Safe Harbor
How Longshoremen Keep Global Wind At Their Backs
As Trade Soars, Union Workers Prosper by Staying Up With Technological Change
Threat of a Day Without Ports

By ANNE MARIE SQUEO July 26, 2006

CHARLESTON, S.C. -- Neat rows of new BMW Z4 Roadsters at the Union Pier Terminal here awaited longshoremen to drive them onto cargo ships one recent morning. Last year, the German auto maker exported some 75,000 vehicles through this terminal and imported 112,000. That may not be good news for unionized workers in the auto industry, but it is terrific news for the longshoremen.

The global economy has shipped overseas hundreds of thousands of union jobs from apparel to auto parts. Their employers, buffeted by lower-cost foreign competitors, are slashing expenses and workers.

But the longshoremen are thriving. The 100,000 members of the two longshoremen unions handle nearly every product or shipping container that enters or leaves a U.S. port. They usually get compensated even for those they don't touch. With average salaries topping $120,000 a year, longshoremen are the highest-paid blue-collar workers in the U.S., according to labor experts.

Over the past century, work on the docks has been transformed by such changes as the move to put cargo in standard-size containers and high-tech tracking systems. But the longshoremen's unions -- the International Longshoremen's Association on the East and Gulf coasts and the International Longshore and Warehouse Union on the West Coast -- have expanded their power. That is partly because the unions aggressively guard their position at the chokepoint of global trade. They have also shrewdly turned technological change to their advantage and formed powerful alliances with affiliated unions, such as the truckers who carry goods to and from docks.

The international scope of their business and the shipping lines whose goods they handle forced them to think beyond individual ports long before people were talking about a national economy, let alone a world-wide one. Now, some of their methods are being viewed by labor leaders as a potential roadmap to re-energize other unions.

"The lesson we learned when there was a national economy is you can't organize one Ford plant, you have to organize the whole company. Now we're seeing that transfer to the global economy," says Andy Stern, president of the Service Employees International Union, who has been pushing the idea of partnerships among workers in different countries as a way to bolster the waning clout of U.S. unions. "The longshoremen were way ahead of their time."

Mr. Stern's union, whose members include health-care and building-maintenance workers, has set up operations in 10 countries outside the U.S. and is funding joint labor drives with overseas partners, since most large companies are now global operations.

With goods flowing in and out of the U.S. totaling about $3 trillion last year, dockworkers are a vital cog in the engine of global trade. On the West Coast, which handles rising trade from Asia, ports handled more than 20 million containers (both loaded and empty) in 2005, more than twice as many as a decade earlier, and that number continues to rise. A work stoppage or even a slowdown on the U.S. docks would have ripple effects around the globe within weeks.

A glimpse of that was evident in October 2002 when the Pacific Maritime Association, which represents shippers and terminal operators, locked the longshoremen out of its 29 ports on the West Coast for 10 days amid faltering contract negotiations. Economists estimate the lockout cost the U.S. economy about $1 billion a day as ships idled offshore and trucks were backed up for miles on land.

"It took only four days before automobile plants were shutting down because just-in-time shipment of parts had exhausted themselves," says David Olson, a professor of political science at the University of Washington who specializes in the history of the longshoremen.

Stronger Position

The lockout left the longshoremen in a stronger position than ever. The ports won the right to implement new technology, such as new software for designing how containers are filled and global-positioning-satellite-system technology for tracking cargo. But the longshoremen got the right to run that technology, with no loss of jobs other than through attrition.

The longshoremen's power is sure to be tested as shipping lines further consolidate and big retailers like Wal-Mart Stores Inc. continue to push for cost cuts in their supply systems. Nonunion ports, especially in Mexico and in states like South Carolina with laws that limit union power, are trying to pick up more cargo from Asia. Kansas City Southern Railway has assembled a rail line from Mexico's port of Lazaro Cardenas to the Midwest that major importers have expressed interest in using, according to a study by the University of California, Berkeley.

Another potential problem: The ILA is being threatened with possible federal oversight because of alleged affiliation with organized crime. Federal prosecutors in New York have filed a civil racketeering case against some senior union officials, naming the ILA itself as a nominal defendant. Howard W. Goldstein, an attorney for the union, which is seeking to have the case dismissed, said the ILA has taken steps to ensure that organized crime or any wrongdoing is addressed by an internal system.

Still, labor and economic experts say cutting out the union-dominated U.S. ports would prove difficult and that much of the development south of the border is due to backups at West Coast ports caused by the enormous flow of goods. Also, the longshoremen have prevented nonunion U.S. ports from landing lucrative work unloading shipping containers: Shippers that sign master contracts with the longshoremen aren't allowed to use nonunion workers without obtaining clearance from the union.

According to the Pacific Maritime Association, average earnings for full-time longshoremen working 2,000 hours a year are $123,464. Foremen make about $192,463. By comparison, the Center for Automotive Research estimates the average United Auto Workers member at one of the Big Three earns about $74,500 a year, based on 2,000 hours of work.

Applicants -- even college graduates -- are clamoring for these longshore jobs. When the Port of Los Angeles needed to fill 3,000 jobs in August 2004, more than 300,000 people applied for the positions, which were awarded via lottery.

