Still Saltchuk expanded, snapping up air cargo, trucking, fuel, and port-logistics firms—companies such as North Star petroleum, Northern Aviation Services, Aloha Air Cargo. In 2006 Northern Lights was converted to a Ro-Ro/Con ship—a “minor” conversion, as the company’s lawyers contended—renamed El Faro, and transferred to Sea Star’s Puerto Rico route.
Saltchuk’s original owners, the Sun Shipbuilding crew, were eventually bought out by the lawyer Mike Garvey, who became majority stockholder in ’93. His son-in-law, another attorney, named Mark Tabbutt, became president of Saltchuk Resources in ’99. Garvey transferred ownership to his three daughters, Nicole, Michelle, and Denise (Mark’s wife), in 2009, making Saltchuk one of the largest private companies in the United States to be owned solely by women.
In 2010 a ship managed by a Saltchuk subsidiary delivered aid to Haiti following the devastating earthquake of that year and remained in Port-au-Prince over two months, providing the only large-scale unloading facility for relief efforts in that harbor.
Judging by their surface record, Saltchuk and its subsidiaries seem a well-run, dynamic outfit focusing on precisely defined markets liable to produce steady if undramatic returns. In 2015 Saltchuk was Washington State’s largest private company, with over $2 billion in assets, $3 billion in revenues, and almost eight thousand employees; in that year Saltchuk companies gave away $2.5 million in donations to various communities. In 2014 Saltchuk Resources was awarded the title of “world’s most ethical corporation” by the Ethisphere Institute of Scottsdale, Arizona.
If one looks closer, though, cracks start to fan out across Saltchuk’s shiny facade.
For one thing, the Ethisphere Institute is a for-profit, Arizona-based corporation that takes money from a limited stable of corporations who pay to join, then nominate themselves for 144 “world’s most ethical company” titles. Ethisphere’s due diligence, according to the Los Angeles Times and slate.com, is token at best.
Another crack in Tote/Saltchuk’s benevolent front concerns the record of Foss Maritime, a Saltchuk subsidiary that will be sued in 2017 by a West Coast longshoremen’s union for retaliatory layoffs during a longstanding dispute over overtime and work-shift limits. The International Longshore and Warehouse Union also accused Foss-chartered tugs of breaking picket lines during a 2013 Columbia River strike; an unsurprising action for a corporation, perhaps, except that Mike Garvey’s father was a committed union man, a stevedore who was part of a dockworkers’ gang that threw scabs off ships during strikes in California ports.
Tote has also engaged in illegal price-fixing activities on the Puerto Rico run El Faro works. In 2002—this according to federal criminal charges against Sea Star and Tote Services—following the bankruptcy of Navieras de Puerto Rico, a major rival on that run, Saltchuk cofounder Shapiro told Sea Star Lines president Frank Peake and pricing director Peter Baci that the Tote subsidiary, Sea Star, which had lost $20 million the year before, must start turning a profit. Later that year, in the Park Hotel in Charlotte, North Carolina, Peake and Baci met executives from the two other major Florida–Puerto Rico shipping companies, Crowley Maritime and Horizon Lines. At that meeting the three companies secretly agreed to fix, for the Puerto Rico trade, uniformly higher prices that would guarantee fat returns. The scheme worked, and next year Sea Star posted a profit; the arrangement continued until 2008, when the colluding companies were sued by some of their major clients, including Walmart, Walgreens, Kraft, and Kellogg’s. Baci and Peake were sentenced to four and five years in jail, respectively: harsh punishment that a federal prosecutor said “Reflects the serious harm these conspirators inflicted on American consumers, both in the continental United States and in Puerto Rico.” The Saltchuk cofounder Shapiro was accused by Baci of ordering the price-fixing strategy, but never charged.
Peake and Baci, of course, are no longer employed by Tote companies. Tote, Inc.’s director since 2010 has been Anthony Chiarello. Its general counsel and chief ethics officer is a lawyer named Michael B. Holt. Both executives came to Tote from the giant Japanese shipping conglomerate NYK; they worked for the company’s US arm headquartered in Secaucus, New Jersey. Coincidentally, NYK was prosecuted for price-fixing in the port of Baltimore between 1997 and 2012, a period during which, at varying times, Chiarello and Holt both worked for NYK. A plea bargain that forced NYK to pay $59.4 million to victims of its restraint of trade was agreed upon with federal prosecutors in March 2015.
