In Search of the Magic Pudding

Shipping and the Waterfront

BW Baillie

I very much appreciate being asked to Lorne as a paying guest of the H R Nicholls Society and to be given the opportunity to present the whole subject of marine transport and the associated support industries into perspective in the brief time that is available.

Many years ago when I was planning to leave a seagoing career and harken to the call of my Australia, I studied accounting through Hemingway Robertson. I recall double entry bookkeeping, debits and credits etc and I hope to show you that throughout the last 20 years there has been from time to time a balance in the ledger of things maritime.

Right now the ledger is in imbalance and there needs to be some quite positive entries in the ledger on the credit side to bring the waterfront and coastal shipping back to some semblance of efficiencies. These are both industries where the pendulum swings violently.

In my address I would like to deal with both the shipping and the Stevedoring aspects of the business in which I have been involved for so many years. Firstly I will outline the development of overseas shipping as it applies to Australia and refer briefly to the container shipping scene, the bulk cargo developments, and tanker shipping. Furthermore, I will touch on the demise of coastal shipping and the new crew deals which involve multi-skilling which places us in a more competitive position with the rest of the world.

In regard to waterfront activities, I will deal with the history and its comparison with other industries. I will then dwell upon the position as it now stands with certain references to the Stevedoring Industry Review Committee and its relationship with the Inter-State Commission. I will then round off with a few comments on how I see the future of this very essential industry and deal briefly with some of the important facets of the labour employment factors that have to be addressed such as the resolution of disputes procedures, the legal contracts, the productivity schemes and co-operatives which have been receiving so much recent press.


The Changing Scene in Shipping

As an island continent so far removed from the main trade centres of the world, Australia has had to rely almost totally on a reliable shipping service since the foundation of this nation 200 years ago. Clearly it is inopportune for me to relate back to the days of Captain Cook but I can say that 100 years ago sailing clippers took three months or more to reach Australia from the United Kingdom. Turning to more recent times, in 1958 cargo vessels in the Liner Trades averaged 2.5 sailings per year as compared with an average of 4.2 round voyages today. Modern container vessels are in fact just over three times the size of the average vessel in 1958.

Currently the European conference has 21 vessels in that trade whilst to lift an equivalent amount of cargo in 1958 it would have required 106 vessels of the type then used. The actual speed of ships has not changed for fuel economy reasons, however, the introduction of containerisation and perhaps more importantly the highly technical and capital intensive handling equipment in container terminals has markedly reduced discharging and loading time and the corresponding round voyage times.

Excessive operating costs, the subsidisation of the rail freight and the rapid expansion of road transport caused the demise of the coastal shipping activities. Until the mid 1960s there were many companies operating with a variety of vessels of all types and tonnages. A number of passenger vessels plied our coastal waters in addition to the general cargo and bulk carriers. Many of these were withdrawn throughout the 60s and now there remains but a mere smattering of a coastal trade that once was the pride of our nation. Limited redevelopments in the coastal trade were confined to the offshore oil rig servicing and the bulk carrying of our own mineral resources.

Nevertheless progress has been made in negotiating reduced crewing with a reduction from 40 men to 18 on most vessels. Admittedly two crews are employed in order to keep the vessel operative throughout the year and we will compare unfavourably with overseas mannings such as in Japan and Europe where 11 men crews are quite common. I do feel that, with our new multi-skilled crew agreement and a resurgence in world shipping, there remains some hope for our national shipping future. Clearly it will be necessary to rationalise further and to carefully consider the feasibility and operating benefits of the C.E.R with New Zealand and the proposals of the Chairman of ANL Mr Bill Bolitho to capitalise on the notion of joint manning of our combined vessel fleets.

Before leaving the subject of shipping I would like to relate to you the position with the POSN ferry service in the United Kingdom. You will have recalled that there was a prolonged stoppage on P&O's European ferries which was actually a dispute that should never have been. As was reported from our London office, the new working agreement in Dover contained terms and conditions which were fair and decent by any standard. This shift pattern (requested originally by the Union) on the Zeebrugge and Boulogne routes is 24 hours on board followed by 24 hours at home. This allows for 10 hours of sleep, rest and meal breaks during the 24 hours on board. This shift, worked for 4 weeks, is followed by two weeks (14 days) paid leave.

The agreement was apparently severely distorted in certain sections of the media and the report goes on to say 'As you know P&O Ferries attempted to negotiate for three and a half months. They went to ACAS and accepted their independent solution. The Union's Dover Port Committee rejected it. We improved on that solution and put it direct to the seafarers. They accepted it by a large majority. The Port Committee refused to put it to a vote. There is no democracy in that.

