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SUMMARY REPORT OF THE COMMITTEE ON PRODUCTIVITY OF MARINE TERMINALS In response to a request by the U.S. Maritime Administration, the Committee on Productivity of Marine Terminals was formed to identify and assess issues related to the productivity of U.S. ma- rine terminals handling containerized general cargo. The commit- tee's report is presented in two parts "Workshop Reports" and "Symposium Papers." This section summarizes the committee's findings and presents its suggestions for productivity improvement in marine container terminal operations. FINDINGS The Committee on Productivity of Marine Terminals reached the following conclusions: 1. U.S. marine terminals are generally employing state-of-the- art technology and engineering design. Over the next 5 years, improvements in technology and engineering design will be incre- mental in nature, building largely upon the existing base. 2. The best U.S. terminals are not as productive as the most productive foreign terminals for many reasons. An important factor influencing productivity is the state of labor-management relations, which runs the gamut in the United States from good to very bad. 1

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2 3. The most promising area for improving marine terminal productivity in the United States lies with better employment of people. This includes: . labor-management relations; the quality of management and supervision; the quality and commitment of longshore workers; and . the quality and flexibility of the work environment. 4. Significant potential for productivity gains also resides in improved information systems to assist in the control of operations and the facilitation of documentation. 5. Improvements in marine terminal productivity are important to the success of individual U.S. port interests in terms of their ability to compete in an economically deregulated, i.e., market- driven, environment. 6. The international competitiveness of U.S. manufacturers competing in the export trade is affected by the quality and pro- ductivity of U.S. marine terminal operations. 7. The committee developed a profile of productivity measures to characterize marine terminal performance in a meaningful way for management purposes, and urges its adoption by the U.S. marine terminal industry (see Table 1, page 14~. 8. Substantial improvements in marine terminal productivity will come from a process that involves all concerned parties in a continuing dialogue at the national, regional, and local levels. This process should include: . joint labor-management cooperation in addressing the hu- man resources aspects of improving productivity; . the establishment of a profile of productivity measures, and the acquisition, dissemination, and use of productivity data as described herein; . the standardization of automated terminal container identi- fication and management information systems. The Maritime Administration can facilitate and promote the pro- cess by working with industry and labor.

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3 STATE OF THE ART OF MARINE CONTAINER TERMINALS Container technology was introduced in the 1950s, but it was not until 1966 that the major international trades began to be containerized. Thus, in 1986, there is over 20 years' experience to draw on in assessing the development of the state of the art. This section will summarize the state of the art in the United States, compare it with foreign marine terminals, and provide ad- ditional comments on the state of automated information systems in marine terminals, labor-management relations, and other broad issues and concerns. Marine Container Terminal Systems Engineering and Design The high fixed costs of marine container terminals impel atten- tion to productivity improvement and most economic utilization. Much has been accomplished to these ends by introducing sophis- ticated specialized container-handling equipment. To use such equipment optimally, there has been an increased emphasis on systems in some cases, computer controlled. Other factors that affect terminal use and productivity include layout, ease of traffic flow, engineering, and personnel efficiencies. Ideas currently in various stages of development include high-density multilevel ter- minals and buffer systems (temporary holding areas) for round- the-clock operations. Among technical improvements sought is equipment that uses less room, is more reliable, and provides greater operator comfort. Information flow, including freight documentation, is a major area of terminal operations that requires improvement. A con- sensus approach to standardization and the introduction of auto- mated systems would be beneficial. Another systems engineering area where present methods require ~rnprovements is vertical stor- age of containers and chassis. Methods for stuffing and stripping freight also are ripe for improvement. No doubt there are barriers to innovation. Development of ideas, systems, and methods require both human and financial resources, frequently not forthcoming in an economically lean climate.

