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OCR for page 38
ISSUES IN
IMPROVING PRODUCTIVITY
The issues in improving the productivity of U.S. marine ter-
minals were sorted into three broad categories to facilitate analy-
sis, although there is considerable overlap and interaction among
the categories. The implementation and use of state-of-the-art
technologies or promising technologies currently being developed,
which will require significant capital expenditure, is one category.
Incremental operational or management improvements that do not
require major capital investment is the second category. The third
category includes the full range of human relations issues from
the most obvious questions surrounding organized labor and the
collective bargaining process to the more subtle questions of the
effectiveness of first-line and middle management, and the role of
management perceptions of organized labor in shaping manage-
ment decisions regarding technological change. These issues were
the most difficult to address and appeared to have the most in-
fluence of the three categories considered, yet they hold the most
promise for productivity improvements, both directly and indi-
rectly, by means of facilitating the introduction and use of other
productivity measures with or without massive capital investment.
Workshop participants are listed in Appendix D.
38
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NEW TECHNOLOGIES REQUIRING
MAJOR CAPITAL INVESTMENT
The implementation and full use of state-of-the-art or promising
technologies, which will require major capital investment, may be
driven by the need to be more productive and cost-e~ective, and to
provide better service. In these instances, new facilities are likely
to be constructed at or near existing terminals. Alternatively,
the impetus for new facilities may stem from a need to relocate
a terminal because of congestion or access problems, limitations
on available land for cargo handling, or competing pressures to
convert port lands to other uses.
It need hardly be stated that investments in new technolm
gies and facilities are not made in a vacuum. Certain aspects of
the larger operating environment need to be kept in mind when
considering issues attendant to investing in new technologies and
facilities.
. New Technology Will Come Regardless of labor-manage-
ment considerations, the possibility of industry overcapacity, cap-
ital limitations, or other factors that would appear to mitigate
against some forms of investment, new technology will be intro-
duced into the U.S. marine terminal industry. The challenge is to
introduce it as effectively as possible, given the limitations.
. Capital Is Limited Particularly in the near term, the cap-
ital resources available for new technology introduction will be
limited. Some private terminals and public port authorities are
facing severe limitations in the highly competitive environment of
today. State and local agencies are being more selective in pro-
viding public port subsidy funds in view of broad governmental
budgeting problems. New bond issues are facing a more difficult
interest rate environment because of changes in federal tax law.
~ The Labor-Management Environment Inhi~oits Fat! Benefits
of New Technology The current labor-management operating en-
vironment, which (most particularly on the East Coast and Gulf
Coast) is better characterized by the adjective Competitive than
"cooperative, has not impeded the development and application
of most competitive technology. However, longstanding labor-
management agreements have denied much of the cost-saving ben-
efits of new technologies to the terminal operators. Until there
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40
time;
.
are advances in this area (as explored subsequently), the labor-
management environment will continue to inhibit the use of new
technology and the reaping of productivity benefits.
New technology for U.S. marine terminals may come from a
variety of sources. It may come from other industries, which may
contribute container identification technology or material handling
technology. It may come from other countries that have already
built highly advanced marine terminals. Or it may come from the
interaction with other transportation modes through intermodaI-
ism. New technology may also come through lateral transfer from
other new facilities within the U.S. marine terminal industry. The
main point here is that many forms of new technology that could
be applied to improve productivity of marine terminals already
exist and are directly applicable today.
Several state-of-the-art technologies (described in the invited
papers presented at the meeting and included in the proceedings)
that are in use in some marine terminals here and abroad offer
considerable productivity improvement benefits. These are:
. infrared data transmission systems;
double-trolley container cranes;
multitrailer systems; and
. integrated terrn~nal design and operations.