Chiarello was deputy administrator for the Port of Baltimore until the early nineties, long before NYK allegedly got involved in price-fixing activities there.
Under Holt’s stewardship as top ethical counsel for NYK’s US group, the company was selected as one of the “world’s most ethical” companies in ’08, ’09, ’10, and ’11 by an Arizona business-ethics consultancy called Ethisphere.
That Saltchuk also seeks to improve its regulatory environment by contributing to, on average, a third of the election war chests of US House and Senate subcommittee members charged with overseeing the merchant marine would of course be routine for a big corporation and accepted as perfectly ethical by current business standards.VIII
Despite the record of Peake and Baci, Saltchuk and its Tote subsidiaries do not normally appear to behave in a manner that can be construed as illegal or even unethical by current business standards. But it’s also fair to say that the record suggests a pressure both standard and significant exerted by Saltchuk on subsidiary companies to maximize profits irrespective of labor sensitivities or, at times, the sensibilities of its employees; and such pressure might well have resulted in behavior that generates risk for those employees.
At Tote, the evidence for a link between pressure to maximize profits—which for any company must include cost cutting—and the experience of El Faro’s people becomes, at least circumstantially, important. Jack Hearn, in later testimony, will say he noticed a change in office support when he joined the Puerto Rico run in 2012. Cuts in staff numbers tend to be one of the first tools a company uses to reduce costs, and inadequate staffing was cited by Tote’s HR officer, Melissa Clark, and also by Jack Hearn as causing glitches in ship/office relations. “I felt at the time I could have used additional staff,” Clark will comment in testimony. An audit cited a company reorganization in 2012, under Chiarello’s supervision, as being at least partially to blame for delayed maintenance and poor ship/office communications; a foreman of longshoremen working on Tote vessels in Tacoma around that time says he noticed a definite change in style, from a fairly low-key, paternalistic company that didn’t mind putting money into equipment, to an outfit with a more hard-edged and stingy management persona.
In 2013, a reorganization at Tote Services Inc., El Faro’s operator of record, resulted in its marine-operations team being reduced, from a team including ship’s officers tasked with offering real-time advice on offshore operations and weather, to one officer, a person holding no merchant marine license and with little direct experience of seafaring. The company’s president also refused to hire a safety coordinator, whose job apparently would have included tracking ships, although the job was listed in the organizational chart and at least one candidate was interviewed before the hire was prohibited. Later hearings will determine that the safety department overall consists of only two persons, one of them Lawrence, charged with overseeing the safety of twenty-five ships worldwide; 85 percent of their workload, according to evidence presented at the hearings, is devoted to the LNG fleet.
El Faro’s port engineer, Neeson, will testify at the same hearings that he is always working the equivalent of two and a half to three jobs at once. His workload must certainly have been increased last month by Tote’s decision to get rid of the “port mate” who helped out with loading. A former chief engineer on El Faro will state at the hearings that whereas, before the company’s reorganization, he could count on support from multiple Tote officers in Jacksonville, afterward he could turn to only one: the port engineer. This kind of reorga
nization could certainly have had an impact on safety and overall maintenance, at sea and in port. It is important to reemphasize as well that pressure to keep to schedule and reduce operating costs, coupled with a human resources culture that fosters insecurity among some officers, might lead employees to cut corners in an effort to satisfy company expectations.
Tote, of course, will deny any negligence, let alone malfeasance, in what is to happen to El Faro during hearings on the loss. Tote will refuse to comment on any matters pertaining to El Faro in the writing of this book. Multiple lawsuits brought by families of El Faro’s crew will be settled out of court. Tote will prove to be fairly humane in its response to individual families and will help pay for memorials to its crew members. And looking at the issue through accountants’ eyes for a moment, one must admit that no company—especially in a niche market in which the bills for replacing equipment are high—can stay 100 percent safety conscious or maintenance obsessed. Nor can such a company afford to be 100 percent profit-oriented at the expense of safety and maintenance; that is, if it wishes its operations to run smoothly.
