The variety of port labour systems in light of the Global Value Chains

In the last decades, the European ports have experienced a paradigm shift. In broader terms, this change occurred in parallel with a new measurement of distance no longer considered through kilometrical units. Time, in the meanwhile, becomes the new parameter to measure space. Bonacich and Wilson (2008) coined this paradigm shift as “logistics revolution”. Ideally, there should be no point, from production to final sale, when goods sit around waiting for further processing. The flow from sale to ordering to production to shipping and to the next sale should occur in one smooth motion (Bonacich and Wilson, 2008: 15). Circulation has become a part of the production process itself, whereas competition shifted from the firm level to the supply chain level (Allen, 1997; Bonacich and Wilson, 2008). Port industry started to witness a significant transition during the 1990s, when ports developed in ‘elements in the value-driven chain system’, nodes within the supply chains and global production networks (Robinson, 2002). Many scholars have shared the idea that the technological revolution of the transportation has taken the shape and size shown in recent years, when it provided an essential support for the economic globalization (Bologna, 2010; Levinson, 2006, Veltz, 1997). Kumar and Hoffmann (2010) observe that the declining cost of the international transport is one of the four cornerstones of the globalized economy (together with telecommunications, trade liberalization and international standardization). In this process, port industry has played a crucial role. If the container embodies the constitutive revolution of the maritime-logistics chain (Meersman et al., 2009), the reasons primarily concern the role of the intermodal transport as a glue between the various nodes of the production networks within which a transnational firm is broken down. By looking at the port industry, this paper argues that the economic strategies of the market players across the maritime-logistics sector are affecting the institutional contexts in which they operate. In order to do so, the study explores throughout a comparative perspective the changing labour dynamics in the port industry – the pivotal link of the maritime-logistics sector – by bridging the theoretical perspectives of the Global Value Chains/ Global Production Networks (GVCs/GPNs) and the Varieties of Capitalism (VoC). The global nature of the port industry, indeed, highlights the mutual interaction between global networks and national institutions, demonstrating how the economic sectors influence the socio-institutional contexts at national level (Lane, 2008). A multiplicity of overlapping elements affects currently the port industry: regulatory and competitive aspects are jointly important in this economic sector, as well as the functional location of a port along the maritime-logistics chain and the spatial location of a port at local, regional and global level. Likewise, the following factors, in particular, influence port industry: 1. Local juridical factors (e.g. national legislations and ongoing reform processes); 2. Supranational juridical factors (e.g. regulations from the European Union, compatibility among supranational and national rules, jurisdictions, Social Dialogue, etc.); 3. Institutional factors (e.g. port governance, port labour regulations, industrial relations); 4. Economic factors (e.g. market strategies of the global players, in particular the shipping companies, which are lead firms in the maritime logistics chain); 5. Social factors (e.g. employment conditions, levels and stability of employment, conflicts, training, quality of the port labour system). This paper presents a comparative analysis of the changing labour dynamics in the port of Antwerp (Belgium) and the port of Genoa (Italy). The study aims at answering the following research question: What is the interaction between the (global) maritime logistics sector and the institutional dimension at national level? Port industry is a peculiar empirical ground that allows to show not only how the global networks are shaping the national institutional constraints on local employment conditions, but also to what extent the supranational institutions are mediating these processes. The compatibility between national regulations and neoliberal policies at European level, for instance, has been a strong influence on the variety of port labour systems. The objective of the European institutions in these years has been to liberalise port services, including port labour, according to the principles of the European Treaty on freedom of establishment and freedom to provide services (Article 49 of the TFEU, Treaty on the Functioning of the European Union), whereas national port labour systems in Europe very often tend in the opposite direction. In 2016 a port labour reform took place in Belgium after the infringement procedure sent by the European Union to the Belgian government, concerning the incompatibility of the port labour system with the principles of the Treaty. The same process took place in Spain in 2017. The infringement procedure in Belgium started from the complaints sent to the European Commission by a multinational cargo handling company, involved mainly in logistics activities in the port of Antwerp, and