Letter from the Editor

By Mark Szakonyi

Ultimately , automating processes , rather than equipment , holds the most promise .

A report released this year by a US Congressional watchdog about port automation provides a sobering read , showing the possible — but narrow — path for adoption amid overexuberance over technology ’ s potential and doomsaying on its impact on labor .

That the reality of automation potential at US ports is somewhere in between , as described by the US Government Accountability Office , is worth remembering in the context of whatever employers and longshore workers agree to or reject come the Jan . 15 deadline for a labor contract along the East and Gulf coasts . The International Longshoremen ’ s Association ( ILA ) wants to strike language allowing any degree of automation , while the United States Maritime Alliance ( USMX ) wants to not only retain the automation allowed in past contracts , but also create a mechanism to consider more in consultation with the union .

The GAO report , released in March , details the possibilities of automation , but also the numerous hurdles , including the high costs and opposition from longshore labor , and cases when it ’ s just not economically feasible . In the report , the feedback from port directors and marine terminal operators highlights the nuances of when automation works , in what form and where . But in some cases , automation can hurt productivity or fail to match that of human labor , the GAO ’ s survey of stakeholders at the top US ports revealed . Some unidentified US port directors and terminal operators told the GAO it could take a decade or two to recover the investment costs of automation , with the technology potentially becoming outdated during that time . Half of the stakeholders interviewed by GAO deemed larger supply chain issues , including cargo visibility and operating hours of nearby warehouses , more pressing than the adoption of automation .

Or , as the GAO report noted based on feedback from a port representative and a terminal operator , “ Unless other parts of the supply chain — such as ground transportation and warehousing — can increase the speed and the efficiency of their operations , any gains in capacity or efficiency that terminals make by adopting automated equipment or other approaches will be lost further down the chain .”

Yet the GAO report , as required by Congress through the Ocean Shipping Reform Act of 2022 ( OSRA-22 ), also shows how automation can help space-constrained ports and marine terminals squeeze out more functional capacity .

Automated gate technologies at the Port of Virginia helped it reduce truck dwells , cutting harmful emissions , according to the report .

Separately , the port has also credited its semi-automated stacking cranes at Norfolk International Terminals for helping it better handle import surges . The hard physical separation of the stacking cranes from the drayage trucks also improves safety by reducing the chances of multi-ton equipment hitting drivers and longshore workers .

Ultimately , automating processes , rather than equipment , holds the most promise , US port stakeholders told the GAO . So-called port community systems that share key information with terminals , truckers , chassis providers and other stakeholders have reduced trucking dwells and are in place at eight of the top 10 US ports , according to the report .

But when it comes to the next level of automation processing , such as adopting AI and machine-learning , US ports lag their top foreign counterparts , the GAO report concluded . US ports lag even further when it comes to digital twin technologies . The creation of a “ digital twin ” to its physical container counterpart allows for not just monitoring , but predicting snags and autonomously adjusting for them .

In terms of adoption of automated port handling equipment , the US also trails its foreign counterparts , the GAO concluded . That includes automated guided vehicles , remotely operated ship-to-shore cranes and automated gantry cranes .

US ports lag the automation adoption of foreign ports , including being absent from the top 50 most productive ports as measured by the S & P Port Performance database , but one can argue that it doesn ’ t make much competitive difference . That ’ s not because other ports aren ’ t more productive .

But like professional soccer leagues in the US or professional baseball leagues in Japan , US ports can be compared with foreign ports , but they rarely compete with them . One exception is how the Northwest Seaport Alliance of Seattle and Tacoma competes with Vancouver , BC , for US exports and US-bound imports .

More often , US ports compete with each other . While East and Gulf coast ports fight among themselves for a greater share of cargo , they arguably compete even more with West Coast ports for discretionary cargo .

Still , even with greater , but limited , automation on the West Coast , it would be hard to find a shipper that routes discretionary cargo through the Tra- Pac terminal in Los Angeles — the most automated facility in North America — for that reason alone .

email : mark . szakonyi @ spglobal . com

4 Journal of Commerce | November 4 , 2024 www . joc . com