DEREGULATION AND TECHNOLOGY Before the passage of the federal Ocean Shipping Reform Act in 1998, shipping companies had to make their rates public. They agreed among themselves to keep rates within a certain range and they enjoyed protection from anti-trust laws.
Shipping “reform” allowed them to make secret deals and the rate agreements fell apart. Competition intensified. Rates fell. Profits fell with them, so shipping companies began to branch out. This diversification helped them cut costs and make profits at other links in the cargo-handling chain.
Changes in information technology have changed work and work flow for cargo-handling companies, shippers and ILWU workers as well. Marine clerks used to mark the docks with chalk to show where containers should go.
“We went from chalk and clipboards to calculators and computers,” said Ron Costa of marine clerks’ Local 63. Before computers, paper followed the goods and went through many different hands. Now information can be put into a computer when the goods leave the manufacturer and tracked by computer till the goods arrive at their point of sale.
Computerization has enabled employers to send documentation and planning work off-dock and even overseas. As early as 1989, shipping lines began moving their agency work inland and out of state so they could shed their contracts with ILWU Local 63 OCU. (Workers in the industry caught on quickly and flocked to 63 OCU so they could negotiate job security.)
Stevedoring Services of America, one of the most anti-union of the PMA employers, moved its yard and vessel planning work to Salt Lake City once the work was computerized. Implementation of new technology proved one of the gnarliest issues in the 2002 Longshore Division contract negotiations. The union insisted strongly that clerks should retain the work specified in Section I of the PCLCD, which governs jurisdiction, and keep control over the work process as the technology changed.
Technology has also reshaped retailing practices, and the changes have rippled through the cargo-handling chain.
NOT YOUR MOTHER’S WAREHOUSE
Big retailers like Wal-Mart, Target and Payless now rank among the top importers. They flexed their influence in the West Coast Waterfront Coalition during the 2002 contract fight—and their business practices mold the warehousing end of the cargo-handling chain.
Retailers no longer store inventory in warehouses and hope their good marketing instincts will help keep down the amount of stuff they store but don’t sell.
Now they demand more frequent, smaller deliveries tailored to customer demand and delivered “just in time,” ready to put on the store floor. Bar codes and computers and the ability to transfer large quantities of data electronically enable stores to collect exact information on sales trends and inventory that needs to be re-stocked.
This information goes to distribution centers, which aim to move goods out as quickly as possible. Highly automated, they often “cross-dock,” taking items out of one truck, sorting them and then sending them by conveyor to other waiting trucks. These facilities also provide a range of services to get products “store-ready,” such as labeling, shrink-wrapping and even assembling.
But modern distribution centers not only handle the movement of goods, but the movement of information about goods. Sophisticated scanners, sensors and computers let them compile this information as the goods flow through. Clerical and technical workers tend the machines, compile data and funnel it to shippers and retailers. They tend to be the permanent employees in facilities that use temporary workers to cope with ebbs and flows of business and to shave expenses.
Shippers are paying more attention now to handling logistics cheaply. “We are at the point now where logistics will make or break a company’s profits in the marketplace,” the president of a small logistics company told a trade publication. “Everyone can buy the same stuff inexpensively if it’s made in China,” he said.
GLOBALIZATION PUSHES PORTS INLAND
Capital chases the lowest wages around the world. Employers siphon jobs from the U.S. to countries where they can pay non-union workers wages that barely support life. No news here. But then the goods produced overseas must get shipped to the U.S. market for sale. The huge influx of goods is swamping West Coast ports.
Cargo volume in ILWU ports has more than doubled in the last 20 years. For the last several years, industry analysts have predicted this volume would double and triple by 2020. And the new generation of container ships is coming on line. These new ships will handle nearly 40 percent more cargo than the older models.
“Operations are moving inland, away from the docks, in response to scarce land, overcrowded transportation corridors, and higher labor costs at the port,” the ILE researchers found. “Sometimes functions that historically were done on dock are being performed hundreds of miles inland.”
Southern California has seen warehouses and distribution centers mushroom in the “Inland Empire” area, Riverside and San Bernardino Counties. In Northern California, the river port of Stockton boasts the largest concentration of distribution facilities in the country. Warehouses are blooming near Sacramento in Dixon and Woodland, and as far out as Sparks, Nev., where the costs of industrial space run half those in California. Washington State warehousing has grown in the Kent Valley south and east of Seattle.
If you visit Victorville today, you see the skeleton of the abandoned Air Force base, with jumbo UPS, United and Airborne Express cargo planes taking off and landing in one section. But when the development is complete there, cargo will arrive on bills of lading marked for the “Port of Victorville.”
Firms watch out for unions when they decide where to locate, logistics expert Evan Armstrong told a trade publication. He put commuting distances, availability of labor and “union activities” on a short list for site selection criteria. “Different parts of a city can have different levels of union activity,” he said. (Plants, Sites and Parks, November 2004)
BIRTH OF THE OCTOPI
PMA member companies have branched out just as others in the industry have. Their parent companies have tentacles in everything from logistics to warehousing.
“The mobility, flexibility and organizational reach of cargo-handling companies operating in this more integrated supply chain provide companies with a greater capacity to evade the jurisdictional reach of the union,” the ILE researchers noted. The organization surrounding a typical PMA company looks like the model in the chart on the right.
Retired ILWU International Representative Abba Ramos always advised organizers, “Follow the container!” To survive and thrive in the changing cargo-handling industry, the union will need to “follow the bytes” as well, and understand the path of the information about cargo as well as the cargo itself.
As the ILE researchers concluded, “The ILWU must confront the challenge of thinking industrially beyond the docks and organizing the full cargo-handling supply chain whether on or off the docks.” This will require not only determined and strategic organizing, but close collaboration with the rest of the labor movement.
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