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Cost of Stevedore Accidents, At Port of New York By Frank C. Gregory* for insuring compensation costs under the longshoremen’s act in New York has been more than 15 per cent of the payroll and has been rising. Conservatively, then, more than 10 per cent-of the total cost of stevedoring has gone to pay for the direct cost of accidents. Total num- bers of accidents and total dollar costs for the port are hard to tie to company experience for comparison. So an attempt will be made to state accident cost on a man-hour basis. There is not enough information on the number of man hours worked on shipboard in a year to compute an accurate frequency rate. There is enough basis for the statement that this rate is more than 100 lost-time injuries per million man _ hours worked. The rate of 100 is used here to illustrate the seriousness of the condition which exists. A million man hours represents 400 men working eight hours a day for 313 days. A frequency rate of 100 tells us that during that time one of each four will receive an injury se- vere enough to cause him to lose time from work beyond the day of the injury. The injuries to longshore- men are more severe than for other industries, the figures here being the actual five year average of the port. Four hundred regularly employed longeshoremen received 100 injuries a year, classed as follows: 20 dis- abled seven days or less, no compen- sation; 65 temporary disability, aver- age nine weeks; 14 permanent par- tial disability, average 44 weeks; nd 1 fatal, average cost to employer $6000. Accident Rates Vary Widely These 100 cases cost, for compen- sation and medical, $37,800, or $378 for each time a lost-time injury oc- eurred, This average accident cost is based on a sufficiently large num- ber of cases so that it should be ap- plicable to all employers, except where definite measures have been taken to control the causes of the serious accidents, The rate of the individual com- panies varies over a wide range, probably from a frequency of 30 to one of 300. The probabilities are that the one with the lower rate has also avoided the more severe injuries. But on the same cost per accident F i: the past five years the rate This article is a part of the paper presented by Frank C. Gregory, safety engineer, United States Employees’ Compensation commission, at the fifth annual Greater New York safety con- ference held at the Pennsylvania hotel, New York City, March 6 and 7, 1934. 50 basis, if stevedore A has a rate of 30 at the head of the list and stevedore Z is at the bottom with 300, after each had worked a million man hours, stevedore A’s compensation bill will be $11,340, while his com- petitor Z will find that his is $113,- 400. That difference in placing the decimal point looms up big on the balance sheet! Two years ago Leon Senior of the compensation rating bureau gave to this group an illustration of the ef- fect of accidents on the insurance rate. If a stevedore with a $50,000 annual payroll had five serious ac- cidents in the year, his premium rate, on an experience basis, was affected by 63 per cent, and went into the debit rate. On the basis of 15 per cent premium he would pay $7500 a year. The five injuries made a differ- ence of $4725 a year in this rate. Considered from another angle, the 99 non-fatal cases above aver- aged twelve weeks, or practically three months disability. Twenty- five of the 400 men were continu- ously away from work on account of injury, One man out of 16 was being supported in the hospital by the other 15. The industry is compelled to support 6 per cent more longshore- men than its maximum need for labor, Important Factor in Costs The situation in the port has caused some companies, who have found they can control their acci- dents, to go self insured, and the in- surance companies to establish credit and debit ratings for the others, so that the good risks are not carrying all of the excessive losses of their competitors. At present there is a total spread of cost rang- ing from not over 6 per cent to at least 24 per cent of payroll. The competitive condition which resulted has compelled the high cost stevedore to cut all possible corners in order to exist, and often to the detriment of his principals and of the labor relations in the port, Desper- ate attempts to squeeze out a profit under these conditions generally re- sults in still further unsafe practices. and increased insurance cost, and more protest from labor until the stevedore is obliged to ‘“‘fold his tent.’’ The ship operator cannot escape paying a considerable portion of the bill. Whether his competitive posi- tion is endangered or not depends entirely upon his trade, but he is un- doubtedly in the best position to re- duce accidents in the port, because MARINE Review—April, 1934 he hires the stevedore. He would do well to keep informed on his acci- dent frequency. A good safety record is one of the best endorsements a stevedore can have, assuring his principal of a minimum cost of ac- cidents, both direct and indirect, and of an efficient and well trained or- ganization, No effective control of accidents will be had until the ship operator and stevedore want it. It must come through their direction. With this in effect, the interest of the longshore- man to avoid injury can be stimu- lated, Very little has been done, so far, toward this end. In fact, during the past few years some claim agents have broadcast the impression that the longshoreman is better off fin- ancially injured than working. If there is a definite wage loss to in- jured men, it should be used as the most powerful argument in urging them to work safely. The compensation law provides that an injured employee shall re- ceive two-thirds of his wages if dis- abled beyond seven days. In New York there is in effect an “agreed rate’ of compensation, regardless of earnings, At the present time it is $16 per week on the assumption that the average wage is $24. That means that a longshoreman would work less than an average of two days per week, or have annual earnings of less than $800 per year, before he would “break even’’ on compensation. Loss of Time Due to Injuries Of each 100 longshoremen injured in this port during the last five years 20 have returned to work in seven days or less, and received no com- pensation for lost time; 52 have re- turned between seventh and forty- ninth day; 27 were disabled 50 or more days, and 1 was killed. The average compensation to the depend- ents of the dead man was $6000, or less than half of his probable future earnings, The losses of the other 99, without attempt to include other than wage loss on a $24 a week wage basis, were: 20 TTD average loss $ 12 $ 240.00 52 TTD average loss 40 2,080.00 18 TTD average loss 232 3,016.00 14 PPD average loss 352 4,928.00 99 non fatal average $103.67 $10,264.00 On this basis, the longshoreman’s wage loss is about one-third the com- bined compensation and medical bill of the stevedore, If this is the case, why conceal such an excellent argu- ment for safe working, in order to advertise the occasional malinger? The longeshoreman can also figure his chances of being disabled by in- jury, If he is lucky enough to work 213 days in a year, he stands a 1 to 4 chance of temporary injury, a 1 to 28 chance of permanent impairment, and a 1 to '400 chance of being killed. Stevedores whose records are better than this average have a right to let their employees know the additional security to be found in their employ- ment,