It is interesting to note that the seafarers in Dover had, prior to the strike call, voted 2 to 1 in favour of negotiations. We now have a sad spectacle of Sam McCluskie, the General Secretary of the NUS calling for a 'trade war' against other P&O companies. He is unashamedly calling for our companies to be damaged. By so doing he is siding with our competitors and putting the businesses and the jobs they sustain at risk.

In our local jargon, this is clearly a secondary boycott. As you well know the Dover Ferries did progressively return to sea with non-union labour but ex employees have been encouraged to rejoin the Company.


The Waterfront Industry---Past & Future

It is recorded that in 1872 a Wharf Labourers Union was formed in Melbourne which went on strike for an increase from 8 pence to 1 shilling per hour, but the strike was unsuccessful. In 1902, the Waterside Workers Federation was formed by the joining together of various localised Port Unions that had sprung up during the interim period. It negotiated a first award giving 2 pounds 2 shillings for 48 hours work. Although ahead of community standards, the labourers were expected to lump bagged cargo for 24 hour shifts. Some bags, later regulated in 1908, weighed 350 pounds.

The Waterside Workers Federation was then registered under the Conciliation and Arbitration Act and in 1917 had its first general strike. The Union capitulated after 10 weeks. The formation of a labour bureau then followed which assisted in keeping union activities away as the employers could select labour. Terrible conditions followed:

  • Heads were picked at wharf gates.
  • The men had very irregular work.

In this context, they 'tramped the hungry mile' as there was no central information published regarding the labour needs for each berth. They had no amenities, they had filthy toilets and only troughs for washing and drinking.

These dreadful conditions continued throughout the 30s and it was not until the leadership of the Union was taken over by Jim Healy in 1937 that improvements were made. During the wartime years a manpower shortage became the impetus for change. Government intervention in 1942 formed the Stevedoring Industry Commission under the National Security Act of 1939.

  • It established a registration scheme for employees and employers.
  • It established a port quota and a volunteer reserve.
  • It introduced a roster system giving all registered men an equal share in available work and made the WWF responsible for recruitment.

It also introduced compulsory attendance and subsequent attendance money. The Stevedoring Industry Commission ruled that any new labour recruited would become WWF members (i.e. mandatory unionism). The Post War Years saw the Stevedoring Industry Commission and the Australian Stevedoring Industry Board established under the Stevedoring Industry Act 1949. In 1951 the employers advocated free selection of labour but intransigent and insatiable union demands combated the employer position.

In 1956 the Stevedoring Industry Act was introduced which replaced previous legislation and the Australian Stevedoring Industry Authority was constituted. The regulatory role of the A S.I.A. included:

  • Fixing labour quotas.
  • Establishment and operation of an employment bureau.
  • Allocation of labour and transfers.
  • Investigation on improved methods of stevedoring.
  • Conciliation of industrial disputes by inspectors.
  • Imposed penalties for work refusal.

Shortly thereafter, the ACTU supported a ban by the Federation in protest to the Act and the provisions giving employers power to recruit and use of supplementary labour were not thereafter used. The period between 1956 and 1963 saw many demarcation disputes but the first major dispute was between the WWF and the AWU over work in new bulk handling equipment in Qld sugar ports.

In terms of bulk loading, there have been dramatic changes in all ports and none more than those experienced in Queensland. Following the conversion of grain loading from bags to bulk, where only minimal labour was then required, substantial redundancies occurred. At a similar time in the 1960s, sugar was converted from bag loading to bulk resulting in no waterside workers being used and North Queensland suffered very severe redundancies.

At that time the Australian Stevedoring Industry Authority was responsible for the making of redundancy payments as casual type employment prevailed. The A.S.I A. left the industry in 1977 with a $23.64m debt which was the basic cause of the introduction of the statutory tonnage levy.

Neither the grain nor the sugar industries accepted the liabilities for the redundancies. The 'industry picked up the tab'.

