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U.S. MARINE TERMINAL TECHNOLOGY AND OPERATION Technology Development and Application in U.S. Marine Terminals FRANK NOLAN, JR. The traditional marine terminal, equipped with labor, rope- nets, slings, crowbars, and hand trucks, was phased out during the 1940s as the wood pallet and forklift truck came into general use. This was just the step in the rapid evolution of cargo handling. It was followed by the through shipment of unitized loads, the introduction of roll-on/roll-off systems, and finally the onset of containerization. Each change evolved from a primitive form to the more sophisti- cated result: the pallet from the cargo tray; the modern container from the many reusable military containers in use during World War IT; the straddle carrier from the lumber carrier of the 1930s; Frank Nolan, Jr., is associated with Container Transport Technology Corp. He worked for International Terminal Operating Co., Inc. for many years and retired as vice-president of engineering. Mr. Nolan recently chaired a subcommittee of the Marine Board, which appraised technology development and application in marine terminals. His paper summarizes the work of that group. 104

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105 and the container crane from the many earlier shipside gantry crane types. The overwhelming motivation for the evolution was profit and the need to remain competitive. Skyrocketing labor costs de- manded technological changes to improve productivity. In this perspective one may conclude that there is nothing new under the sun, but each change along the way required departure from tradition and a willingness to step into the unknown or at least the unproven. - The energy crises of the 1970s followed by high-interest rates, the strong dollar with resultant trade imbalances, and the reces- sion of the late 1970s that brought on intense competition forced the maritime industries to reduce staff, eliminate research and de- velopment (R&D), and even cut back on maintenance and repair in order to survive. Unfortunately, these are the very expendi- tures that are necessary to sustain and advance technology, and to maintain a competitive posture. Not only had private industry curtailed R&D expenditures, but the Maritime Administration (MarAd), a significant contributor to R&D, has been under severe government pressure to pare expenditures in the wake of enormous budget deficits. To aid MarAd in assessing the present status of the maritime in- dustry, the Marine Board of the National Research Council formed the Committee on Strategies to Improve R&D in the Maritime In- dustry, which in turn formed work groups to evaluate each segment of the industry. The objective of the Marine Terminal Work Group was to doc- ument R&D and to identify opportunities for improvements. To carry out this assignment the work group developed four general tasks and assigned each task to one or more individuals. Eight papers were prepared, discussed in committee, revised, and finally worked into a single preliminary committee report. The report includes the following: . rail operator's intermodal assessment; . civil engineering aspects, vis-a-vis deep-water requirements; labor productivity and manning levels; equipment and facilities; . management systems; and bulk cargo terminalsstate of the art, and R&D assessment.

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106 Until recently the shipper or freight forwarder had little from which to choose in determining the routing of cargo. Various gov- ernmental regulations were responsible for the establishment of artificial rate structures, and limited the degree to which an en- trepreneur could provide through service. Deregulation has elim- inated these roadblocks and now permits a single entrepreneur to provide door-to-door transportation. This will intensify compe- tition among all transport segments along alternative routes and will tend to align transport along the least-cost path, thus opening the door to the systems approach to transportation. THE RAIL PERSPECTIVE The recent introduction of double-stack cars has opened new vistas for long-haul, heavily traveled rail routes. Rates have come down about 30 percent in these operations. Most double-stack volume has been the result of marketing by steamship carriers. Railroads have not encouraged its growth as profit margins are very small. Problems foreseen include right-of-way maintenance costs, bridge clearances, equipment service life, and cost of in- stalling interbox connectors on some types of cars. As growth of double-stack service takes place, there will be pressure for con- struction of new, efficient intermodal rail terminals, designed to handle the rapid high-volume through-put associated with the marine interface. CIVIL ENGINEERING ASPECTS Government cost-sharing policy for harbor improvements, as well as the economic pressure for deeper ships, will affect marine terminal costs. There are existing techniques for protecting ter- minals against subsidence when berths are dredged beyond their design depths. In the future, marine terminals wit} be expected to bear the cost of structural improvements as well as the cost of initial and maintenance dredging. These costs will likely be a factor in defining the least-cost route in the transport chain.

