Longshoremen set up a picket line outside the Houston Port Authority on October 1, 2024 in Houston, Texas. The strike, which affected 36 ports, was a historic event, the first since 1977, according to the union. The International Longshoremen’s Association and the American Maritime Alliance have reached an agreement on better wages, but automation is still being negotiated. (Photo by Brandon Bell/Getty Images)
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Consumers and businesses may have breathed a sigh of relief after the International Longshoremen’s Association tentatively agreed to suspend strikes. Logistics experts say it is still far from an agreement.
Unions and port owners have reached an agreement on wage increases in a new master contract, but port automation remains a key issue to be ironed out in an interim agreement, and negotiations will not be the easy part.
ILA said in a statement on Friday that it wanted to tighten language on the use of automation in ports. “Automation continues to be an issue to be resolved and is being addressed in this agreement,” ILA said. “ILA negotiated limits on automation and semi-automation in the last contract. ILA just wants to tighten the language that no automation means no automation.”
It will take more than three months to finalize the deal, but logistics executives remain cautious.
Peter Sand, Chief Shipping Analyst at Supply Chain Intelligence “It will be a big hurdle.” Solid Zeneta. “There are now only 100 days left to reach an agreement or there could be further strikes.”
At the September union meeting, Harold Daggett, chief negotiator and ILA president, said in a video message to members that wages, medical expenses and royalty payments based on cargo containers would be changed and that “automated terminals and There will be no automated terminals.” This is among the conditions to prevent labor unions from being “shut down.”
Mr. Daggett has fulfilled his original strike promise, and a person with knowledge of the tentative agreement told CNBC that USMX has increased his proposed 50% pay increase over six years to 61.5%. At one point, the ILA was demanding an increase of up to 77%.
But automation is an area of negotiation, which will become more difficult given Daggett’s “no automation” policy.
Dennis Daggett, ILA executive vice president and son of Harold Daggett, called automation a “cancer” in a recent video message to union members shared during a September meeting.
“We do not believe that robotics should take over human jobs, especially those that have historically done those jobs. So we will continue to do so for as long as we live. , we’re going to keep fighting it. They pay us $100 an hour, so there won’t be any jobs in the future,” he told union members.
According to the Government Accountability Office, all 10 of the largest container ports in the United States use some form of automated technology to process and handle cargo. GAO reported that at least one terminal in each port uses it to track and communicate information about container movements.
ILA Chairman Harold Daggett began his career on the wharves before containerization, which fundamentally changed the way global shipping and ports functioned, and has fought fiercely against automation, semi-automation, and certain technologies. Mr Daggett has spoken out against cameras installed at ports and roads to monitor trucks.
“I disagree with this brother,” Daggett said in the September video. “I’m against all of that. People can’t even breathe without being seen on camera. That’s not right.”
He also called semi-automation a “back road to automation.”
However, when it comes to some technology, he said, “I’m doing more computer-based work, and my luggage has doubled.”
For these reasons, Sund told CNBC that no one can assume a deal will be reached.
A study conducted by Dr. Michael Nacht, a professor of public policy at the University of California, Berkeley and former assistant secretary of defense, and Larry Henry, founder of ContainerTrac, concluded that the output of automation at two semi-automated terminals was higher. I did. The ports of Long Beach, California, and Los Angeles actually saw employment increases for the International Coastal Warehousing Union.
The report was commissioned by the Pacific Maritime Association, which manages West Coast ports, and a new contract was reached with the ILWU in 2023, averting a strike. A study commissioned by the ILWU found that automation has reduced working hours and wages.
A gantry crane loads containers onto automated guided vehicles (AGVs) at the LBCT Container Terminal at the Port of Long Beach in Long Beach, California, as part of a 10-year, $2.5 billion redevelopment, Thursday, February 16, 2023. Load. project.
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TraPac, which owns the semi-automated TraPac terminal in Los Angeles, and APM Terminals, an independent division within AP Moller-Maersk, are both members of PMA.
In a video message to members in September, Daggett said the fully automated terminal at the Port of Los Angeles would result in the loss of 800 longshore worker jobs. He said shipping companies come from “overseas” and want “to come into the U.S. and build fully automated terminals and eliminate American jobs. High-wage jobs that support families with health care, pensions, and pensions.” denounced.
Harold Daggett was re-elected to a fourth four-year term as ILA International President in July 2023. His current term ends in July 2027. As International President, he serves as the lead negotiator for the ILA-USMX Master Agreement negotiations.