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4 By and large the marine terminal industry in the United States does not engage in ongoing systematic research into its equip- ment and systems requirements, but usually leaves this function to outside consultants that are brought in for specific projects. A limited amount of development and testing is done under the Cargo Handling Cooperative Program (CHCP), established by the U.S. Maritime Administration in partnership with U.S.-flag carriers. Operating Systems Marine Container Terminal Operations U.S. container terminal operating systems are almost evenly divided between chassis systems (46 percent) and stacking, or grounded, systems (54 percent). There appears to be no clear indication as to which of these systems is superior in terms of productivity. The users of either system understandably claim that their system is more productive and cost-effective. The choice of systems may be influenced by the availability of lay~own areas (space to set containers as they await transshipment) within easy distance of the ships' berths. An important intangible factor in any comparison is customer satisfaction particularly in connection with pick-up of import containers. In this area the chassis system is clearly superior, as it minimizes waiting time. However, due to the high capital cost involved, it is rare for a carrier or terminal to switch from one system to the other once the initial choice has been made. Throughput at U.S. container terminals is Tow (as a percentage of capacity) in comparison to many terminals in other countries. There is a consensus that this is due in part to terminal overcapac- ity, caused by intense competition among ports. Carrier preference for private terminals has contributed to American ports having a reserve capability which indicates that, by and large, there is very little need if any for further expansion during the next several years, except for those ports that have attracted considerable ad- ditional traffic. Overall cost of terminal operations is generally broken down into labor, terminal lease costs, capital cost (including maintenance), and overhead. In the United States, labor is the major component in all situations. Because labor costs are sensitive to the efficiency

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5 of terminal use, labor costs have the widest variation from one terminal to another. Many other factors also bear on the final figure, particularly work rules which vary from region to region. Rail Operations With few exceptions, the interface between marine terminals and railroads involves some drayage (movement by truck). As a re- sult, the basic relationship between marine terminals and railroads is similar to that between marine terrn~nals and truck operators. Some potential improvements are suggested by a railroad re- quest that special lanes be set aside for volume movements between marine terminals and rail yards and also that marine terminals adopt more flexible working hours in response to user needs. An- other suggested area for attention is the creation of neutral chassis pools to minimize fluctuations in chassis requirements. Also, rail- roads recommend the creation of surge facilities to deal with peak situations, which would otherwise clog either the marine terminal or the rail facility. Finally, there is the ultimate question of how to eliminate drayage between marine and rail facilities. This has been resolved in many foreign terminals by constructing pier-side rail facilities (see following discussion on intermodal operations), which has cer- tain attractions. However, in terms of state of the art, the concept is largely untested in the United States. Intermodfal Operations The most significant development in connection with the in- termodal aspect of containerization has been the double-stack train concept. This has led to volume movement of a previously unheard-of quantity and a corresponding reduction of line haul cost. It has also brought in new technology and systems, partic- ularly in connection with rail operations. However, few U.S. con- tainer terminals provide on-terminal transfer facilities. Drayage is necessary in all instances. Any attempt to establish on-terminal transfer facilities will confront complex trade-offs. Container yard space represents a serious impediment. A double-stack container train is typically a mile long; few existing terminals can accommodate such a train. The presence of entire

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6 unit trains could seriously disrupt other container movements at the marine terminal. On-dock transfer facilities (between con- tainer stacks and unit trains) would also run counter to the pref- erence by railroads to use high-volume intermodal hubs to serve both trailer and container customers. Also, managers of ports and handling facilities will be reluctant to adopt major changes in the current operational pattern. Solutions to improved on-dock transfer systems will depend on the incentives offered to the parties affected ocean carriers, port authorities, terminal operators, stevedores, Tongshore labor, truckers, and railroads. Any breakthrough to a new system is likely to become an innovator/follower situation. Once there has been a breakthrough, competitive pressures on others will follow. Truck Operations The problems experienced by truck operations in their interface with marine terminals are very similar to those of railroads and are amenable to similar solutions, i.e., special lane requirements or flexible working hours to minimize peaks. In addition, truck operators put particular emphasis on the need for smooth docu- mentation procedures to minimize turnaround time. Prechecking procedures have helped to reduce delays caused by documentation snags. An unrelated but important aspect of the quality of truck op- erations comes from the impact of trucking industry deregulation. This has caused a large share of the work to be taken over by owner- operated trucks which, in some cases, operate without proper au- thority or insurance and without observing required maintenance and safety standards. Terminal Management While optimum design capacity of the average container crane is in the 40-45 lifts per hour range, the U.S. average performance is only slightly above 20 lifts per hour or less than 50 percent of design capacity. This contrasts with an average performance of 3~35 lifts per hour in European and Asian terrn~nals. In improving productivity, terminal management must take ac- count of the technical features and requirements of the vessel, the

