Sailing Into a Worker Shortage

The current situation at the ports of Los Angeles and Long Beach, the third-largest port complex in the world, might be described as “stagnant waters.” Some days, more than 83 vessels–an armada larger than most of the world’s navies–wait for their cargo to be unloaded. What’s more, emptying each of those ships is taking six to eight days, twice as long as normal.

    The reasons for the delays are complex. But experts say that some of the traffic jam can be traced to poor workforce planning and the strained relationship between port management and longshoremen. In essence, this is a story about the difficulty of balancing labor costs and efficiency in a highly volatile industry.

    The port experienced a similar jam during and after an 11-day lockout of dockworkers in 2002, which was held over issues of productivity and laborsaving technology. The union wanted additional full-time workers, who earn $105,000 to $167,122 a year in salary, plus $45,000 in benefits. The port, in contrast, preferred to use more “casuals,” part-time workers who make $20.66 an hour without benefits. The casuals provide more flexibility in adjusting the labor force to the amount of work, but lack the skills and experience of full-timers.

    “Now it appears the union may have been right in arguing they needed more full-time workers,” says Richard Greenwald, an assistant professor at the U.S. Merchant Marine Academy in Kings Point, New York. But he concedes that the answer wasn’t so obvious at the time. After 9/11, traffic at the port slowed significantly. But thanks to upswings in the economy, the port’s traffic increased dramatically in June, well before its usual busy season, which normally starts around Labor Day, when holiday merchandise arrives. There were other problems as well. New security regulations have slowed the movement of cargo through the port. The deteriorating railway system that feeds into the port has also caused delays.

    The short-term fix was a lottery, held in August, in which the ports and the International Longshore and Warehouse Union agreed to hire 3,000 people for new casual positions. These workers can be brought on at a rate of 35 to 50 a day, after they’ve taken basic safety training, learned to drive tractors and passed drug and alcohol tests.

    “Perhaps the port management shouldn’t have taken such an adversarial position and assumed the unions were whining about needing more workers,” Greenwald says. “However, if they had hired more full-timers and the port volume hadn’t increased, we’d be criticizing them for the high cost and inefficiency of having those additional workers.”

Workforce Management, November 2004, p. 26 — Subscribe Now!