Isn’t it time for automation at U.S. East Coast ports?

Port automation, surprisingly, is a bone of contention in the mecca of all things tech - the United States of America (U.S.). Not surprisingly, not a single U.S. port is among the Top 50 ports ranked by the World Bank based on 2023 performance.

The top-ranked container ports in the Container Port Performance Index (CPPI) 2023 are Yangshan Port (China) in first place, followed by the Port of Salalah (Oman) in second place, retaining their ranking from the CPPI 2022.

Third place in the CPPI 2023 is occupied by the port of Cartagena (Colombia), up from 5th place in the CPPI 2022, while Tangier Mediterranean (Spain) retains its 4th place ranking. Tanjung Pelepas (Malaysia) improved one position to 5th, Ningbo (China) moved up from 12th in 2022 to 7th in 2023, and Port Said (Egypt) moved from 16th to 10th in 2023.

"Ports moving in the other direction in the top ten: Khalifa port (UAE) falls from 3rd position in 2022 to 29th position in CPPI 2023. Hamad Port (Qatar) fell from 8th in 2022 to 11th in 2023."

Maritime transport forms the foundation of global trade and the manufacturing supply chain, the World Bank report added. "The maritime industry provides the most cost-effective, energy-efficient, and dependable mode of transportation for long distances. More than 80 percent of global merchandise trade (by volume) is transported via sea routes. A considerable and increasing proportion of this volume, accounting for about 35 percent of total volumes and over 60 percent of commercial value, is carried in containers."

The negative effect of poor performance in a port can extend beyond that port’s hinterland to others as container shipping services follow a fixed schedule with specific berth windows at each port of call on the route. Therefore, poor performance at one port could disrupt the entire schedule. This, in turn, increases the cost of imports and exports, reduces the competitiveness of the country and hinders economic growth and poverty reduction, the update added.

Port of New York & New Jersey, which will be in the centre of the likely strike by the International Longshoremen's Association (ILA) w.e.f January 15, 2025 on issues of automation is ranked 92th in the World Bank list.

U.S. ports are automated, partially

All of the 10 largest U.S. container ports have adopted automation technology to varying degrees, according to the U.S. Government Accountability Office (GAO).

“At least one terminal at each of these ports uses process automation technology to optimise, track, or communicate container movements (e.g., automated gate systems). Four also use automated cargo handling equipment to load, unload, and move containers.

“Selected foreign ports generally adopted more automation technologies than U.S. ports due to factors such as larger container volumes and variations in labor availability.”

United States Maritime Alliance (USMX), an alliance of container carriers and port associations serving the East and Gulf Coasts, has been calling for automating operations to step up output and increase productivity.

"Beyond the wage increase, central to successfully reaching a new long-term agreement is how we can also strengthen the ability of USMX members to make critical investments in technology and infrastructure to densify and improve the safety, productivity and efficiency of our ports, which provides a direct benefit to both ILA members and businesses in nearly every sector of the U.S. economy. American businesses rely on continuous improvements at our ports to help streamline their supply chains through expediting cargo turn times, attracting more vessel calls, and increasing overall capacity to meet their growing business demands on the export or import side.

"We have been clear that this can, and will, be done in a way that not only protects jobs, but adds new jobs as our operations expand. Evolving port operations and increasing wages and jobs for the ILA are not mutually exclusive. Modern technology is proven to dramatically increase the amount of cargo that can be moved through a port annually. ILA members make more money when they move more cargo and ports need to hire more workers to manage that growth.

"Ultimately, these improvements serve to bolster U.S. industries by creating supply chains that are more resilient and efficient, which keeps cargo moving and helps manage costs and improves reliability for American companies that depend upon our operations every minute of every day.”

An argument not being bought by U.S. President-Elect Donald Trump and ILA. "I have studied automation, and know just about everything there is to know about it," Trump said in a social media post after meeting ILA President Harold Daggett and Vice President Dennis A. Daggett.

Dennis Dagget, in a blog post claimed "U.S. ports are full-service gateways that handle a complex mix of imports and exports, integrating rail, trucking, and warehousing to deliver goods across a vast geography."

Comparing U.S. ports and transshipment hubs is "like comparing apples to oranges."

The World Bank’s study relies on criteria like vessel turnaround times, which inherently favour transshipment ports that focus exclusively on unloading and reloading containers, says Daggett. "U.S. ports, on the other hand, must account for time-intensive processes like customs clearance, intermodal transfers and extensive safety and security protocols mandated by U.S. law. Ignoring these factors distorts the efficiency rankings."

A view backed the the U.S, GAO report, which says that foreign ports tend to have more transshipments - meaning that containers are moved from one ship to another ship rather than to trucks or rail - than U.S. ports. "Ports with a large percentage of cargo moved through transshipment lend themselves to the use of automation technologies.

"Terminal operators at large transshipment ports may use automation to increase container throughput from one ship to another rather than looking for ways to improve the movement of goods in and out of the port on other modes of transportation. Officials from the Port of Singapore - a port with a large percentage of transshipments - told us this was a key consideration in their decision to automate."