When it comes to port efficiency, the United States ranks below many other countries in the world. According to the World Bank’s Container Port Performance Index 2023, U.S. ports are not among the top 10. The top U.S. port is Philadelphia, ranked 50th overall.
In an interview discussing automation with CNBC on Friday morning, Harold was echoed by Acting Labor Secretary Julie Su, who played a key role in this week’s agreement and the ILWU/PMA agreement, which also contested the use of port automation. I used words. Daggett used the term in a video message when rebutting a question from CNBC about U.S. port efficiency. “Machines don’t have families,” Sue says.
“Other countries are introducing automation in their ports much faster than the U.S.,” Hsu said, but added, “In many countries, interest in jobs is so high that people are wondering what will happen with automation. I’m not that afraid of it,” he added. safety. “
The 2023 agreement between the PMA and ILWU did not disclose terms regarding automation.
ILA says that under its current contract, the union has fully automated and semi-automated protections, but it wants to strengthen those protections.
“We have discovered that the terminal operator is proceeding with certain automations that we believe are in violation of the contract,” Dennis Daggett said in a September video.
In fact, allegations regarding the use of automatic truck handling gates at the APM terminal in Mobile, Alabama, were one of the biggest reasons for the collapse of summer negotiations between the ILA and USMX, and the stalemate has led to the union It lasted until The port owner then began making exchange offers again the day before the strike began on October 1st.
“Automation is an issue that the two countries have not been able to resolve in more than a year of negotiations,” Sand warned. “There are now only 100 days left to reach an agreement or there could be further strikes.”
Why ports are being automated and why the US is lagging behind
Lars Jensen, CEO of Vespucci Maritime, said automation and semi-automation will be used to increase terminal throughput and not to reduce labor. “Automation also leads to more stable levels of productivity. For example, we now have cranes that use remote controls. This reduces physical strain in bad weather and allows for safer work. ” he said.
But automation can streamline operations, improve freight flow and reduce costs, says Nick Vyas, founding director of the Randall R. Kendrick Global Supply Chain Institute at the University of Southern California Marshall. However, he said there was a risk of kicking out striking workers. “The outcome of these negotiations could set a precedent for the future of U.S. port operations, determining whether labor-intensive jobs survive in the face of technological advances,” Vyas said.
The reasons for automating or not automating U.S. ports compared to the adoption levels of foreign ports can come down to a variety of factors, not limited to union contract language.
According to the GAO report, terminals must exceed a minimum cargo volume (estimated by one official to be at least 2.5 million to 3 million twenty-foot equivalent units (TEUs)) to potentially benefit from high initial investment costs. Freight will be needed. And most U.S. container ports handle less cargo than this amount. Foreign ports also tend to do more transshipment (moving containers from one ship to another rather than by truck or rail) compared to U.S. ports, and that redundancy favors automation. . Officials at the Port of Singapore, which accounts for the majority of transshipments, told GAO that this is a key consideration in automation decisions.
At the Port of Norfolk, Virginia, the port’s largest terminal, NIT, is undergoing an expansion that will eventually include more than 90 semi-automatic stacking cranes and increase container capacity. Virginia Port Authority CEO Stephen Edwards said its semi-automated operations helped the port deal with a surge in containers after the Baltimore Bridge collapse.
Beth Rooney, the port director for the Port Authority of New York and New Jersey, said at a press conference Friday that the Ports of New York and New Jersey do not have automation in place. He said there is limited semi-automation at the Port Liberty Terminal in Bayonne, N.J., which was agreed to between the terminal operator and ILA several years ago. The current master agreement is structured to include a committee of six to seven members from USMX and ILA to consider requests that terminal operators must implement semi-automation or automation.
“Ports and terminals need some degree of automation to improve efficiency,” Sand said. “I don’t think they will give in to ILA’s demands not to automate or semi-automate.”
The automation part of the contract is critical to Harold Daggett’s goal of creating an international union made up of all longshoremen around the world to oppose automation.
“I’ve worked my way up to this point,” Daggett said in the September video, gesturing with his hand on his forehead. “The only way we’re going to fight this is by having this alliance. … We’re going to prove to corporations that we have the power, not you. … We’re going to fight it with that alliance. I’m going to shut them down. ”
Interim agreements and strike suspensions have their limits, Sand says. “Funding has been shown, but automation hurdles could lead to another strike in mid-January.”
