They started small, handling irregular vessel calls at second-tier facilities in minor ports. But over the last two decades, stevedores that don't employ International Longshoremen's Association labor have become solidly established in Gulf and South Atlantic ports.
Pacorini USA is an example of how far they've come. The company is packaging its stevedoring with other logistics services to offer a turnkey shipping operation. Mario Casiano, the company's president, says the package that "Door-to-Door Logistics" service is normally offered only by brokers.
The innovation is the latests in a series by Trieste-based Pacorini Co., a family operation that specializes in warehousing metals traded on the London Metals Exchange. In 1993, Roberto and Federico Pacorini opened one of the first bulk coffee-processing and storage plants in the U.S. - Silo-caf, at the former public grain elevator at the Port of New Orleans. The bulk transport of coffee had prompted the Pacorinis to develop a high-tech, computerized system to clean and blend green coffee beans before roasting. The system offers higher consistency and greater speed than traditional methods.
In May 2001, another arm of Pacorini Co. entered the stevedoring business by purchasing the assets of Mari-trend Inc., a non-ILA operator. Pacorini took over Maritrend's lease and signed a 10-year agreement with the port as the warehouse and terminal operator at the Alabo Street Wharf on the Mississippi River downstream from the Industrial Canal. The company employs 45 people full-time and about 110 longshoremen on a daily contract basis.
The ILA approached Pacorini about using ILA labor when the company entered the stevedoring business, but was rebuffed. The New Orleans service, Pacorini's only stevedoring activity, is run by the company's vice president, Ed Stettinius, one of the original managers at Coastal Cargo Co.
Coastal, founded by Norcom Jackson and Mike Kearney, broke the ILA's monopoly on handling cargo at New Orleans in 1985 when it entered the stevedoring business with Teamsters union labor. Jackson and Kearney hired laid-off forklift and crane operators from the recently closed Kaiser Aluminum plant in Chalmette, La., to load and unload LASH barges in Harvey, La., across the river from New Orleans.
When Coastal began handling small ships at the port's Galvez Street Wharf, the company was hit with ILA pickets and a shortlived but bitter dispute that ended with a restraining order against the longshore union. Coastal's willingness to work without the ILA-imposed contractual guarantees made a big difference in shippers' profit margins, and in the 1990s the company expanded its operations to other Gulf ports.
Coastal's success spawned more non-ILA stevedores, including Stevedores Inc., which was founded by Stettinius and two partners in 1997. The non-ILA stevedores competed for breakbulk and bulk cargoes that weren't covered by the ILA master contract's "subscription agreement," which effectively restricts major container carriers to ILA terminals.
In ports such as Houston, the ILA fought back, pressuring port authorities to keep non-ILA stevedores off public docks. Non-ILA stevedores were relegated primarily to private terminals in Houston until 2000, when Montreal-based Empire Stevedoring, which had operated for 17 years at private terminals, leased space in the port's Turning Basin area. Empire's lease lasts through 2006, and each year the stevedore has met or exceeded its minimum annual cargo guarantee of 120,000 tons.
In recent years, the IULA has changed its strategy by emphasizing productivity and the stability of its work force, all of whom are drug-tested. Although container wages and benefits are the same in Atlantic and Gulf ports, the ILA has accepted rollbacks in wages and benefits for breakbulk and bulk cargoes. Even so, the ILA has had a difficult time reclaiming business lost to non-ILA competitors.
When ILA stevedore Transocean Terminal Operators purchased Stevedores Inc., it struck a deal with the ILA to operate the division as a hybrid stevedore classified as "ILA Lite," employing workers at special entry-level ILA wages and reduced benefits designed to compete with non-ILA labor.
"It created a backup work force for the ILA and a way to compete with non-ILA stevedores," said Dave Morgan, vice president of P&O Ports of Louisiana, which in 2000 purchased Stevedores Inc. and TTO, and also the unionized Gulf Services, New Orleans Marine Contractors, Baton Rouge Marine Contractors and Lake Charles Stevedores. "The benefit for the longshoremen is when they are not working for the ILA Lite stevedore, they can hire out for the regular ILA as casuals. It was also good for the ILA because it helped get a lot of younger, non-vested workers onto the rolls."
Stevedoring Services of America soon followed suit with Total Logistics Co., its own ILA Lite subsidiary.
Stettinius moved from P&O to Pacorini in May 2001 because "P&O was handling more and more containers and Pacorini was 99.9 percent breakbulk," he said. "New Orleans is the only place that Pacorini is both the stevedore and the terminal operator. It is a unique experience for them."
Pacorini had been importing bulk coffee to New Orleans since 1993 for its Silocaf storage facility and saw an opportunity to expand its handling of London Metals Exchange commodities. "Where we took a different track was to take the experience from all the businesses Pacorini operates and meld them into one," Stettinius said. "We offer collateral management; a lot of people do this completely brokering all the links of the supply chain. The difference between them and us is we have the work force and the assets to do it ourselves whenever possible."
Besides stevedoring, warehousing and terminal operations, Pacorini USA charters ships and barges for custom-ers, handling paperwork and managing quality control. The company has joint-venture agreements with 40 inland terminals. It also offers a packing-and-stuffing service, using P&O Ports labor.
"We are doing as much as the customer wants us to do," Stettinius said. "If a customer wants us to move 1,000 tons of coal from Brazil to Chicago, we handle the entire process. The things we can't do, such as customs clearance, we contract out. The bottom line is that the customer ends up with one invoice."
Pacorini's LME business involves approvals from multiple banks. So if a small trading company needs help with bridge financing, "we can be the bank's eyes and ears during delivery," he said.
"We are looking at the business from cradle to grave instead of just loading and unloading ships," Stettinius said. "We are doing it with some steel, and mostly the nonferrous metals like aluminum, zinc, lead, copper, nickel and tin. In Brazil, we are doing it with a nut trader buying cashews and selling them in Japan. We arranged the financing and delivery."
Stettinius said the process is common in moving bulk cargo, but Pacor-ini's innovation is offering the service with general cargo. The turnkey operation now accounts for as much as 20 percent of the New Orleans stevedore and warehouse operator's business.
"The ILA isn't going away, and neither are the non-ILA stevedores," Stettinius said. "There's enough work out there for all of us. I think the ILA's primary future is in containers. How much they remain in breakbulk will differ at different ports with different dynamics."