Environment | Ten Across

why does the U.S. lag other nations so badly in the automation of its ports? (and is that good or bad?)

Editor’s note: This article is part of a collaboration between APM Research Lab and the Ten Across initiative, housed at Arizona State University.

by EMILY SCHMIDT | November 3, 2022

As 2022 draws to a close, the shadow of last year’s global supply chain disruption looms over this year’s highly anticipated holiday season.

The nation’s two largest ports in Los Angeles and Long Beach, California together process about 40% of all imported goods shipping to the U.S. When the pandemic contributed to the long-haul truck driver shortage, this caused a major backup of ships in ports—transit time to ship goods between China and Los Angeles doubled from January 2020 to January 2021 because of this bottleneck effect.

With the possibility of supply chain events like this one becoming more frequent, the role of automation comes into play. Automation is broadly defined as the utilization of technology to perform tasks with less human assistance. And with the pandemic-induced worker shortage, would automation have helped unload and transport cargo from ports more easily?

Currently, only four out of 360 commercial ports in the U.S. have at least semi-automated terminals: Los Angeles, Long Beach, New York & New Jersey and Virginia.

Supporters of automation praise its eco-friendly efficiency. However, according to the 2021 Container Port Performance Index, three of four American ports that incorporate automated technologies rank low for overall efficiency compared to both automated and unautomated ports in other countries.

So, why is that the case?

The basics of automation

It’s important to understand what port automation looks like before understanding its benefits, drawbacks and implementations.

Dr. Ricardo Ungo, director of the Maritime & Logistics Institute at Old Dominion University, says it’s important to remember that automation exists as a range.

“When people talk about automation, they [expect] everything in a terminal to be fully automated. It’s not a binary choice, like you’re not automated or fully automated,” he said.

Rather, implementing automated technology could be replacing a few diesel-powered, manually operated cranes with electric, remotely controlled cranes in one terminal of a port.

It can also be a completely automated terminal like in the case of the Long Beach Container Terminal and Middle Harbor project. It is the first completely automated port terminal in the U.S. and was named “The Greenest Seaport” in the 2018 Asian Freight, Logistics and Supply Chain Awards. Costing $1.5 billion, this project was completed in 2021, though it took a decade and was built in phases. Now, it boasts computer-powered electric stacking cranes that can handle several containers at once.

Automation seems to increase efficiency, but not as quickly or clearly as you might think

When discussing port automation, three key questions often arise: How efficient and productive is it? How will it impact the environment? How many jobs will be lost?

In the International Transport Forum’s report on container port automation, efficiency is defined as “the ratio between sets of inputs and outputs into ports,” but the term is rather ambiguous, especially when considering port productivity. One such example is autonomous equipment running constantly. Together, efficiency and productivity measure a port’s overall performance.

Studies on port performance are somewhat contradictory. A 2017 survey by McKinsey polled executives from ports around the world, automation equipment and software suppliers and experts from academia, port-asset management firms and shipping companies.

Respondents indicated that automation has the potential to cut operating expenses 25 to 55% and increase productivity by 10 to 35%. The survey concludes, however, automation currently cuts operating expenses by 15 to 35% and productivity falls by 7 to 15%.

In contrast, a report published in May by the Pacific Maritime Association (PMA), stated that automation efforts at the Ports of Los Angeles and Long Beach are tangibly increasing productivity and efficiency. Specifically, between January 2020 and February 2022, the amount of cargo or number of vessels handled over time rose notably compared their conventional container terminals. In addition, containers were processed twice as fast.

Dr. Michael Nacht, professor of public policy at the University of California-Berkeley, contributed to the PMA report.

“If automation had lots of negative effects, the data would show it,” he said. “We’ve lived through over 100 years now of successful automation in all kinds of industries.”  

A union-funded study by Economic Roundtable published shortly after the PMA report disputes the efficiency and productivity of automated ports, specifically those of Los Angeles and Long Beach.

Although the above graph shows an increase in the percent of cargo handled after automation, the study argues that increase was the result of two factors: diverting cargo from other terminals and increasing the size of the terminals.

There may be environmental benefits to port automation, but the evidence is not entirely clear yet

Aside from port performance, the environmental impact of automation is a popular point of dialogue.

The LA Times reported that port emissions increased dramatically from 2020 to 2021. At the Port of Los Angeles, sulfur oxides soared 145%, diesel particulate matter jumped 56% and nitrogen oxides rose 35%.

The Port of Long Beach saw similar, but less intense increases in air toxins. These numbers are important to note because diesel particulate matter can cause cancer, and nitrogen oxide is the precursor to smog.

Both ports also experienced notable surges in greenhouse gas emissions, but port officials asserted the overall increases were abnormal, given pandemic circumstances.

Dr. Khalid Bachkar, professor of international business and logistics at the California State University Maritime Academy, said the maritime shipping sector is sixth largest emitter of greenhouse gases globally.

In thinking about how to lower that pollution, he conducted a study on the adoption of zero emissions cargo handling technologies in the Southern California ports, and said Long Beach is on the right track.