Every corporation builds an operational rheostat on which it seeks a right setting between the two poles of employee safety and profit. It seems very possible if not likely that Tote, used to the tranquil Puerto Rico run, and encouraged by a more bottom-line-oriented regime at Saltchuk, allowed its setting to creep too far to the profit side, and this resulted in a slacking of effort devoted to safety concerns. An important example of this might be the failure to keep close track of ships and weather, of El Faro in relation to Joaquin; relying instead and solely on the noon report, the time-honored practice of having the captain notify the head office of position and status daily at midday.
As Michael Garvey will say in an interview after the price-fixing incident, most business sins are sins of omission rather than commission. Tote’s line managers, some of whom were mariners themselves, are certainly far from indifferent to El Faro’s fate. Many of them, it appears, will be personally devastated by what happens to her crew. But overall the evidence seems to point to Tote’s responsibility for a number of sins of omission: “a colossal failure of management” is how Tom Roth-Roffy, the leading National Transportation Safety Board official investigating El Faro’s disappearance, will express it during hearings;IX and this will have a measurable part to play in the fate of one of Tote’s ships over the next twenty-one hours.
It is ironic that the ship in question should have been one of the original Sun fleet present at the conception of Tote and Saltchuk—come back, an unshriven ghost, to haunt the company’s offices in Jacksonville, Princeton, and Seattle, for years to come.
5
The first SAT-C forecast to predict Joaquin’s elevation to hurricane status comes chittering out of the Inmarsat console on the bridge at 10:57 a.m. and is torn off the printer at 11:00. It shows the storm, which (it is also predicted) will generate winds of seventy knots, is going to move to the southwest, heading 230 degrees; ambling along, still slowly, at five knots. This prediction will turn out to be off by sixty-two miles and thirty knots. It heralds a Category 1, blowing between 64 and 82 knots (74 to 95 mph),X the least strong of hurricane ratings. Yet the forecast for the first time gives some definition to the beast Joaquin is at heart, some clue to what it is becoming.
On the bridge Jeremie Riehm and the captain confer. A few minutes earlier, before the SAT-C came in, Riehm talked about being on a “collision course” with the storm, and Davidson tweaked his “nice little diversion” a handful of degrees farther west, pressing the change into the ship’s GPS and putting the ship on a course of 138 degrees. He and Riehm think the ship won’t experience winds stronger than forty-five knots when they brush by the circling tumult of the storm. When he looks at the newest forecast, though, Davidson compares it to the Bon Voyage prediction he has already scanned, and curiously, he repeats the same line he used before, almost as if it were a prayer: “Yeah, I think we’re gonna—we’re gonna duck underneath it.”
Davidson puts a lot of faith in BVS and the clarity and resolution of its forecast package, and so does at least one other officer: Shultz at 3:33 p.m. today will say to his opposite number on a radio call to El Faro’s sister ship, “We’re really lovin’ that BVS program now.” The red zone of highest winds at the center of a cyclone, the orange/yellow of lesser turbulence around, the easy greens and blues of relative calm; the black projected track of a storm, sharply defined on a chart; these seem to offer solid, concrete choices, as opposed to the small gray print and implied uncertainties of the longer meteorological analyses offered in text. Against these bright, colorful pictures one can plot a ship’s evasive tactics as clearly and simply as in a video game.
One thing Davidson cannot know, however, and nor can anyone else, is that the BVS track he is relying on is misleading, and not only because of the underlying inaccuracy of the National Weather Service forecast. A glitch in Advanced Weather Technologies’ mainframe computer in Sunnyvale, California, has resulted in an uneven refresh of the BVS forecast package. The text portion has been changed to reflect the newest NWS/NHC data, but the track portion of the graphics has not been reworked. It is the old track, and this means that if you tot up the time that NWS takes to convert raw data into a forecast (three hours), plus the time BVS needs to create their package (six hours), plus the wait period before the next transmission cycle, the trackline Davidson and his officers are looking at through most of the morning of September 30 represents yesterday’s predictions for Joaquin, well before it became a hurricane. Graphically speaking, the forecast is twenty-one hours old.