I have studied automation, and know just about everything there is to know about it. The amount of money saved is nowhere near the distress, hurt and harm it causes for American Workers; in this case, our Longshoremen.
-U.S. President-Elect Donald Trump. 

Daggett also highlights the outdated infrastructure that supports U.S. ports such as highways, bridges, rail systems and dredging operations. "Many of these critical connections to the ports are decades behind the needs of modern commerce. Trucks transporting goods often face bottlenecks on congested and deteriorating highways. Aging rail systems struggle to keep up with the demands of intermodal transport. Dredging operations to accommodate larger vessels lag behind, forcing delays and inefficiencies. Is that the ILA’s fault, too? Instead of pointing fingers at the workforce, attention should be directed toward improving these foundational systems that connect ports to the broader economy. Without such investments, no port can achieve optimal efficiency, regardless of its operations."

A view, somehow, echoed by the World Economic Forum, which says a 2022 report found over 570 jobs were eliminated across the Ports of Los Angeles and Long Beach due to automation.

"However, if ports commit to using the cost savings from automation to reinvest in job creation and climate-resilient projects, this transition could bring long-term benefits to workers and communities.

“In the last two years, dockworkers in Canada and the United States have called for increased wages to reflect the demands of a challenging, often hazardous work environment and limits on automation to safeguard their jobs."

A McKinsey study in 2018 found that successful, automated ports could see operating expenses fall by 25 to 55 percent and productivity could rise by 10 to 35 percent.

"And in the long run, these investments will lead the way toward a new paradigm — call it Port 4.0 - the shift from asset operator to service orchestrator, part of a larger transition to Industry 4.0, or digitally enabled efficiency gains throughout the world economy. Port 4.0 will generate more value for port operators, suppliers and customers alike, but that value isn’t proportionally distributed across ports and their ecosystems. Innovative business models and forms of collaboration will be required to realize this vision."

The cornerstone of Port 4.0 will be automation, which, if implemented and configured appropriately, can transform ports into highly reliable and flexible logistics hubs that direct predictable physical flows and use extensive data and advanced analytics to buffer the many variables in transportation networks, according to the McKinsey report. "Ports, now often seen as constraints in transportation networks, could then actively resolve problems in other parts of the value chain." Port 4.0 could have an impact of some $70-80 billion on a global scale, the update added.

Out of around 850 container terminals globally, only around 70 container terminals are fully or partially automated as of mid-2024, according to data from Drewry.

"This represents 8.3 percent of all main container terminals but 14.7 percent of the total global footprint in terms of hectares. While the average container terminal size was 51.7 hectares, it was 74.7 hectares for automated terminals, underlining the scale propensity for automation."

Implementing automation in a port is an expensive undertaking, says a study by Michigan State University. “Incorporating the machinery necessary to fully automate a port terminal comes with a price tag ranging between $500 million and $1 billion.

“In order for an investment in automation to make sense, terminals need to be handling around one million TEUs per year, according to an estimate from Priceonomics. If new trade partnerships push terminals over that tipping point, implementing automation to allow for 24-hour operations while avoiding having to pay workers overtime may be worth the investment.

“Currently, only four cargo terminals in all of the U.S. use automated cargo carriers. Container shipping lines looking to automate will get a clearer view of its domestic potential to pay dividends as the Port of Long Beach in California opens a fully automated terminal.”

Pros & cons of automation
When they’re working well, automated container terminals are faster, safer and more efficient than conventional ports, says an analysis by Thetius, a research firm that helps maritime leaders make technology decisions .

“Automated terminals like Rotterdam operate 24/7 without worrying about human operators becoming tired and distracted. Truck drivers face frequent delays at conventional ports, so it’s no surprise that they’re in favour of automation as well. It’s not just about turnaround times. Optimised, automated cargo handling reduces emissions while increasing the number of ships the port can handle.

“The Port of Auckland can’t expand outwards, so they’re expanding up instead. New automated straddle carriers will load and unload trucks and stack containers in the yard. They can handle higher stacks, increasing capacity by a third without increasing the land use. As well as saving on labour costs, Port of Auckland expects the automated straddle carriers to save fuel, need less maintenance and repair, require less lighting (and therefore electricity), be quieter, and provide greater safety by separating people and machines.”

While automation can create jobs supervising and maintaining the equipment, they come at the cost of existing jobs, Thetius says in its report. “This is why labour unions usually object to automation. With planning, ports can help staff to upskill and retrain, retaining staff and maintaining a positive atmosphere.”

A just transition for ports
Ports can turn investments in new technologies – including automation – into opportunities for growth that strengthen, rather than reduce, job security, the WEF says in its report.

"In other words, automation doesn’t have to result in net job loss; instead, it can open doors to new roles in clean energy, infrastructure and climate resilience that benefit workers and communities.

"Automation is intended to optimise operations, enabling terminals to operate more efficiently and safely around the clock. By automating cranes, gates and cargo handling equipment, ports and terminal operators can streamline operations, improve cost and time efficiency and reduce the risk of human error and injury.

"When coupled with electrified, low-emission equipment powered by renewable sources such as wind and solar, automated terminals can help ports reduce air pollution and greenhouse gas emissions, creating cleaner, healthier environments for workers and neighbouring communities."

