(Copyright 2008 Commonwealth Business Media. All rights reserved.) A critical shortage of skilled and unskilled workers has spurred the breakbulk-project cargo industry to action. Shippers, carriers and third-party logistics providers are banding together to develop and expand programs for recruiting, training and retaining new employees.
The project cargo industry is in the midst of a sustained boom, and shippers and carriers have precious little time to act as mentors or teachers, said Jerry Nagel, president and chief executive of Rickmers-Linie (America) Inc.
But there are few, if any, schools, courses or training programs that teach the unique skills and knowledge needed in the highly specialized breakbulk-project cargo niche. The job categories that are experiencing shortages - technicians, engineers, laborers, drivers, production operators and skilled manual tradesmen - comprise most of the industry's work force.
The labor and skills shortage has been building for a long time, said Capt. William Schubert, president of Houston-based consulting firm International Trade & Transportation Inc. and a former U.S. maritime administrator. When he stepped down from the Maritime Administration six years ago, more than 60 percent of his employees were within five years of retirement.
As the "gray heads" retire, the industry has to take the initiative to recruit and train young people, Nagel said.
Breakbulk and project cargo shipping are a science and an art. For example, positioning and stowing cargo affects the safety and efficiency of shipments, and it takes years to learn to do it correctly. "Whether (you are) a port captain in charge of loading and discharging vessels or scheduling shipments in an office, you have to understand the relationship between weights and measures," Nagel said.
Several changes are driving the skills and labor shortage. Near the top of the list are an aging work force and a culture of cost- cutting policies that have hurt employee retention and recruitment. At the same time, global competition for talent is heating up. By 2012, in the U.S. alone, there will be 6 million fewer college degree holders than the overall job market will require.
The skills shortage has affected the efficiency of project logistics worldwide. Experienced people are working double time. Engineering procurement contractors are being called out of retirement to manage projects. With few college or university courses devoted to breakbulk-project logistics, companies are forced to provide their own training - an expensive and time-consuming proposition.
Good training is essential because mistakes can be costly; entire energy or construction projects can be shut down if a glitch occurs in the supply chain. However, "right now, the only way to learn it is by doing it," Schubert said.
Historically, the industry's work force planning strategy has been to hire people away from the competition, Schubert said. That has proved unsustainable; what the industry needs now is to attract entry-level people who are willing to learn on the job.
The industry began to get serious about recruitment and training about four years ago, largely through the efforts of the Exporters Competitive Maritime Council, a group of engineering procurement contractors, known as EPCs, along with other breakbulk and project cargo shippers, forwarders and third-party logistics providers.
Schubert co-founded the Exporters Competitive Maritime Council about 10 years ago. Today, ECMC members are devoting much of their energy to addressing the skills and labor shortage. A number of plans are under discussion, including an internship program in which new employees would rotate through company departments to learn all facets of the business - from procurement, chartering and domestic and international freight to providing in-country services.
"We realized we needed to get younger folks into the industry and we needed to educate them," Nagel said.
High-tech industry has lured away a lot of young people who might otherwise have become engineers, said Grant Wattman, director of logistics at CH2M Hill, a $5 billion global engineering and construction firm known for its maritime infrastructure projects. The challenge is "the sheer number of logistics people needed as a result of the growth of the global economy," Wattman said.
To meet that challenge, CH2M is investing more in training and recruiting; attending more trade fairs; investing in certificate programs and Web-based training; developing internship programs; partnering with high schools, colleges and universities; and reframing human resources as a capital investment instead of a transaction-based activity.
Wattman is a member of the work force planning group of the ECMC and of the Logistics Institute, a certification body. CH2M is committed to bringing at least five university graduates into its procurement organization next year, he said.
The skills shortage has forced Fluor Mining and Metals in Vancouver, British Columbia, to modify its hiring and retention procedures, said Gonzalo Valdes, senior logistics manager. Fluor Corp., a Fortune 500 EPC with $14 billion in revenue in 2006, hires new college graduates with logistics experience but not necessarily in project cargo. For global projects, the company seeks out locals.
"We accept people from a wide variety of backgrounds as long as they are motivated to learn," Valdes said.