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107 LABOR PRODUCTIVITY AND MANNING LEVELS Generally speaking, labor has not impeded the development and application of most competitive technology. However, in those ports served by the International Longshoreman's Associa- tion (ILA), longstanding labor and management agreements have denier! much of the cost-saving benefits of new technologies to the terminal operators. Manning levels of shipside gang units in these areas are two to three times the size of those in most areas of the world, and crane productivity in all areas is confined to a narrow band. In spite of this disadvantage terminal operators have contin- ued to be innovative. The resultant loss of potential profitability has made it impossible to pass savings along to the terminal user. This, too, will affect the least-cost route determination. EQUIPMENT AND FACILITIES Container size and capacity changes that introduced the 45- foot container and the 24-ton, 20-foot container provide shippers with optimum equipment for certain cargoes, but an entire series of problems develops down the line with existing equipment designed to prevailing international standards. It is expected that these new containers will continue to be used in closed systems that are economically justified. High- and intermediate-density, yard-stacking systems have been introduced, employing straddle carriers with three-high stacking capability, rubber-tired yard gantry cranes, and rail- mounted yard gantry cranes. Some of these systems will permit a high level of yard automation, such as that employed by Matson at Los Angeles. Improvements have been made in gate design, perrn~tting effi- cient document transfer and voice link from truck to tower. Deck- lashing systems, though underutilized, can eliminate the costly installation and removal of lashing and securing devices. Equip- ment has been developed to permit the radio transmission of data from portable units to update computer data files.

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108 MANAGEMENT SYSTEMS The most significant progress in recent years in marine termi- nal operations has been in computer application of management systems. Even so, technology is available to make greater strides in the near future. Tests are under way to determine the e~ec- tiveness of machine-readable labels to identify equipment and its cargo at selected stations. In time it is expected that a complete, three-dimensional yard location plan can be automatically taken to locate every piece of equipment in the container yard. Auto- matically logging equipment in and out of the gate, as well as on and off ships, is also envisaged. Standards must be developed and established for the coding of required information to facilitate its transfer along the transport chain. This, however, is outside the control of the marine ter- minal operators. It is a problem that can best be addressed by the maritime industry as a whole in cooperation with standards , organizations. BULK CARGO SYSTEMS Most of the technical problems uncovered in the analysis of the intermodal marine container terminal were found to be present in bulk terminals huge capital requirements, no dependable future volume to amortize investment, and curtailment of R&D funds when profits are squeezed. Enormously expensive facility expan- sion during the recent energy crisis is now surplus as world coal trade stumped after the crisis. Vast strides have been made in improving productivity in recent years, but little is being done now to expand the application of technology or to develop new technology. SUMMARY The Marine Terminal Work Group envisions the need for contin- ued and expanded development and application of existing tech- nology in pursuing the system concept. The historical parochial outlook within the marine terminal industry must give way to the overall economics of the transport chain. Recent government deregulation of the transportation industry has opened the door

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109 for the transportation entrepreneur to provide door-to-door ser- vice. The marine terminal industry must be prepared to react to dislocation brought about by competitive adjustments in other links of the transport chain that might directly affect the routing of cargo. Innovative operators will be able to control their destiny by influencing system economics in their favor. The single greatest deterrent to innovation is the huge capital outlay required to reach the ultimate level of automation, and the uncertainty of the end result. - While the marine terminal industry is a highly competitive one, its economics are borne equally by all operators, foreign and domestic. However, any inefficiencies suffered in U.S. ports may adversely affect the competitive position of exporters competing for Third World business. Technology available to marine terminals in the United States is as advanced as that available to the world as a whole. Marine Terminal Operations in the United States DAN RAYACICH Born in the U.S.A." is the theme of a popular song, and most certainly a true statement about containerization. Cargo-handling costs were the largest single expense in the carriage of ocean-borne cargo, and containerization was the made-in-the-U.S.A. solution. The new technology was soon exported overseas, and its inherently superior productivity led to worldwide acceptance. It is ironic that we are meeting here out of concern that container-handling productivity in U.S. ports may have declined below levels achieved overseas, that the teachers may have been outstripped by their former pupils. Containers cannot normally be delivered directly from shipside to the next link in the intermodal transport chain (truck, rail, onsite CFS [container freight station; or rail facility), and vice versa. The container terminal is the temporary repository for in- transit storage of containers while notifications are being sent to Dan Rayacich is president of Rayacich Maritime Consultants.

