In Search of the Magic Pudding
Shipping and the Waterfront
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
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
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
- 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
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
- 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
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
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
- 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
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
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
- The introduction of port conciliators, appointed
by the C&AC, to assist in each port speedy dispute
- 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
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
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
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
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
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