A career in the high-pressure project logistics industry isn't for everyone. Deadlines are unforgiving, and planning must be meticulous. Employees must be able to communicate with people at all levels of organizations, including their own. When projects are under way, weekend work is the norm. Employees may be asked to relocate to remote locations for long periods of time. Fluor has projects under way worldwide, including in the Andes Mountains at 14,000 feet above sea level.
"Each project is different, and things happen quickly," Valdes said. "It's hard for people from other areas of logistics to come in and perform well right away."
Fluor has increased its training and recruitment spending and is reaching out to the academic community. Last September, the company announced a $2 million contribution to Clemson Universi-ty to help create the Fluor Endowed Chair of Supply Chain and Logistics within the school's department of industrial engineering. The program will focus extensively on the logistics of capital projects.
"Supply-chain and logistics skills have become the lifeblood of the engineering and construction industry's ability to execute projects at home and abroad," Alan Boeckmann, chairman and chief executive of Fluor, said at the announcement ceremony. "By supporting this endowed chair at Clemson, we are ensuring that the next generation of engineers and procurement specialists are equipped with the knowledge to excel in our industry."
Rickmers has responded to the labor shortage by making training and mentoring a priority, Nagel said. The company has hired extra staff, a necessary step as it brings in inexperienced people and shepherds them to more responsible positions.
Nagel and his ECMC colleagues also have reached out to the Maritime Administration. The agency, which provides funds to the U.S. Merchant Marine Academy and state maritime academies, has the resources and expertise to help develop courses or modules in breakbulk and project shipping that could be integrated into existing logistics and continuing education programs.
ECMC members are also partnering with groups such as The Journal of Commerce. Nagel is leading an advisory group that is working with the JoC and Teledata Informatics Ltd., a global software services provider, to create a Web-based learning platform at www.breakbulk.com.
The interactive Breakbulk Institute, as it is currently called, will include an online course designed to provide sales personnel, rate clerks and other employees on the administrative side of the business with a basic understanding of how the industry works. The program is being designed with entry-level users in mind. Plans include a certificate for participants who successfully complete an online exam, the first such program specifically designed for the breakbulk and project cargo industry, Nagel said.
Planned modules also include a glossary of terms, maritime geography, documentation, legal and administrative processes, customs requirements, customer service, business protocols, and cargo handling and stowage. The modules will include quizzes, self- assessment exercises and refresher courses for more experienced sailors.
At The Journal of Commerce's annual Breakbulk Transportation Conference & Exhibition, senior executives have regularly complained that a lack of basic skills and knowledge have led to delays and cost overruns throughout the breakbulk-project cargo industry. Solutions are needed now, said Peter Tirschwell, senior adviser to the Journal of Commerce Shipper Group.
The first course could be rolled out as early as May, with a full rollout of the Web site later in the year. The advisory committee headed by Nagel met in January to begin the lengthy and intensive process of mapping out the curriculum and developing the course content, which is key to the program's success. "When you're asking people to pay for courses, they have to be good or they won't fly," Tirschwell said.
Online learning in the maritime industry is in its infancy, but it's definitely catching on, said Swapan Das Sarma, director of maritime education and e-learning for Tel-edata. With regard to learning, the industry faces a conundrum: It is steeped in a tradition of hands-on learning at sea, but continuing-education requirements force people to leave work to attend school, which drives many from the industry. "People don't have time to go back to school during working hours," said Sarma, former head of the Singapore Maritime University, the world's largest maritime school. "I feel this can be overcome by e-learning."
Teledata has been a pioneer in creating e-learning tools for the maritime industry. The company has developed a senior ship managers' program and a maritime logistics program for the Maine Maritime Academy. Good classroom teachers can't be replaced, Sarma said, but with a global skills shortage and a shortage of qualified maritime instructors, e-learning is not only cost-effective but necessary. "I'm hoping the next two years will see a really dynamic change in the industry," he said.
Current industry efforts are just the beginning, Nagel said. The industry needs to expand efforts to tell high school and college students about the opportunities in the maritime industry and the excitement of working at the cutting edge of global market trends and international commerce.
"We have to start hosting career days, go into the high schools and tell them about the maritime industry," Nagel said. "It will take time and dedication, but that's what we need."
My Research