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110 consignees, containers arrayed for orderly delivery, Customs pro- cedures satisfied, documentation completed, arrangements made for pickup, and the like. In the export direction, assembling containers at the terminal in a well-planned array so that ship- loading operations can be done swiftly and efficiently, thereby avoiding ship delay at the berth, is also an important function of a container terminal. The operating productivity, as containers are handled and rehandled in the course of passing through the terminal, is usually stated in terms of containers handled per shift, per crane, or in terms of annual container throughput. CONTAINER-HANDLING SYSTEMS From the earliest days of containerization, not much more than 30 years ago, the pioneering American container carriers devel- oped different container-handling systems. Sea-Land decided on the chassis system, and it is still its method of choice. Matson Navigation Company preferred a stacking system using strad- dIe carriers, and that is still its principal mode of operation. Equipment manufacturers promoted still different systems by de- veloping specialized machines for handling containers. PACECO's transtainer was the basis for a high-density stacking system com- monly called the transtainer system. Comparable machines pro- duced by other manufacturers are called transfer cranes, rubber- tired gantry cranes, yard cranes, and so on. Forklift manufac- turers have equipped their very large forklifts with spreaders to handle containers from their upper corner castings and with high- lift capability to enable stacking of containers three high. The corresponding container-handling systems are called port packer systems, top-lift systems, and the like. The sidepicker, another variation of the forklift, came into common acceptance as a sup- plementary machine to handle the stacking of empty containers. Also, there are combination systems; for example, one Bay Area terminal uses port packers for the ship operation, transtainers for receiving and delivery, and a sidepicker for stacking empties. The latest development is based on rail-mounted yard cranes that span 20 container rows and operate in semisutomated mode by means of computer control systems, as exemplified at the Port of Richmond.

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111 - ~ ~ - ~= =~ - SHIP STORAGE CRANE TRUCK & CHASSIS (ON CHASSIS) TRUCK FIGURE 1 Truck and chassis container-handling system. fat ~ STRADDLE SHIP CRANE CARRIER FIGURE 2 Straddle carrier container-handling system. ~~--,ua~.,=~ GROUND STRADDLE STORAGE CARRIER TRUCK Currently, chassis systems are used in 46 percent of the con- tainer terminals in the United States, and 54 percent use stacking systems that are quite widely distributed among the types just discussed. Which System Is Best? Figures 1 through 5 depict typical container-handling systems. Each has advantages and disadvantages. If one should ask hands- on operating personnel which system is best, they tend to support whatever system is provided in the terminal in which they work. Often, generalizations are made concerning the basis for selec- tion of a given system. For example, if backup land is cheap and plentiful and paving costs are moderate, a chassis system is said to be the most advantageous. If land is costly and limited, a stacking system might be the choice.

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112 Of, ^___^ _ ~4) SHIP CRANE ~4 ':. ,~'t1~_ GROUND YARD TRUCK TRAVEL CRANE STORAGE FIGURE 3 Travel crane container-handling system. ~_~1 l~ 111111~11111 TRAVEL CRANE TRUCK BRIDGE GROUND SHIP CRANE . TRUCK & CHASSIS CRANE STORAGE TRUCK FIGURE 4 Bridge crane container-handling system. CONTAINER SHIP ll Ion,, ~~ 11 ~ ~ ~ 1 111 ~ ~ \~C~E 1 k ~~ , Y~G~Y rim - ;~ f1 1[ ~ ~ __ . . ._ F.. ... I I Van CONTAJNER ~ CONVEYOR FIGURE 5 Overhead container-handling system. , ~ YARD GANTRY 1 ~11 ~ ~~] TRANST~NER The logical approach in determining the most suitable con- tainer-handling system is to apply cost minimization techniques, taring account of the following factors: 1. Equipment expense initial capital cost . annual operating costs annual maintenance and repair costs