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7 terminal cranes, and the terminal operating systems as well as labor-management relations. By and large, new technology for vessels, cranes, and operating systems is incorporated into ter- minals when it is cost-effective. However, there is real need for improvement in management and labor relations. Shortcomings in this vital area are the result of the combined impact of poor planning, poor management, and poor labor. Frequently, manage- ment has abdicated its planning responsibility to labor. Labor, in turn, is neither adequately trained nor motivated to perform this function efficiently. There appears to be very little rapport with the labor force under present practices. An in-depth analysis of these issues is needed to bring about better management, better labor, and better management and labor relations. Information Systems in Marine Terminals As in many other industries, operational managers are becoming knowledgeable in modern computer systems. New systems typi- cally are introduced into operations by means of a series of test programs and subsequent reviews. The new climate has encour- aged the marine technical industry to evaluate and apply emerging information technologies. Automated container-identification procedures are in various stages of research and development with significant development and testing being conducted collaboratively by the shipping com- panies, which also operate terminals. At present, material-handling systems are generally manually operated. One of the few U.S. terminals to have gone beyond the experimental stage in advancing the state of practice of materials handling is Matson Terminals, Los Angeles, California. Matson employs computer process control to minimize crane travel time. Microwave technology is employed to track the placing and picking up of containers. Among foreign terminals, the Europe Container Terminus (ECT) in Rotterdam, The Netherlands, employs laser technology to monitor the location of container-handling equip- ment. In the past, the container terrn~nal industry sometimes created "islands of automation." Where this situation existed, the benefits of improvements in the automated area of the overall operation could not be fully realized due to barriers in other areas of the

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8 terminal system. In order to achieve maximum benefit from ad- vanced and expensive information technology, it will be necessary to identify such bottlenecks and then to correct their impact on the overall productivity of the terminal. Labor-Management Relationships The introduction of containers and container systems led to serious labor disputes. Initially, the issues focused on the size of the labor force and the problems of redundancy created by the higher levels of productivity made possible under the new system. Over the years the issues have remained complex. Escalating competition has brought on a need for reduced costs. In several areas, ports and employers have even looked to alterna- tive labor unions or, in some cases, nonunion labor. The primary underlying economic force has been the need for a reduction in gang sizes to bring down the total cost to an acceptable competi- tive level. Such pressures have been particularly prevalent on the East Coast and Gulf Coast, where the existing labor contracts are tied to large gang sizes. Reductions in the work force will raise social issues and present new issues on how to maximize the electiveness and safety of the reduced force. Stability of employment is an aspect of labor and management issues that has defied an efficient solution. Modern management techniques point in the direction of core labor groups that would be employed on a steady basis, supplemented by casual labor. This system, patterned on Japanese practices, is gaining wider application. At the same time, the technique favored by organized labor pulls in the opposite direction through the mechanism of the hiring hall, which serves as a means of distributing work among union members. Impact of Government Policies on Container Terminals Government trade, political, and military policies all influence the maritime industries. Governments sometimes support or subsi- dize unproductive practices in foreign trade as matters of strategic concern. While measuring the impact of such practices is difficult, the reality of their existence cannot be ignored.

