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U.S. ports down size staffs in new economy by Peter Hull In mid-August, the South Carolina State Ports Authority reported a nearly 20 percent drop in container volume for the fiscal year that ended June 30. During the same period, the maritime agency’s earnings slumped 53 percent. The news marked the latest chapter in a story of economic doom and gloom from which almost no port complex around the country has escaped. As the downturn became a full-blown recession, steamship lines anchored 10 percent of the world’s cargo fleet and the worldwide economic slump gnawed into profits and productivity. The inevitable consequence: port operators trimmed their budgets with hiring freezes, furloughs – and layoffs. Here’s a spot-check on how the meltdown has affected some of the nation’s dock workers. Virginia At the start of August, Virginia International Terminals laid off 90 employees, or 20 percent of its work force. It marked the first mass layoff initiated by VIT in its 27-year history. Prior to the announcement, VIT employed 452 people at its marine cargo terminals in Newport News, Norfolk, Portsmouth, and the Virginia Inland Port, an intermodal facility in Front Royal. Cargo volume and revenue in the fiscal year that ended June 30 was down nearly a quarter. South Carolina In July, the South Carolina State Ports Authority eliminated 17 dockworkers from its payroll and required all employees to take a two-day furlough. The cost-cutting plan was expected to save the ports authority $1 million — $750,000 from the staff reduction and $250,000 from the mandatory unpaid time off. The staff cuts took the maritime agency’s employees from 541 to 524. Prior to the layoffs, the ports authority reduced expenses by freezing wages and eliminating vacant positions. A number of administrative and operating positions previously were eliminated through attrition. The workforce reductions primarily affected positions directly related to handling cargo. Alabama Also in July, the Alabama State Port Authority cut 86 hourly employees from its payroll, one of several moves by the authority to balance falling volume and revenue. In addition to the layoffs, the authority levied salaried workers a $180-per-month charge for dependents’ health insurance, 15 contract employees were let go, and contracts for engineers, attorneys and lobbyists, among others, saw fees cut by 10 percent. Port officials said they expect savings of at least $5 million annually. The authority expected a net loss of more than $10 million for the fiscal year. Alabama docks last had significant layoffs in 1999, when about 100 workers were let go. The cuts will leave the docks with about 400 hourly workers. California One of the hardest-hit ports, and one of the earliest to announce layoffs, was the Port of Oakland. In August 2008, the Northern California port cut 100 jobs, representing about 15 percent of its workforce. The cutbacks, which included 38 vacant positions, were the biggest reduction in recent memory. The cuts were spread across Oakland’s sea and airports. The recession couldn’t have come at a worse time for Oakland. Previously determined wage increases came into effect and the port assumed certain costs for environmental mitigation. Further, the port began to pay the principal plus interest on its debt, rather than just the interest, as it previously had paid. By the end of 2008, port officials said, they were staring down a $12 million budget deficit. Incidentally, at the sprawling ports of Los Angeles and Long Beach, officials reduced operating costs through hiring freezes, reduced travel and cuts in overtime, among other initiatives. Washington In February, the Port of Seattle told non-union employees, which represent about half of its 1,700 workforce, to take two weeks off without pay to save the port almost $3 million. The port asked union employees to come up with similar savings. Then, in May, at the neighboring Port of Tacoma, officials eliminated 47 positions, or about 18 percent of the port’s staff. In addition to layoffs, the port initiated a voluntary separation program of money and benefits for people willing to voluntarily resign from their jobs. Before the cuts, the Tacoma port employed 256 people.	In This Issue Up Front News, Trends & Analysis New Items The risks of delayed action Supply Chain Is your service provider compliant? Does that belong in my port? Features Grading the carriers: How are your service providers doing? Gateway at a glance: China Ports & infrastructure Port Productivity Tools: Six success stories U.S. ports downsize staffs in new economy Port Products RTGs and reach stackers Commentary What’s on the horizon? On the Horizon Fleets of the future: The Chameleon Casualties
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U.S. ports down size staffs in new economy