Some workers find the docks are an improvement over their professional careers. Marquette Map, 35 years old, was laid off from his engineering job at telecom company Nortel Networks Corp. in Atlanta. His father-in-law helped him get a longshoreman's job in Charleston. Now, he says, he makes more than he used to, and his hours are flexible enough to allow him to pick up his children from school.

For many, the image of a longshoreman, made famous in the 1954 film "On the Waterfront" starring Marlon Brando, is that of a rough-and-tumble, brawny man with a limited education. Back then, these jobs involved back-breaking work -- lifting 250-pound bags of coffee or moving 500-pound rolls of paper while avoiding being crushed.

Alonzo Grant, a 65-year-old longshoremen with 38 years on the Charleston docks, remembers the difficulty of moving bananas. "They'd come in on a whole stalk that you'd need two men to lift," says Mr. Grant, noting it had to be done without bruising the fruit.

Now, the longshoremen rarely move individual items -- just the containers that have revolutionized the shipping industry. The containers, 20- or 40-feet long and loaded with everything from socks to refrigerators, are moved using massive cranes. They were first introduced at the Port of Newark in New Jersey in 1958, and the longshoremen immediately identified them as a threat. Suddenly, the work of 21 men could be done by six.

In November of that year, the ILA began boycotting all ships carrying containers. It was largely a symbolic gesture, given that few such vessels existed. But the message was clear: The longshoremen wouldn't accept the introduction of containers without a fight.

An interim truce was reached in December, and a year later a plan was set in motion that would financially compensate the union for all container traffic. The container-royalty fee, as it became known, endures and assesses a $3-per-ton levy on containers coming into port, up to a certain tonnage cap. Last year, ILA members with seniority in Charleston, for example, each received a check for $16,500.

Even so, the issue of mechanization led the ILA to strike in 1962 and 1964, leading to a landmark contract that further bolstered the union's safeguards. In exchange for agreeing to work with containers and the massive cranes that move them, the ILA extracted unprecedented promises on job security and guaranteed pay.

"The container came at a time when everyone in America was concerned about automation, not just on the docks," says Marc Levinson, author of "The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger." "The thing that was unusual about the longshoremen was that they got compensation for the loss of their jobs, which most people in the economy did not."

Small Price

For shipping companies and port operators, such concessions were a small price to pay for the increased productivity containers would bring.

At the time, the West Coast was already doing something the East Coast longshoremen didn't adopt until the 1980s: negotiating master contracts that cover the union's whole territory. Doing so provided enormous leverage in negotiations and thwarted efforts by shipping lines to play one port off another on fees. By signing the master contracts, shippers essentially agreed not to call on any nonunion ports, under threat of a strike by the longshoremen.

Some basic realities of the job have helped strengthen the position of the longshoremen as well. The job, while not as physically demanding as it once was, is still dangerous, exposes workers to the elements and requires experienced operators for the heavy equipment. That makes it difficult to replace them during a strike or lockout.

Today's cranes are some 10 stories tall, with an operator sitting inside a glass-enclosed bubble that hangs down from a metal rafter. Using a joystick, the operators shuffle the huge containers like Lego pieces. "On a windy day, the wind will take the crane and start moving it," says Louis Cavana, an 18-year veteran of the Red Hook Terminal in Brooklyn. "If the boom hits the ship, it could collapse." Cranes usually have to be shut down when winds exceed 50 mph, he says.

The longshoremen can count on the support of other unions in contract talks. During the contentious 2002 negotiations between the ILWU and the Pacific Maritime Association, representatives from other unions flew to California to sit in on meetings and attend rallies. At one meeting, James Hoffa Jr., general president of the International Brotherhood of Teamsters, said, "If you pick a fight with the ILWU, you're picking a fight with the Teamsters. Just so you know."

International connections also proved pivotal in a 1999 fight in Charleston between the union and Nordana, a Danish shipping line that sought to shift its work to cheaper, nonunion labor after 23 years of working with the ILA. South Carolina, a right-to-work state, also has nonunion ports.

ILA members picketed Nordana's ships when they pulled in to shore. During one incident in January 2000, hundreds of state police officers turned out to end the boycott, and a melee broke out near one of the docks.

Five longshoremen were arrested for inciting a riot. Dubbed "the Charleston Five," they became a rallying symbol for workers at other ports who believed Nordana was trying to break the union's stronghold.

When longshoremen in Spain refused to offload Nordana ships that had been loaded by nonunion laborers in the U.S., Nordana folded and renegotiated its contract with the ILA.

Eventually, the state also gave in when it came time to try the five workers. With union members on the East and West coasts, Australia, South Korea and elsewhere threatening an International Day of Action that would shut down ports around the world, the state dropped the most serious charges in November 2001. The men pleaded guilty to misdemeanors and paid $100 fines.

"This is a unique industry," says Leonard Riley, also a Charleston dockworker. "The importance of having labor peace holds a lot more significance than if it was a private company."

Write to Anne Marie Squeo at annemarie.squeo@wsj.com