This is not a terrible delay for the clients NWS most cares about, who are wondering whether to put their bikes in the garage or nail plywood over the picture window, but it’s a matter of life and death for mariners depending on BVS to show them the likely path of a cyclone.
If we imagine Michael Davidson on the bridge or in his office, focusing on the clearest and most visually effective representation of Joaquin—a BVS track that shows the storm, a circle of bruised scarlet, separated by a collar of lighter and cooler colors from El Faro’s projected course, and visually just far enough away to allow the ship to “duck” beneath, through winds and seas that will resemble, as Davidson likes to repeat, the usual day’s work in Alaskan waters—it is not entirely surprising that he doesn’t stop to reassess his thinking and opts instead to keep the ship on course.
It seems clear from the VDR recording that El Faro’s officers in general are not aware of the lag between data and prediction inherent in either forecast; or if they are, they do not pay sufficient attention to the extra uncertainty such a lag must entail.
6
Danielle Randolph is up and running well before the change of watch at noon, in part because that’s the etiquette for relieving the previous watch; in part, very likely, because the second mate’s brief, as well as navigation and keeping the bridge in order, is to back up the chief mate on cargo work, so she would walk the narrow canyons on Main Deck between the stacked containers, their crossed breastwork of chains and rods; thin rectangular views of sea, clouds, a flat horizon slowly moving up and down against the ship’s roll, and a stubborn spangle of bright sun glimpsed between the forty-foot-high steel walls; random spray of thrown spume, warm but still refreshing, when she moves between the outboard railing and the outermost boxes; and there, a heart-salving sensory overload of wind and the crash-wash-crash of wake.
Then, down the companionway to the decks below, opening a scuttle to clamber down the ladders, past 2nd Deck to 3rd Deck, where she might run across Champa and one of the goodies doing another ritual check of the refrigerated trailers; down yet another level to the Tank Top, where the only company among a crowd of parked, silent cars might be an engineer checking on the complex of pipes and pump valves that is the core of the ship’s firefighting system, ranked against the bulkhead starboard-aft. Sensory overload of a different kind happens inside these cargo spaces at se
a, everything half-dark yet alive with the ship’s motion, the vast, echoing, exhaust-blackened garages inside El Faro’s hull, most of the holds over a hundred feet long and ninety wide, sectioned off by the gates, and through those gates you walk into the next vast space, hold after hold, each an abode of steel girders and close-packed trailers and great black shadows fighting the occasional blare of neon light; smell of oil and gas from the cars, pervasive roar of reefers all around, creaking springs as the trailers rock, the distant, regular boom of waves on the thick metal that keeps the sea out. Throwing your weight on the levers that dog the watertight doors inside the gates, you make your way from the forward areas, 1-hold back to 2-hold and 2-A (a “plug” hold, the section added in 1993), to the ass end of 3-hold, making sure you close and dog every door behind you; then through the watertight door kept open for ventilation to the engine room on 3rd Deck, or back up to 2nd Deck to another hatch, and a final check of 5-hold aft.
Then, most likely, a quick lunch in the officers’ mess. Afterward, Randolph and Larry Davis make their way to the bridge, where Riehm and Jackson have been looking over the forecast—“Got it forecasted all the way up to one hundred and twenty [knots],” Riehm says, and Jackson responds, “Holy shit,” but that’s a forecast for October 3, and the men agree they’ll be in “safe harbor” before that: “. . . We’ll probably see forty-five [knots],” Riehm says. While Davis and Jackson complain about the union meeting that woke them up this morning—“If I were you, I’d come out with a hammer and just whack! Whack! Get the fuck outta here!” Jackson advises—Riehm shows Randolph the GPS waypoints for the tweaked course Shultz and Davidson planned earlier. The new course is “one three eight,” Jackson tells Davis. “One three eight,” Riehm repeats, and “One-three-eight,” Randolph confirms; and wishes Riehm and Jackson good day.
Run the Storm Page 12
