Del Monte to shift port cargo from Camden to Gloucester

In a move that changes labor dynamics on the Delaware River, Del Monte Fresh Produce Co. is shifting 75 ships and a half-million tons of banana cargo annually out of Camden and south to privately owned Gloucester Terminals L.L.C., which employs less-costly labor.

The switch is seen as devastating to the International Longshoremen's Union, which says it will lose 200 to 300 jobs, or 400,000 ILA labor hours a year on the river.

Although Del Monte's lease does not expire with South Jersey Port Corp. until 2020, its labor agreement with Delaware River Stevedores, which employs ILA workers in Camden, expires at the end of this year.

Six weeks ago, Del Monte challenged DRS and the longshoremen's union to come up with about 25 percent, or roughly $5 million, in wage savings, said Robert Palaima, president of Delaware River Stevedores.

Del Monte also asked South Jersey Port Corp., which runs the Broadway and Beckett Street Terminals in Camden, to come up with changes.

"Both South Jersey Port and the ILA delivered big-time with a concession package," said Palaima, who received formal notice Friday that Del Monte will move in October to Gloucester marine terminal, owned by the Holt family.

Leo Holt, whose family also runs Packer Avenue Marine Terminal in South Philadelphia, said Del Monte's move had "nothing to do with labor, and everything to do with having a facility that is up to the modern levels of capacity and abilities" Del Monte needs.

Vessels entering and departing the pier at Camden's Broadway Terminal must be accompanied by two tugboats, and they are restricted by the Coast Guard as to times they can go in, and come out, of the berth, Holt said.

"At Gloucester, they will use one tug to dock, and none to depart," he said. "This reduces expense 52 weeks a year as it relates to tugboats. It boils down to technology. It's about a modern facility and opportunity for growth."

Del Monte's vice president for port operations, Tim Albano, did not return telephone calls seeking comment.

ILA leadership said wages figured into Del Monte's decision.

James Paylor, an ILA vice president, called Holt's labor rates "inferior" to area and industry standards. "They have some employees at $16 or $17 an hour with some benefits, but others work for $12 an hour and have no benefits," Paylor said. "Unheard of in our industry."

Workers at Gloucester Terminals are members of the International Dock Workers Union No. 1, a Teamsters local, or the International Association of Machinists.

Holt would not discuss hourly rates, saying only "it's nowhere near what Jim Paylor asserts. It's nowhere near $12."

Palaima countered, "Don't dishonor the union movement by saying that's a union facility."

"We were asked to give them $5 million in reductions, and we did," Paylor said. The ILA agreed to drop its $31 hourly rate for container-ship work to $22.50 and cut a $24.50 hourly rate for break-bulk cargo work to $22. Terminal workers are paid $21.50.

"It was very painful," he said. "I had people literally in tears, talking to me at the pier. This is something that will affect the industry as a whole."

Paylor has requested an emergency meeting of the ILA international executive board "to determine what our steps are going to be, including having Del Monte products blacklisted nationally."

"I will be calling for a public investigation of all port activities," he said, "because this harms not just families but an industry on the Delaware River."

Joseph Balzano Sr., executive director and CEO of South Jersey Port Corp., said: "We did as much as we possibly could to continue our mutual agreement. Unfortunately, Del Monte decided the reductions were not enough."

Del Monte will meet lease obligations of $1.4 million a year to the South Jersey port until 2020, Balzano said.

Some say a shift in labor costs could make the Delaware River more attractive to other shippers, because rates would be lower.

The ILA dominates longshoremen work in seaports across the country. In Camden, Philadelphia, and Wilmington, the ILA works 1.5 million to 1.6 million labor hours a year.