Supply Chain Envoy Says Automating Ports Doesn’t Have to Cost Jobs

Shipping containers at the Yusen container terminal at the Port of Los Angeles
Shipping containers at the Yusen container terminal at the Port of Los Angeles. (Lauren Justice/Bloomberg News)

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The White House’s supply chain envoy said the ports and logistics industry must move toward automation, a sticking point in protracted contract talks between U.S. West Coast dockworkers and their employers.

Automation is inevitable and the industry should “move there deliberately as opposed to getting dragged,” Stephen Lyons said at a conference Feb. 28.

Lyons, along with outgoing Labor Secretary Marty Walsh, have been involved in negotiations between the International Longshore and Warehouse Union that represents 22,000 West Coast dockworkers and the Pacific Maritime Association — which speaks for companies — over a new labor agreement to replace one that expired in July.

The talks had hit a logjam for a “little while” but are moving along again, with discussions now focused on provisions such as automation, said Lyons in a separate interview.

The twin ports of Los Angeles and Long Beach, which together are the top gateway for U.S. imports from China, are among the world’s least-efficient container ports, according to a ranking by the World Bank and IHS Markit.

While research by the PMA last year concluded that automation can be part of the solution to speeding up cargo processing, a separate study by the Economic Roundtable that was underwritten by the ILWU said that automated ports are less productive and eliminate jobs for dockworkers.

In conversations with the union and the shipping industry, Lyons said he describes a role for automation that doesn’t displace workers from jobs only humans can do.

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“Automation has to be part of the solution going forward, but it doesn’t have to be at the expense of labor,” Lyons said. “Labor has to be part of the solution.”

It’s reasonable for businesses to look at investments in technology that would enhance production and efficiency, Lyons said.

Lyons spoke at the TPM23 Conference by S&P Global Market Intelligence in Long Beach, Calif., where more than 3,700 representatives of the container shipping industry are gathered to kick off contract-signing season after years of pandemic turmoil left many importers waiting months for their goods — and paying record-high freight rates.

As supply strains have eased, a potential capacity glut has sent those rates tumbling and could turn the tide against the ocean carriers’ run of unprecedented profits.

Fears are growing about a possible work stoppage or strike at the West Coast ports the longer the labor talks drag on, and the uncertainty is causing some shippers to divert cargo shipments to East and Gulf ports. Both sides say they remain committed to avoiding a disruption.

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Lyons said he will likely leave the Biden administration at the end of May, when his term ends.

“That’s what I’ll probably stick to,” said Lyons, who replaced John Porcari as President Joe Biden’s ports and supply chain envoy in May last year.

Biden intends to nominate Deputy Labor Secretary Julie Su to replace Walsh, and she is expected to lead the department on an acting basis until the Senate takes up her nomination.