Dockworkers, technology again on a collision course
By Andrew Gomes
Advertiser Staff Writer
Changing technology has long been one of the most contentious yet unavoidable realities in the evolution of industrial businesses such as shipping.
Associated Press
But today's pressure for innovation, which often pulls companies and their employees in opposite directions, has risen to a point that could threaten the stability of shipping on the West Coast and Hawai'i.
The 10,500 members of the ILWU returning to work Wednesday found stacks of everything from car parts to Christmas presents piled up during the 10-day shutdown of West Coast ports. The shutdown was the result of contentious negotiations over various issues, including technology.
The issue, which has been highlighted recently by heated arguments between shipping companies and unionized dockworkers, could either leave West Coast ports in cramped dysfunction or spawn the greatest technological changes in 40 years at dozens of ports that handled $300 billion in cargo last year.
At stake are millions of dollars, hundreds of jobs, and one less reason for labor unrest on the waterfront in future years — all of which will affect Hawai'i.
Contentious negotiations over various issues, including technology, resulted in a two-week shutdown at ports from California to Washington state that cut the supply of more than 90 percent of Hawai'i goods for nine days before the Islands received an exemption last weekend.
At its core, implementing technology is a troublesome issue because shipping companies and the union representing dockworkers disagree on how to share the benefits technology would bring.
Similar issues are expected to be one key point of upcoming negotiations in Hawai'i, where longshore labor talks generally follow settlement of the West Coast contract.
The Pacific Maritime Association, which represents about 80 West Coast shipping companies and terminal operators, and the International Longshore and Warehouse Union have long known that technology would be the most important issue in this year's labor talks.
To help smooth negotiations, the two sides stipulated in their 1999 contract to regularly meet to discuss introducing new technology.
Management and labor toured advanced ports in Hong Kong; Singapore; New Jersey; and Rotterdam, Netherlands. But there were just two committee meetings — both of which accomplished little, according to Pacific Maritime spokesman Steve Sugerman.
Need to modernize
About five months ago, the shipping company association began pushing for union permission to use electronic container-tracking equipment, downloadable files listing container contents and automated truck driver and load identification devices.
The technology would speed cargo in and out of ports by eliminating practices of using chalk and colored magnets to identify where containers should go, retyping or rechecking container content files and personally identifying truck drivers and loads.
The changes are not so much revolutionary. (The port of Rotterdam has been using computer-guided robotic equipment to move containers between ship cranes and truck chassis for a decade.) But the improvements could save an estimated $100 million a year and would upgrade some of the most congested ports in the world that are five to 10 years behind leading ports in Europe and Asia.
"We must modernize our terminals and bring our waterfront into the 21st century," said Tom Edwards, a Pacific Maritime negotiator and Northern California area manager. "We have ILWU clerks retyping information when that information can be processed with the press of a button."
Sharing in the proceeds
Pressure to upgrade is coming from customers wanting faster deliveries with fewer delays, more advanced competing ports and projected increases in shipping from Asia that threatens to overwhelm the capacity of ports with no more room to expand.
"If some serious automation is not done they won't be in the position to handle the volume of business coming through those ports," said Hayes Howard, publisher of trade magazine American Shipper.
Michael Perri, an ILWU spokesman in California, agrees that efficiency-improving technology is "certainly something whose time has come. (Ports) are expanded to the limits of their capacity. That's why now is the time."
But while recognizing the need for technology, the union wants current and future members to share the proceeds of more efficient and less costly operations.
"How do we make this work together for everybody's benefit?" Perri said.
According to one California labor institute, longshore workers received $29 million of $200 million, or about 15 percent, of the financial gains when the industry in the 1960s introduced containerization — a revolutionary change that eliminated tens of thousands of jobs on the West Coast and several thousand in Hawai'i.
"It's a question of who gains from modernization," said Hawai'i labor historian Teresa Bill. "The increases in productivity should benefit the industry, but it should benefit the workers as well."
The number of jobs expected to be lost if West Coast ports implement desired technology is 300 to 400 out of 10,500, according to the carriers' association.
Without technological advances, the ports of Los Angeles and Long Beach alone would require more than double the number of current dockworkers to handle the expected doubling in volume a decade from now, according to Peter Vandermat, vice president of JWD Group, an Oakland, Calif.-based consulting and engineering firm that has designed container ports around the world.
Sugerman said the association projects that within four to five years more than 300 to 400 new jobs under the union's jurisdiction would be created by new technology and increased shipping volume. Generally, clerks would be replaced by more longshoremen and foremen, he said.
Pacific Maritime also is promising to preserve the jobs of existing clerks until they retire, and is willing to discuss a "significant" pension enhancement for all ILWU members as part of an agreement on technology.
What the union wants
The union said it is willing to implement the technology at the loss of jobs, but only if all jobs created by the technology — as well as jobs currently outside the union's jurisdiction such as terminal control, planning and some supervisor positions — are made union jobs.
