The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger (19 page)

Against that background, the employers made a concrete offer in 1959: in return for the elimination of work rules, they would guarantee that all A-men who had been on the roster in 1958 would at least equal their 1958 earnings in future years, and that employment would shrink only as longshoremen quit or retired. The union produced a counteroffer in November. In return for each man-hour saved by more efficient methods of cargo handling, it asked the employers to pay one hour’s average wage into a compensation fund. Trouble was, no one knew how much money might be involved. St. Sure finally grabbed a number out of thin air and offered the union $1 million in compensation for all work that might be lost owing to automation prior to June 1960. Bridges naturally asked for more, making a counteroffer of $1.5 million, and a temporary deal was struck. In return for $1.5 million and a guarantee that no A-men would be laid off, the union agreed that the employers had the right to change methods of work over the coming months. Negotiations on a permanent arrangement would continue.
²²

Months of serious study and dialogue ensued, involving the ILWU, the Pacific Maritime Association, and a variety of dissident factions within both groups. When formal negotiations reopened on May 17, 1960, St. Sure announced that the employers would not sign another interim agreement on automation; they wanted a complete contract. The union again proposed that employers contribute to a worker compensation fund based on man-hours saved. The ship lines had supported just such a concept in 1959. Now, however, they changed their tune, offering flat annual payments to buy out the old work rules for a fixed price, with no obligation to share future cost savings. Three days later, Bridges accepted the idea in principle. The union threw a figure on the table: $5 million per year over four years, an amount equivalent to about twenty cents each year for each man-hour worked in 1959.
²³

Dozens of bargaining sessions followed before the landmark Mechanization and Modernization Agreement was finally signed on October 18, 1960. On the management side, small coastal carriers, Japanese steamship lines, and stevedoring companies all demanded exemptions from contributing to the guarantee fund, and St. Sure had to threaten resignation to obtain unanimous support from the Pacific Maritime Association’s executive committee. The political problems on the union side were even worse. The ILWU local in San Francisco had agreed to terms for handling Matson’s new containership,
Hawaiian Citizen
, but when the vessel called at Los Angeles in August 1960, just as the mechanization talks were reaching a critical stage, ILWU Local 13 refused to work the ship. The Maritime Association promptly shut the entire port, and several ship lines threatened to move next door to Long Beach, where a different union local held sway. The Los Angeles Board of Supervisors responded with a proposed ordinance making port employees civil servants with no right to strike, an idea that was anathema to the ILWU. Bridges was forced to crack down hard on Local 13. Port, union, and Maritime Association officials signed an unusual agreement setting out penalties for men who refused to work as directed. St. Sure and Bridges made a joint appearance before the Board of Supervisors promising to install a full-time arbitrator to deal quickly with any labor disputes in the port. The Los Angeles docks reopened within a couple of weeks, but bad feelings lingered between the ILWU’s local officials and its international leaders.
²⁴

Two months later, when the draft Mechanization and Modernization Agreement was presented to the ILWU’s October caucus, delegates knew that it meant the end of an era. “It is the intent of this document that the contract, working and dispatching rules shall not be construed so as to require the hiring of unnecessary men,” read the key clause. The word “container” did not appear, but the language gave management the right to change working methods for all types of cargo so long as this did not result in unsafe conditions or “onerous” workloads; the union could file a grievance if it believed conditions were onerous. The ILWU retained control of cargo sorting on the dock, but containers and pallets arriving at the dock fully loaded would no longer be emptied and repacked by longshoremen.

