It has been recently announced that naval officers will be examined in their promotion examinations on matters pertaining to the American Merchant Marine. An understanding of how our maritime business is administered ashore may be of assistance to the readers of the Naval Institute Proceedings who are unacquainted with this phase of the industry. The writer wishes to point out that these observations have been drawn from his own experience based on employment in a division of a company whose sole function is the carriage of petroleum and its byproducts. It must be remembered that the familiar tanker is the backbone of our Merchant Marine. On a visit to Port Arthur, Texas, in a heavy cruiser in 1934, officers were told by citizens of the city that the port was the fourth largest in the United States from the standpoint of total seagoing tonnage entering or passing through its harbor. Practically all of this tonnage was composed of tank ships.
The operation of tankers differs very little, from an administrative point of view, from that of luxury liners or combination freight and passenger ships. True, it is not necessary to worry about publicity or carry on advertising campaigns displaying the beauties of oceangoing vacations. Nor does the company usually have to go out and “sell” its services to shippers. Yet the same problems arise in regard to personnel and material, traffic, finance, and communications.
The accompanying chart has been prepared to give the reader a quick perception of how the shore staff operates. In the language of personnel men, it is a typical “line and staff” form of business administration. The terms line and staff are practically synonymous with those of naval parlance. It will be noted by reference to the chart that the General Manager of the Marine Department heads the entire organization. He is the “Old Man”—the Boss. Some shipping companies call him a “President” and give his division heads the titles of “Vice Presidents.” In this company, the division heads have been termed “Managers” of their respective divisions.
Each Division Manager acts in a line capacity to the General Manager. Each Division Manager also has a staff of assistants and although they act in a staff capacity to him, since there are many special skills and knowledges involved, for purposes of administration they are in a line setup. All Division Managers work out their own problems and the whole organization works as a unit to avoid duplication of functions with attendant delay and added expense. The fact that about 250 persons (and this includes everyone from the General Manager down through to the newest office boy as well as operations personnel in outports) administratively operate a fleet of 75 privately owned vessels, about 30 more on time charter, and a large number of ships on voyage charter, speaks for itself. The reader may now delve into the workings of each department.
Construction and Repair Division
This department is vested with complete responsibility for preparation of
plans and specifications for new construction and its supervision at the shipyard during building and trials until the ship is finally accepted by the company. It also supervises and directs maintenance and repair work. Vessels are surveyed and work specifications are prepared. Contracts are awarded and the work inspected until it is satisfactorily completed. To clarify its dual functions, the department is divided into a Construction Section and a Repair Section. It is interesting to note that the usual time required to build a tanker for final acceptance is about 12 months from the time of laying the keel, tankers in service go into a repair yard about every 6 months for a week’s lay-up for necessary repairs in about the same mlanner that naval ships go to navy yards for overhaul periods. Each ship also has an annual Federal inspection in addition to Constant inspections by the port staffs.
Finance Division
This department has complete responsibility in all matters pertaining to insurance of hulls and cargo; disburses money and collects it and this includes the payment of seagoing personnel which must be done every time the ship “pays off” at the termination of a voyage for which the men have signed articles. It does the accounting and keeps statistics for determining costs. It maintains the office service section for the home office and keeps all Records of office personnel. To facilitate its functioning, the department is subdivided as follows:
- Insurance Section.—Responsible for all disbursements, collections, accounting and checking in connection with the Marine Department’s activities.
- Accounting Section.—Maintains records and issues reports covering budgets, costs, freight fates, estimated earnings and expenses, statistics Pertaining to tonnage, shipments of cargo, and marine and indemnity insurance. Also prepares charts and new forms used in connection with the financial activities or any activities of the Marine Department. Keeps an account of all ship’s pay rolls.
- Office Service Section.—Maintains the stenographic service and looks after all mechanical duplication of paper work such as mimeographing, etc., which is not actually done in this section. Handles cables, telegrams, radiograms, mail for the home office and all the ships and outports, and keeps a large staff occupied with an elaborate filing system for the whole Marine Department. This last not only saves space in individual offices, but tends towards a more centralized core for final and “live” handling of paper work. This section has constant knowledge of where every file folder is at any time. It also orders and keeps a full supply of office equipment on hand of every nature and supervises the adoption, revision, or cancellation of the various printed forms used in connection with all paper work of the Marine Department. The Finance Division Manager is the “office manager.”
Medical Division
This department is vested with complete responsibility for the physical examination of all applicants for employment, both ashore and afloat. It gives advice to all employees regarding their health. It looks after the medical features of company plans for employee benefits and annuities. It inspects medical facilities of all vessels and keeps medical supplies filled under the supervision of the captains of the ships. It conducts inspections of the company’s ships to determine sanitary conditions and makes reports of its findings to the management, including recommendations for corrective measures. It maintains supervision from a medical standpoint of food supply for the ships and passes on such matters as supply of fresh milk to the crews on ships at various outports. Through the company’s agents, there is liaison with medical facilities at the various outports so that local doctors are used when needed. This division also keeps close contact with the U. S. Public Health Service and follows up on cases involving hospitalization of company’s seagoing personnel.
Operating Division
This department has complete responsibility for the physical operation of all vessels owned and chartered by the company. Its functions are divided among various sections. It should be noted that agents at outports must act in complete accord with all divisions so that the ship maintains her itinerary as planned by the home office. When delays occur, the outport agents notify the home office for further instructions which are generally sent by a quick method of communication such as telephone, telegram, cable, radio, or air-mail letter.
