Job Descriptions and Departments: How Steamship Operations Are Organized
The second of a series of articles telling the part which systematized organization plays in the administration and growth of great American industries
BY CLEMENT ACTON GRISCOM, GENERAL MANAGER OF THE AMERICAN AND RED STAR LINES
In perhaps no other business is there required an organization so complex and far reaching as in the operation of a great steamship line. It draws its business from every corner of the earth; its operations are carried on at ports widely separated and under different governments; it constantly deals with peoples differing in language, monetary systems and methods of doing business.
Its various departments of necessity must exercise a large measure of independence and individual responsibility, and yet to be successful the whole organization must be closely welded, under a capable and far-seeing directing power.
Take the International Mercantile Marine Company, which, as the largest of its kind, serves to illustrate this point better, perhaps, than any other.
It operates a fleet of 140 steamships, sailing under three different flags, over a score of ocean highways, extending all the way around the globe. It has dealings with half a dozen different governments and with dozens of cities. each with individual regulations and port requirements to which it must conform.
One of its constituent companies alone — the White Star line — runs steamships from New York to Queenstown and Liverpool, from Boston to the Mediterranean ports, from England to South Africa and Austra!ia, by way of Cape of Good Hope, between England and Australia by way of Cape Horn. and from China and Japan across the Pacific to San Francisco.
Thus it traverses every important highway of the commerce-bearing seas and its vessels at any given moment are scattered all the way around the world. This, too, is only one of the six constituent companies in the International Mercantile Marine Company, which has vessels sailing regularly from Portland, Boston, New York. Philadelphia, New Orleans, Galveston and San Francisco.
While the steamship company occupies a vast field of operation, its work at the same time is one of infinite details. As in every other business, it is upon the proper organization and administration of these details that its success depends.
While its plan of organization and methods of doing business are perforce much like those of a great railway system, the problems with which the steamship manager must deal are by the very nature of the business peculiar to itself. He has no local traffic to consider, but deals only with through shipments and the factors that affect his business are international, rather than local or sectional.
THE ADMINISTRATIVE DEPARTMENTS OF A STEAMSHIP COMPANY
'I here are so many sides to the work of the steamship company that it is impossible to consider all of them within the limits of a single brief article. There is the financing of the company, with its heavy investments in floating stock—the modern steamship costs from one million to five million dollars, according to its size and speed—port terminals, offices and agencies.
There is the handling of its insurance, an important and interesting branch in itself. Coming down to the work of the company which more particularly concerns its relations with the public, however, its work may be classified as divided between three main departments, maintenance and administration, freight and passenger.
The whole subject might be covered under the two latter, since steamship lines exist primarily for the transportation of persons and commodities; but it will be more convenient and perhaps will give the reader a clearer idea to explain the operation of a steamship fleet independently of the methods of obtaining and handling freight and passengers.
The steamship manager has under his direction a certain number of vessels operating over fixed routes between certain ports, with regular dates of departure from each of these ports. It is his duty to see that this schedule is regularly maintained, since the announcement that a steamer will sail on a certain date is in the nature of a promise to the traveling public and the business world.
He must see to it that his ships are kept in good condition to perform their work, that they are properly officered and manned and provisioned, and, finally, he must see to it that they carry as large a complement of freight and passengers as conditions will permit., since this is the source of the earnings which the company's balance sheet should show at the end of the year. The latter consideration is the one with which the freight and passenger departments are directly concerned, so the former will be considered first.
The big Atlantic liners ordinarily spend about half their time at sea. During the other half they are in port on one or the other side of the ocean, undergoing the overhauling, cleaning, provisioning, unloading and loading that are necessary between voyages.
For instance, the steamships of the American line which ply between New York and Southampton make one round voyage each month. As the trip between these two ports occupies exactly a week, it will be seen that their time is evenly divided, each vessel spending alternate weeks at sea and in port.
