Automation at ports has been once again thrown into the spotlight, as failed collective bargaining negotiations between the International Longshoremen's Association (ILA) and the U.S. Maritime Alliance (USMX) led to a strike beginning October 1, which now threatens to cripple 14 major East and Gulf Coast ports accounting for more than half of all U.S. containerized cargo. Even if the dispute is resolved quickly, the battle over automation of U.S. port operations is set to rage on for a good long while to come.
“The deeper challenge is determining how ports will integrate advanced technology without displacing workers,” says Richie Daigle, supply chain evangelist at Tive Inc., a tracking and software provider. “For supply chains already strained by delays, this strike highlights the urgent need for technology that supports workers instead of technology that threatens to ｒｅｐｌａｃｅ them. It will take a collaborative effort between labor, management, and policymakers to find a solution that ensures both operational efficiency and job security while maintaining the flow of goods — especially during critical times like the holiday season.”
Automation of port operations was at the heart of a dispute earlier this year between the International Longshore and Warehouseｕｎｉｏｎ(ILWU) and DP World Canada, after the terminal operator revealed plans to automate parts of its rail intermodal yard at Vancouver's Centerm Terminal. In that case, a strike was only averted after Canada's Industrial Relations Board (CIRB) ruled that a strike notice from theｕｎｉｏｎwas illegal.
Going back further, port automation was a major hurdle in the eventually successful negotiations between the Pacific Maritime Association and the ILWU in the spring of 2022, as it had been as far back as 2008. A deal struck back then provided employers with the right to deploy fully mechanized and robotic-operated marine terminals. But, as these measures began to be implemented in 2019, theｕｎｉｏｎbalked, galvanizing large crowds to show up at Los Angeles City Hall and at harbor commission meetings to protest.
At that time, a letter from Ramon Ponce de Leon Jr., Joe Gasperov and Daniel Miranda, all presidents of the ILWU, stated: “All automation does is ｒｅｐｌａｃｅ labor costs (payroll dollars that are immediately reinvested into local, state and federal economies) with capital costs, giving corporations more control of terminal operations.”
Then-president and CEO of the PMA, Jim McKenna argued, “Labor always has leverage. We’re a regulated monopoly. The only people who do work in the 29 West Coast ports are ILWU members, so there’s always a lot of leverage on this contract.”
In this recent spat, the ILA — whose members account for tens of thousands of dockworkers at U.S. major U.S. East and Gulf Coast ports — halted negotiations with the USMX in June, after discovering that a handful of ports were using automated systems to check in trucks, and refused to resume formal talks before previous contract expired on September 30.
With many other parts of the supply chain that keeps cargo moving internationally embracing automation of both physical and administrative operations, are unions fighting a losing battle against inevitable change? And are their claims that automation threatens jobs justified?
So far, research appears to have split along the lines of vested interests. A study released in May 2022, authored by University of California, Berkeley, Professor Michael Nacht and commissioned by the PMA, found that “automation has not reduced job opportunities for dockworkers, as many workers have traditionally feared.” Further, automation has “delivered meaningful benefits for shippers and consumers, members of the International Longshore and Warehouseｕｎｉｏｎ(ILWU), as well as the environment,” the PMA said in a statement.
But a different report published by nonprofit research organization The Economic Roundtable in June 2022, and commissioned by the ILWU, concluded that the addition of automation at a pair of shipping terminals in Los Angeles and Long Beach, California, eliminated nearly 5% of roughly 13,000 jobs.
A somewhat more balanced view may come from a report released by the U.S. Government Accountability Office (GAO), which provides fact-based, nonpartisan information to Congress, in March 2024 that examines the experience of both U.S. ports and non-U.S. ports that have more fully implemented automation of both kinds, entitled “Port Infrastructure: U.S. Ports Have Adopted Some Automation Technologies and Report Varied Effects.”
What the report determined was that there aren't any simple answers when it comes to the question of automation at ports.
"The answer is a little bit complicated," says GAO director Andrew Von Ah, one of the report's authors. "It really kind of depends on the terminal operator, volumes at the port, and certainly, labor agreements are a huge part of it. But there are a host of other factors that are important."
Von Ah notes that automation at ports in other countries have led to lost jobs, but in many cases, a handful of existing roles will change instead of getting completely eliminated. And among other findings, the GAO report even questions whether automation always increases efficiency of port operations.
"Automation may not give you what you thought it would in terms of productivity, and it does take time for terminal operator to understand how the automation works," Von Ah says. "It doesn't always work as intended."
What is Port Automation Anyway?
