US port labor talks resume with spotlight on automation

By Lisa Baertlein

(Reuters) - Contract talks covering 45,000 dockworkers on the U.S. East and Gulf Coasts are set to restart on Tuesday in a labor dispute that will help set the pace of automation at ports stretching from Maine to Texas.

The International Longshoremen's Association wants to eliminate past labor contract concessions on automation - notably the use of semi-automated cranes that stack containers on docks - arguing they pose a threat to jobs.

The United States Maritime Alliance (USMX) employer group, meanwhile, argues those rail-mounted gantry cranes are key to remaining competitive as ports, most notably in China, lead the way on automation.

If the two sides do not reach a deal by Jan. 15, workers at container ports that handle more than half of U.S. ocean imports could start a strike just days before President-elect Donald Trump's Jan. 20 inauguration.

A three-day strike by the ILA last October triggered a spike in shipping prices and cargo backlogs at the 36 affected ports.

The union and employers, which have issued dueling statements in recent weeks, did not comment separately for this article.

PAST REGRETS

Nearly two decades ago, port employers convinced an earlier group of ILA leaders that using semi-automated cranes at what is now known as Norfolk International Terminals would eventually help create thousands of new jobs, the union said.

Those cranes replaced equipment like specialized human-operated forklifts known as top loaders, and have been introduced at a handful of other U.S. port terminals since.

The cranes can handle bigger container stacks than traditional equipment, expanding capacity on the dock, and can work overnight arranging containers for pickup the next day, with little human involvement. Placing containers on the trailers of trucks waiting to whisk them away is still handled by joystick-wielding human operators.

"What seemed like a win for one port turned out to be the project that is becoming the model for automation that could potentially chip away at many jobs at almost every other terminal along the East and Gulf Coasts," Dennis Daggett, the ILA's executive vice president, said in December.

Union President Harold Daggett, Dennis Daggett's father, has called for "absolute airtight" contract language stating that there will be no automation or semi-automation at port terminals.

Employers, who recently battled the ILA over the installation of automated truck entry gates, say the nation's economic growth relies on faster and more efficient ports.

"Modern technology is proven to dramatically increase the amount of cargo that can be moved through a port," the maritime employers group said in December. "This can, and will, be done in a way that not only protects jobs, but adds new jobs as our operations expand."

The group includes terminal operators like APM, owned by Danish container carrier Maersk, as well as the U.S. arms of other major carriers like China's COSCO Shipping and Switzerland's MSC.

They agreed to a 62% wage increase over the next six years to end the October strike and underscored that the pay rise is contingent on finalizing all outstanding issues - including automation.

IS AUTOMATION THE ANSWER?

U.S. port executives and unions say there are many other ways to boost port efficiency, including by sharing incoming cargo data to match staffing with demand, and installing cranes that can pluck two containers off a ship at a time instead of one.

While automation has increased productivity in factories that turn out cars and other goods, early results suggest that benefits to seaports could be much more limited.

Major export ports in China have relatively stable cargo flows that are more suited to automation, but top U.S. ports in Los Angeles/Long Beach and New York/New Jersey have big swings in volume.

Fixed automated systems cannot expand and contract with cargo flows like human crews and may not reduce labor costs enough to justify hefty equipment costs, authors of a 2021 report from the International Transport Forum at the Organization for Economic Cooperation and Development (OECD) said.



There are just 53 container port terminals around the world, or about 4% of global capacity, with some form of automation, they said.

"Automated ports are generally not more productive than their conventional counterparts."

Source: Investing.com