Statement by David S. Mackey, Interim CEO of Massport
A downturn in global maritime trade as well as over-capacity in the container industry caused the indefinite suspension last month of Conley Terminal’s new Suez Canal service from COSCO and its partners. With the loss of the Suez service, as well as lighter than anticipated container volume on other routes serving Boston, we anticipate a $12 million operating deficit at Conley Terminal this year. The Massachusetts Port Authority must take painful steps to reduce the deficit by 30 percent. This will be accomplished primarily through reductions in staffing for both the International Longshoremen’s Association and Massport’s workforce.
Last year, Conley Terminal lost $6 million. This year, Massport expects the terminal’s operating loss to be approximately double, caused by a combination of Conley Terminal seeing a 30 percent reduction in projected container volume each week, and a 14 percent increase in unionized labor costs at Conley Terminal.
The port is a vital economic engine for the New England region and Massport has subsidized its yearly operating and capital costs through revenues from the Tobin Bridge and Logan Airport. Massport will continue to subsidize the port’s operating loss with Aviation revenue, but the transfer of the Tobin Bridge and the downturn in container volumes require changes in staffing and operations at Conley Terminal.
The current economic climate at Conley Terminal is not sustainable, and we need to manage the facility in a way that is not disruptive to the port’s customers and port operations. We will lower our staffing levels through layoffs and transfers starting next week. In addition five vacant positions which were posted will not be filled. Starting Monday, Jan. 23 Massport will require fewer longshoremen to maintain and operate yard equipment and fewer ILA clerks.
We appreciate the ILA’s effort to work with us to protect as many jobs as possible as well as the long-term economic viability of the Port of Boston. This was a difficult decision and we hope conditions improve quickly so these people can be back on the job.