In return for near-total flexibility, the employers agreed to pay $5 million per year. Part of the money would support retirement: longshoremen with 25 years of service would receive $7,920, or approximately 70 weeks’ base pay, upon retirement at age 65, plus the $100 monthly ILWU pension. Workers aged 62 to 65 would be paid $220 a month until age 65 if they would retire early. The rest of the money guaranteed all A-men average weekly earnings equivalent to 35 hours of work, whether or not their services were needed on the docks. Anyone hired as a longshoreman after the agreement was signed would never be eligible for the guarantee because, as a union spokesman explained, “they will not have given up anything.”
²⁵

The caucus demanded numerous changes before sending the draft for a membership vote. More than one-third of the ILWU’s members voted no. Some opponents, such as San Francisco’s famed longshoreman-philosopher Eric Hoffer, were outraged on ideological grounds. “This generation has no right to give away, or sell for money, conditions that were handed on to us by a previous generation,” Hoffer stormed. Dockers in Los Angeles, still angry that Bridges had interfered in their local labor dispute and upset about the loss of work unstuffing and restuffing containers, rejected it by nearly two to one. The local in Seattle backed Bridges; so did his home local in San Francisco, where the unusually old workforce—nearly two-thirds of San Francisco longshoremen were 45 or older—liked the retirement provisions. Members in those two cities provided most of the votes to approve the contract.
²⁶

The Mechanization and Modernization Agreement brought surprises all around. The initial result, predictably, was a wave of retirements. With incentives encouraging older longshoremen to leave the workforce, the number over age 65 fell from 831 in 1960 to 321 in 1964, and the number between 60 and 65 dropped by one-fifth. Contrary to expectations on both sides, though, income guarantees for active dockers proved unnecessary. Rather than a labor surplus, the docks experienced a labor shortage thanks to an increasing flow of cargo. Large numbers of B-men were admitted as A-men for the first time in years.
²⁷

The agreement delivered everything the ship lines had hoped for in terms of productivity. Labor productivity had been flat for nearly two decades prior to 1960. The employers’ new ability to change work methods for noncontainerized cargo drove up tonnage per man-hour 41 percent in five years, and overall productivity, adjusted for changes in the mix of cargo, doubled within eight years. Shippers could send their canned goods, bagged rice, flour, and similar products on pallets without having to pay longshoremen to unpack and repack the pallets. Iron and steel were handled by two men on the dock rather than four or six, and six cotton bales were now sent for export prepacked on a single pallet weighing 3,000 pounds—too heavy under the old rules, but permissible under the new. Tonnage per man-hour in sugar rose 74 percent between 1960 and 1963, in lumber 53 percent, in rice 130 percent. In the agreement’s third year, West Coast ports used 2.5 million fewer man-hours of labor than the previous contract would have required, a figure equal to 8 percent of all the labor those ports had employed in 1960.
²⁸

Contrary to the union’s expectations, these massive productivity gains came from sweat, not automation. “The evidence suggests that the employers, for the most part, devoted their effort to trying to squeeze more physical labor from the workforce, rather than innovating or undertaking new investment,” wrote economist Paul Hartman after a careful analysis of the trends. Sacks grew larger, and sling loads, no longer bound by the former weight limit of 2,100 pounds, increased to as much as 4,000 pounds. The result was much harder physical work for the men in the hold, who had to shove these heavy loads into place. Extremely large sling loads, long prohibited by contract, were soon known on the docks as “Bridges loads.”
²⁹

Bizarrely, the parties now switched sides. The union demanded that the employers mechanize
faster
to eliminate these physical burdens. “We intend to push to make the addition of machines compulsory,” Harry Bridges told management negotiators in 1963. “The days of sweating on these jobs should be gone and that is our objective.” The ship lines were hesitant to spend the money. The ILWU responded by filing grievances against the lack of machinery on docks and in holds. After one of the strangest arbitration proceedings ever to occur in any industry, the employers were ordered in June 1965 to provide longshoremen with more forklifts and winches.
³⁰

