US port automation holds promise, but hardly a sure shot

A report released this year by the 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 (GAO), 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it could take a decade or two to recover the investment costs of automation — with the technology potentially becoming outdated during that long wait. 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 release of 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.

Process over equipment

Ultimately, it’s automating processes rather than automating equipment that 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 Global 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 premier soccer leagues or professional baseball leagues in the United States and 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, British Columbia, for US exports and US-bound imports.

More often though, 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, say, Los Angeles’ TraPac terminal — the most automated facility in North America — for that reason alone.

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