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9 Particular mention should be made of the clear U.S. government policy of deregulation. The impact of this policy on marine termi- nals has been indirect, primarily in the form of changing patterns of inland intermodal transport. A case in point is the accelerated development of landbridge and minilandbridge rail services. In a relatively short time, these new concepts have captured a large share of U.S. foreign trade with Asia. Likewise, deregulation has Towered the cost of terminal trucking operations, with the over- whelming volume of container transfers to rail being hnndIed by owner-operators. Comparison of U.S. and Foreign Marine Container Terminals As observed previously, container cranes In European and Asian terminals today generally operate at a rate of 3~35 lifts per hour, which represents a productivity of about 30 percent over U.S. op- erations.*As impressive as the present overseas productivity is, it pates in comparison to the target set by the more progressive ter- minals; for example, the ECT in Rotterdam has the goal of 40 lifts per hour by the year 2000. It is clear that much of the expected productivity improvement must come in the area of stacking sys- tems (stacking operations being the prevalent system in use in most European and Asian terminals). Other key areas receiv- ing attention are information and gate control procedures. Some of these terminals put particular emphasis on modern computer systems featuring exhaustive data communication capabilities to * While there is clear indication that many foreign terminals have better productivity than some U.S. terminals, this distinction often depends on the method used to measure productivity. The difference is most significant when compared on a per-man-hour basis, particularly when comparing U.S. East Coast and Gulf Coast terminals with foreign ports. This is most obvious when a comparison is made with Canadian ports, where relatively high productivity has been achieved with considerably smaller gang sizes compared to the U.S. East Coast and Gulf ports. The existence of this difference in productivity has been a major factor in generating cargo diversion to Canadian ports. In the direct trade with U.S. trading partners, the differences in productivity have no measurable impact (import and export movements in either direction will be faced with practically identical costs, granted in the reverse order). However, the lower U.S. productivity has an adverse effect when U.S. export trade is competing with other trading nations to serve third-country markets.

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10 achieve efficient control of container movements in order to oW tain a high throughput. A major European terminal has even advanced its systems to the point that wireless data communica- tions are performed through an internally developed infrared light data-transmission system. There is clear recognition among the efficient foreign-terminal operators that much future growth in productivity will have to come from advances in the employment of human resources. ~ain- ing and motivating the labor force is viewed as essential. This is particularly the case in Western Europe and in Japan where the cost of labor represents a major portion of the overall cost in some cases as high as 60 percent. Taking all technological devel- opment into consideration, the key factor to a successful operation is still considered to be the quality and motivation of management and labor. The most successful foreign terminal operations em- ploy participatory management systems that encourage labor to contribute to improvement in methods, equipment, and working conditions. They keep employees informed about the quality of their performance, and they reward them when they achieve sig- nificant improvements. They stress employees' identification with their work, whether individually or as a group. In practical terms, the foregoing is being achieved by operat- ing with a proportionally higher share of regular employees who perform their tasks in decentralized units. This leads to well- motivated teamwork. The management function is well delegated to middle management. For the increased share of the work force under regular employment, the proper mix of individual respon- sibility, job satisfaction, information availability, clearly defined employment conditions, proper training, and safety procedures leads to proper motivation and increased productivity. The nature of the European traffic system is such that there are important considerations to be taken into account before any comparisons are made between their terminal handling systems and their U.S. counterparts. One key difference is the fact that in the European feeder systems there are a far larger number of roll- on/roll-o~ (Ro/Ro) vessels. Likewise, in European deep-water services the Ro/Ro vessel is also employed on a more frequent basis. Another difference should be noted in connection with stack/rail/stack transfer operations, which frequently take place directly at the marine terminal. Both differences create different

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11 (and more complex) terminal traffic problems. Nevertheless, the overall foreign terminal productivity is superior to that of U.S. terminals. Canada presents an interesting contrast to the United States. While Canadian trains are comparable to those operated in the United States (both in terms of the train's composition and the distances involved in overland operations), the intermodal transfer usually takes place at the marine container terrn~nal (without drayage). The similarity in rail operations and the contrast in terminal operations between the United States and Canada would appear to point toward a further detailed study of the potential for applying Canadian intermodal practices and systems to U.S. terminals. Another area that a comparison between U.S. and foreign ter- minals must take account of is government rules and regulations. For example, safety rules have a measurable impact on terminal productivity. In those unfortunate instances where there has been an accident involving death at a terminal, a substantial drop in the rate of productivity occurred at the terminal after the accident. In the long run productivity has reverted to its earlier, higher level. No doubt these situations have helped improve safety standards for marine terminals. OPPORTUNITIES FOR IMPROVING PRODUCTIVITY IN MARINE TERMINALS Efforts to improve productivity in marine container terminals must balance the needs of the many constituencies that affect the terminal. Improvements within the terminal should be accom- plished without adding to the total cost of transportation. The question of improving terminal productivity, therefore, must be viewed within the broader perspective of the customer of trans- portation service and the total cost of service. Improving productivity is accomplished by change for exam- ple, by replacing one element of cost with a lesser element, perhaps capital for labor, by eliminating unnecessary work and delays, or by providing required communication in its broadest sense. The options of the terminal operator are often limited by his surroundings. Generally, the port authority provides him with a pier and land, thereby fixing the upper level of volume. The size