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113 2. Land and infrastructure expense . initial capital cost . construction costs . annual maintenance and repair costs 3. Labor expense and overhead Other considerations are the expected cargo (container) flows, traditional labor practices, safety, and capital requirements and limitations. All these factors affect the economic feasibility, which should be the basis for selecting a particular system. It follows that the traditional measure of productivity should be used; namely, productivity = cost/containers handled. Public Versus Private Container Terminals Notwithstanding that we consider the United States to be a bastion of free enterprise, about 88 percent of the container terminals in this country are provided by a public body, a port authority at the city or state level. When at the state level, in Hawaii for example, a single port authority controls all ports in the state. More commonly, the port authority's jurisdiction is at the city level. For example, all of the following port authorities in the San Francisco Bay Area are independently functioning port bodies, despite their proximity: Port of San Francisco Port of Richmond Port of Sacramento Port of Benecia Port of Oakland Port of Redwood City Port of Stockton Port of Alameda Comparable groupings of autonomous port bodies can be found in Puget Sound, Los Angeles/Long Beach, Chesapeake Bay, Gal- veston Bay, and the Mississippi River. A container terminal within a given port can be: a common use facility, available to any vessel; ~ a preferential use facility, usually available to several spe- cific lines, but available to others if not fully occupied by the preferential users; and . an exclusive use facility, usually placed under the control of one line. However, that line often has the option of bringing in others as customer accounts. An exclusive use facility can be very

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114 near to a private facility, with only minimal involvement by the port authority. OVERVIEW OF OPERATING PROCEDURES The description of operating procedures that follows is quite general, describing operations activities that most container ter- mina] operators would find familiar, while probably not applying entirely to any particular terminal. The hypothetical terminal is assumed to use a stacking system and to have a current type of interactive real-time computerized information system with com- puter displays and terminals at key operating positions. Operations Control Center The necessary coordination and control of all container termi- nal activities are handled by personnel at the operations control center (OCC). There is a flow of information between OCC and all other functions of the container terminal concerning container movements and status. Often, key personnel of OCC are located at elevated offices or in an operations tower well above the con- tainer stacks, for unobstructed views of the container terminal. From that vantage point, they are readily able to confirm by visual observation the container-handling activities that are being reported to them by telephone, pneumatic tube, radio, computer, and other means of communication. Export Container Flow to Terminal Well in advance of a vessel's scheduled arrival, the steamship company will set up its documentation for export movement of containers to be loaded on that vessel, and corresponding doc- umentation will be organized at OCC. Booking information is sent to the terminal, accompanied by requests to release empty containers and chassis to shippers. Prior to the vessel's arrival, the steamship company sends an inbound stow plan to the termi- nal that identifies the containers to be discharged from the ship and consequently indicates which container slots on the ship will be available for loadback. The freight projection (provided by the booking department) identifies expected container types, the

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138 nations, longshore employment has been halved in the past 2 decades in spite of a fourfold increase in tonnage handled. Given the likelihood that the size of the work force in these industries will continue to diminish, two issues are raised: 1. How can this reduction be managed so as to ameliorate the effect on the existing work force and its organizations (unions)? 2. How can work be redesigned to maximize the effectiveness and safety of a smaller work force? The first issue, that of softening the blow to existing workers and their organizations, is a humanitarian concern. With few exceptions, individuals and their organizations have survival as a first priority. It is unrealistic to expect anything but strong resistance to activities that threaten their continued livelihood and existence. Especially in those industries in which labor is organized within powerful unions, employment (or at least income) security guar- antees have been negotiated. The marine terminal industry is a very early and dramatic example. Reductions have been ac- complished through a combination of attrition, work sharing, and income guarantees for existing workers. The second issue how to redesign work and work organization to correspond to a smaller work forceis one that is sometimes given short shrift within those same industries that have powerful unions. There are several contributing reasons: 1. Union attention is concentrated on the first issue, which is of greater importance to them preservation and equitable sharing of jobs and income for their members. 2. Some hiring rules and work rules, designed to preserve and share jobs, are in apparent conflict with the objective of increasing the efficiency and safety of remaining workers. 3. Management is primarily concerned with maintaining the head-count reduction and is not inclined to risk that easily quan- tified cost savings in an effort to achieve less quantifiable produc- tivity improvements through adjustment of the organization of work.