In addition, there are a number of emerging technologies that
hold promise for productivity improvements. Among these are:
automated trim and list control systems;
cell guides for container stowage on deck;
semiautomated or fully automated cranes;
buffer systems to decouple major equipment and reduce dead
chassis guide systems to speed container placements;
passive and active/passive equipment identification systems;
automated container storage and retrieval systems;
automated guided vehicles;
~ voice recognition technology for equipment commands and
data entry;
. hand-held interactive computer terminals;
. advanced rail car and chassis designs;
stowage planning systems;
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decision-support computer models;
. networking and data-base management systems; and
. crane simulators and operations simulators for planning and
personnel training.
In the future, a top priority in new technology introduction
should be in the general area of information management, since
better information flow can achieve more productive cargo flow
even with existing handling facilities. A particular area of oppor-
tunity now being addressed by the Cargo Handling Cooperative
Program (CHCP), a cooperative technology development program
sponsored by the Maritime Administration and U.S.-flag carriers,
is for an accurate and dependable container identification system
that can be compatible with location-sensing devices.
Overcapacity of container facilities is a problem. The enormous
investment in container facilities over the past 30 years has led
to overbuilding, with consequent overcapacity and underutiliza-
tion. Interport competition, and the desire to employ the latest
technology as an adjunct to marketing efforts, may further this
trend. The marine terminal industry needs to employ economic
analysis tools, modeling techniques, and other decision-support
methodologies in order to test decisions properly regarding new
technologies and new facilities, and to direct investment to those
technologies with the highest potential profitability.
Those who invest in marine terminal technologies should take
account of certain factors:
. Increased standardization in the industry, especially in con-
tainer identification systems, sizes, and documentation, will con-
tribute to most efficient investment and improved productivity.
. Each investment in new technology or new facilities should
be evaluated in light of the total transportation system of which
it is a part.
. A mechanism for industry-wide cooperation in developing,
adapting, and proving technologies for marine terminals would be
very useful.
. Some form of rationalization of the capital expenditure pro-
cess would be desirable to prevent or reduce redundancies in cap-
ital development programs.
As elaborated elsewhere, labor needs to be involved in the entire
process of technological change to ensure worker acceptance and to
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deal fairly and jointly with the problem of job displacements. At
all levels, management needs to be committed to training for safety
and efficiency. Management and labor also need to introduce the
new and higher skills that may be needed to use new technologies
fully. All have to recognize that the terminal worker, whether in
the yard or in the office, is an integral partner in the successful
operation of a marine terminal. Management has to take the
needs of workers into account, especially in the areas of safety,
environment, and worker satisfaction. For its part, labor needs to
adopt a cooperative attitude and to demonstrate a real interest in
improving productivity.
INCREMENTAL OPERATIONAL IMPROVEMENTS
NOT REQUIRING CAPITAL INVESTMENT
Several incremental improvements can be made in marine ter-
minal operations that will improve productivity with little or no
investment. One way of locating opportunities for productivity
improvement Is to conduct a systems analysis of overall terminal
operations, including not only the activities within the termi-
nal boundaries, but also the arrival and departure activities of
vessels as well as trucks, trains, and barges. A container ter-
minal simulation mode} under development by U.S.-flag carriers
through the CHOP provides a valuable first step in this regard.
Such an analysis will help to focus attention on bottlenecks and
on areas where cargo flow capacities are not In balance. Such
analyses should study both the flow of cargo and the flow of
information. Even when changes in work organization are indi-
cated, much can be accomplished within the framework of existing
labor-management agreements, provided there is cooperation and
understanding among the parties involved.
Outside the Terminal Boundaries
Once a ship enters a port area, its ability to reach a terminal
in a timely and reliable manner will affect the productivity of the
terminal. Efficient operations of tugs and pilots in a port area
will be a valuable aid to terrn~nal operations. In a sunilar manner
the ability of vehicles (i.e., trucks, trains, and barges) to carry
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43
cargo to and from the terminal will also influence the terminal's
productivity.