- Port Staff— Consists of Port Captains, Port Engineers, and Port Stewards and their assistants. They contact the seagoing personnel directly either on board the ship or at the home office or outport office. They keep close watch over their respective divisions from every practical aspect to keep the personnel satisfied and the ships in a good state of upkeep and repair. They usually make recommendations for hiring the licensed personnel, recommend promotions or demotions, suggest transfers and the times of vacation, and are frequently required in labor relations work to negotiate agreements with unions and to smooth out grievances when “job actions” (strikes, “sit-downs,” and “quickies”) take place. These men are generally selected because of their wide seafaring experience, tact, good judgment, and executive ability and are usually former ship captains, chief engineers, and chief stewards. The port captains look after all personnel and material in connection with the deck department. Such matters as inspecting charts, compasses, gyros, and other navigational equipment, as well as deck gear, ground tackle, etc., come under their cognizance. They also inspect dock and harbor facilities and make recommendations for dredging, dock repair, etc. The port engineers look after the engine department and follow up on all maintenance work, repairs, and make recommendations for work to be done either on board by the ship’s force or at overhaul yard. This company maintains a machine shop in the home port which does constant overhaul work within its scope- The port stewards have the commissariat to look after. This not only includes buying food and preparing and inspecting menus, but also laundry service for bed linen and towels which are furnished the men, and the selection and training of cooks and stewards at the shore cooking school. At present, there is a “relieving staff” at the home port to handle port operations after the ships dock so that the licensed personnel and certain petty officers may be relieved of all duties during the stay of the ship in port. This group may also be used to fill vacancies in emergencies.
Operations Section.—Handles operations and movements of vessels, including arrangements for entering, clearing, berthing, towing, lighterage, loading, discharging, and fueling. All written orders to the masters of ships and agents or representatives at outports are prepared in this section. The usual practice is to assign an “operator” to several ships. He keeps a file on each ship and has her plans and specifications. He is well acquainted with the physical characteristics of each ship which he “operates” and knows what kind of cargo each one can best carry, their cruising radii, speed, fuel and water consumption, contemplated repairs or layups, and other special variables. The “Head Operator” checks all written orders for correctness before he submits them to the Operations Manager or his assistant for signature. Occasionally orders already delivered have to be changed when a vessel is at sea or at an outport. This is done by quick means of communication either directly to the captain of the ship by radio, or by telephone, telegram, cable, or airmail letter to the agent at the port where the ship will enter. The captain is then given new orders and the ship dispatched to the next port of the changed itinerary, if any. The “Dispatchers” at the home Port assist the port staff in carefully checking all details of loading or discharging and keep in constant touch with the ship by actually remaining on board or at the dock until she is ready to sail.
In this section there is an “Estimating Unit” which determines, insofar as posable, the actual costs of each voyage. Sometimes it pays the company to hire out its vessel if the charter rate offered is greater than the net which can be realized by the company’s own operation of the vessel. Needless to say, when the freight rates are “high” and there is a great demand for bottoms, the company has to hire outside vessels rather than rent any to outside parties. In times of slack business, the company maintains a sort of receiving ship to tie up any part of its fleet. This hulk is equipped to house and feed the skeleton crews required to maintain the vessels in a seaworthy condition.
- Ship’s Personnel Section.—Maintains facilities for hiring both officers and Unlicensed men either at the business office as in the case of officers, or at a ‘shipping office” near the water front for unlicensed men. These offices keep all records of personnel involved. An elaborate filing system is required so that it can be determined at any moment where any individual is if employed, or who he is in case he presents himself for re-employment. This section looks after annual vacations, sick leaves, transfers, annuities, insurance and retirement, and keeps the voluminous records necessary for this business. Although there is actual employment of about 2,800 unlicensed men at any one time, the turnover requires that about 9,000 men be hired each year, even though 80 per cent are former employees. Since the occupation of the seafaring man is filled with men of a type who do not as a rule go to sea every day in the year except for vacations, but take their own “layoffs” as the mood strikes them, the personnel section has some 50,000 individual records of former employees filed for constant reference. The number of Johnsons, Jensens, Christensens, Smiths, and Joneses is so great that these names are filed separately.
- Supply Section.—Keeps vessels supplied with stores of every description. Material is classified and catalogues issued to all ships so that material may be ordered by symbol designation. This section operates the storehouse and harbor lighter service in the New York area. Under the supervision of the port steward it maintains a constant laundry service, removing soiled laundry and placing on board the clean laundry. This applies only to linen furnished by the company.
Traffic Division
This department is vested with complete responsibility for handling of charters, rates, and allocations of vessels in connection with employment of the company’s fleet. It also charters or contracts for outside tonnage or space as necessary. It makes daily “nominations” of ships to handle certain cargoes and submits these nominations to the Operations Division, which concurs or not depending on conditions actually existing. A ship may need immediate repairs upon arrival; there may be a delay caused by labor trouble in an outport; bad weather or fog may hold up a ship from carrying out her scheduled itinerary. If the nomination is approved, the Traffic Division sets about allocating cargo and turns over the data to the Operations Division which then writes the orders previously mentioned. In this connection, a “slate” is prepared showing the requirements as against tonnage, and nominations are made from this slate. Requirements are usually known for about two (Concluded on bottom of page 568)