Automation on the Docks
From time to time, I’m lucky enough to be able to visit container terminals: some of the people who run them are familiar with my books, and they are kind enough to give me a peek inside the gate. Each terminal, of course, is unique; the old saw “if you’ve seen one port, you’ve seen one port” is absolutely true. But there’s one lesson that’s pretty consistent among the terminals I’ve visited in various countries over the past few years: automation doesn’t always pay off.
On October 1, the International Longshoremen’s Association, which represents dock workers on the Atlantic and Gulf Coasts, launched a strike that is at least nominally intended to block automation that could eliminate its members’ jobs. (I say “nominally” because whatever labor negotiators say about a pending dispute should be taken with a grain of salt.) This has become a hot-button topic. U.S. container ports are woefully inefficient compared to their counterparts around the world, as measured in a variety of ways. Automation is often proposed as the fix. And now that everyone seems concerned about supply-chain risk, we hear automation being touted as a way to make supply chains more resilient.
These are talking points. In reality, “automation” does not have a specific meaning when it comes to container terminals. Technology can replace humans in many different tasks, from allowing trucks through the entry gate to operating the vehicles that move containers between storage locations and piers. Almost every terminal I’ve visited has some automated functions. There’s none at which management can simply lock the gate and let computer-guided equipment run things. As Elon Musk admitted in 2018, after acknowledging that Tesla had installed too much automation in its California factory, “Humans are underrated.”
In most terminals, automation seems to have led to more efficiency, if efficiency is defined as container moves per worker hour. But in many cases, automation has not cut the time required to discharge and reload a vessel–the sort of efficiency ship lines care most about. More problematic, terminal operators have learned that automation isn’t always a wise investment. New hardware and customized software have to be paid for, as does the army of technology professionals needed to install and maintain them. These are fixed costs, and if the volume of containers is less than anticipated, the return on investment may be negative.
Introducing automation, in general, is a good idea; I don’t favor preserving jobs that computers can do better than people. But it is legitimate for the ILA to be concerned about protecting its bargaining power and about compensating or retraining workers whose jobs may disappear. If union resistance leads terminal operators to think more carefully about what technology to bring to the waterfront and how workers might benefit from it, that may not be such a bad thing.
Tags: containerization, ports, productivity