by several interim agencies. After months of talks, the social partners proposed a process of port reform to the European Commission, to be implemented in the coming years. The solution proposed by the Belgian government was positively assessed by the Commission in May 2017 and the infringement procedure was withdrawn. However, what seemed to be the end of a path is actually the beginning of a new phase for the port industry. What will the scenario be when this new phase ends? The debate between the Social Partners at European level refers both to forms of ‘protection’ against the external pressures to which port labour is subject and to ‘restrictions’ to the free market. Port labour markets are classified as a source of market barriers and restrictive practices and, as such, constituting a ‘headwind’ against further marketisation (Turnbull, 2016). Exploring the evolution of the European port policy, Thomas and Turnbull conclude that the port transport industry is “one of the remaining transport sectors in Europe where there are still a significant number of market barriers and restrictive practices” (Thomas & Turnbull, 2016:2). However, this might not be the case in the future. By testing the legality of dock labour arrangements against the four freedoms of the single market, the strategy of the Commission has led to a hollowing out of the protective institutions of industrial relations in many European ports. Despite the lack of empirical studies on port industry by these theoretical viewpoints, this study argues that we can discern some background tendencies by comparing labour systems in two European ports integrated within the global production networks, although these dynamics are mediated by institutional variables in each context. By comparing two distinct cases in the port sector, the study aims to shed a light in the debate about the consequences of globalization for the national economies and the variety of capitalisms (Greco, 2016). In this debate, the issues to be addressed concern how economic globalization affects the capability to adapt of the capitalisms and the consequences on the different models. Economic sociologists in this regard have emphasized the independent role of the social institutions in shaping the economic action (Borghi and Magatti, 2002). Notwithstanding the evident complementarities between these two perspectives with regard to the study of the global economy, the dialogue has been limited (Greco, 2016). Scholars of both the viewpoints (GVC/GPNs and VoC) agree on the importance of national institutions for the outcomes of economic activity, and on the existence of levels of “detachment” between national institutions and sectorial dynamics. The contrast in the debate refers rather on what to define more important, the national institutions or the systems of coordination between sectorially specific firms (Bair and Mahutga, 2012; Greco, 2016). While recognizing that national institutions influence the activities of production networks, the position of the GVC approach may support the idea of a convergence of the economic activities. Vice versa, scholars of the Variety school are sceptical in relation to the idea that the economies would converge towards a single model (Hall and Soskice, 2001; Sorge, 2005). In the globalized economy, those scholars state that the institutional comparative advantage will persist. The study of the global economy indeed been declined through different levels and units of analysis (Gereffi, 2005). At the macro level, the presence of supranational organizations and actors that set rules for the global economy is observed (Ibidem). At the micro level, many theories related to the economic sociology inscribe the global economy in their framework (Borghi and Magatti, 2002), but differ according to how this is defined (as a system that models the behaviour and motivation of the actors within it, or as an arena where national actors interact and influence each other). At the meso level, scholars who observe national states as the main analytic units are related to the literature on the Variety of Capitalisms (Hall and Soskice, 2001). The approach of the Varieties School has provided many answers with theoretical and political implications. Starting from a series of empirical studies on the historical evolution of national capitalisms, this approach is one of the most prominent analyses opposed to the orthodox ideas on globalization, in a climate prone to theorizing processes of neoliberal convergence at global level (Peck and Theodore, 2007). The paradigm division suggested by Gereffi (2005) observes the two broad literatures of the Varieties of Capitalism and the Global Production Networks. Contrary to the institutional perspective, the organizational approach tends to analyse firms’ behaviour in the context of the global economy. Both approaches tend to focus on governance structures, but the goals and contents differ. Using the comparative design, the approach of the variety of capitalism looks in particular at the institutional complementarities in the economies of the advanced countries. By contrast, the perspective of global production networks emphasizes the connections between developed and developing countries created by multinational companies and firm networks. Here, governance is exercised by lead firms in the global production (Ibidem). The Variety of Capitalisms approach has been associated over the years with a growing number of arguments on the embedding of firms’ behaviour and other economic actors in a set of institutional spheres. At the same time, those scholars who have raised some questions about the appropriateness of this approach criticize the bipolar vision (Coordinated versus Liberal market economies), the methodological nationalism and the tendency to a static, transversal comparison between capitalisms of advanced economies. (Peck and Theodore, 2007). In this regard, Streeck suggests a longitudinal historical approach, able to focus on the commonalities of the national versions of capitalism rather than its varieties (Streeck, 2012). The debate on capitalist variety has been concerned with the problem of how an emphasis on institutional constraints can be reconciled with an understanding of ongoing processes of change enhanced by global integration (Yamamura and Streeck, 2003; Crouch, 2005; Morgan et al., 2005; Sorge, 2005; Streeck and Thelen, 2005; Deeg and Jackson, 2007; Hancke et al., 2007, Lane, 2008). This work has focused predominantly on change processes internal to political economies. As Lane highlights (2008), the drivers of change are often vaguely referred to as the ‘pressures of globalization’, and the way domestic firms’ global networks may create such pressures on home country institutions has received shallow attention. Even when external pressures are identified, the actual interaction of global actors and national institutions has not been studied in depth. Little attention (with the exception of Whitley, 1996, 2001; Sorge, 2005) has been devoted to an examination of the reverse process of influence (Lane, 2008). The focus of the debate has been mainly on the possible adaptation of the institutional arrangements of national economies with the ongoing changes, while less attention has been paid to the coordination strategies of the firms internationally oriented, and the way firms from different institutional contexts can influence the processes of economic globalization (Gereffi, 2005; Greco, 2016). Other empirical studies point out that the institutional contexts are resilient to the pressures of globalization. Nevertheless, the empirical research shows contrasting results with respect to this theoretical debate (Bair and Mahutga, 2012; Whitley and Morgan, 2012; Greco, 2016). By comparing the case of German and American automotive industry, Herrigel and Wittke for instance affirm that their efforts in the contexts observed cannot be considered identical, even in the presence of similar difficulties in building and governing the growing articulation of production processes (2006). This evidence challenges the thesis of the homogeneity of entrepreneurial strategies and vice versa supports the hypothesis of the institutional diversity of capitalism. Ultimately, it emerges that firms behave as dynamic actors seeking new and different options, including the various national contexts, of which they are able to modify the same institutions (Whitley and Morgan, 2012; Greco, 2016). Lane analyses the mutual interaction between global systems of production and national capitalisms, adopting a comparative approach, from the theoretical perspectives of varieties of capitalisms and global value chains or global production networks (2008). Her work has focused empirically on two industries – clothing and pharmaceuticals. Firms in these two sectors fragment the value chain differently, depending also on their original location (UK, United States and Germany), as the cross-national comparison highlights. The position of Lane is located between the theoretical interpretations of the GPNs/GVC and comparative capitalism approaches, suggesting that the study on GPNs can be enriched by considering the insights developed by a theory of capitalist diversity (Herrigel and Wittke, 2006). In certain circumstances, the imprinting by domestic institutions significantly shapes the degree and manner in which lead firms in GPNs pursue competitive advantage in the global economy. On the other hand, Lane argues that firms operating in global networks tend to be shaped also by the nature of the market in which they compete. There is therefore diversity within a given model of capitalism in the way sectors and firms respond to global constraints (Lane, 2008). Her analysis of global networks of firms from different national origins invite closer attention to the varying balance between viewing firms as autonomous, strategically oriented actors, and as shaped by their institutional environment. How different social and economic contexts shape that balance is also a crucial point underlined in this seminal work (Ibidem). In sum, firms are influenced at various geo-political levels and multi-level institutional constraints interact with strategic choice. All these aspects can be observed in the port sector and across the maritime-logistics chain, a key economic sector underestimated by the scholars involved in this debate. It becomes important, therefore, to compare two distinct cases and to explore this key sector of the global economy, focusing on the main commonalities rather than the superficial differences between the changing employment conditions in two European ports located in different institutional contexts.