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12 and configuration of the terminal may have been determined by reasons other than low cost to the operator. The port also may provide the handling machines to move containers and thereby re- strict the mode of operation. Alternatively, the terminal operator may serve an ocean carrier who provides him with an inventory of chassis and the requirement that all containers be moved on wheels. The constituencies who affect the terminal have different goals from those of the terrn~nal operator. The trucking community wants to turn their equipment rapidly through the terminal. The ocean carrier wants a rapid turnaround at berth requiring that as many cranes as possible work the ship. As a consequence the terminal must gear up to provide that service and incur more idle time for a possibly greater set of equipment and its underlying capital. Members of the collective bargaining units want job se- curity and high pay, which may be at variance with the terminal operator's needs to improve productivity and to hire the number of workers that is economically justified. Measuring Productivity- A Precondition to Improvement In order to manage a process, it is necessary to measure it. The management of a marine terminal is no exception. The measure- ment of marine terminal productivity is quite unlike the measure- ment of the productivity of, say, an assembly line. First, no two terminals are alike. Second, in any given terrn~nal, no two ships worked are exactly alike in configuration or loading. The result is that the work performed in a terminal is repetitive only in a gross sense. A marine terminal is complex in that it involves a variety of ma- jor components (such as the berth, the cranes, the container yard, the gate, and, of course, labor) and various constituencies that play a role in the operations of combinations of these components (the port, the shipping line, the terminal operator, the stevedoring company if different from the terminal operator, the truckers, and the longshoremen). This complexity excludes the possibility that one single measure of productivity can encapsulate the essence of all of the interactions between components and constituencies and still reflect the efficiency of the operation in a meaningful way. An

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13 alternative approach to the measurement of marine terminal pro- ductivity was developed during the course of this study (see Table 1~. (The proposed profile of productivity measures is described in detail subsequently in the workshop report "Measures of Marine Container Terminal Productivity" [in this volume].) Productivity is commonly measured in monetary terms, since management often views increases in productivity as a means to increase profits. Within a given terminal such measures do have considerable relevance. However, different terminals may well be in-different labor markets, use different currencies, and be subject to different physical and environmental constraints. Thus, it is not clear that such monetary measures of productivity are either meaningful or useful when comparing different marine terminals. As a result, the profile of productivity measures developed by the committee involves physical quantities such as man-hours and crane moves. In this way it is hoped that meaningful comparisons can be made among terminals both here in the United States and abroad. The concept of a profile of productivity measures was the result of an attempt to characterize all the principal areas of operations of a marine terminal with the smallest number of measures. Many of the measures in the profile are not now in common use. Those involved in marine terminal operations have their own in-house productivity measures used on a day-to-day basis. It is not the intent of this section to suggest that these measures be abandoned. Rather, the purpose of a profile of productivity measures is to de- velop a common language to communicate the performance of one terminal in a context that can be understood by others. The pro- posed measures, because they involve careful definitions of terms, are also the beginning of a standard dictionary of terms. This standardization will further promote communication on marine terminal productivity and show how to improve it. As a result of variations in labor conditions, terminal operations, geography, and other variables, the profile of one terminal should have some measures of productivity inferior to, and others superior to, those in the profile of another terrn~nal. Understanding these differences should lead to an understanding of the relative operations of each terminal and its strengths and deficiencies.