Through 1966, West Coast shipping interests paid $29 million into funds that provided early retirement, death, and disability benefits, along with wage supplements to displaced longshoremen. This proved to be a hugely profitable investment. In 1965 alone, by one estimate, the ship lines saved $59.4 million owing to the Mechanization and Modernization agreement, nearly twelve times their annual payment. The improved efficiency, which contributed to a surge in carriers’ profits, came at a time when the container had barely begun to make itself felt in the Pacific ports. Container shipments accounted for a scant 1.5 percent of all general cargo tonnage at Pacific coast ports in 1960 and less than 5 percent in 1963. When the container finally arrived in force, leading to unimagined productivity increases, it brought yet more surprises. The port of Los Angeles, where longshoremen had been so certain that automation would destroy jobs, was to flourish beyond all expectations, while the port of San Francisco, whose longshoremen had been the strongest proponents of the Mechanization and Modernization Agreement, would wither. As they negotiated over automation in 1960, though, neither management nor labor was able to foretell what the container would do. The law of unanticipated consequences prevailed. As Bridges confessed later, “Frankly speaking, the ILWU was caught off guard, as were many shipping companies.”
³¹

The Mechanization and Modernization Agreement set the rules for the U.S. Pacific coast and was immediately extended to western Canada. In the East, the politics of the fractious International Long-shoremen’s Association would not allow such a sweeping settlement of automation issues. The ILA represented longshoremen from Maine to Texas, but it negotiated separately with different groups of employers up and down the coast. There was no coastwide contract such as there was in the West. Nor was there a Harry Bridges, a union leader trusted and respected enough to win member support for an otherwise suspect deal. The ILA’s headquarters had minimal power over local union leaders, who could do pretty much as they pleased. “It is the only anarchist union,” columnist Murray Kempton wrote aptly in the
New York Post
.
³²

William Bradley, the ILA’s president from 1953 through 1963, was a genial man who took the title “captain” from his days as a tugboat operator. He was named to head the union after longtime president Joseph Ryan was forced out on corruption charges in 1953. Having never worked the docks, Bradley won little respect among longshoremen in Brooklyn and Manhattan, much less those in Houston and Savannah. In 1961, dissidents demanding strict contract enforcement and maintenance of twenty-one-man gangs won union posts at Anthony Anastasia’s Local 1814 in Brooklyn. In the midst of contract negotiations the following year, the choleric Anastasia tried to withdraw his local from the ILA and bargain on independently. Bradley relied on Teddy Gleason, officially the union’s chief organizer and executive vice president, to sort out such internal political complications as well as relations with employers. Gleason, who had once been a pier supervisor—a management job—had the waterfront in his blood; his father and grandfather had both been longshoremen, and he and his twelve siblings had been raised a few blocks from the docks in lower Manhattan. His longshore work, though, had been as a checker counting cargo, not as a holdman physically lifting coffee and cement. The Irishmen among his rank and file were not sure that he was tough enough, and the Italians and blacks, the other main ethnic groups working the docks, were not sure they wanted yet another Irish American leader. This was not an environment in which bargainers could make progress on a subject as emotional as automation.
³³

The union’s internal political problems were rooted in unpleasant economic realities. Although the port as a whole was prospering, Manhattan’s piers were not. The number of men hired at the five Manhattan hiring halls fell 20 percent from 1957–58 through 1961—62, while hiring in Brooklyn and New Jersey increased. Urban redevelopment projects, such as the proposed World Trade Center, threatened the removal of piers that would never be replaced, and the congestion along the entire Hudson River waterfront made it obviously unsuitable for new container operations. Brooklyn longshoremen, by contrast, saw no immediate threat to their jobs. Container operations had not even begun in many ports, including Philadelphia and Boston, and therefore were not a priority for local leaders. With these very different situations leading powerful local presidents to stake out differing views, the ILA had great difficulty coming up with a united approach to the container.
³⁴

The arbitrators’ temporary compromise of 1960, protecting jobs but allowing the employers unlimited use of containers and machinery in return for payments into a royalty fund, barely mattered. A royalty board was set up to manage the expected flood of money, but a drop in port traffic during the economic slowdown of 1960—61 meant that there was little by way of royalties. Gleason alleged that other ship lines were trying to evade royalty payments by encouraging shippers to pack their cargo on pallets rather than in containers. “This is a clear-cut threat to our existing collective bargaining agreement and to the royalty program,” he charged in late 1961. Longshore hours worked in December 1961 were down 4 percent from the previous year and down 20 percent from December 1956, but there was still no compensation being paid out to the men whose work had diminished.
³⁵