To ensure a successful transition, ports must prioritise initiatives that equip workers with the skills needed to thrive in a modern, climate-positive industry, the report added. "By committing to robust retraining and skills development programmes, ports can prepare their workforce for emerging roles, supporting sustainable economic growth and long-term job security."

As ports continue to automate and adapt to climate regulations, they have a choice: reinforce the status quo or redefine labour’s role in a transformative, sustainable future. "By addressing workers’ needs for secure, evolving roles within an environmentally responsible framework, ports can become leaders in building resilient, inclusive communities. Through a fair transition, port workers can drive positive change, strengthening the industry and making it more adaptable for future generations."

Fully automated ports promise faster and more efficient container handling, leading to quicker vessel turnaround times and a bump in overall terminal throughput, according to an update from DP World founded DF Alliance, an independent freight forwarders’ association covering more than 190 countries.

"Take the example of Long Beach, which, in addition to winning sustainability awards, has seen a record annual container throughput, thanks to the implementation of automated solutions. The transition to smart digital ports has played a key role in achieving these impressive results.

"Terminal automation systems integrate with tank gauging systems to enhance efficiency and throughput. This further strengthens its position as a leading international port. The port's ability to handle more containers in less time showcases the practical benefits of embracing automation in a competitive global market."

Automated systems reduce the risk of human error, promoting safer working conditions in often-hazardous port environments, the update added. "Technologies like automated gate systems enhance security by streamlining access control and monitoring. This is evident in implementing CARGOES AVA+ at Batangas Container Terminal, operated by Manila-based Asian Terminals (ATI). Having successfully switched to fully automated gates has enabled smarter, faster and safer trade through Southern Luzon’s international gateway port."

Challenges
The shift to automation necessitates considerable capital investment in automation equipment, DF Alliance says in its update. "Ports embarking on this transformation must carefully consider financing, potential returns on investment and the long-term economic implications for terminal operators. Port operators face challenges in realising the benefits of automation and the mismatch between expectations and actual outcomes in terms of cost reduction and productivity improvement."

The potential for job displacement due to automation is a real concern - an issue being repeatedly raised by ILA. "Governments and port authorities need to address these workforce anxieties. Investing in reskilling and upskilling programmes for employees will be key. A great example is training traditional crane operators to become technicians for smart terminal automation systems and equipment. This will ensure a skilled workforce ready to operate and manage these advanced systems. It will also ease the transition for workers apprehensive about losing their livelihoods. Addressing these concerns proactively is essential for a smooth transition to an automated port environment."

The Port of Rotterdam in the Netherlands is often cited as the most automated port globally. "Its Maasvlakte II terminal is a prime example of a highly automated port, showcasing advanced robotic cranes, automated guided vehicles and sophisticated terminal operating systems," says the DF Alliance report.

"A port’s success isn’t measured by the volume of cargo that is put through the port area, but by the impact that is created there," says an update on The Digital Port by the Port of Rotterdam.

"The port of the future is the port that is best able to adapt to our changed world: a port that is digital and climate-neutral. A port that draws its power from offshore wind farms, where operations are predictable, thanks to the utilisation of real-time data, where ships can load and unload without waiting times, and where users save time and money thanks to the optimal use of AI, blockchain and IoT."

The Port of Rotterdam is confident that in the port of the future, "objects will be able to communicate with each other without human intervention. Quay walls 'talk' with ships, containers with cranes, terminals with trains, distribution centres with trucks. These exchanges help the port to optimally utilise the available capacity. The Port of Rotterdam Authority is currently realising the digital infrastructure for this development – fitting assets with the required sensors, for example. By now, hundreds of sensors have been installed throughout the port, and we are gleaning a mass of insights and potential improvement opportunities from their readings. For example, this data-driven approach already allows us to plan maintenance and dredging based on necessity rather than a fixed schedule."

Rotterdam Port Authority is making a targeted investment in the platform economy and disruptive technologies that stimulate new types of service."We work closely together with tech providers, cargo owners and financial institutions – each of which can add their own value to the whole. This opens up new and unexpected avenues and creates opportunities to develop novel, sustainable services. Utilising blockchain applications like DELIVER, for instance, or the deployment of drones in the port area. Through this approach, the Port Authority’s role is gradually shifting from traditional port manager to port entrepreneur, partner, incubator and supplier of products and data services."

Automation, at best, seems like a partial explanation of American port productivity problems, writes Brian Potter for Construction Physics.

"The U.S. is not necessarily all that far behind in automated equipment adoption, and it’s not as clear a win as some people seem to think. Plenty of automated ports (including American ones) don’t operate particularly efficiently, and plenty of non-automated ports do."

Container unloading and transport is a long sequence of operations, of which only some can be addressed by automation, adds Potter. "If your operations aren’t carefully synced or they’re bottlenecked by some other factor unrelated to automation (such as the availability of truck chassis), then automation can’t do much to help. Conversely, carefully synchronising operations to minimise waiting and waste doesn’t require automation to achieve."

How far and how long can these arguments keep automation away from U.S. ports and what cost?