Behind the East Coast dock strikes
It's a quiet, rainy scene on the Boston waterfront. This week dockworker strikes were settled in Baltimore, Philadelphia, and Wilmington, Del., but management and union members in Boston still haven't been able to come to any agreement.Skip to next paragraph
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Except for Baltimore, the issue in these ports has been guaranteed annual income (GAI). With GAI, dockworkers are guaranteed that they will be paid for a certain number of hours per year, whether or not they work that many hours. The amount of guaranteed paid hours varies, running from a high of 2,080 in New York to zero in Portsmouth, N.H., and Canada.
Although GAI is just one thorny issue for port workers and managers, it points to a much bigger one - fierce competition among East Coast ports. GAI deals with costs, and when it comes down to which ports a shipping line chooses, ''the bottom line is cost,'' says Alfred Corry, president of the Philadelphia Marine Trade Association, which won GAI concessions from longshoremen Thursday.
Dockworkers have been losing jobs to technology - hence the birth of guaranteed income in 1966. The technology is containerization, a widespread method of shipping which packs goods into uniform containers that are loaded and unloaded mechanically. With containerization, it takes less time, fewer people, and less money to move shipped cargo.
The problem many ports are facing is that they have to pay guaranteed income to workers they no longer need. This keeps costs artificially high and reduces the competitive position of a port, management complains. Since 1980, for instance, 12 shipping lines have pulled out of Boston.
But other factors eat away at the competitive position of a small port like this one. Arthur Lane, president of the Boston Shipping Association, explains that container ships are getting bigger. Because of their size and the huge amount of goods they carry, it's more economic for them to dock at one or two major ports, rather than visit a number of medium-size ones. Goods then get moved to their final destination by rail, truck, or barge.
Ports serving these larger ships are known as ''load centers,'' and it looks as if such cities as New York, Norfolk, Va., and Baltimore are beginning to fit into this category. It's a new ball game for ports, Mr. Lane says. ''Boston is changing with the times,'' he says; ''it's becoming what's known as an outport (i.e., a port that mostly exports).''
While ports like Boston are losing business to ''load centers'' or other Eastern harbors with lower costs and higher productivity, the whole Northeastern seaboard faces a host of other competitive problems.
David Wyss, senior vice-president of Data Resources Inc., a major economic forecasting firm near Boston, ticks off a list of other concerns port managers have:
* First, the pattern of trade is changing from European dominance to Asian. Philadelphia and Los Angeles lose out to San Diego and Los Angeles.
* Also, the Northeast has become less of a manufacturing area over the years. This change mostly affects export traffic, though. A good deal of manufacturing has moved south - hence one reason why Gulf and Southern ports are thriving.
* Third, Northeast ports are congested, Wyss points out. ''It's just more expensive to land in an East Coast port than a Southern port,'' he says.
The Pacific development wouldn't be so bad for Eastern ports, transportation experts point out, if it were not for trucking and rail deregulation. Rate deregulation has freed up these inland transporters so they can move goods at a competitive price with shipping. Now, an East Coast manufacturer, even though he is based near New York, might decide because of costs to send his Asia-bound goods via rail to the West Coast, then on to his destination by ship.
Frank Caggiano, assistant director of the New York-New Jersey ports, says his ports have lost the Asian and Midwest business. Asian exporters don't want to ship all the way to New York, then backtrack to the Midwest. ''And if time is important (to the Asian shipper), we lose,'' he says.
Meanwhile, Eastern ports are renewing marketing efforts to compete for Asian trade. New York, for instance, is trying to build itself up as a load center, building more warehouses and adding on more container-moving capacity. It's speeding up the whole loading and unloading cycle by reducing the number of checkpoints and amount of paper work that go with the process.