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139 Stability of Employment It is difficult to achieve an efficient and safe work force in an environment in which there is little employment stability within the industry, within firms, or within work groups. Efficiency and safety is not strictly a matter of individual competence when the nature of the work is such that it is accomplished by people working in groups and through the coordination of groups (and that is certainly the case in the marine terminal industry). Larger Japanese firms achieve employment stability by means offs core group of employees hired for life, supplemented in labor demand peaks by subcontract labor. British shipyards are now guaranteeing the wages of their employees, and are assigning the workers to stable membership production teams. European ship- yards are also hiring core employees with employment guarantees honored during periods of shipbuilding downturn by contracting out these workers to other steel-fabricating companies. Through- out the shipbuilding world, employees are no longer being casually assigned work within yards. More commonly, they are assigned to fairly stable teams that work in the same general area of a yard on specific construction modules. Seamen around the world (licensed and unlicensed) are now being hired by individual firms on a contractual basis and are assigned to individual ships for time durations of several years. It is reported that Saturn workers will have lifetime employment guarantees; currently autoworkers have achieved 3-year job secu- rity. In longshore work, the issue of industry-wide employment sta- bility has a long history. Dock workers in Britain are registered under a National Dock Labour Scheme and are guaranteed a weekly Manhour minimum wage. A similar scheme is in effect in Australia. In the United States, collective bargaining has provided the means by which longshore employment has been stabilized and regulated. For many years on the East and Gulf Coasts, Interna- tional Longshoreman's Association (~LA) members have worked under full-year minimum payment guarantees that provide up to 2,080 hours of straight-time compensation. On the West Coast, class A longshoremen also benefit from substantial income se- curity protection, with employer assignment made through the union hiring hall.

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140 Employment stability within stevedore firms is less common. British dock workers are a notable exception in that they are assigned to port employers on a permanent basis. When redun- dant workers cannot be transferred to other port employers, they are assigned to a temporary unattached register (labor pool) and paid a lesser weekly amount by the National Dock Labour Board. Australian waterside workers have less continuity in that they are assigned to employers on a weekly basis by the Australian National Stevedoring Industry Authority. In the United States, even less within-firm continuity is achieved due to the operation of rotary hiring halls, although permanent assignment was a de facto reality for certain specially trained longshoremen in the early days of containerization. The expansion of container traffic and specialized gear has suggested the need for greater continuity of dock worker assignment. The "steady mane issue has haunted West Coast labor relations since its original acknowledgment in the 1960 Mechanization and Modernization Agreement. Employers cite the expansion of container traffic and special- ized equipment and the need for more steady assignment of dock workers. They wish to increase their use of capital through the services of a reliable skilled manpower base. ~ contrast, union officialswhether they are the ILA, the International Longshore- men's and Warehousemen's Union (~LWU), Transport and Gen- eral Workers Union (Great Britain), or Waterside Workers Fed- eration (Australia) remember the abuses of favoritism in hiring, and preserve the hiring hall to achieve equity, homogeneity, and solidarity among its members. American seafaring union leaders have similar memories of hiring abuse, but are holding to their rotary shipping hall system for an additional reason. Unlike the longshore industry, they have not stabilized the seagoing work force, and employ the hiring hall to spread available work among a too-numerous membership. As effective as the hiring hall may be in spreading employment opportunities, it has its shortcomings. Terminal operators are less willing to make training investments in short-term employees. Short-term employees are less likly to become familiar with specific pieces of machinery, company operating practices, or even the work habits of fellow workers. It is difficult to form a cohesive team when the faces are continually changing.

