Recent collective bargaining between West Coast dockworkers and waterfront employers for a new contract revolved around issues such as wages, health benefits, pensions and retaining jurisdiction over chassis maintenance, but many maritime industry professionals suspect another unspoken sticking point has been the degree to which container terminals automate cranes, entry and exit gates, cargo-handling equipment and other functions.
In the previous contract that expired last June, the International Longshore and Warehouse Union agreed to allow technology at marine facilities as long as the parameters of each deployment were negotiated on a case-by-case basis.
As terminals become overwhelmed by concentrated growth in volumes, many experts say mechanization and computerization are needed more than ever to load and unload bigger vessels, shuttle boxes to and from storage yards, stack containers, lift them on and off truck chassis, and process trucks through the gates.
Upgrades at two terminals in Southern California—OOCL’s Middle Harbor facility at the Port of Long Beach and TraPac Terminal at the Port of Los Angeles—will make them among the most modern port facilities in North America.
The ILWU’s formal position on automation doesn’t necessarily mean that rank-and-file longshoremen or their union bosses are comfortable with automation just yet.
An ILWU official at a port productivity conference in December provided a window into the union’s mindset towards technology and its perceived threat to members’ jobs.
“The word automation scares the hell out of me,” Jeff Smith, a member of the ILWU’s Legislative Committee from Local 8 in Portland, Ore., remarked from the audience during a panel on port labor at the Journal of Commerce-hosted event in Newark, N.J.
He acknowledged difficulty adapting to technology, saying “it was hard for me to use an iPhone. It was hard for me to use a computer when it came out.”
Several terminals have centralized gate operations instead of manning booths in each truck lane by using cameras, speakers, card readers and radio frequency identification systems to verify the truck, driver and dispatch assignment. A fewer number of workers can process all the trucks from a nearby office.
Some container lines carry out ship planning and customer service from remote locations, such as Phoenix, Salt Lake City or Denver.
“Well, that scares us because if you can do that with a computer who knows that we’re not going to be loading ships from Billings, Mont., or Salt Lake City?” Smith said. “That scares the hell out of labor. And that’s why the resistance is there when the negotiations go on because we have to secure our future.”
He even expressed fear that welding jobs on the docks might be eliminated.
Anthony Scioscia, a former head of APM Terminals North America, who now heads his own eponymous port management advisory firm, assured Smith that mechanics that repair equipment will not be replaced, but noted new mechanical equipment and information technology “requires a different skill set, not only to operate the systems, but to repair them. So, the rank-and-file is going to have to be brought into the industry that has those skills and abilities.”
Pacific Maritime Association officials insisted that automation was not part of the contract negotiations this time.
Automation is not unique to the port industry.
The United States producers more automobiles today than ever before with a workforce a quarter below what it was 10 years ago. But automation takes a lot of practice, and trial and error. Workers in the manufacturing sector, especially in Europe, tend to get retrained with better skills and their compensation eventually goes up, Walter Kemmsies, chief economist at infrastructure engineering firm Moffatt & Nichol, said during a presentation at the Transportation Research Board’s annual conference in Washington last month.
“Whenever the volumes increase and we use machines for something it’s because we need labor to be doing something else. So there will be alternative jobs,” Kemmsies said. “Whether employment growth will be as great as during the early parts of containerization—probably not. But, then again, containerization was a phenomenon changing the structure of an industry” that has now matured.
Workers tend to benefit in the end. “It’s just the short-run that’s scary and unstable,” he added.
U.S. container terminals, especially on the West Coast, have a reputation for not being as productive as many advanced cargo hubs around the world.
American dockworker unions need to stop holding back progress, Yossi Sheffi, director of MIT’s Center of Transportation & Logistics, said in a blog post.
“No industry has ever been able to win the struggle against technological development and corporate flexibility. The United Auto Workers, for example, is now a shadow of its former self owing to the trade union’s over-reaching tactics. The UAW’s actions were based on the belief that production assets are not moveable and thus employers have to succumb to their demands. The result was the creation of multiple manufacturing plants in the South, dwindling union clout, and bankruptcies at General Motors and Chrysler,” he said. “The lesson for Pacific ports is that they can either modernize or continue to fall behind and suffer the same, predictable outcome.”
The ILWU’s clout comes from the fact that there are only a few ports considered major gateways for trade. Other unions have lost power because their industries are less concentrated, competition is intense, businesses and workers can easily relocate, or production can be outsourced overseas. The danger, however, is that shippers have learned to take advantage of alternative ports on the East and Gulf coasts, and in Mexico and Canada.
“The union clings to outmoded practices and negotiating tactics, while the rest of the industry moves on. To some extent this is a symptom of an aging leadership that is far more concerned with the needs of the current generation of dockworkers than future generations,” Sheffi wrote.
Terminals would face less pressure to automate if unions did a better job policing their members to make sure nobody slacked off and undermined productivity, James Devine, who retired last year as the chief executive officer of New York Container Terminal, said.
The ILWU and the International Longshoremen’s Association on the East Coast have failed to discipline longshoremen who short-time employers, he argued.
“In the new contracts, the ILA and the ILWU have to step up to the table and take an active role in making sure the workforce that they sponsor is properly motivated with positive, and when appropriate, negative measures to make sure that you don’t have the one crane operator who does 35 to 40 moves an hour and then other crane operators get up there and deliberately do 22 moves an hour” to stick it to management, Devine said from his perch in the audience. “And when you call them to task for it, the union puts their arms around them and protects them,” excusing the action as falling within a “sustaining pace,” he said.
Devine is now a senior associate with Mercator International, a boutique management consulting firm focused on logistics and infrastructure.
In an aside to a reporter during a break, Devine added, “It is incumbent on the ILA and the ILWU leadership to bring that home to them. They are well paid. They need to come to the terminal and do their job.
“That’s the problem. Some percent of the workforce tries to get over and do as little as they possibly can. And that’s what drives the automation for some people. Get rid of this guy because he’s sitting at his desk playing a word game and he’s not attending to the gate. If the guy was doing his gate job, you wouldn’t have to spend the money [on technology] and he would have protected his job,” he said.
Devine couched his comments by saying that he is a firm believer that labor is a critical component of ports, that it needs to be at the negotiating table and involved in creating value-added positions. He stressed that terminal operators’ first responsibility is to ensure the safety of workers and they should show them respect by taking care of details such as having clean, fully stocked restrooms and making sure windshield wipers on vehicles work well.
Companies should sit down with their unions, be transparent about their goals, follow the contract protocols regarding automation and do the proper bargaining over how many people will be impacted by technology, Scioscia recommended.
“If you do that and you are honest and sincere about it, I think you can get it done,” he said.
This article was published in the April 2015 issue of American Shipper.