On the Waterfront, Rise of the Machines
September 28, 2012
On the Waterfront, Rise of the Machines
By ALAN FEUER
NEWARK — IN the rising light of a mid-September morning, the CSAV Pyrenees, a blue-water freighter sailing out of Suape Port in Brazil, was lashed to its lines at Berth 59 of the Port Newark Container Terminal. At rest beneath a looming row of gantry cranes, the ship had come to port on a half-day call to discharge a load of South American cargo: 421 containers’ worth, each one weighing as much as a family of elephants — or slightly more than 40,000 pounds.
Fifty feet above the deck, crane trolleys flew through the air, their jawlike spreaders plucking boxes from the giant vessel’s hold. As the boxes were lowered onto the wharf, they were gobbled up by a waiting fleet of straddle carriers, busy arachnid vehicles that alerted a computer to the cargo’s arrival, and hauled it off to preordained locations in the yard.
From the asphalt dock, the scene looked a little like the launching pad at Cape Canaveral: a sprawling techno-space dominated by Jurassic-size, seemingly autonomous machines. One astonishing thing about the longshore business these days is how its vast scope — tons of roses from Costa Rica, sneakers from South Korea and children’s clothes from Malaysia are moved each year — requires so few visible human bodies.
Much of the work takes place indoors. Up in a control room, sitting among some peers, a superintendent monitored a digital schematic of the ship, tracking the operation, step by step, in real time. His blinking, changing screen showed the number of containers already unloaded and the number still aboard. It showed how many crane lifts and straddle-carrier moves had been accomplished and, moreover, whether the ratio of moves-per-15-minute-increment was faster, or slower, than the terminal had planned.
Sitting in an office nearby was James Pelliccio, the president of the terminal, one of six such outfits that make up the Port of New York and New Jersey and lie in a loose semicircle south of Manhattan from Newark Bay through the Kill Van Kull to Upper New York Bay. “The way I see it, we’re not really in the transportation business anymore,” Mr. Pelliccio said. “We’re in the information business.”
It was a striking thing to say about the classic New York task of handling seaborne cargo, an activity that, if only in the collective imagination, still remains connected to the grueling leg-and-shoulder work immortalized on film by Marlon Brando. The truth, of course, is that today’s port is driven more by brains than by brawn. Terminal workers speak a florid corporate language of “space optimization” and “key performance indicators.” Longshoremen click computer mice and complain about Microsoft Windows as everyone else in the white-collar world does.
It is partly because of these mechanical and technological advances that the New York area ports are now booming, after the last few difficult years. In 2011, the six terminals in Brooklyn and New Jersey and on Staten Island handled the equivalent of 5.5 million container loads of cargo, more than at any point since New York was founded by the Dutch. The Port Authority of New York and New Jersey estimates that this year will be just as busy, leading one former Port Authority economist to write in August that the city is in “striking distance” of reclaiming from Los Angeles the title of the country’s busiest trade zone.
The history of the region’s port has always been marked by transformation, whether in 1825, when the Erie Canal was opened, allowing trade with the flourishing Midwest; or in 1956, when standardized containers began ushering out the era of winching unevenly shaped break-bulk cargo out of holds.
Those at the port today agree that this is another moment ripe with change, even if they disagree about what that change will bring. The Panama Canal is scheduled to be widened in a few years, and the Port Authority will, by then, have spent the better portion of a $3.8 billion capital investment plan to attract its massive freighters, which will have nearly double the capacity of current cargo ships. Terminal executives, like Mr. Pelliccio, have spent an additional $1 billion on infrastructure improvements, eagerly joining the “arms race” for business out of Panama against rival ports in Long Beach, Calif.; Norfolk, Va.; and Savannah, Ga.
While all this money and frenzied preparation have lent the port an atmosphere of energy, it has also destabilized its inherent balance of forces, as a small group of stakeholders — shipping companies, terminal owners, the Port Authority, the longshoremen’s union — jockeys to promote specific visions of the future. Not surprisingly, these conflicting visions have become a central issue in the bitter contract talks between the union and its local negotiating partner, the New York Shipping Association. The talks fell apart last month and would have resulted in a strike on Oct. 1, right before the Christmas inventory season, if a federal mediator hadn’t gotten both sides to agree to a three-month extension.