In one sense a vessel is unproductive property while she is not at sea, but the work that is carried on in port is so essential to her efficiency and earning capacity that it is in reality as important as the actual voyaging which she is paid to perform.
The work of operating steamships both at sea and in port is divided and subdivided into departments. The organization is much the same in all ocean steamship companies, but for the purposes of illustration, I will use that of the American and Red Star lines, with which I am naturally most familiar.
THE ORGANIZATION OF THE WORK ON SHIPS IN PORT
When one of our liners, as the Philadelphia or St. Louis, arrives in New York, each of the various departments is in readiness to undertake its particular share in the work of unloading and overhauling and preparing her for another trip.
First of all, of course, comes the discharging of the mails and of passengers and their baggage. This is a comparatively brief operation, and as soon as it is completed the dock superintendent, who has charge of the work of handling cargo, takes charge of the ship.
He has from 150 to 300 longshoremen in waiting, and these are subdivided into squads, each under the direction of a foreman. They remove the hatches, rig the booms and falls, and begin the work of swinging the ship's cargo out upon the pier. As soon as a few compartments are emptied and cleaned, the work of putting on board the outgoing freight that is piled up on the pier or lying alongside on lighters begins and goes on at the same time with the unloading.
Simultaneously coal barges are ranged on both sides of the vessel and the coal gang begins the laborious task of filling the liner's bunkers with the fuel which will carry her across the Atlantic. Thus the operation of relieving the ship of her incoming freight and providing her with outgoing cargo and fuel goes on at the same time.
Meanwhile the marine superintendent has set his men at work cleaning the decks and overhauling the deck machinery, inspecting the boats and painting the ship from water line to mast head, an operation that has to be performed between every two round voyages.
Down in the engine and fire-rooms the suprintendent engineer has a force of skilled workmen employed in overhauling and cleaning the engines, scraping fire bars and inspecting every screw and bolthead to see that every part of the propelling mechanism is in perfect condition. "Spares," or duplicate parts of machinery, are kept constantly on hand, so that almost any part of the mechanism can be removed without delay.
THE SYSTEM USED IN " STOCKING UP " A LINER.
In the steward's department men are set at work immediately upon the ship's arrival to clean the woodwork and upholstery, sort out the thousands of pieces of soiled linen for the laundry, and to put every part of the passenger quarters into shipshape condition for the next trip.
The chief steward, who has charge of the ship's housekeeping arrangements, makes report to the port steward of the exact amount of food supplies consumed during the voyage, and presents a detailed inventory of the amounts of various kinds of provisions left on hand.
A requisition sheet is then made out, on which the amount of fresh supplies necessary for the forthcoming voyage is set down. It is a somewhat difficult matter to decide how much of the different kinds of provisions which the modern menu demands will be required for a steamer sailing several days hence, but the port steward, in making his allotment, is governed by his experience and by detailed statements from previous voyages, which are carefully kept on file, giving attention also to the season of the year and to the number of passengers the ship is likely to carry.
Of course, a food supply two or three times that necessary to meet the actual needs of the average voyage is provided, so that the possible emergency of an unexpected delay will not find the vessel unprepared.
The vast amount of food consumed on an ocean steamship during a trip across the Atlantic has been written about so frequently that it does not require mention here, except to say that the purchasing of the tons of beef and thousands of bushels of potatoes and the other necessaries and luxuries is a part of the port steward's duties, and he must see that these are delivered on board and safely placed in the storerooms and refrigerating chambers before the steamer sails.
These activities continue up to the very moment when the steamer leaves her pier, and by that time the cost of her stay in port, of unloading and loading and provisioning her, of painting and cleaning and making necessary repairs, has amounted to from $10,000 to $15,000.
This is aside from the cost of coal, which varies greatly not only with the speed of the ship, but between different vessels of practically the same size and speed. Thus the cost of fuel for a round voyage of the various Atlantic liners will run all the way from $15,000 to $25,000, and is quite the heaviest single item in the steamship's operation.