Gate Operations
A variety of approaches can be used to improve the produc-
tivity of gate operations. A cost-benefit analysis can be made
concerning the inspection of equipment. It may be cost-effective
to perform thorough inspections—and make corresponding entries
in-the Equipment Interchange Report (EIR)—only when major
equipment damage exists. Where local circumstances indicate,
consideration should be given to separate in-gate lanes for special
purposes (empties, bare chassis, high-volume movements, and in-
termodal land bridge movements). Also, operational procedures
can be revised to incorporate a quick precheck of documentation-
weeding out early those with incomplete documentation. Some
terminals already use these types of gate arrangements with good
results. Inexpensive hand-held computer terminals can be em-
ployed effectively to quickly capture critical information. In addi-
tion, where practical, incoming and outgoing gate lanes should be
interchangeable to accommodate heavy traffic flows, along with
changeable directional signs and markings. Extended and flexible
operating hours would also contribute to more efficient use of fa-
cilities and vehicles. Separate and multiple scales may also speed
gate operations.
Other Terminal Operations
The layout of the terminal can have a major impact on pro-
ductivity. Preplanned traffic flows, including express lanes, should
be provided to allow relatively unrestricted movement between
parking slots or container stacks and the shoreside cranes. Traffic
patterns in the terminal should be designed and well marked to
mitigate peak period congestion problems, especially when several
operations are being conducted simultaneously.
Carefully planned parking areas for equipment can aid produc-
tivity. A simple parking system should be incorporated in the
design for fully wheeled operations. Installing high-visibility, row-
number signs and pavement markings could facilitate traffic flow
and elirn~nate confusion for tractor drivers.
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44
The productivity of a crane operator may be improved by
painting gathering guides with high-visibility paint for day and
night operations. Where feasible in transtainer operations, if
high-horsepower yard tractors are available the terminal opera-
tor should consider connecting several yard chassis in tandem. In
this way, one tractor can pull up to five chassis-mounted contain-
ers. (Even longer yard pulls are employed in at least one European
terminal.) The benefits would include reduction of tractor trips
between stack and ship, fewer tractors needed, and a decrease in
the number of tractor drivers required.
Decreased productivity in cargo handling can be caused by de-
lays and congestion in the handling of information. A terminal
operator should consider the standardization and consolidation of
documents so that all documentation functions can be handled at
one processing point. A good deal of documentation deals with
inspection activities of federal agencies (e.g., Customs, Trans-
portation, or Agriculture). If these different functions could be
unified into a single activity, it might be possible to increase the
productivity of both the federal agencies and the terminals.
A change in terminal operations policy could also increase pro-
ductivity. Terminals typically receive cargo up to the last minute
before sailing. Such an occurrence requires juggling of boxes and
extra effort to handle the unexpected cargo. If a terminal had
strict cut-off times to allow systematic planning for cargo han-
dling, there would be fewer surprises and increased productivity.
The difficulty with this idea is that if only one terminal or ocean
carrier adopted this practice, others would gain a competitive ad-
vantage. Therefore, strict (and reasonably early) cut-off times
would work best if all the terminals in a port area, or all the ocean
carriers on a particular trade route, jointly adopted this strategy.
IMPROVING LABOR AND MANAGEMENT
PERFORMANCE AND RELATIONS
Marine terminals may operate at different levels of productivity
even though they use comparable equipment and systems and em-
ploy similar work practices. These differences arise in part because
of site-specific variations, but labor and management practices are
also an important factor.
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45
Opportunities for productivity gains as the result of improve-
ments in labor and management performance and relations lie
in the general areas of management practices, work-rule changes,
improved use of labor under existing work rules, union hiring pro-
cedures, and improved training. For these gains to be realized,
all parties need to be innovative in their approach to the issues,
cooperative in their attempts to solve problems, and respectful
of the interests and viewpoints of the other parties. Thus, there
are two elements to improvement. The first is identifying specific
changes in labor and management practices, which are desirable
because they show prorn~se (primarily from experience in other
industries or elsewhere) of improving productivity. The second is
achieving mutually supportive labor and management relations,
probably based on shared objectives such as improved economic
activity in the port, which enable changes to occur.
