26 Januari 2013

[260113.EN.SEA] Union Labour Costs, Manning Scales Make Major US Ports Uncompetitive


THE high cost of union dockers in the US combined with lagging port modernisation are making major American ports uncompetitive and giving obscure ports in right-to-work states an advantage.

With an east coast dock strike looming, terminal operators have invested more in automated equipment to reduce manpower. But more automation, US dock productivity trails overseas ports and smaller terminals in right-to-work states.

Rotterdam and Shanghai ports use fewer than five dockers to do what 20 do in the US, according to Jim Kruse, director of Texas A&M University's Centre for Ports and Waterways.

Reuters reports that US dockers are among the highest-paid blue-collar workers in the country, with the average man making more than US$115,000 a year.

High pay, workplace efficiency and automation have proved major hurdles in the talks between union and management at US east, west and Gulf coast ports.

"Everyone wants to reduce costs and that means lower wages or fewer people," said a west coast container terminal operator.

The Texas A&M report said tensions are likely to remain high, particularly as competition between ports heats up ahead of the 2014 opening of a triple-capacity Panama Canal accommodating ships of 14,000 TEU.

This will lead to more containers switching from US west coast to east and Gulf coast ports to be closer to final destination.

Miami, Charleston, Savannah, New York and other large east coast ports have been dredging harbours to 50 feet to accommodate larger ships.

An example of the inability of US ports to compete is the US$330 million terminal owned by MOL in Jacksonville. Since the terminal's opening in 2005, it has been unable to compete with cheaper surrounding ports that employ non-union labour.

MOL expected to handle containers from North America to ports in the Caribbean and Latin America but the cargo did not materialise, said general manager Dennis Kelly.

To compare, Florida is a right-to-work state, meaning employees need not join a union. Terminals are not bound by the International Longshoremen's Association (ILA) rules can be flexible about starting times, the number of workers employed and rates of pay.

"It limits my opportunity to go out and compete for new business," Mr Kelly said. "It's pretty much impossible because our labour agreement with the ILA makes us non-competitive."

The report described the latest bout of labour disputes as not being this bad since the 1970s when west coast dockers went on strike. Then President Richard Nixon invoked the back-to-work Taft-Hartley Act.

At the end of last year, unionised clerks at the ports in Los Angeles and Long Beach struck for eight days in a dispute about outsourcing of jobs. Dockers refused to cross their picket lines, effectively shutting down most of the container terminals at the San Pedro port complex - America's biggest.

With an east coast strike looming, the ILA, which represents 14,500 dockers, and the US Maritime Alliance (USMX), agreed to a temporary deal on December 28. A strike is still possible, though, if the talks fail to secure a deal to be ratified by workers by February 6.

Source : HKSG, 25.01.13.

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