When one adds to this the wages of officers' and crew, numbering from three to four hundred, the cost of repairs and insurance and port charges, and multiplies the result by the number of steamships in a fleet, not forgetting to count in the cost of maintaining port terminals, offices and agencies, it will be seen that the expense of operating a steamship line is necessarily a heavy one, and that the careful systematization of its many branches of work is essential to its successful conduct.
The American and Red Star lines run their steamships from New York, Philadelphia and Boston, on the American side, to Southampton, Liverpool and Antwerp, on the European side. In each of these cities the operating department maintains separate branches and the work of handling the ships in port and preparing them for their voyages, which has been outlined hastily above, goes on constantly and simultaneously in all of them.
The work of this department presents itself as a series of individual tasks, which are entirely distinct, though each one follows the same general routine.
Not so the work of the freight and passenger agents. While steamships come and go, whether lightly or heaily laden, the work of the company's agents, scattered all over Europe and America, goes steadily on. They are booking passengers, perhaps for tomorrow, perhaps for the vessel sailing six months hence, and securing freight, perhaps a yearly contract from some big exporter or importer, or perhaps a small consignment for the next steamer. The sum total of results accomplished is the main consideration with them.
In the case of any steamer sailing from an American port, both her passengers and cargo are likely to represent nearly every section of the country, from the Atlantic to the Pacific; but the organization required for securing these is considerably different in the case of freight from what it is in the case, of passengers.
Most of the heavy shippers of freight have departments in one of the principal cities to handle this branch of their business, while of the remainder the greater proportion is in the hands of brokers and commission men, or is shipped on through bills of lading from inland points; that is to say, direct from Kansas City or Chicago to Southampton or Antwerp. In this case the representatives of the railway lines are the persons with whom the steamship company's freight agent must deal.
METHODS OF SECURING AND HANDLING FREIGHT SHIPMENT ORDERS
Thus the freight business is largely concentrated at a few points. In addition to the main offices in the ports from which its vessels sail, the company maintains freight branches in Chicago, Kansas City, St. Louis and Minneapolis. Much of the business of securing cargo for European shipment is transacted on the New York Produce Exchange and among the big exporting houses of the city.
For example, the company's freight representative in the course of business on the exchange will contract to carry a hundred thousand bushels of grain to Antwerp. The arrangement is a verbal one, but is confirmed by the shipper at the end of the day in a letter to the company. The transaction is then entered into the books and at the proper time the shipper is notified to deliver the grain on a specified date to a certain steamer.
There is no red tape or unnecessary machinery in carrying through the transaction. A great deal of the freight business is governed by yearly contracts. For instance, the great beef exporting concerns of Chicago and New York will contract for a certain amount of refrigerator space in each steamer of a line for a year, and this is at their disposal to utilize for their products as the foreign demand requires.
The westbound freight, made up of imports to America from Europe, is, of course, very different in its nature from that which is carried by the eastbound steamers. It is largely made up of manufactured goods and materials for manufacture, and the business originates partly among the importers in this country and partly among the European exporters, so that the freight agents have to watch both classes on both sides of the Atlantic.
A very large part of this business also is handled by yearly contracts with the large shippers, such as the great wholesale and department houses, and the freight agent therefore concerns himself largely with the renewal or securing of these contracts, although, at the same time, he keeps a sharp eye out for the smaller transient business.
The two classes of freight, moving in the two directions, are so distinct in their character and sources that the steamship company maintains at each end of its line eastbound and westbound freight agents, each of whom concerns himself wholly with the shipments traveling in the one direction, beside the general freight agent, who is in charge of the entire department.
THE FAR-REACHING PASSENGER TRAFFIC ORGANIZATION
In the passenger department the working field is much larger. The person who is planning a trip abroad usually likes to arrange the matter in a personal interview, and the result is that every city and large town in the country is a center from which passenger traffic is drawn in a greater or less volume.