ILWU representatives also say they have security concerns about the ability of technology such as bar-code scanners and cameras to verify truck-driver identities and container seals.
David Lewin, a chaired professor in human resources and organizational behavior at The Anderson School (of Business) at UCLA, said the disagreements are reminiscent of the arguments over containerization 40 years ago.
"(Back) then there were long struggles, protracted strikes and work-to-rule slowdowns to slow or stave off technological change, and that's like trying to put your finger in holes in a dike that's about to break," he said.
High-paying tradeoff
Back then, ILWU leader Harry Bridges realized the inevitable and made a historic compromise, for which some union members criticized him. In agreeing to the Mechanization and Modernization Agreement of 1961, Bridges won huge increases in wages and benefits that today make dockworkers some of the highest paid blue-collar workers at just above $100,000 a year.
The alternative, labor historians say, was to resist containerization and lose jobs in the demise of the industry.
Lawrence Boyd, a labor economist at the Center for Labor Education and Research at the University of Hawai'i-West O'ahu, said the waterfront work force today is one-tenth what it was in the late '50s and early '60s, but a 1,000 percent gain in productivity has made the industry thrive as lower costs enabled manufacturers around the world to ship goods to far-off countries.
Today, West Coast ports are facing similar decisions to modernize or lose business, but the strength and militancy of the union is weaker while the anticipated gains in productivity are smaller relative to the containerization transition, Boyd said.
Standing fast
Lewin said he believes that the ILWU will end up making a deal again to allow new technology in return for payments to compensate for short-term job displacements.
The ILWU has said it won't agree to such a deal. "We will not move along those lines, not now, not ever in the future," said union President James Spinosa.
Technology talks broke down Sept. 25 after four months, and the issue was temporarily shelved two weeks ago before the union agreed to discuss it again with the assistance of a federal mediator.
In Hawai'i, the ILWU and negotiators representing stevedoring and shipping companies have agreed not to talk publicly about contract issue details, said Neal Yokota, a spokesman for the Hawai'i Employers Council, which represents the companies.
Hawai'i cargo ports do share some technology issues with the West Coast, though terminal operators CSX Lines and Matson Navigation Co. already have some advanced equipment that many West Coast ports lack.
Matson officials declined to comment for this story, citing the sensitivity of ongoing negotiations. But the company, which recently completed a $36 million terminal improvement project at Sand Island that included a $4 million satellite tracking system for containers and terminal equipment, said in a July conference call with stock analysts that work practices are limiting benefits of Matson's new technology.
Work-practice changes
W. Allen Doane, president and chief executive officer of Matson parent Alexander & Baldwin Inc., said Matson will push for work-practice changes in negotiations.
"For reasons of real prudence, let me just say that we do need to work through our unions in Hawai'i — independent of what's happening on the West Coast," he told analysts. "This is the biggest change that this part of the company has had in decades.
"It is absolutely a revolutionary change that we probably and certainly did underestimate the challenges of just launching it as well as we wanted to."
Eusebio Lapenia, president of Local 142 of the ILWU, said last week that the union had not received any word on work-practice changes that might be sought by Matson.
He said in general that union members are concerned about job security as new technology is introduced.
CSX also uses technology at its Hawai'i terminal that is more advanced compared with many West Coast ports, but the company still would like some work-rule changes sought on the West Coast.
Brian Taylor, CSX vice president and Hawai'i general manager, said it has been four or five years since the company installed terminal gate pedestals containing cameras, card readers and printers that identify truck drivers and their containers and direct them to drop-off and pick-up points.
A software upgrade to the system planned for this month and November would enhance processing to reduce average truck turnaround times from 20 or 22 minutes down to less than 18 minutes, he said.
Changes planned for next year include equipping stevedores with hand-held computers that can provide a real-time inventory of all containers at the terminal.
Some of the recent technological improvements at CSX's Hawai'i terminal work well, but others are limited by existing work rules, Taylor said.
"There is always some of those past work practices or jurisdictional issues that do bump up against the implementation of some of the technology applications," he said. "When you change the way something is done, you have to get the union to agree."
Different needs
Other forms of technology being sought on the West Coast are not necessarily an issue for CSX in Hawai'i, Taylor noted. For instance, a satellite-based tracking system for containers may not be cost effective for CSX here because of lower shipping volumes.
"I'm not sure at the moment that all of the technology that they want to implement on the West Coast could be justified in Hawai'i," he said.
Still, Taylor said other issues, such as clerks retyping container content files instead of downloading the information, is something sought by CSX in Hawai'i.
The ILWU's Lapenia said last week he was not aware of work-practice changes desired by CSX.
UH labor economist Boyd said local negotiations over technology likely will center on where the line is drawn between sharing higher pay and higher profits gained from costs reduced by automation.
"Industrial unions have never been Luddites," he said. "They've always accepted the basic premise that mechanization should occur."
Advertiser reporter Treena Shapiro contributed to this story.
Reach Andrew Gomes at agomes@honoluluadvertiser.com or 525-8065.
