Automation has become a contentious issue in recent labor negotiations, particularly between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX).
“We firmly believe that machines should not replace the hard-working men and women who have dedicated their lives to this industry,” stated ILA President Harold J. Daggett on November 14th.
Daggett’s stance was so resolute that negotiations with the USMX ended prematurely, well before the January 15th contract expiration. It remains uncertain if or when both parties will resume talks. As a result, a potential East and Gulf Coast port strike looms in January, with the possibility of lasting longer than October’s brief strike, triggered when the original contract expired without an agreement.
While the ILA supports automation for its safety and efficiency benefits, it insists that human oversight remains central.
Responding to the ILA, the USMX stated on November 13th: “The USMX has been clear that we are not seeking technology that would eliminate jobs. What we need is continued modernization—essential for improving worker safety, increasing efficiency in ways that protect and grow jobs, strengthening supply chains, and boosting capacity to financially benefit American businesses and workers alike.”
Canada’s ports have faced significant disruptions this year due to strikes, with automation being a key driver of the unrest. Concerns escalated when DP World Canada announced plans to automate parts of its rail intermodal yard at a Vancouver terminal, sparking opposition from unions.
According to the World Bank’s 2023 Port Performance Index, North American port rankings improved in 2023 compared to 2022. Charleston emerged as the top U.S. port, climbing to No. 53 from a previous rank of No. 340. Philadelphia also saw a significant improvement, moving from No. 98 in 2022 to No. 55 last year. However, most North American ports still lag behind their global counterparts.
A lack of automation is one factor contributing to these lower rankings. Automation enhances efficiency and reduces costs.
As highlighted by the online media platform FreeThink, faster container movement at ports allows for higher throughput, leading to increased revenue, rising wages, and the creation of new jobs. Additionally, when goods flow more quickly through the supply chain, it results in lower costs for consumers.
While not full automation, the advent of the shipping container in 1956 revolutionized shipping. According to FreeThink, it reduced the cost of loading a ship from $5.80 per ton to just $0.16 per ton, showcasing how innovation can dramatically cut costs and improve efficiency.
How does automation affect port jobs? The answer varies depending on perspective. A 2022 study from the Pacific Maritime Association (PMA) argues that “increasing automation will enable the largest West Coast ports to remain competitive, facilitate both cargo and job growth, and reduce greenhouse-gas emissions to meet stringent local environmental standards.”
Conversely, a report from the Economic Roundtable, commissioned by the International Longshore and Warehouse Union’s (ILWU) Coast Longshore Division, challenges many of the PMA’s claims, asserting that port automation leads to job losses.
While measuring job gains or losses due to automation is challenging, union membership at various ports has continued to grow.
According to a New York Times article, West Coast ports, where automation is more advanced than on the East Coast, have seen a 12% increase in registered union workers since 2020, rising to 16,400 longshoremen, based on data from the PMA. Meanwhile, the United States Maritime Alliance, representing East Coast operators, reported a 15% increase in membership during the same period, reaching 47,412 members.
Additionally, the membership of the four local branches of the International Longshoremen’s Association (ILA) in Norfolk has grown by 17% between 2018 and 2023, totaling nearly 3,400 workers.
Port automation has the potential to lower costs and create new jobs, benefiting both ports and shippers. However, implementation at many North American ports will require union approval and significant investments, meaning progress will take time.
In the meantime, shippers face the looming threat of a potential strike on January 15th. To navigate these challenges effectively, shippers must monitor freight rates in real-time using platforms like Ship Angel. These tools provide not only rate insights but also visibility into associated surcharges, helping to mitigate unnecessary costs.
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