Many passengers, of course, write direct to the main offices of the company and arrange their trips in this way, but the local passenger agent is of vast importance to the steamship company and books the larger part of the business. This applies specially to third-class travel, by far the greater proportion of which, on both sides of the Atlantic, comes through these local agents.
In its various departments of passenger travel the company is brought into relations with no less than six thousand agents. Some of these may book no more than a score of passengers in a year, while others send in dozens for every steamer; but they are all part of the system, and must be kept supplied with literature, sailing lists, schedules of rates, and all the information likely to be demanded by prospective passengers.
In the case of first-class passenger business, a certain number of staterooms from each steamer are assigned to the agents in each of the important cities, while the agents in small towns reserve accommodations by telegraphic communications either with the main office or the district agent.
One respect in which the system of keeping account of business in use among steamship companies differs from that followed by railroad lines arises from the individuality of the ocean liner. A railway company does not attempt to compute the earnings of each of its individual trains, but the steamship company keeps a careful record of the revenues and expenses of each of its liners. To this end a comprehensive system of reports covering every phase of its activity is in use.
KEEPING THE COST AND INCOME RECORD ON EACH SHIP
When a steamship comes into port the purser reports to the passenger department his receipts and expenditures during the voyage. The amounts received in passage money from first, seond and third class passengers is reported to the heads of these departments and by them submitted to the general passenger agent.
Similarly the records of the freight department show the amount of cargo and the receipts therefrom, and the chief steward's report shows the amount of food consumed and every detail connected with his department. When the ship sails again, each department has detailed reports showing the amount of cargo and the number of passengers on board, the cost of unloading and loading her, the amount and cost of provisions and coal with which she has been supplied and the precise nature and expense of the repairs and overhauling which she has undergone.
These reports are summarized and kept on file in the various departments, so that they are available for the use of the manager at any time. They are especially valuable in showing the earning power of the different classes of vessels in the fleet, the volume of traffic from different ports, the relative proportion of cargo and passenger earnings, and many other points likely to have an important bearing upon the conduct of the business.
For instance. if a company plans the construction of a new vessel it may become an important question whether this should be a very fast ship, designed especially with an eye to passenger business, or a craft of moderate speed and large cargo capacity, designed to support herself chiefly by freight revenues. The records of the different vessels are valuable then for the light they throw upon this question.
The kind of business that a steamship is to handle is fixed to a great extent by the type which she represents. For instance, the fast express steamers of the American line, as the St. Louis and St. Paul, like express trains, carry shipments of goods that are perishable or particularly valuable, and in the transportation of which there is a demand for speed, while the larger and somewhat slower boats of the Red Star line carry a great amount of bulky cargo, such as grain, steel and machinery.
Among the longshoremen, the freight shipments of the express steamships, which are made up of a large number of small packages, are designated as "toothpick" cargoes.
In the swifter vessels the proportion of passenger to freight earnings is naturally larger. There are some steamships running between New York and European ports which probably derive 90 per cent of their earnings from passengers, while others, including some that carry large numbers of passengers, too, derive not more than 25 per cent of their revenue from this source, and still others, among which are very profitable ones, carry no passengers, but depend entirely upon freight.
As the cost of operation increases almost in geometrical progression with the speed, it often becomes a nice question in the construction of a new vessel how far to carry her development.
Not only are the detailed and systematic reports of each voyage of every ship of use to the steamship manager in this connection, but they enable him to keep in touch with every part of his far-reaching organization and to exercise an intelligent supervision of its various departments.
They enable him to learn the comparative cost of operating the same steamship on different voyages or different ships on similar voyages, and to trace the history of any of his steamships from the time they began service.
If there is an excessive breakage of dishes in the pantry of one vessel, an unusually large coal consumption on another, or a surprising falling off in the passenger business of a third, he can look into the matter and remedy it as a result of the bird's-eye view which he maintains over the whole system.
System Magazine, A Monthly Magazine Devoted to the Improvement of Business Method, Volume V, Number 2, February 1904, Pages 71-81.