In 1963 at the National Conference convened by the Government on the request of the ACTU on problems in the industry, the WWF adopted a claim for pension and mechanisation funds with the impending approach of containerisation. It was encouraged by the ILWU/Pacific Maritime Association Agreement on mechanisation and modernisation (M&M). The employers refused to become involved in the non-contributory pension scheme as proposed by the WWF. In 1965 the year the Stevedoring Industry Act was introduced which transferred control of recruitment to the A.S.I.A. and the ability to deregister the WWF. Following that, the ACTU proposed and 'All-In' conference which became known as the Woodward Conference and the main outcome was the introduction of permanent employment in November 1967. The objectives were to:

  • Develop stronger employer/employee relationships.
  • Enhance training and specialisation of labour.
  • Provide a minimum weekly wage for the regular waterside workers in major ports.
  • Ensure that a majority of employees be employed directly with remainder by 'Stevedoring Employers of Australia Ltd' (Seal).
  • Reduce the retirement age from 70 to 65.
  • Create new disputes settling procedures.
  • Reduce the A.S.I.A.'s role.
  • Make employers responsible for rostering and allocation of work.

With the introduction of the container age in the late 60s, a number of Commission hearings, which demarked the work of waterside workers and storeman and packers and the like, were heard and there was little or no disruption to the normal work activities. One of the most significant agreements was in 1967 when the Memorandum of Understanding between AEWL and the Federated Clerks Union was reached. The matter came before Commissioner Holmes and Commissioner Gough in 1969 and was finally ratified by Mr Justice Moore in 1970. This hearing regarded the unpacking of containers and effectively gave the clerks a presence at any unpacking facility other than bonafide FCL areas. Some exemptions were made such as the Trans Tasman Trade, refrigerated containers and wool facilities. The clerks argument was based on a fundamental right for them to 'follow the work' which had traditionally been theirs for decades.

It was in 1969 that the first container terminals opened in Melbourne, Sydney, Brisbane and Fremantle and in March the first container vessel arrived. It has to be noted that in marked contrast to some other countries such as the USA with its 'Mechanisation and Modernisation' agreement, its 50 mile limit for LCL containers, and other such penalties, the introduction in Australia occurred without any real disputation or heavy concession.

In 1970 the ACTU/STL/WWF Agreement on 7 day shift work was reached but the trade off was the 35 hour week. This eventually spread to all other terminals including ANL and so forth. In 1972 during the award negotiations, the 35 hour week was extended to the rest of the waterfront. Such conditions were then further extended to the inland depots as a result of hearings before Mr Justice Moore.

During the 70s and 80s a period during which the container system consolidated its position and as a consequence a greater number of shore based facilities were constructed. The period also has seen considerable merging of operating companies particularly in conventional stevedoring. The smaller organisations became unviable and combined with others to form what are now two major stevedoring companies in the main ports (with a third in Melbourne) handling the bulk of Australia's uncontainerised cargoes. Terminal operators emerged with substantial investments being provided by some whilst others chose to use facilities provided by the port authorities where they were available. Concerted efforts by the Unions involved ensured that their members presence would continue in controlling roles within the new system and enormous pressures were exerted to protect existing and expand to as many jobs as possible. Nevertheless, even when the cost balance in terminals is analysed and it shows up as labour constituting over 70% of the total costs, a comparison of the labour statistics with the tonnages handled indicates what an enormous drop there has been in numbers of men employed on the waterfront compared with the enormous increase in the millions of tonnes of cargo handled in the same period.


WWF ''A' Register

Year Number Millions
Handled

1957 25,622 24,950
1967 19,249 42,252
1977 10,336 50,373
1987 5,493 55,503
1957-1987

Difference

(20129) 30553

    Tonnages based on Statutory Levy payments.

One of the many enquiries into the waterfront followed the introduction of the Stevedoring Industry (Temporary Provisions) Bill of 1976 which had proposed a number of measures to address to the problem excess labour supplies and funding arrangements. The second National Stevedoring Industry Conference under the chairmanship of Sir Richard Kirby was held between December 1976 and April 1977. The objectives were set down as providing detailed arrangements for the dealing of recruitment, redundancy and fluctuating labour requirements. The recommendations of the conference were accepted by Government and included:

  • A formula for determining port quotas.
  • Transfer of surplus labour between stevedores.
  • New arrangements for the use of supplementary labour during labour shortages.
  • The introduction of a Federal Co-Ordinating Committee to be responsible for assessment of port quotas and redundancy matters.
  • The introduction of port conciliators, appointed by the C&AC, to assist in each port speedy dispute settlements.
  • The introduction of statutory levies and non-statutory levies and also the introduction of a Non-Statutory Stevedoring Industry Consultative Council comprising of representatives of shippers, employers, and unions to exercise a voice in the industry's affairs.

This system is still operating but many areas needed addressing in 1986 as a result of the biennial negotiations, AEWL and the Waterside Workers Federation together with ancillary unions agreed to establish the Stevedoring Industry Review Committee to examine a variety restrictive work practices and endeavour to introduce efficiencies into the industry. As you are well aware, the Government then appointed Sir John Moore to chair the committee which became part of the overall Waterfront Strategy Enquiry.


