. ports, hobbled partly by rigid union-labor rules, have continued to operate much as they did in the ’70s and ’80s. The resulting dockside traffic jam, industry experts say, costs the U.S. economy more than $1 billion annually.
Prevailing conditions
However, The International Longshore and Warehouse Union, refuses and rejects the idea that its work rules are an impediment to progress. They insist that the real culprit is the heavy truck traffic at U.S. ports, which makes logistics more complicated than at foreign terminals, where barges and other vessels ferry much of the cargo to and from dockside.
This claim is vindicated when one observes the Global Gateway South in Los Angeles, which is run by the APL Ltd. unit of Singapore-based Neptune Orient Lines. Truck backups are the most visible evidence of waterfront congestion. It appears that the truck drivers spend hours in the four long lines of traffic waiting to get inside the terminal’s gates. The peak congestion occurs during July to November, when companies are shipping large volumes of goods to the U.S. ahead of the Christmas season.
A good volume of the overseas trade is conducted in Global Gateway South. It is the largest terminal at the ports of Los Angeles and Long Beach, California. These 2 ports handle about a third of the U.S.’s containerized cargo. The cargo is mostly consumer goods, such as electronics, apparel and toys, arriving from Asia. Expenses of loading and unloading these items were saved by the shipping lines by packing many such items into a single container that can be placed aboard ships and unloaded at their destinations.The worsening bottlenecks in the ports’ container yards have eroded some of those savings.
The volume of U.S. trade with Asia expected to double in the next 10 years. U.S. exporters and importers say they could face more delays, higher costs and poorer service unless American ports can improve their productivity.
Some port operators fear that their customers might eventually find it more cost-effective to shift U.S.-bound cargo to docks in Mexico, Canada or the Caribbean and transport it the rest of the way by truck, rail or feeder ships.
Retrieval of cargo
In the earlier number of years, the U.S. terminals had so much surplus land that few worried about running out of space. They could afford to store row upon row of containers, each mounted on a chassis, or wheeled frame, to make it more convenient for trucks to retrieve them. However, as the volume of container traffic has soared and the supply of undeveloped harborside property has dwindled, many U.S. dockyards look increasingly like vast container parking lots.
Nowadays, locating a specific container among the thousands on Global Gateway South’s 300 acres can be like finding a needle in a haystack. To locate cargo, the terminal uses a small fleet of pickup trucks equipped with transponder readers and satellite positioning devices. If that doesn’t work, employees sometimes have to hunt for it on foot.
To battle sprawl, some ports are buying new cranes that allow them to stack containers three or four high. But the International Longshore and Warehouse Union has resisted stacking them any higher, citing safety concerns. And many older docks lack the structural strength to support the weight of taller stacks of containers. That’s inspired many U.S. terminal operators to look abroad for new ideas.
Comparison with development of Asian seaports
In doing so, they have been particularly dazzled by Asian ports’ ability to handle enormous volumes of cargo, often from very compact facilities. In Asia, ports typically stack containers without their wheels to make better use of their limited space. That’s partly why the port of Hong Kong, where land is scarce, can handle three or four times as many containers per acre as the U.S.’s West Coast ports.
Hong Kong
Hong Kong’s bustling Kwai Chung terminal area, for example, makes the most of its 540 acres by stacking cargo containers six or seven high. To store freight more compactly, Richmond, Va.-based CSX Corp. has built a 14-story container depot over its Kwai Chung terminal. The 43-acre CSX terminal has just one ship berth, but it moves 1.2 million container units a year — more than the entire port of Baltimore.
Unlike the U.S., where shipping companies typically run terminals limited to their own ships, many Asian and European terminals serve multiple shipping lines. That allows them to make maximum use of their capacity. The U.S. system is “like running an airport, and each airline has its own runway,” says John Meredith, group president for Hong Kong’s Hutchinson Port Holdings.
Singapore
In Singapore, where dock unions and management have a more conciliatory relationship than in the U.S., the port’s crown jewel is the Pasir Panjang terminal. There, rows of massive concrete columns rise nine stories in the air, supporting a network of 44 overhead cranes.
At Pasir Panjang, computerized machinery does most of the work of lifting, moving and lowering containers. Operators such as Mr. Koh, who makes the equivalent of about $18,400 a year — or less than a fifth the typical income of a port of Los Angeles crane driver — are involved only for several seconds at the beginning and end of each move. “All they have to do are the takeoffs and the landings,” says Vincent Lim, the port’s deputy president of container terminals. “The rest is autopilot.”
Europe
In Europe, the Dutch port of Rotterdam uses robotic cranes to pluck cargo containers from unmanned vehicles guided by sensors in the pavement. The technology has cut container-terminal employment in half, to about 30 workers per shift. And like many foreign ports, Rotterdam, which is built on a network of canals, escapes much of the truck traffic that clogs U.S. ports by loading container ships from smaller vessels.