“By improving air quality and increasing the port's productivity, it’s been considered as one of the leading gateways in electrifying container terminals,” Bachkar said.

While he said this technology can be implemented across all California ports by 2035, several factors need to be considered including power grid infrastructure. The consistently scorching temperatures across California have pushed its power grid to the limits, so much so that in August 2020, the state ordered outages for the first time in 20 years due to inadequate power supply.

“Do we have a resilient grid that will provide sustainable electricity to the port?” he said. “Ports cannot afford to have a blackout.”

However, it’s a matter of whether that clean technology is automated or not. While the PMA report suggests that automation is critical in achieving the goal of zero emissions, the union study states manually operated port equipment can be just as easily electrified as robotic equipment.

Tradeoffs in unionized work, high upfront costs and cybersecurity

The largest concern with installing automated port technology typically comes from the workers themselves.

In particular, those part of the Longshore Division of the International Longshore & Warehouse Union (ILWU) have long resisted the transformation to automated terminals at Long Angeles and Long Beach.

“Automation does two things. It makes the companies rich and the Longshore workers unemployed. Make no mistake about that. Automation doesn’t improve productivity. It destroys lives and livelihoods,” said International Longshoreman’s Association President Harold J. Daggett in a video released in May.

The study funded by the ILWU drills into the loss of valued workers, many of whom have been serving the ports for decades, and how it could impact local economy and communities.

The graphs demonstrate clearly that after the automation of LBCT and TraPac terminals, dockworkers spent less time working compared to the other non-automated terminals at the same ports—the most glaring decrease in dockside-to-shipside hours at LBCT.

Nacht said there’s a lot of countervailing evidence against the assumption that automation will necessarily lead to a reduction in workers and salaries. He pointed to Rotterdam, a completely automated port in the Netherlands, where the demand for workers has increased four-fold over the past few years. As of April, there were 8,000 unfilled positions across all job departments.

“It’s true that not every single worker can be used in automated plants…but overall, it’s a benefit to the workers,” he added.

Backar echoes Nacht in saying that he understands the workers’ frustration at possible reduced labor from the introduction of automated, zero-emission technologies. However, he sees the transition to automation as an opportunity to retrain and repurpose workers.

“A driver for diesel-powered equipment [could become] the technician that fixes and maintains the automated machinery,” he said.

Ungo said a one question that isn’t typically considered is how much partially automating even one port terminal will cost. The more that is automated, the higher the cost and investment.

In the PMA report Nacht wrote, “It can take 15 years or more to implement [automation] and to pay [it] off through [higher productivity].”

TraPac, a container terminal operator, has invested $700 million to partially automate in the Port of Los Angeles. In 2016, the Virginian government paid $217 million for 86 automated stacking cranes from a Finland-based company for the Port of Virginia.

In addition to concerns about the high costs and long timeframes associated with port automation, experts also raised questions about automated ports’ cybersecurity vulnerabilities.

“[Proponents] forget about the safety of the equipment and the systems in the sense that the more you automate, you’re always creating more space for cybersecurity risks,” Ungo said.

According to the Jones Walker 2022 Ports and Terminals Cybersecurity Survey, 90% of respondents—maritime industrial and midstream oil-and-gas stakeholders—believe U.S. ports are prepared against cybersecurity attacks. Despite their confidence, 74% report their systems or data had been the target of an attempted or successful breach over the last year.

About 45% of survey respondents believe that ransomware (threatening to publish or blocking access to data unless a ransom is paid) is the biggest cybersecurity threat to ports. However, the largest reported threat was remote desktop protocol (connecting to another computer remotely), though the survey states that law enforcement agencies believe that ransomware attacks are very underreported.

Lagging behind

Experts agree that the U.S. is slow to adapt to automated port technologies for a number of reasons. Terminals in Europe and Asia, such as at the Port of Rotterdam and Singapore, have implemented automation since the 1990s. The U.S. didn’t automate until 2007 at the Port of Virginia.

Primarily, though, the lag in port automation stems from a lack of coordination amongst stakeholders of this large-scale technological transformation.

Bachkar said the government needs to step up and play a role in steering policies that the ports themselves cannot control. Without a strong market drive and government regulation, the transition to zero emissions automated equipment is much less likely to occur.

For the Ports of Los Angeles and Long Beach, the web of organizations that govern ports is complicated, Nacht said.

Ungo also stated stakeholders at every level must be considered. “For any company that wants to tackle automation, it will be very important to have an agreement and coordination with management and the labor unions,” he said.

There’s no “one-size-fits-all,” Nacht added. Size, capacity, location and other factors must be incorporated into plans for future automation.

“I think [the advancement toward automation] is inevitable. Just like electric vehicles and self-driving cars, things that seemed inconceivable some time ago will become commonplace, and the customer and the consumer will adapt,” Nacht said, adding that “it's up to the workers to adapt to this changing technological environment which is pervasive throughout society.”

Note: A previous version of this story incorrectly stated the U.S. didn’t automate until 2014. This was corrected to 2007 with the Port of Virgnia. APM Research Lab regrets this error.

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