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15 The measures of productivity proposed are interdependent. That is, an increase in yard productivity (by storing more contain- ers in the yard) can easily lead to a decrease in crane productivity or in gate productivity, since the efficiency of storage and retrieval functions in the container yard may suffer. Improving the oper- ation of a given terminal inevitably involves trade-offs between the operating elements in order to optimize profitability and per- formance. The manager's task is to perform these trade-ofl5s and to integrate the whole system. This optimization process must deal with local costs in explicit terms. The proposed profile of productivity measures will illuminate the nature of the trade-o~s selected, but will not expose the actual costs. Need to Gather Data In order to profile productivity measures for comparative pur- poses, it is necessary to have profiles from several different ports. Collecting these data poses significant problems. As previously mentioned, these productivity measures are not now being col- lected, and many of the proposed measures are different from those in current use. It is easy to understand the reluctance of the individuals involved in terminal operations to identify and collect a set of new data. However, the data base provided by the col- lection of these profiles will be valuable for comparison with other terminals and make up for the cost of the data collection. Collection of productivity data is a sensitive issue, particularly because of the extreme competition that exists in the industry and the overcapacity of the ports. Careful consideration needs to be given to ways in which the data can be presented anonymously, so that the competitive stances of individual shipping or terminal operators are not compromised. An opportunity exists for the ports to take the lead in data collection at the local level. Many ports already require regular submission of some productivity data from their client terminals. Standardization of this process would lead to development of the required data at each of the major ports. A need would still exist to collect these data from the individual ports, to assemble and collate them, and to disseminate the data back to the interested parties.

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16 Possible Uses of Data A data base of the productivity profiles of several marine termi- nals would improve terminal management. Since each individual measure of marine terminal productivity focuses on one facet of the terminal, a comparison between two ports of similar type should be useful for management in assessing local productivity. For ex- ample, many ports use similar types of container cranes, although much of the other parts of the operation can be quite different. One would anticipate that two ports with sinner cranes should have similar crane productivities. The extent that they differ indi- cates some inhibiting factor in the port having lesser productivity. The complete profile of productivity measures provides a picture of the other parts of the operation so that these influences can be assessed. The detail included in a complete profile of productivity permits the assessment of productivity deficiencies to be made at all levels of management, particularly at the lower levels where direct contact between labor and management occurs. The data base of terminal productivities will indicate the results of the different trade-offs made at individual ports, and should therefore reveal the sensitivity of any one productivity measure to another. To optimize the profitability of a given terminal op- eration, each individual measure must be converted to local cost. This provides a common base to combine the effects of all of the measures. The sensitivities indicated by the data base together with the local costs can predict the financial impact of change in any of the primary aspects of terminal operations. Because local costs vary from terminal to terminal, the resulting optimal balance at one terminal is likely to be different from another terminal. It should be noted that the profile of terminal productivity does not address the cost of management of the terminal. These overhead costs must be added to the direct operations costs if the total cost of the operation (or equivalently, the total cost per container handled) is to be determined. The profile could be used to set productivity and incentive goals. The profitability of a marine terminal can be particularly sensitive to productivity. As a result, it seems reasonable to tie productivity performance together with labor contracts, so that labor can share in both the benefits of good productivity and the costs of poor pro- ductivity. With unambiguous and easy-to-calculate productivity

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17 measures and, most importantly, with evidence of attainable lev- els of productivity in other ports, the use of these measures as incentive goals seems valid. As an alternative, historical records of productivity covering many ports may also be used as part of the collective bargaining process. Ship scheduling is sensitive to the productivity of marine termi- nals. High berth utilization (because the terminal is productive) can lead to delays in obtaining a berth. Low crane productivity and low yard productivity can lead to delays in ship turnaround times. Knowledge of these factors should influence the shipping line to develop sophisticated scheduling strategies to account for these possibilities and to minimize their influence on its operations. Improving Productivity Through Capital Investment The preceding section on the state of the art of marine container terminals explained that the marine terminal industry generally is using the latest available technology shown to be cost-effective. Some of the technologies being developed abroad, although they could improve productivity, are not cost-effective in the United States at the present time (except in a few instances). These include: once) dual trolley cranes (capable of handling several containers at automated cranes automated container storage and retrieval systems automated guided vehicles buffer systems multitrailer systems cell guides for deck storage automated trim and list control systems This situation exists because a considerable portion of U.S. ter- mina] resources are underutilized. Therefore, a primary objective for the industry must be to increase productivity and the use of the current plant through operational and management-level im- provements. As a general rule, capital improvements should be