Beyond the specifics — the shippers’ frustration, say, with antiquated work rules or the union’s concern with protecting jobs against advancing automation — the debate has pitted self-professed visionary capitalists, who have spent a fortune hoping to seize the next big thing, against a shrinking working class that sees itself as besieged not only by management and an unsympathetic news media, but also by potential obsolescence.
“The longshore community is worried that the next phase of evolution will render them irrelevant,” said Jim Devine, the president of Global Container Terminals on Staten Island, which recently began a $350 million automation project. “In my opinion, that’s not true. While jobs will be lost, new jobs will be created.”
Officials from the International Longshoremen’s Association turned down repeated requests to answer questions for this article. Then again, the facts speak for themselves.
Thirty years ago, there would have been 40 or 50 longshoremen — lashers, hustlers, checkers — working on the CSAV Pyrenees. Now, there were fewer than half that.
ONE of the things heard around the port is that people there, particularly powerful people, believe that they are working in obscurity. New York is — and has always been — a port town, they say, but few people think of it that way. One former terminal executive recalled seeing an advertisement for a recent public event celebrating the city’s waterfront. Ferryboats and kayakers were mentioned, but not the port.
The omission was shocking, not least because the port is gigantic: the largest on the East Coast, the third-largest in the country, an industrial leviathan that supports nearly 280,000 jobs, including truckers, security guards and maintenance workers. (In comparison, Wall Street supports about 160,000.)
The port is also extremely busy. For the past 10 years, the Port Authority has been deepening the channels of New York Harbor in one of the largest dredging projects in American history and has more recently improved the port’s railroad system; it will soon spend more than $1 billion to raise the Bayonne Bridge. Shipping lines have invested in larger, faster vessels, and terminal owners have expanded wharf space, bought bigger cranes and installed sophisticated “in-gates” — tollboothlike plazas where cameras automatically record the ID numbers of trucks and containers.
All of this is to prepare for the expected increase in materials passing through the Panama Canal on the “all water route” from Asia they hope will replace the practice of shipping containers to the West Coast and then moving them by rail to profitable markets in the heartland.
“New York is perfectly positioned to capture the future,” said Joseph C. Curto, president of the shipping association, an industry trade group. “It’s cheaper to send Ikea lawn furniture here on the proverbial slow boat from China than to send it to the West Coast and train it across.
“The goods will come here,” Mr. Curto added, “if we remain the most economical way to get them here.”
Getting so-called discretionary cargo — destined for locations beyond the region’s borders — means competing with larger ports in California and with smaller, leaner, often non-unionized ports along the mid-Atlantic Coast. Labor accounts for nearly half the cost of doing business in New York, which remains the most expensive port in the world to shippers, the shipping association says.
It is not just the shipping lines, searching for the best deal in a kind of port arbitrage, that are putting pressure on New York to become more efficient. In the past half-dozen years, four of the region’s six container terminals, which used to be privately held businesses, have been bought by pension funds and investment firms, including financial giants like A.I.G. and Deutsche Bank. Looking for returns in the short term, they have focused much of their attention on labor costs.
The union, Mr. Curto said, perceives a threat in these developments, and “its natural reaction is to hunker down and protect what it has.”
While longshoremen at other ports have traditionally worked in shifts, those in New York have always been organized into clannish gangs that work around the clock until a job is done. Imagine a ship that takes a full day to unload. At ports in Los Angeles or Seattle, the work is divided into segments, and the gangs are rotated in and out. In New York, however, the gang that starts the job works continuously until it is finished. This requires extra workers in relief in each gang, all of whom receive full pay, even when they are resting.
“The way we work,” Mr. Curto said, “we’re paying people for 24 hours each, even if they’re only really working seven or eight.”
This spring, the Waterfront Commission of New York Harbor, a state agency meant to combat corruption, published a report saying that up to 40 percent of all workers at the port were there to accommodate breaks and relief. The report also described a core of union supervisors who were paid, in an idiosyncrasy unique to the waterfront, for every hour that workers under their care were on the clock, even if they themselves were at home barbecuing or mowing their grass.