The new high-tech systems don’t come cheap. Singapore, for example, spent $1 billion to build Pasir Panjang, including more than $200 million for its overhead crane system, which allows each operator to control as many as five or six cranes.
Of course, even efficient ports have their problems. Because there still isn’t enough room at its docks, Hong Kong unloads and loads some ships in the middle of its busy harbor, using cranes anchored aboard barges; not only is that dangerous work, but containers sometimes slip into the harbor’s deep waters and are lost. Nor does the high technology always adapt smoothly to dockside conditions. In the early 1990s, when Rotterdam first tested its automated cargo-moving vehicles, their guidance systems often stopped working when seagulls sat in front of the vehicles.
Even so, efficient Asian ports can unload and reload a large container ship in about 40 hours, compared with 76 hours in southern California, say officials at Maersk Sealand, part of Danish shipping line A.P. Moller. In Asia, within two or three minutes after a ship is secured to its berth, “they’re taking cargo on and discharging cargo,” says Tom Murphy, third engineer of the container vessel Glasgow Maersk, during a stop in Hong Kong. “In the States, I’ve seen it take 10 minutes to an hour.”
US Work Rules
Shipping executives blame that disparity on work rules perpetuated by the powerful ILWU. One example: The union insists that its clerks enter cargo information into a computer manually, even though optical scanners and other technology could do the task more efficiently.
“It’s always been our job to start and finish a transaction, and we were just trying to preserve jobs,” says John Kunich, a clerk at Global Gateway South.
The ILWU’s Mr. Spinosa says the union went along with efficiencies and job losses when containerization was introduced on the West Coast in the 1960s. Now, technology threatens to take away still more ILWU jobs at the port as well as allow terminal operators to shift some jobs away from the docks to nonunion locations. And, he says, the union can’t predict how many jobs might be affected because U.S. terminal operators haven’t agreed on a common standard for automated cargo-handling systems.
Terminal operators dismiss that argument as a union stalling tactic. But there’s a lot at stake for the ILWU, whose members are among the country’s most highly compensated union workers. The ILWU keeps a tight hold on the labor supply at its ports, at times punctuating its demands with work slowdowns and stoppages.
ILWU members can earn $100,000 a year for jobs that don’t require a high-school diploma. Clerks and foremen earn considerably more. Many of those workers are dispatched to their jobs each day by joint management-union hiring halls. Terminal managers say that practice sometimes results in workers arriving late or unfamiliar with their assigned terminals. The union says the dispatch system ensures its members equal access to jobs and that their punctuality is improving.
Some skilled dockworkers enjoy almost free-agent status, with shipping lines competing for their services by offering pay guarantees, abbreviated work schedules and other side deals. For example, Global Gateway South guarantees pay to ILWU member Joe Radisich for 20 days a month, even though it usually needs him only three days a week. On his days off, Mr. Radisich, who operates one of the terminal’s giant ship-to-shore cranes, can go to the local hiring hall to pick up extra work. The 38-year-old says he made a total of $130,000 last year.
The Pacific Maritime Association, which represents West Coast terminal operators, is hoping to make sweeping changes in dockside labor practices. PMA President Joseph Miniace has promised to guarantee “work opportunities” to the union’s 10,000 currently registered dockworkers if the ILWU gives him a free hand to employ new technology. So far, the union hasn’t taken him up on his offer.
Labor problems are far from the only ones facing U.S. ports. Some East Coast ports are too shallow for the largest modern container ships. And one highway bridge over a Long Beach ship channel is 20 feet too low for those vessels to reach some docks.
Politics can be a factor, too. At the port of New York and New Jersey plans to reconfigure terminals and deepen ship channels were put on hold for more than a year, starting in 1999, after New York Gov. George Pataki and then-New Jersey Gov. Christine Todd Whitman feuded over how to spend local bridge and tunnel tolls. The work is now under way and most of it is expected to be complete by 2005.
Lately, U.S. port operators have been trying to reduce delays by keeping their truck gates open longer hours; they also plan to set up appointment systems for truck drivers, who now show up at random intervals. And to relieve overcrowding, the port of New York and New Jersey is proposing to barge cargo containers to nearby satellite ports — such as Albany, N.Y., and New Haven, Conn.
In Charleston, S.C., where residents have blocked plans to build a new 800-acre terminal, the port, whose facilities are operated by the South Carolina State Ports Authority, rather than by private companies, is considering using automated container-handling systems to make better use of its existing space. It still has to persuade the International Longshoremen’s Association, which represents dockworkers there and elsewhere on the East Coast, to go along.
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Source: WSJ
