Dockworker negotiations resume, with automation a thorny issue

The can that was kicked down the road is back. Dockworkers and their employers are again at the negotiating table, with a deadline of Jan. 15 to come up with a labor agreement and avoid another possible strike. 

They reached a tentative agreement back in October that included a 62% pay raise for East and Gulf coast dockworkers, but left out the most bitter part of the dispute: automation. Talks broke down in November but resumed Tuesday. 

Automation at ports could be as basic as using an online scheduling app to book trucks. It could also be a robotic rail-mounted crane nine stories tall and 200 feet wide: “Container cranes that can essentially automatically unload ships or also cranes that can be used to stack containers,” said Jason Miller, a professor of supply chain management at Michigan State University.

The International Longshoremen’s Association told Marketplace it has no updates, but it’s previously made clear it’s concerned automation will take jobs. Miller said it’s hard to say definitively, but so far automation appears to be changing jobs, not replacing them.

“As an example, if you have more automated container cranes, you may need less individuals in the role of being a container crane operator, but you now need more individuals with the specialized skills to fix those container cranes if they break,” he said.

Miller said ports in the U.S. that are more automated haven’t shrunk their payrolls, and the United States Maritime Alliance, representing employers, has said automation is needed to become more efficient.

“Ports like Yen Shun in China can move 113 to 80 containers per hour, which is very efficient. But the majority of the ports in Los Angeles and others are around 25 per hour,” said Robert Handfield, a professor of supply chain management at North Carolina State.

The Longshoremen’s union counters international ports are more productive because they’re doing easier work, like moving containers from one ship to another, as opposed to sending shipments along into deep domestic supply routes involving trucks and trains. 

As the two sides work through their issues, other businesses are bracing for the impact of a possible strike.

“It could cost about $3.7 billion during the first week, which is $540 million a day,” said Erin McLaughlin, a senior economist with The Conference Board.

Some shipments would just get delayed, others, like fruit and meat, eventually start to perish. If a strike goes on beyond a week, she said costs start to rise.