There was, for instance, Paul Buglioli, a union timekeeper responsible for overseeing work hours, who earned $474,947 last year because of this contractual quirk — and despite his testimony to the commission that he didn’t “physically check to see that someone who is signed in is actually present on the pier.” There was also Ralph Gigante, a union shop steward, who earned $406,659 in 2011 because he was allowed to bill for hours that other people worked. Even though Mr. Gigante — a nephew of Vincent Gigante, the former boss of the Genovese crime family — was a union representative, he admitted under oath that he didn’t know that the letters C.B.A. stood for collective bargaining agreement.
Mr. Curto recalled that when he began working at the port in 1970, as a junior terminal manager, straddle carriers hauling containers to the storage yard would pass beneath a tower and a man would shout down directions, telling the driver where to place the box. Now, it is done electronically. Technology has changed, he said, and so must “certain work practices that make the port noncompetitive.”
“But change is tough,” he added. “People resist change.”
THE list of longshore jobs that technology has rendered obsolete is long and poignant. Mr. Curto’s tower workers are gone. The cube workers, who calculated the cubic volume of loose cargo, are gone. The coopers, who sewed torn sacks and repaired broken pallets, are gone. The water boys, working in the steamy reaches of the hold, are gone, as well.
In the 1960s, when New York was the world’s busiest port, there were more than 35,000 longshoremen on the city’s docks. Today, there are 3,500.
This thinning of the ranks has stiffened the necks of the New York chapters of the longshoremen’s union, which have been among the most successful in the country at preserving benefits for their members. The coveted remaining jobs, usually secured through referrals from other union members, pay well. According to the United States Maritime Alliance, rank-and-file longshoremen earn an average of $124,000 a year in wages and benefits, with specialists like crane operators receiving a premium. The Alliance, the union’s national negotiating partner, also said that one in three longshoremen in the New York area takes home more than $208,000 annually.
In 1964, in the wake of containerization, Thomas Gleason, the union’s president and scion of a New York longshore family, managed to establish a now-defunct guaranteed annual income for his members, which allowed longshoremen to collect as much as $32,000 a year for doing no work at all after they lost their jobs. Mr. Gleason’s predecessor, Capt. William V. Bradley, fought successfully in 1960 for what are known as container royalties — year-end payments to longshoremen based on the weight of cargo moving through their ports. Last year, the royalties for East Coast ports were, on average, $15,500 for every worker.
These days, the staunchness of the New York union sometimes reads like defensiveness. Last month, after The New York Post published an article condemning greedy “wrong-shoremen” for scuttling the contract talks, one member of Local 1814 in Brooklyn wrote a bitter, personal response to the reporter describing “the difference between us.”
“I didn’t have connections to get the right job like you did,” the union member wrote. “I took a dangerous job so I could be responsible and pay my bills, the American way. I am not sitting at a desk every day, or any day for that matter. I am not wearing a cardigan because the air-conditioner may be set on low today in the office.”
But some longshoremen do sit at desks each day. And if they are not wearing cardigans, they may, like Twiggy Richardson, a 47-year veteran, have brought in a space heater to guard against the air-conditioned cold.
Mr. Richardson was working the 6 p.m.-to-6 a.m. shift in the control room a couple of weeks ago when the CSAV Pyrenees returned to the terminal in Newark to take on a load of 1,500 boxes bound for Germany. Working as a checker, his job that night was to electronically track the movement of containers from storage yard to straddle carrier to ship.
He prepared his work space with the punctiliousness of a surgeon: wiped his keyboard and his radio with a Handi Wipe, laid a folded towel across his chair and taped to the wall beside him a handmade sign reading, “7” — he would be working until dawn with crane No. 7. Booting up his computer, he logged into the terminal’s Navis information system. Doughnuts and a fresh pot of coffee waited on a refreshment table. Out the window, the great halved-orange of the sun was setting behind the tower at Newark Liberty International Airport.
It was a far cry from the early days, when Mr. Richardson, 68, was a marine carpenter working, as he put it, “among the rats and the roaches.” He joined the checkers just in time. The entire carpenter’s local “went the way of the buffalo,” he said.
As the crane trolleys glided back and forth, and the ship, in its berth, was illuminated like a stage set by the wharf lights, Mr. Richardson became contemplative. “Eventually there’ll only be one guy up here, with cables in his ears and nose, and wires in his behind, running the whole thing,” he said. “Sounds crazy, I know, but that’s where it’s headed.”