Process automation technologies reduce human involvement in optimizing, tracking, or communicating container movements. For example, an automated gate system uses sensors to collect information from trucks and containers that pass through a port’s gates. These technologies can either ｒｅｐｌａｃｅ or reduce the number of workers that are manually checking and recording this information. Many process automation technologies use software to perform tasks traditionally performed by workers. For example, digital ledgers can be used to record transactions and provide real-time monitoring of container location instead of a worker manually recording this information into a physical ledger.
Automated cargo handling equipment reduces human involvement in the physical loading, unloading, or movement of containers within the terminal. For example, an automated gantry crane stacks or transports containers to a truck or train. Automated gantry cranes can either be operated by software or by a worker located in a remote location to guide containers onto a truck chassis or train. This contrasts with conventional equipment that relies on an operator on the crane to move containers.
According to the GAO report, the 10 largest U.S. container ports have all adopted some form of automation technology, but to varying degrees. All 10 U.S. ports included in the GAO review have at least one terminal that has adopted one or more automation technologies, with more adopting process automation technologies than automated cargo handling equipment. That includes the Port of Long Beach, which Von Ah says is the "gold standard in terms of automation in the U.S.," with cranes that are almost fully automated at the West Coast port's container terminal.
By contrast, the foreign ports the GAO reviewed have generally adopted more automation technologies than the 10 largest U.S. container ports and are more likely to use automated cargo handling equipment. All 10 of the selected foreign container ports had at least one terminal that has adopted a process automation technology; nine have at least one terminal that has adopted an automated cargo handling technology.
The GAO report also found that foreign ports tend to use more advanced technologies, such as digital twin technologies and blockchain, which have not been widely adopted in the U.S. In general, foreign ports have a longer history with automation technologies and have been able to implement more of these technologies. For example, some terminals at the Port of Rotterdam adopted automation technologies beginning in the early 1990s, and are considered to be highly automated, while U.S. ports that use automation have generally started doing so during the last decade, the report said.
The move to automation could be driven by cargo-handling volume, the report said, noting that the foreign ports they selected for review — including the ports of Antwerp-Bruges (Belgium), Busan (South Korea), Rotterdam (Netherlands), and Singapore — handle higher volumes of cargo than U.S. ports, helping to justify the substantial investment needed to implement automation technologies. “A few stakeholders told us that a terminal would need to surpass a minimum amount of cargo — one stakeholder estimated at least 2.5 to 3 million twenty-foot equivalent units (TEU) — to realize a potential return on the investment,” the report’s authors said.
But labor considerations are also a significant factor in the decision to automate, the report found. “According to some port stakeholders we interviewed, existing labor agreements in the U.S. can make it more difficult for U.S. ports to adopt automation technologies than foreign ports because the use of certain types of automation technologies may require a change to current labor agreements,” the report’s authors said. “For example, according to a few U.S. ports and terminal operators, some labor agreements specify thatｕｎｉｏｎemployees must carry out certain job functions. As a result, the ports may faceｕｎｉｏｎresistance if they want to use automation technologies to perform those functions.” Even so, Von Ah says that it's difficult to get a sense for the exact number of jobs that automation stands to threaten at U.S. ports.
"It's hard to get a bead on it," he adds. "It depends on the level of automation that a terminal might be looking for."
The report found that automation technologies can have varied effects on the size and skills of the workforce. “A few of the port stakeholders we interviewed said that adoption of automation technologies can reduce the size of the port workforce,” the report reads. “However, a few port stakeholders said that automation technologies can be adopted without replacing the workforce. A few port stakeholders said that adoption of port automation technologies allowed them to expand their operations, which required an equal or greater number of workers.”
In parts of the world outside the U.S. a shortage of labor can be a prompt to automate, too. “For example, one international industry stakeholder told us that automation is viewed as a necessity in some European countries due to labor shortages,” the report noted.
The GAO report found that, while port automation can reduce worker injuries and greenhouse gas emissions, it is not necessarily a silver bullet when it comes to increasing throughput or efficiency. Ultimately, Von Ah says that "it's not a cure-all" for all that ails a port, with the effectiveness of the technology varying depending on the size and needs of any one shipping hub. While increased operations, such as running 24/7, can lead to higher productivity, the report found that decreased ability to operate in adverse weather conditions and respond to exceptions can lead to reduced efficiency and productivity. It also noted that increased frequency of equipment maintenance issues can do the same thing.
A few stakeholders interviewed by the GAO said that adopting automated cargo handling equipment can even slow operations, as the equipment may not move containers as quickly as conventional equipment. Von Ah points to two terminal operators the GAO interviewed — one in the U.S. and one overseas — as a prime example, with one finding that automated equipment was slower and less productive than a conventional workforce.
In the meantime, the standoff between the USMX and ILA continues, with the issue of automation chief among the concerns of theｕｎｉｏｎwhile the East and Gulf Coast port shutdown drags on.