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18 assessed for their value in improving productivity after the pro- ductivity of the current plant has been improved to the maximum extent possible. One important exception to delaying the improvement of pro- ductivity stemming from capital investment is providing the means to improve flow of information in the terminal. Information is the glue that holds the operation together, linking the customer, man- agement, and the work force. Better information provides all levels of the terminal with the vital information needed to improve the rate and the doing of work and may provide the basis for better integration between management and terminal workers. For each operation in the terminal a specific container must be moved from a known location to a rearm destination. Any improvement in this process of identifying locations and containers will not only help the planning of yard and vessel moves, but will also provide feedback to assess the quality of the operation for future improvements. In addition to the means for improved planning, the equipment operators must have exactly the same information. With infor- mation flow improved in this manner much of the delay currently endemic in today's terminals will largely disappear. Some aspects of this specific area of opportunity for improv- ing productivity are now starting to be addressed by the CHCP, which addresses the problem of automatically identifying container equipment and location with a high degree of accuracy and wireless transmission of digital information. Current work involves testing the durability of this equipment in the marine terminal environ- ment and on the high seas. This effort on the part of the industry already is beginning to show that standardization of the electronic hardware and software is mandatory if terminal operators are to uniformly reap the potential benefits of this work. Improving Productivity Through Operations Research Since many marine container terminals tend to be underutilized, improvements in operating the existing plant must be the first or- der of business in the marine terminal industry. This involves searching for areas that have less productivity than could logically be expected. The profile of productivity measures that has been

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19 suggested can help in this regard. Making incremental improve- ments will require additional analytical work, however. This work needs to stress the analysis of the interaction of one segment of the terminal operation with prior and succeeding operations and with events outside the terminal. These analyses should look at the functional aspects of operation such as: the layout and planned flow of equipment in the terminal; . the effect of outside forces that impinge on productivity in the terminal, such as vessel arrivals, interchange to trains and barges or feeder vessels, and gate arrivals; the organization and assignment of the terminal work force; . the planning operation for working the vessel and yard; . the manner in which normal flow of containers is handled versus the movement of containers that demand service outside of the normal handling routines (the latter could be containers with late arrivals at the terminal or containers whose clearance for export is changed at the last minute); ~ the operation of the gate, which can present wa~ting-line problems that could be ameliorated by standard techniques of specialized handling of equipment with short service time require- ments; and . the operation of gantries and other yard-handling equipment. Gantry delays can be due to an inadequate support operation from the yard. Delays can also be due to impaired vision available to the crane operator. Some of these could be corrected with improved markings of locations, others with improved guidance systems, the use of contrasting colors, appropriate aids for stopping under handling equipment, and improved gathering devices on lifting beams and for chassis. Improving Productivity by Improving Working Relationships Different marine terminals that use comparable equipment and systems have been observed to operate at significantly different levels of productivity. This has generally been attributed to the differences in fundamental management and labor practices. Good relations between management and labor are an essential prereq- uisite to introducing productivity improvements successfully into the workplace. It is in this area especially that large gains can