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141 Employee Involvement in Problem Solving In traditional industrial organizations, very few employees are hired to solve problems. Those few are generally referred to as "management," or in many instances, as "top management." The dramatic quality and productivity accomplishments of the Japanese brought home to the United States the fact that all employees, not just managers, have problem-solving capability- especially regarding their immediate work responsibilities. A number of American industries have, in the last 5 years, developed new organizational structures to encourage employee problem solving at all levels. Known variously as "quality cir- cles," "labor-management participation teams" (steel), or "em- ployee involvement teams" (auto), these problem-solving groups are formed of 8 to 12 hourly and management employees that work an hour or two per week, occasionally full time, on detailed data collection and analysis related to problems that they have identified themselves or that have been recommended to them by management or a joint labor-management committee. Rec- ommendations proceeding from these groups are given careful consideration by high levels of management and union, and the process itself is sanctioned and monitored in unionized settings by joint labor-management committees. Problem-solving teams of this nature generally deal with non- contractual issues relating to productivity, quality, and safety. Given the significance of safety to the marine terminal indus- try, it is instructive to note the accomplishments of employee involvement in the Japanese shipbuilding industry. The Japanese have been very frank in admitting that the pro- ductivity of their shipyards during the tanker-factory era of the mid-1960s was built "on the backs of the workers." One fallout of this speedup was an unusually steep rise in the frequency and severity of accidents. These shipyard safety statistics were so out of line with the record of other Japanese industries that the gov- ernment established special teams to enforce safety regulations in shipyards. This group was empowered to arrive at a yard unan- nounced and shut down production if they found any violations at all. At this same time, Japan was in the process of spreading their new human resource innovation, quality circles, throughout a number of industries. The shipyards, faced with their safety

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142 problem and close government enforcement, chose to put their initial quality circles to work, not on efficiency or quality issues, but on the matter of safety. The result was a phenomenal improvement in yard safety. By way of international comparison, there were, in 1980, less Toss time accidents in all of the Japanese shipyards combined than in one single American yard- and the Japanese produced 10 times the U.S. tonnage in that year. Japanese shipbuilders give full credit for this accomplishment to the activities of shopfloor quality circles. If there are any employee involvement activities under way within the marine terminal industry, they have not been publi- cized. It is likely that there are few, if any, given the constantly changing composition of the work force within firms. Problem- solving teams require time bow their tools" to do this sort of work (paid for by management), and a long enough period of associ- ation to collect and analyze data opportunities that do not fit well in an environment of temporary work assignment. Decentralization Just as corporations are more frequently setting up their di- visions as semiautonomous profit centers, so too are functions within firms becoming less centralized and more integrated into the primary business of the enterprise. The underlying logic is that employees are often the best qualified to make decisions in their immediate sphere of work, and that organizational bureau- cracies (layers of supervision and staff) not only extract a cost in terms of higher overhead, but also prevent, rather than facilitate, the productivity of the employees they are supposed to help. Many ship operators are reorganizing their shoreside operations in a manner that gives primary decision-making responsibility to a group of senior officers aboard each ship. These shipboard- management teams, in turn, are supported by a single point of contact with the shoreside office, a multifunction ship manager or line manager. And to make adjustment for the increase in management content of the jobs of ship officers, much of the planning and daily decision-making related to the maintenance of these vessels now rests in the hands of the unlicensed work force. This is quite different from the traditional structure of

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143 ship operation in which shoreside functional specialists, such as marine superintendents and port engineers, closely directed the shipboard officers within their respective disciplines, who, in turn, directed the unlicensed in their separate departments. Similar changes are under way in shipbuilding. Engineering, planning, and scheduling functions are being pushed down from main administration into the production workshops. Within pro- duction, the hourly work force is more likely to be formed into small teams with responsibility for meeting a schedule within budget, and with the authority to make decisions that will permit them to be successful. Previously, hourly workers were reassigned as individuals to various jobs within the yard on a day-to-day basis, with minimal responsibility and no authority. In the marine terminal industry, it appears that the trend may be in the opposite direction. In the days of break-bulk operation, longshoremen usually worked in the context of fairly self-managing work groups (gangs). In the age of containerization and mechanization, although the term ~gang" may have survived, longshoremen work in more isolated fashion (men in cranes, driv- ing straddle lift carriers, and lashers working 20 to 40 feet apart atop the boxes), and have less control over their work. Even the role of first-line supervisor, the "walking boss," has been dimin- ished, as detailed directions are now more likely to come from terminal superintendents. Part of the safety problem may be related to the distintegration of the traditional gang system. The argument might be made that intermodalism and infor- mation systems require more centralized (rather than decentral- ized) control in marine terminal operation. The same argument has been used in the defense of centralized control of engineer- ing, planning, and scheduling within zone construction shipyards (which is the construction equivalent of intermodalism), and in the defense of centralized control of ship management (also a link in intermodal systems). Experience indicates, however, that the best use of information system advances is in the facilitation of communication between self-managing activities. The facts demonstrate that interim- product modules fit together on the ways best in those shipyards that have made engineering, planning, and scheduling functions the responsibility of individual production workshops, and that ship operators who support but do not direct the activities of

