A year ago Longshoreman Fred Frampton used to bring his 4-year-old son along most mornings when he reported for work at the union hiring hall because he knew his chances of landing a job were just about nil.
Mr. Frampton's son doesn't get to tag along very much these days, because his father is working pretty steadily on the docks.
"It feels good to be working," Mr. Frampton said recently as he broke for lunch after a morning of loading steel pipes on a ship.
Mr. Frampton's fortunes began to change in April when he and the 16 other members of his crew went to work for Universal Maritime Service Corp., the newest stevedoring company in the port.
Since Universal, based in Jersey City, N.J., began operating in Baltimore a little more than a year ago, its business has grown dramatically. A sister company of Maersk Line, Universal started out handling the cargo carried by Maersk ships, but Universal has doubled its business by landing a succession of new accounts.
Stevedoring companies load and unload ships, manage dockside storage areas and document the movement of cargo as it arrives at the docks or is released at the pier for delivery to inland points.
Universal's success comes as many other port businesses struggle because of the general decline of the port, compounded by the recession. "Anyone who opens a business like this doesn't expect to make a profit in the first year," said Anthony A. Chiarello, the Universal assistant vice president in charge of the Baltimore operation. "We were all pleasantly surprised."
And the entire port is benefiting from Universal's results.
Universal's profit potential was a key to Maersk's recent decision to sign a contract that will keep the Danish company's ships coming to Baltimore for 10 years. Because Maersk is the most important container line in the port, that contract with the Maryland Port Administration will stabilize a big part of the port's business. And it represents a vote of confidence in the long-term future of Baltimore.
Steamship lines and shippers say they are attracted to Universal by its aggressive pricing and customized service. The result has been a much more competitive atmosphere among stevedoring companies. Rates have dropped significantly, thereby lowering the cost of moving cargo across the state's piers, according to Michael Angelos, deputy director of the Maryland Port Administration.
"There's no question it has lowered the cost of doing business in the port. Wherever there's good competition, that's the inevitable byproduct," Mr. Angelos said. He added, "They're part of the optimism we all feel."
Not everyone is happy about what Universal has accomplished under Mr. Chiarello. Other stevedoring companies are shaking their head over their diminishing profit margins, and have nicknamed Mr. Chiarello "low-ball Tony."
You could say that Mr. Chiarello began his preparation for his current job on the day he was born 35 years ago into a family that operated a stevedoring company in Brooklyn, N.Y. Mr. Chiarello's grandfather and his six brothers started the company at the turn of the century. And the next generation, Mr. Chiarello's father and three brothers, ran it -- American Stevedoring Co. -- while Tony was growing up.
Yet it was far from certain that Tony would follow in their footsteps. In fact, his father and uncles tried very hard to dissuade him from a career on the docks.
He recalls as a child visiting the docks with his father and encountering some longshoremen. "They asked if I would be the boss," Mr. Chiarello said. His father responded angrily. "He said he'd do everything in his power so that I would not be." About 1970, the family sold American Stevedoring. By one of life's little ironies the buyer was Universal, which at that time had not yet been purchased by Maersk.
In college, Mr. Chiarello decided that maybe his father and his uncles were right. "It was always stressed there are easier ways to make a living," Mr. Chiarello said. He graduated from Villanova University in 1977 with "the full intention of going to law school," but somehow it never turned out that way.
"Once you get this industry in your blood, it's difficult to get away from it," he said.
After a year of graduate school, he married and took a job in Baltimore with a friend's construction company as a mechanic and machine operator. At the end of another year he was ready to do something different. He considered law school but instead took a job as management trainee for International Terminal Operating Co. Inc. in New York. Within a year, he was back in Baltimore supervising ship-loading operations for ITO.
After seven years with ITO, Mr. Chiarello moved over to the Maryland Port Administration, where he rose to be deputy director under Brendan W. O'Malley, the MPA chief who stepped down last spring after two turbulent years in the post.
In 1989, Mr. Chiarello was one of the leading candidates for the job of port director but lost out to Mr. O'Malley.
It's perhaps characteristic of his self-confidence that Mr. Chiarello thinks he could have succeeded in the job of port director despite the turbulence of that period. "I still think they made the wrong decision" in selecting Mr. O'Malley instead of him, Mr. Chiarello said.
He left the MPA in August last year to take the job with Universal. At the MPA, part of his job had been to sell the port of Baltimore to steamship lines around the world. That marketing experience, plus his extensive experience with ship operations gained during his days at ITO, made a formidable combination when the time came to sell Universal's services in Baltimore.
Levant Line began using Universal's services when its ships began calling in Baltimore last April. After five months the line was happy enough with Universal to sign a one-year lease agreement in September.