Innovative Labor and Management Practices
This section sets forth several innovative steps that might be
taken. None of the steps, in and of itself, is a panacea. There
are vast differences among terminals. No one approach to human
relations issues can be universally applied. However, steps such
as those described here have been helpful in situations where the
introduction of new technologies into the work place has neces-
sitated rapid advances arid accommodation by both management
and labor. Examples of this in other industries abound, including
several in the maritime industries.*
Employment Continuity
Productivity improvements may result from increasing the num-
ber of laborers who are employed on a continuing rather than ca-
sual basis. There is already a considerable amount of steady em-
ployment in the skilled trades. Particularly in the skilled trades,
familiarity with equipment and procedures ~3 well as better em-
ployer identification can lead to better productivity. Employment
* National Research Council. 1984. Effective Manning of the U.S. Merchant
Fleet. Washington, D.C.: National Academy Press; National Research
Council. 1982. Productivity Improvements in U.S. Naval Shipbuilding.
Washington, D.C.: National Academy Press.
OCR for page 46
46
continuity can be achieved either by formal agreement or by in-
formal practice. There are examples of workers who have been in
de facto continuous employment with one employer for 20 years
or more with no formal agreement required. Some workshop par-
ticipants cautioned that more continuity of employment does not
always lead to better productivity. This type of change may have
its greatest value in supporting or facilitating other more innova-
tive changes.
Multiskilling
This change refers to the practice of reducing the number of job
classifications so that a given worker may work at two or more
separate jobs on different shifts or even within the same shift if
circumstances so dictate. To be effective, multiskilling needs to
be accompanied by training to ensure that workers are properly
trained for each job within their classification and that each worker
can do each job efficiently and safely. A potential concern with
multiskilling is that workers might evolve into jacks-o£all-trades,
but masters of none. To avoid this, and in the interests of safety
and effectiveness, job classifications need to be chosen carefully and
not made overly broad. Unions are concerned that multiskilling
can lead to fewer jobs (and lower union membership).
Flexible Hours
More flexible work hours could lead to greater productivity in
the marine terminal and in the connections to the other transport
modes, particularly trucking. The current, relatively rigid, shift
schedules in some terminals can lead to excessively long waiting
times for trucks, especially in the periods near shift changes. The
costs associated with long turnaround times for trucks should
always be the direct concern of a terminal operation, since they
affect the overall efficiency of the total intermodal transport chain.
Strengthening First-Line Supervision
First-line supervisors are the interface between labor and man-
agement. The quality of their performance reflects the support
from and integration with middle and upper management, as
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well as the quality of labor-management relations in the termi-
nal. Many in the work group were concerned about the need for
improvement in first-line supervision.
Some felt that many companies have abdicated first-line man-
agement responsibility to union foremen and have left the first-line
management personnel with an undefined or poorly defined role.
First-line supervisors are frequently undertrained and not ade-
quately supported by upper management either in their dealings
with the labor force or in the planning and preplanning of the
work. Concern was also expressed that many, if not most, first-
line managers in the marine terminal industry are not sufficiently
compensated relative to the responsibilities of their position or
relative to the compensation of the workers they are charged with
supervising. Improvements in first-line supervision are especially
critical to elective management in the introduction and applica-
tion of new technologies.
Summary
These and related steps could improve productivity at current
levels of technology and investment. Furthermore, in other indus-
tries, they have been especially helpful in supporting and managing
the introduction and application of new technologies in the work-
place. If such measures are successful, then the result may increase
work opportunities in a terminal or port. However, there is also
the possibility that the increased efficiency that results from im-
proving productivity will lead to reduced demand for labor. The
historical trend in longshore employment as the industry switched
from breakbulk to containerized general cargo is clear. No one
knows whether a trend of similar magnitude will accompany the
next generation of marine terminal technology.
The problem of work force reduction due to technological change
or work-ruTes change is especially difficult. Progress in this area
will require labor recognition of management concerns in the ar-
eas of productivity and competitive position, and management
recognition of labor concerns in the areas of work preservation
and worker income. Both must recognize the need for stable and
long-term solutions.
