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Improving Productivity in U.S. Marine Container Terminals (1986)

Chapter: Issues in Improving Productivity

« Previous: Measures of Marine Container Terminal Productivity
Suggested Citation:"Issues in Improving Productivity." National Research Council. 1986. Improving Productivity in U.S. Marine Container Terminals. Washington, DC: The National Academies Press. doi: 10.17226/926.
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Suggested Citation:"Issues in Improving Productivity." National Research Council. 1986. Improving Productivity in U.S. Marine Container Terminals. Washington, DC: The National Academies Press. doi: 10.17226/926.
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Suggested Citation:"Issues in Improving Productivity." National Research Council. 1986. Improving Productivity in U.S. Marine Container Terminals. Washington, DC: The National Academies Press. doi: 10.17226/926.
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Suggested Citation:"Issues in Improving Productivity." National Research Council. 1986. Improving Productivity in U.S. Marine Container Terminals. Washington, DC: The National Academies Press. doi: 10.17226/926.
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Suggested Citation:"Issues in Improving Productivity." National Research Council. 1986. Improving Productivity in U.S. Marine Container Terminals. Washington, DC: The National Academies Press. doi: 10.17226/926.
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Suggested Citation:"Issues in Improving Productivity." National Research Council. 1986. Improving Productivity in U.S. Marine Container Terminals. Washington, DC: The National Academies Press. doi: 10.17226/926.
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Suggested Citation:"Issues in Improving Productivity." National Research Council. 1986. Improving Productivity in U.S. Marine Container Terminals. Washington, DC: The National Academies Press. doi: 10.17226/926.
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Suggested Citation:"Issues in Improving Productivity." National Research Council. 1986. Improving Productivity in U.S. Marine Container Terminals. Washington, DC: The National Academies Press. doi: 10.17226/926.
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Suggested Citation:"Issues in Improving Productivity." National Research Council. 1986. Improving Productivity in U.S. Marine Container Terminals. Washington, DC: The National Academies Press. doi: 10.17226/926.
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Page 46
Suggested Citation:"Issues in Improving Productivity." National Research Council. 1986. Improving Productivity in U.S. Marine Container Terminals. Washington, DC: The National Academies Press. doi: 10.17226/926.
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Page 47
Suggested Citation:"Issues in Improving Productivity." National Research Council. 1986. Improving Productivity in U.S. Marine Container Terminals. Washington, DC: The National Academies Press. doi: 10.17226/926.
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Page 48
Suggested Citation:"Issues in Improving Productivity." National Research Council. 1986. Improving Productivity in U.S. Marine Container Terminals. Washington, DC: The National Academies Press. doi: 10.17226/926.
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Suggested Citation:"Issues in Improving Productivity." National Research Council. 1986. Improving Productivity in U.S. Marine Container Terminals. Washington, DC: The National Academies Press. doi: 10.17226/926.
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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

39 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

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;

41 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

42 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

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.

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.

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.

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

47 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

48 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

49 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

so 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.

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Is the U.S. marine terminal on the verge of becoming a bottleneck rather than a funnel for world general cargo commerce? This volume, prepared at the request of the U.S. Maritime Administration, appraises issues pertinent to the productivity of these marine terminals, addressing such topics as the state of the art of technology and engineering design in general cargo terminals; the comparison of technology and design with that of other countries; the interrelationship of port and terminal practices; and the implications of port and terminal costs, practices, engineering design, and use of technology.

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