David Alouf, Levant's executive vice president, said the satisfaction had as much to do with the personal service rendered by Mr. Chiarello as it did with price. "I feel more close to Chiarello than to many other stevedores we've done business with for a very long time," he said. "We do get what we need."
Mr. Chiarello estimates that the increased competition created in the last year by Universal's presence in the port has resulted in about a 5 percent to 10 percent reduction in the cost of moving a container across the docks in Baltimore.
While costs vary according to the circumstances of an individual steamship line, Mr. Chiarello estimates that stevedoring costs average about $175 a container. That represents the cost of getting the container off the ship, storing it in the terminal and checking it out the terminal gate for delivery to the customer.
Based on the 5-10 percent savings cited by Mr. Chiarello, it costs about $13 less to move a container through the port than it did a year ago. That's a considerable sum for steamship lines that move thousands of containers a year.
Some of Universal's business is coming from new customers to the port, lines such as Companhia Maritima Nacional and Levant Line and shippers such as U.S. Steel and Louisana Pacific. Pittsburgh-based U.S.Steel has been shipping steel pipes and coils manufactured in plants in the Midwest. Universal attracted that business to Baltimore as part of a joint venture with Cooper T. Smith Stevedoring, based in Mobile, Ala. Louisiana-Pacific Corp., based in Portland, Ore., has been bringing wallboard to Baltimore on barges originating in Halifax, Nova Scotia.
That's a boost for all the port interests: the pilots who guide the additional ships to the port, the tugboats that dock them, the long shoremen who unload them, the agents who represent their interests in the port, the customs brokers who expedite the movement of the cargo and the truckers and railroads that move it inland to its destination.
But not all the port interests are cheering.
In addition to business new to the port, Universal has also grown by taking lines that were already in Baltimore away from competing stevedoring companies. From Ceres Marine Terminals Inc., Universal lured away American Transport Lines Inc., Lloyd Brasileiro and D.B. Turkish Cargo Lines. From ITO Corp. of Baltimore, Universal captured Safbank Line.
Universal has grown so fast that in a year it has gone from the bottom to the top of the heap. In the last few months, ITO has gone from the No. 1 stevedoring company in the port to No. 3. That shift occurred when Atlantic Container Line, one of the very biggest lines in the port, shifted its business to Ceres. Universal, on the strength of its fast growth, now is vying with Ceres for the No. 1 ranking.
"I wouldn't be surprised if we're the largest," Mr. Chiarello said. "With Ceres having ACL, it would be pretty close."
The long-term leases with the MPA signed by Maersk and Universal will give Universal control over its own terminal in the port. Universal expects to achieve economies of scale and to install computer technology that will make the Baltimore operation more efficient.
Even without those efficiencies, Universal has been successful in its first year in large part because of a high productivity rate from its workers and a good safety record, Mr. Chiarello said.
The contract with the International Longshoremen's Association sets the crew size for most jobs. Consequently, all stevedoring companies have essentially identical labor costs per hour. However, how much any crew produces in an hour can vary a great deal. That's one area where Universal has been able to reap benefits.
"We've shown we can outproduce the competition," Mr. Chiarello said.
He objects to charges that Universal has set prices unrealistically low to attract business, saying, "We're not in business to lose money." He expects that Universal will continue to grow rapidly in the next year, if not at the phenomenal rate of the first year. "I think we're still right in the midst of a major growth," he said, predicting that in the coming year the business will grow by at least 50 percent.
Universal had the advantage of inheriting the work crews, or gangs as they are called on the waterfront, that had worked for Universal's predecessor, Maersk Container Service Co. The MCSC did not work for any steamship line except Maersk. But Maersk as the leading steamship line in the port provided a steady stream of work for those crews.
"They were getting as steady a bite as anyone in the port," Mr. Chiarello said. That meant the crews -- and perhaps most importantly, the crane operators -- were able to keep their skills honed. That meant Universal could count on good unit costs in bidding for new business.
Mr. Chiarello said he made a point of meeting with the gangs early on to impress on them the importance of their productivity if labor and Universal were to prosper. The message seems to have struck home.
John Leichling, the ILA leader of Mr. Frampton's gang, said, "If they don't make it we don't make it."
Mr. Leichling said his men had been averaging only about 12 hours of work a week before they joined Universal in April. Now that figure is up by about 50 percent. And of late they've been doing even better. A few weeks ago they logged 36 hours.
The port is not nearly as busy as it was a decade ago, but Mr. Leichling sees some hope that things are at least moving in the right direction now. And Mr. Leichling attributes much of the change to Mr. Chiarello.
"I've know Tony for years. He was always a go-getter," Mr. Leichling said.
Mr. Chiarello says he has just begun. Taking what he learned at his father's side, at ITO and the MPA, he is pushing hard to win more business for Universal.
"I think we caught them asleep," he said of the other stevedoring companies in the port. "The competition will get fiercer."