A number of longshore collective-bargaining agreements contain
provisions for income or job guarantees when workers are displaced
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due to technological change or work-rules changes. Some workshop
participants were concerned that such programs can be transitory
responses to long-term problems and that the transitory responses
may have Tong-term, negative effects on terminal productivity.
The interests of both management and labor may be better served
by cooperatively addressing these problems with a view towards
equitable and efficient long-term solutions.
Achieving Mutually Supportive Labor
and Management Relations
The stimulus for innovative steps in human relations may be
positive or negative. In some cases, a terminal or port may have
an opportunity for increased business or improved profitability,
and the stimulus for change could be the possibility for increased
throughput at no additional investment for management ant} in-
creased work opportunity for labor. In other cases, a port or
terminal may face intense competition and need to respond with
better productivity, lower costs, and better service in order to
retain or regain cargo. Alternatively, the need for port produc-
tivity improvement may be triggered by the possibility of major
technological change. Whatever the stimulus, the types of changes
addressed in this report are most effective when both sides recog-
nize that a need for change exists and desire to bring about change
in an equitable manner.
Many of the innovations discussed in this report require special
circumstances and care to be applied. Each change has to be
tailored to the situation in question, taking into account the type
of terminal, its competitive position, the region of the country,
and, of course, existing collective-bargaining agreements. Taking
all of this into account, these innovations (and those that follow)
are completely compatible with collective bargaining, as has been
demonstrated In many other U.S. Industries.
Sometunes it is possible to reach agreement on proposed changes
between management and labor leadership more easily than it is
possible for labor leadership to communicate the need for such
changes and the implications to union members. Management may
have to support labor leadership in this. A particularly valuable
insight in this regard Is that fear of the unknown can be a major
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impediment to worker acceptance of new concepts. The opportu-
nity to witness the new concepts and discuss them with workers
who know them can help overcome such fears. Management can
provide the catalyst for this by arranging for representative groups
of workers to visit other terminals in this country or abroad, where
the work rules or technological changes in question are already in
place.
Joint labor-management committees at the work site might of-
fer a more continuing basis for discussing problems and potential
changes and their implications. In the current context, how work
practices affect productivity would be a major topic of discussion.
Other topics that typically benefit from mutual exploration are
workplace safety, training programs for advancement, training pro-
grams for outplacement, first-line management issues, long-range
plans for facilities improvements or new facilities construction,
and means for dealing with substance abuse. Joint groups might
also serve as points of contact with users of marine terminals such
as shipping lines, railroads, or truckers in order to give workers
firsthand knowledge of how their work affects others. Cooperative
labor-management activity can be most effective when it extends
beyond the top levels (terminal management and union officials)
to joint efforts by first-levl! management and longshoremen in the
form of task forces and problem-solving groups.
While these innovations are compatible with collective bargain-
ing, the impetus and suggestion to change labor and management
practices may come to the forefront either within or without the
collective-bargaining framework. Regardless of their origin, trial
changes, mutually agreed upon, ought not to be allowed to in-
terfere with other contract provisions. Safeguards to this end are
desirable. Safeguards can take the form of an enabling agreement
such as a contract provision, a side letter of agreement, or a non-
contractual letter of understanding stating objectives and ground
rules.
Sometimes proposed changes are substantial departures from
current practice. Both management and labor may have an in-
terest in gathering limited experience on how a particular new
technology or work practice innovation would affect operations
and productivity at a specific job site. In this event, marine termi-
nal management and labor can take a cue from other hard-pressed
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industries and consider trying, on a temporary basis, various com-
binations of human resource innovations that might improve pro-
ductivity and safety. Joint labor-management committees, already
discussed, offer a possibly useful mechanism for designing, trying,
and evaluating innovations, and have been used widely in other
industries for this purpose. Impartial, expert assistance, working
jointly for management and labor, can also be helpful in estab-
lishing and analyzing the results of trials. Where changes are
substantial departures from past practice, it may be helpful to
set up shelter agreements that protect both the integrity of the
innovations to be tried and the basic interests of management and
labor.
Representative terms from entire chapter:
marine terminals
