US Port Automation is Languishing
US ports are falling behind their European and Asian counterparts when it comes to automation. The culprits vary, but opposition from organized labor is a key bottleneck. Everything from self-driving vehicles to automated cranes is being opposed by the dockworkers’ union. The International Longshore and Warehouse Union represents roughly 22,400 dockworkers amongst 29 ports along the West Coast. Some automation had been agreed to in contract negotiations in 2008 and 2014, but in practice, implementation has been slow.
Meanwhile, Singapore now boasts arguably the world’s largest fully automated port. The Asian giant joins Yangshan and Ningbo, China, Tanjung Pelepas, Malaysia, and Khalifa Port, Abu Dhabi as the most efficient ports in the world. Yangshan’s average container moves per hour is 113.35. Contrast this with Los Angeles, Long Beach at 57.87, New York and New Jersey at 57.60, and Oakland, California registering 25.21. Yangshan is 352% more efficient than Oakland.
During Covid automated cranes and trucks were a common sight at the Long Beach Container Terminal. Yet, this subsided somewhat when pandemic restrictions were lifted, and currently, very few ports in the US outside of New York and New Jersey are close to the Los Angeles, Long Beach efficiency levels. Some shipping executives still remain optimistic, however. Despite China’s efficiency, US ports remain geographically competitive and will eventually be pushed to automation via market forces alone. Yet, space constraints and the potential for attractive returns on heavy equipment investment will make it difficult in the short term.
The union leader (International Longshoremen’s Association) of the East and Gulf Coast dockworkers union made recent news with an expressed intent to mount a coalition to curtail automation in maritime operations. The previously mentioned space constraints, however, are difficult to remedy in major metropolitan area ports. New York, New Jersey, Los Angeles, and Long Beach are roped in. There is little to no area to expand. Khalifa Port in Abu Dhabi by contrast is swimming in open space.
One bright spot is the modern terminal at Long Beach, one of four at Los Angeles, Long Beach that can currently handle twice as many containers (per acre) as a conventional port. Yet, the remaining terminals in the nation’s busiest gateway for container trade have shown little interest in automation.
Automation ramp-up is costly and ports end up surrendering terminal space while under construction. This amounts to revenue loss for a significant period. It would appear in the short term that America’s Asian counterparts are still in a comfortably competitive position.