The Present & the Future

Before concluding, let me give you a few thoughts on the present and the future. To date there has been an enormous over-capitalization of the Australian Ports to the extent that, in the container trade, we now have 38 shore based container cranes handling only 1.3M TEU's per annum. By comparison, Hong Kong has 7 cranes to handle 1 million containers and the Port of Felixstowe U.K has 8 cranes to handle a similar number.

Port Kelang in Malaysia, in which my company plays a very significant part, has 4 cranes and handles 400,000 TEU's per annum. The system we live with at present in Australia is both cost ineffective and totally lacking in incentive. The prime cause of this malaise is the monopolistic nature of the labour employed on the waterfront and the lack of effective union leadership. By protecting jobs and by having a secure future; knowing that wages will be paid weekly and that his livelihood is strongly supported by his union, there is no incentive for the individual employees improvement in productivity or attitude.

This had been recognised for many years but each time attempts were made to combat the problems of poor productivity, overmanning, indiscipline and the like, employers were generally leaned on to withhold taking any action that may have national effect.

The terms of reference of the Stevedoring Industry Review Committee were established to counteract these problems and it was only the intervention of the Government and the formation of a national inquiry under the auspices of the Inter-State Commission that changed the course from the review being 'in-house' being in the employers hands to being one of a statutory nature.


So what of the future?

I am never one to forecast gloom and doom and don't believe that this is the case now. Advances have been made and considerable ones at that. The waterfront is an unusual industry and when the users focus their attention on it the worst pictures in the world are painted. When the focus is diverted to other industries such as the coal industry, the State Rail Authorities, and even some of our own Harbour Authorities, the same malpractices, restrictive practices and rorts would be exposed. We now have the opportunity in the waterfront industry of rectifying so many of these problems because if we don't do so on this occasion then we may as well pack up our bags and go home.

The waterfront is an essential industry and therefore it should be declared as such. We do have in place a perfectly good disputes procedure which, with a little trimming perhaps, would work providing there is a will and an attitude displayed by the workforce to make it work. The recent introduction of joint ventures between minor operators and the Waterside Workers Federation in our out-ports has been criticised by myself quite openly in recent times. I believe this is merely a different slant on an incentive scheme with no risks being taken by the Federation. We firmly believe that when the new industry structure is in place and sensible and meaningful productivity schemes are introduced, there will be no room for such arrangements. The difficulty we face at present is that the so called joint ventures are enjoying conditions conceded by the Federation which are not available to other employers. By this I mean they are in breach of conditions that were imposed on employers by the Federation itself. In other words it is a clear case of discrimination which cannot be condoned.

In summary therefore may I say that I do have high hopes for the future and that has been clearly demonstrated by my own company in investing considerable capital into activities in which we have been involved over many years. In order to be successful a number of objectives must be achieved to the extent that:-

    a) The industry must be totally flexible in its design such that it is responsive to the needs of its clients and the labour force must be structured accordingly. We cannot afford to carry those numbers that are required to meet our peaks but at the same time we have to accommodate the needs of our clients who want service in excelsis when their vessels come alongside.

    b) The labour must be highly skilled and motivated in order to operate the higher tech equipment that becomes available year by year. For the non-specialist levels, we must have sensible multi-skilling such that there is no wastage of personnel and there is interchangeability between operational and clerical staff.

    c) The industry at present is highly over supervised and this must be trimmed down to the levels that are sensible and satisfactory. If anything, excess supervision is a demotivator and a reduction is seen as a method of encouraging the workforce to adopt a more positive attitude.

    d) As I mentioned before, our productivity levels continue to be below international standards. This is not because our equipment is below par but because again there is a lack of motivation and incentive when wages are guaranteed and discipline is so difficult to maintain.

    e) With the average age so high in the workforce, and so many walking wounded still employed, it is imperative that a proper redundancy scheme be introduced to rejuvenate the workforce. We see this as taking place over a period of time but it will need governmental assistance. Additionally, with the introduction of normality of employment is a prerequisite that (compulsory redundancy) as it would be in any other industry.

    f) The essential services nature of the industry makes it evident that essential services legislation be imposed on the waterfront and that also immediate stand down clauses be inserted in the awards.

With all these in place, we can tighten the total structure to make the waterfront a more efficient and acceptable enterprise which will contribute to the wealth and future of our country in a more positive manner.

Why HR Nicholls?

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