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20 be realized. Without this any improvements can capture only a portion of their potential. There are two fundamental elements to improve and strengthen these basic relations. The first is to identify labor-management practices that can be conducive to improving the operation. The second is to seek mutually supportive labor-management relations. These two elements, not necessarily named in order of importance, are not new. They have been tried successfully in other industries and have even been introduced into portions of the marine terminal industry. Particular labor-management practices with potential to im- prove the productivity of marine terminal operations are described in detail in the workshop report, "Issues in Improving Productiv- ity" (in this volume). These practices include: . Employment Continuity Employment continuity can ben- efit both marine terminal operators and terminal workers. As permanent employees, terminal workers have the opportunity to learn a skill or the intricacies of a particular job to an extent that increases their worth to the employer. In exchange for a more skilled and knowledgeable employee, the terminal operators of- fer job security and possibly higher compensation. Some of this practice is ongoing today but mostly among the highest skilled workers. A particular benefit of expanding this practice is that it has great value in enabling or facilitating innovative changes in the terminal over time. ~ Mu~iskilling The longshore work force of today is a sub- stantially more skilled body of people than those who worked in the industry before containerization. This higher level of skill has gone together with substantial increases in benefits for the work force. However, this practice also has bred narrow specialties that defeat the search for a Tow-cost operation. Broadening the skill of the terminal workers can create future benefits to both the operator and the worker. Through training, terminal workers can acquire additional skills with additional pay. The terminal operator can reap the benefit of more effective use of the work force. . Flexible Hours The marine container terminal is marked by very large surges in demand for service. These surges of unusually high service demand could be ameliorated by providing service over a longer period of time beyond current contractual work hours. Changes in work rules that support more flexible operating hours

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21 have the effect of making a particular terminal more competitive and profitable. This should lead to more jobs or compensation or both for the worker. . First-Line Supervisors First-line supervisors representing the terminal companies deal directly with the work force. Their strong performance can play a critical role in successful innova- tions to improve productivity in the terminal. Sometimes first-line supervisors are less trained, experienced, and compensated than the workers they are supervising. This can result in management abdicating its responsibility to supervise the work force. Upper management needs to direct greater attention to the problems of first-line supervisors in dealing with the labor force and in pre- planning the work, as well as in improving productivity. Achieving Mutually Supportive Labor-Management Relations The manner in which the terminal management communicates with labor personnel is also very important, as is labor's recogni- tion of the value of a viable terminal. Both sides must recognize the need for stable and long-term solutions. There are two basic avenues for communication between management and labor. One is through the collective bargaining process, another through joint labor-management groups. The catalyst for achieving mutually supportive communications in many industries during the past several years has been the ne- cessity to prevent the demise of the company or industry. Such dealings between management and labor have been along a rocky road because of the critical environment in which these talks have taken place. In the marine terminal industry, the need for im- proved communication is not yet driven by threat of a bankrupt work environment. Long before any such eventuality occurs, the needed communications could be generated and common objec- tives identified. A current stimulus for dialogue, which is starting to appear, is the shifting of cargo from one port to another or from U.S. ports to ports of contiguous foreign countries. The foundation of the structure for starting this very difficult dialogue appears to be in place in spots. For example, on the West Coast of the United States, the mutual benefits to be derived from safety have generated formal and informal labor-management dialogue. Some companies have begun to hold so-called gangway

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22 talks with longshoremen about safety issues. This has led to the development and implementation of training in the safe handling of lashing gear and tensioners. Representatives of the collective bargaining units and the employers have formed the Joint Accident Prevention Committee to oversee and encourage safety dialogue. These mechanisms have all the earmarks of a start in constructive labor-management dialogue to improve productivity. A Process for Improving Productivity The marine container terminal industry is still in a growth mode. The wealth of information in this report and proceedings on improving productivity makes this a propitious time to for- maTize a process for improving productivity before the inroads of competition make this a distressed industry. Port authorities, shipping companies, stevedores, terminal operators, labor unions, shipping associations, truck and rail operators, and government agencies all have an interest and a role to play. Interested top- level officials should consider creating a structure within industry to address the common interest of productivity improvement in the marine terminal. A voluntary national committee of all elements of the industry on marine terminal productivity, facilitated by the Maritime Administration and possibly the National Research Council, could encourage, initiate, and oversee many efforts that are in everyone's interest, for example: . the establishment of a profile of productivity measures (as described in this chapter); . the standardization of automated container identification and terminal management information systems; and . joint labor-management cooperation addressing the human resources aspects of improving productivity. The efforts of this committee, and of all who have participated in the proceedings leading up to this report, should not be wasted. Many significant suggestions have been made. Many people have begun to believe that improvement, soon and without great expen- ditures, is possible. The effort should be continued until improved productivity has been achieved in the marine terminals of the United States.