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144 shipboard management teams aboard individual vessels, achieve substantial cost savings. Just because large intermodal firms are replacing smaller steve- doring companies does not mean that they have to operate as monolithic bureaucracies. In fact, one of the advantages of so- phisticated information systems is that they allow elements of large organizations to be more self-managing, because they have access to a much wider range of information (they can see the Wig pictures), and because they do not have to wait for information to be routed to them. Multiskilling Providing workers with a greater range of skills, and the op- portunity to use them, is a clear trend in a number of industries today. In some instances, this multiskilling can be seen as a neces- sary adjunct of work force reduction (fewer people accomplishing the same range of tasks). This is certainly the primary stimulus for the creation of general purpose (dual purpose or multipurpose) seamen and semi-integrated officers aboard merchant vesseb. Multiskilling also permits a greater degree of employment and work group stability, such as in shipbuilding, where workers no longer have to be moved in and out of the yard, or work areas, with every change in the stage of construction. The practice has also been introduced for the purpose of im- proving job satisfaction of workers through provision of a variety of tasks (especially in assembly-line production operations. ~ .. .. ~ Frequently, multiskilling is accompanied by additional compen- sation schemes that reward employees for the greater range of skills they possess. In some instances this takes the form of a premium rate for a single multipurpose job classification (gen- eral purpose seamen). In other cases, a sliding scale is provided that corresponds to any number of skill combinations. Individuals working under these "pay for knowledge schemes are reimbursed at a rate reflecting their range of knowledge or skills, regardless of the capacity they may be working in at any particular point in time. For the marine terminal industry, multiskilling may be of value for its contribution to the composition of smaller sized gangs,

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145 or simply in providing the appropriate skills when needed. Un- der current arrangements there is frequently a mismatch between skills and requirements, due, in part, to narrow job specializa- tions and on-and-off multiemployer training schemes. It should be emphasized that where multiskilling arrangements have been instituted without additional training for employees (who are mul- tiskilled in name only), results have been disappointing in terms of productivity, quality, and safety. Incentive It is possible to achieve a highly productive work force through intrinsic rewards alone (job satisfaction, pride, and dignity) that often accompany the introduction of the sort of human resources innovations that have been described. Eventually, these pro- ductivity gains are translated into extrinsic rewards (improved employee financial gains) through negotiated wage improvements. A more powerful incentive arrangement is one in which the efforts of the work force translate more directly and immediately into financial rewards. Putting aside individual incentive systems (piece-rate) that have been tried for years and are now fading in almost all industries (even in apparel), these more immediate extrinsic incentives fall into two main categories: profit sharing and gainsharing. Profit sharing is a concept that ~ familiar to most. Employees share in an established portion of any profits generated by their firm. This financial reward is a bit more immediate and direct than periodic wage and salary increases, but its shortcoming lies in the fact that a firm's profit does not necessarily reflect productivity gains achieved through the efforts of the work force. Profit in any period can be exaggerated due to sale of assets, or can be minimized through capital acquisitions or other conversions of funds. For an incentive system to work well, it should directly reflect the productivity of the work force, not the internal financial manipulations of the firm. Gainsharing, like profit sharing, is a group incentive arrange- ment, but one in which concrete productivity gains, not illusory profits, are shared between shareholders and labor. There are several variations on the gainsharing theme, but they share a com- mon thread. A productivity base is established, usually through

