Automation tends to make some people nervous. Ever since the invention of the steam engine, common carriage has since been expected to become ever faster, more reliable, and offer larger carrying capacity. Couple this with cheaper and faster access to information. That, too, makes some people nervous – from the original printing presses (which displaced medieval scribes) to the one-click-away Uber/Lyft drivers (who are now displacing traditional taxicab companies). In each of these cases, markets became more efficient (i.e., using fewer inputs to generate higher-value outputs). As a result, jobs were lost and those remaining were re-tasked to utilize the latest technologies. These structural changes are rarely smooth but, at the same time, they are hard to stop.
Automation is now being widely discussed at container ports. It is more accurate to say that a new form of automation is under brisk discussion because the process of automation is never-ending. The shipping container itself – exemplified by the pioneering work of Malcom McLean – changed the nature of dock work forever by making it less labor-intensive and more efficient. Locked and sealed intermodal containers move from origin to destination by way of various transfer points. Avoiding the unloading and re-loading of the cargo at those points save time, money and lower the risk of theft, damage and terrorist tampering. Today, the tide of automation is leading to driverless container carriers and remote-controlled gantry cranes.
The July 2019 study by Toronto-based Prism Economics and Analysis noted job loss as part of the economic impact of partial to full automation of port activities in British Columbia. The report was sponsored by the International Longshore and Warehouse Union (ILWU). Naturally, the ILWU is concerned with activity that might lead to job loss among its membership. It has taken a strong stand against increased automation at the Port of Los Angeles, though that effort was unsuccessful and APM Terminals deployed its first set of automated straddle carriers last August. However, the ILWU and APM Terminals did reach an agreement on worker retraining. This is the sort of push-back to be expected from trade unions in the coming years because the number of unionized jobs will surely decrease. Unfortunately, labor is the highest variable cost in port operations.
While the Prism report suggests that productivity may decline and the return on capital invested may be lower than otherwise, it also notes that the number of fully/partially automated ports in the world is likely to increase beyond the 60 today. If this is so then the risk vs. return on capital does not seem to be a strong deterrent to at least some investors and governments. Still, of concern is the upfront capital expenditures necessary to move to more automation. Of course, some in the 1950s made that same argument when they contemplated the upfront expenditures on gantry cranes. In due time it became widely understood that such cranes were a necessary price to pay before ports could realize the full benefit of lift-on, lift-off (LO-LO) containerized shipping. A further benefit from containerization was the spurring of intermodal transportation. Using gantry cranes to speed loading/unloading of containers incentivized investment in more trucks and trains to handle the extra demand for inland container transport. In like manner, we can expect the largest ports to invest in the newest technologies because of their economies of scale.
Remote-controlled gantry cranes mean the operator does not deal with the physical movements and equipment noise and vibrations that come with operating the crane in a sealed compartment. The remote operator, sitting in a more comfortable work space, could be “moved” from one crane to any other across the terminal by the push of a button to call it up on his monitor. The future could see an operator handling more than one crane simultaneously. The Port of Rotterdam, an early flashpoint in this drive, had a wildcat strike on this very issue in 2013 with further strikes occurring in 2015 and 2016. Thus, it will take some time to implement the latest automation because some degree of union buy-in, or at least their reluctant resolve, will be necessary. There will be fewer jobs; but they will be more comfortable and dependent on computerized technology. At the same time, trade unions at the ports will be under increasing pressure as new labor-saving technologies become available. Caught in the middle will be the state and local governments which oversee the major U.S. ports. If the aphorism “all politics is local” still holds true we can expect a lot of lobbying and counter lobbying on the future-of-work in the years ahead.