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Global Supply Chain News: Longshoremen Continue to Thwart Automation at Port of Los Angeles, Despite OK in Contract

 

Does Dispute Foreshadow Contract Troubles in 2022?


Oct. 7, 2019
SCDigest Editorial Staff

The saga of APM Terminals' attempt to automate some of its container moves at the port of Los Angeles continues on.

Supply Chain Digest Says...

Through the first half of 2019, the ports of LA-Long Beach handled 46.6%of all US imports from Asia, down from 54.7% period in the same period in 2005.


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As part of the agreement between West coast port and terminal operators with the International Longshore and Warehouse Union (ILWU) in 2008, the terminals were given the OK to automate, and in fact two terminals at the LA/Long Beach port complex - TraPac and Long Beach Container Terminal – have installed automation.

But the attempts by APM to do the same have been thwarted by the union several times since the start of the year. That despite the fact that as part of the 2008 agreement, the ports and terminals will have paid some $800 million in additional payments to the union by the time the current agreement expires in 2022.

The union, it appears, wants to have its cake and eat it too.

In late June, the Los Angeles City Council voted Friday to overrule a permit granted by a panel of harbor commissioners that would have paved the way for driverless electric cargo mover to operate at the Port of LA.

That after it took a number of months for the commission to approve the permit after union members disrupted a number of hearings on the matter.

But the commission then voted in early July once again approved the permit. It is not clear where the issue stands at the moment.

Regardless, APM, owned by container shipping giant Maersk Line, has said it will proceed with its automation plan for Pier 400 anyway.

In a letter to the City Council, APM Terminals "has the undisputed right under its lease and its collective bargaining agreement to introduce automated technology of this sort and does not require any permit or any other port, city or state approval."

 

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Maersk and port officials who supported the permit also say that thwarting automation will accelerate the loss of market share by ports in LA and Long Beach to ports on the East Coast and Gulf Coast.

At least one other terminal at the complex has plans to automate, and others seem likely to do so.

Now, some are wondering how the dispute will impact the 2022 contract negotiations – and if the union will try to unwind its earlier approval for port automation.

"Our biggest concern is that we're headed for a lockout. Or we're headed for a strike. I don't know what the resolution is, but from an outsider's perspective, both sides seem pretty dug in," Weston LaBar, chief executive of the Harbor Trucking Association (HTA), told the Journal of Commerce.

Complicating the issue is the need for terminals comply with a 2030 mandate as required under something called the Clean Air Action Plan, which seeks to significantly reduce CO2 emissions from port operations. Moving to electric container movers is seen as a major contributor to reducing those emissions – and if that significant investment is going to be made, why not invest in autonomous equipment that does not require human driver,?

And looming over all of this is the loss of market share recent years by the the LA-Long Beach ports.

Through the first half of 2019, the ports of LA-Long Beach handled 46.6% of all US imports from Asia, down from 54.7% period in the same period in 2005, according to data from HIS Markit.

While there are many factors in that decline in share, concerns about strikes or lockouts as the ports have seen before, is likely part of the reason behind importers changing strategies, as are concerns about costs and cycle times – both of which automation could help address.

What do you think about the union's attempt to stop the port automation? Let us know your thoughts at the Feedback section below.

 

Your Comments/Feedback

David Ross

Longshoreman , Company
Posted on: Oct, 19 2019
The union did not try and stop APM from automating, they appealed a permit that should have been a coastal developmental permit level 2 instead of level 1. There are significant enviromentalist impacts to consider when nearly automating an entire container terminal which includes the economy of cities that are mostly supported by longshore work. Also the introduction of wireless technology has no current studies on EMF radiation which should be addressed as well. Furthermore, APM planned to use automated equipment with diesel if the permit would not pass so it has nothing to do with clean air.  This also does not deal with loss of market shares because as proof from the 2018 McKinsey report, automation does not output the same amount of TEUs that manual operation does. 

Pete

Title, WPT
Posted on: Oct, 19 2019
I think it's natural for a group of people with a non transferable skill set, combined with a substantial income from that non transferable skill set, to protect the means to live. Especially when the existing automated  terminals show they are willing to run an operation with a skeleton maintenance crew.  The expectation that the workforce could be reskilled is a farce. The idea behind automation is to save on payroll expenses. So it's common sense that the future
is bleak for the LA/LB workforce.  Bloody Thursday was the name given to the original fight in 1934, and people died in pursuit of the unions existence. When the workers back is against the wall and alternatives are not apparent, they fought to the death.
 

Carlos

Mr., Blue Collar Worker
Posted on: Oct, 19 2019
I support the unions opposition to automation. This company APM terminal was given a $34 million dollar donation to enhance its rail yard. This money was stolen from the tax payers as it comes from SB1. SB1, the gasonline tax, was supposed to be used to repair roads and highways. The Port of LA and the governer have done a bait and switch by giving out money Maersk Pier 400. Are SB1 funds going to really be used to build a rail yard at pier 400? Or was any of that money used to enhance their Automation. Automation does not keep blue collar workers at work. Automation kills jobs in all industries. If Maersk has millions of dollars to spend on Automation. They don't need our SB1 $34 million dollar donation. They can use their own money to enhance their Rail yard at pier 400. 

Unknown

Unknown, Unknown
Posted on: Oct, 20 2019
The loss of jobs will have a dire impact On communities surrounding the Ports! Small businesses will suffer and Real Estate to say the least! The Government must think of the economic impact and take into consideration - who will support the local communities?
 

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