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146 historical or engineered time standards. Any improvement in pro- ductivity over this base is shared between employees (salaried and hourly) and shareholders. Payout is frequent (monthly). Gain- sharing arrangements are frequently associated with employee involvement structures that allow workers to offer suggestions (or make decisions) that permit them to achieve productivity gains. Although gainsharing is found primarily in manufacturing set- tings in which productivity is fairly easily measured, it is now being tried in a U.S. shipyard environment in which productivity standards are very difficult to establish. Kaiser Steel Fabricating and the Boilermakers have entered into an agreement in which both parties jointly work up each bid for the construction of offshore of! platforms. In this depressed market, and in direct competition with low labor cost Asian nations, the company and union have agreed to bid these jobs at a labor rate substantially less than that agreed-to in their 3-year labor agreement. When a contract is won, and if a platform is built for less hours than bid, 100 percent of this gain goes directly to the work force until they are made whole with the 3-year agreement. If further productivity gains are made, additional gains are split 50/50 between the work force and the company. The lesson of the Kaiser/Boilermakers case is that a gainsharing base can consist of an agreed-upon bid, rather than an historical or engineered time productivity standard. The authors know of no gainsharing application within the marine terminal industry, but it can certainly be tried where a productivity and safety baseline or bid baseline can be established. What would complicate a gainsharing scheme in this industry (at least for longshoremen) is the lack of employment stability within firms. Another organizational innovation related to incentive is that of the employee-owned firm. Although found overseas (Swedish seafarers have been pooling their resources to purchase ves- sels from their now-bankrupt former employers), employee-owned firms have largely been an American phenomena, due in part to U.S. legislation that provides very favorable tax advantages to participating banks. Since deregulation, a number of trucking firms have made use of employee stock ownership plans (ESOPs) to remain in business. However, formal employee ownership does not automatically guarantee a structure of management style that

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147 motivates workers to improve the productivity of their firm. In some cases, industrial relations actually deteriorate as employees are disappointed to find that although they are now owners, they have no greater role in decision making than prior to the buy-out. The most successful employee buy-outs have incorporated a high degree of employee involvement. Some firms are now sharing with their employees gains achieved through savings in health and safety costs. Although health care gains are commonly distributed through an individual incentive arrangement (appropriate since health costs are frequently the result of individual life-style), a group incentive arrangement does make sense for safety-related savings, as safety is not strictly a matter of individual behavior. Labor-Management Cooperation There are certainly issues over which labor and management should, and will, continue to interact on an adversarial basis. These are issues in which one side's immediate gain is necessarily the other's immediate loss. The overall size of the economic package is an example. However, there are many other workplace issues that do not constitute such a zero-sum exchangethose in which both parties may gain. The operation of employee involvement groups is a case in point. It is in this arena that labor-management cooperation is proving to be of value in other industries. Labor-management cooperation in the United States generally takes the form of parallel structures of labor-management commit- tees, from the highest levels of management and union leadership down to joint shopfloor activities. The value of this form of cooperation lies in the fact that it pro- vides an opportunity for both sides to think through jointly, and experiment with, new and unfamiliar structures of work. Rather than rushing to judgment with collective-bargaining positions, la- bor and management (and their members/employees), through these joint committees, are first able to gather some data and ~ gain experience. All of the innovations mentioned in this discussion are rooted in collective bargaining. But many of them have been stimulated and fleshed-out by means of various structures of labor-management

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148 cooperation ranging from union representation on boards of di- rectors to quality circles. RECOMMENDATIONS The recommendation of the authors is for the marine terminal industry to attempt, through collective bargaining and labor- management cooperation, to increase the efficiency and safety of its work force by developing, experimenting with, and implement- ing new forms of work. The details of these new work structures will be deterrn~ned in the process. However, it is likely that they will include some of the following features: . greater use of the existing and potential technical skills of employees (multiskilling); . greater use of the potential problem-solving skills of employ- ees (employee involvement teams) these teams should probably be put to work initially on the safety issue; . provision for sharing of efficiency and safety gains; . return to more decentralized decision making (self-managing gangs); and ~ greater stability of employment within firms and within work groups (in a manner that will not result in inequitable sharing of work) the hiring hall could still be used to make assignment to more permanent positions in the larger firms that can pro- vide regular employment, to make more frequent assignment to smaller firms that cannot maintain a regular work force, to handle reassignment in all cases, and to assign casuals.