Automation is shaping up to be a key flashpoint in high-stakes contract negotiations under way between unionized dockworkers and the shipping lines and cargo handlers at U.S. West Coast seaports.
The ocean carriers and terminal operators that control some of the country’s busiest gateways for seaborne container trade are pushing for greater use of robotic equipment on the docks, arguing it is the best way to efficiently handle the ever-growing volumes of cargo hitting the ports and would help ease the bottlenecks that have hobbled U.S. supply chains.
The dockworkers’ union, which gave in to some automation in highly contentious talks in years past, wants to draw a line against any further use of automated cranes, self-driving vehicles and other equipment they fear could replace some of the best-paying union jobs in the nation.
The dispute over automation is a major dividing line in contract talks that began last month and are aimed at replacing the multiyear agreement that expires July 1, negotiations that come as the shipping industry is entering its busiest period while still trying to clear big backlogs of ships and cargo.
“The bottom line is that automation has killed jobs at the ports,” said Frank Ponce De Leon, a senior official at the International Longshore and Warehouse Union, which represents some 22,400 dockworkers at 29 ports along the West Coast.
Cost-savings of increased robotics would go to shipping lines based overseas, he said, serving “their desires for a future of fewer American workers and more foreign profits.”
The dispute at the docks is part of a continuing debate over the growing use of automation in U.S. industrial facilities, including goods-picking robots in warehouses, and self-driving vehicles and drones in parcel delivery.
At some port terminals in the U.S. and many more overseas, robotic equipment such as large mobile cranes and self-driving straddle carriers that pick up and move containers have replaced the manually-operated vehicles that loaders have used for decades to handle boxes.
To the dockworkers’ union, automation is an existential threat.
Harold Daggett, head of the International Longshoremen’s Association, which represents East and Gulf Coast workers, released a video in May exhorting the West Coast union to hold the line against the robots.
“They want to put automation in and eliminate us, that’s what it is all about,” Mr. Daggett said in the video.
The companies that transport and handle the cargo say the automation is one solution to the congestion at ports, particularly the Los Angeles and Long Beach sites at the heart of America’s supply chain woes. The spare use of robotics at U.S. ports leaves them uncompetitive with big gateways in China and Europe that are packed with automation, they say.
Jeremy Nixon, chief executive of Singapore-based container line Ocean Network Express, told the TPM22 Conference produced by The Journal of Commerce in Long Beach earlier this year that European and Asian ports can clear backlogs quickly because they have automated cargo-handling equipment that operates around the clock. “Here, we just don’t have that resilience,” he said.
The ILWU and the Pacific Maritime Association, which represents the cargo-handlers and ocean carriers, have agreed not to discuss the talks while they are in progress.
Negotiations usually open with discussions on relatively straightforward issues such as healthcare coverage. Thornier issues such as automation and worker pay don’t usually reach the bargaining table until after the contract expires, when the risk of job actions that could hamper the flow of goods grows and the push for an agreement becomes more urgent.
Industry officials expect this year’s talks to go through the summer and into the fall.
PMA Chief Executive Jim McKenna, in an interview before the negotiations began, said automation would be “front and center” in the talks. The PMA says the Southern California port complex will hit its cargo-handling limits by 2028 and that the only way to further grow volumes is to move more goods through the same footprint using automation.
The association released a report last month saying that during the Covid-19 pandemic the most advanced automated facilities at Los Angeles and Long Beach processed boxes up to twice as fast as neighboring conventional terminals.
In an open letter, ILWU President Willie Adams said the management group was “posturing” by issuing the report ahead of negotiations.
Other studies show U.S. ports in general performing poorly compared with peers world-wide.
A port performance index created by the World Bank and S&P Global Market Intelligence ranked the Los Angeles and Long Beach port complex dead last in efficiency among the world’s ports last year, trailing Luanda, Angola, and the Port of Ngqura, South Africa. The world’s most efficient ports were in the Middle East and Asia.
In principle, West Coast dockworkers agreed to automation in contract negotiations in 2008 and in 2014. In practice, union leaders have resisted cargo-handlers’ efforts to automate. So far, just two of the 13 container terminals at the neighboring Los Angeles and Long Beach ports have been fully or partially automated. Two other facilities have started to introduce automation, or say they plan to.
Importers fear that if both sides dig in, the ports could see a repeat of the work slowdowns and other actions taken during highly combative negotiations as a contract expired in 2014. An agreement was finally reached the following year, after big backups in shipping that buffeted the U.S. economy.
Retailers support the use of technology that can speed up cargo flows, said Jonathan Gold, vice president for supply chain at the National Retail Federation. But importers are also wary of labor disruptions at a time they are pulling in merchandise for the back-to-school and fall holiday shopping seasons, especially with the U.S. economy fragile.
”We are coming to a critical time and we want to see smooth operations,” Mr. Gold said.
Source: Wall Street Journal