“A lack of robots is one of the single biggest problems among the many logistical issues currently tangling America’s supply chains.
At most major ports around the world, the cranes that unload shipping containers from boats to trucks are largely automated. That means they can operate around the clock at lower cost and—extra importantly right now—have zero risk of catching COVID-19. One recent study found that cranes at the mostly automated port in Rotterdam, Netherlands, are roughly 80 percent more efficient than cranes at the Port of Oakland, California, where humans still man the controls. In other words, it takes nearly twice as long to unload the same ship in Oakland as it would in Rotterdam.
One of the major hurdles to automation is the expense. It can cost as much as $500 million to install new, fully automated terminals at existing ports, according to the Journal of Commerce, a trade publication. Even if it might make sense to do that in the long run, short-term considerations keep American ports operating at their current, less efficient status quo.
Conveniently, Congress has just passed a $1.2 trillion infrastructure spending bill—one that includes $17 billion for port infrastructure. Of that $17 billion, about $2.6 billion is specifically earmarked for defraying the cost of upgrading equipment at America’s ports, nominally to reduce air pollution.
If you were a member of Congress looking to spend a bunch of money to immediately and meaningfully upgrade American infrastructure in a way that would help solve the current supply chain logjams, automating ports should be at or near the top of the list. It’s quite literally a no-brainer.
The bad news, however, is buried on page 308 of the 1,600-plus page bill: “The term ‘zero-emission port equipment or technology’ means human-operated equipment or human-maintained technology.”
Yes, the subsidies doled out as part of President Joe Biden’s bipartisan infrastructure deal are expressly forbidden from being used to automate operations at American ports. Instead, taxpayers will spend billions to upgrade existing cranes with lower-emissions alternatives that won’t actually work any faster or cheaper. It’s a major missed opportunity.
Why? Biden’s close ties to labor unions probably have something to do with it. Along with the cost, unions are the biggest reason why American ports don’t have more robots. When an automated terminal was introduced at the Port of Los Angeles a few years ago, the politically powerful longshoreman’s union that represents dockworkers threw a fit.
But the automated terminals were a hit with truck drivers who work at the port. The Los Angeles Times reported in 2019 that drivers, who are paid by the delivery, were thrilled to have more reliable loading schedules, instead of having to wait around for hours to pick up a container. One truck driver told the paper that automation meant no longer having to “wait hours and hours in long lines” because the dockworkers decided to “leave early to go to lunch and come back late.””
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“Automated ports in places like Norfolk, Virginia, meanwhile, are handling record volumes with no backlogs, according to the Journal of Commerce. “With the automation, you can rework your yard to say, ‘Okay, while I was expecting to be loading Ship A first, I’m now loading Ship B first,′ and can keep import flow fluid,” Stephen Edwards, CEO and executive director of the Port of Virginia, told the Journal in September.
Ports should invest in automation regardless of whether Congress is subsidizing that transition, of course. But if lawmakers are going to approve huge amounts of new spending to upgrade American infrastructure, it’s fair to wonder why one of the most useful upgrades is expressly forbidden. It looks like Congress and the White House are more interested in cowing to unions than helping fix America’s supply chain problems.”
“these shortages and delays are the product of many cross-cutting problems that have existed for years, including the Covid-19 pandemic, rising consumer demand, and a global and highly optimized manufacturing network that doesn’t adapt to change quickly.”
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“What the pandemic did do was cause factories to shut down, usually because there weren’t enough workers, and that created shortages of products and components. Those shortages led to bottlenecks and delays in product manufacturing (if factories don’t have the parts to build something, it doesn’t get made and doesn’t get shipped).
As more shortages lead to more bottlenecks, the disruption causes problems in other parts of the supply chain, creating even more shortages, new delays, and higher prices. For example, automotive manufacturers haven’t been able to make cars and trucks, because they can’t get their hands on enough computer chips. Ikea can’t ship furniture parts from its warehouses to its stores thanks to the trucker shortage. A supply crunch for petrochemicals has driven up the cost of making anything that includes plastic, including children’s toys.”
“US companies have been moving more and more manufacturing abroad for decades, which means a growing amount of the stuff American consumers want to buy needs to be imported. Meanwhile, worsening conditions for truck drivers in the US have made the job incredibly unpopular in recent years, even though the demand for drivers has gone up as e-commerce has become more popular. That means that as Americans relied more on online shopping during the pandemic, getting goods from ports to doorsteps has been challenging.”
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“Covid-19 has also affected consumer demand — namely, which products they want to buy and how much — creating constant changes that the supply chain just hasn’t been able to keep up with, especially lately.”
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“This record number of imports is slowing down product deliveries. Cargo ships carrying holiday merchandise are waiting to unload their stock along the California coast, but there aren’t enough port workers to do the job. Those delays mean there are fewer containers available for manufacturers trying to send more products to the US, which only sets the supply chain back even more.”
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“Pushing the Port of Los Angeles to operate 24/7 is Biden’s most direct action to date, and it’s supposed to ensure that an additional 3,500 cargo ships are unloaded each week. The Port of Los Angeles and the Port of Long Beach, which expanded its operations last month, are responsible for 40 percent of the containers brought into the US, so expanding their operations is supposed to speed up shipping nationwide, the White House says.”
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“it’s not clear what Biden can do to fix the bottlenecks occurring higher up in the supply chain, like manufacturers running low on components and factories getting shut down abroad. While the White House has convened task forces to address these underlying problems, those efforts probably won’t bear fruit in time for the holidays.”
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“In the long run, it’s possible that the US government can change policies that contributed to this situation in the first place. Politicians could shift their approach to trade, which has historically encouraged US companies to manufacture products abroad. Improving labor standards might boost working conditions for truckers and factory workers to make those jobs more appealing — boost global vaccine manufacturing and ensure that workers in other countries are safer from Covid-19 outbreaks. Admitting more people into the US could address a shortage of delivery and port workers.”
“The Wall Street Journal reports that Walmart, Target, Costco, and Home Depot are among the major retailers to adopt the “if you want something done right, do it yourself” approach to importing goods. Worker shortages and COVID-19 protocols have slowed trans-Pacific shipping considerably—it now takes about 80 days to transport items from Asia to the U.S., about twice as long as it did before the pandemic, the Journal reports.”
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“many of the bottlenecks are domestic issues. For example, major ports in Europe and Asia operate around the clock, but American ports run at about 60 percent capacity because they close at night and on Sundays. Even when dozens of ships are waiting to be unloaded, inflexible union rules that govern dockworkers’ and truckers’ hours make it difficult to meet swelling demand.
By chartering smaller, private ships to carry their goods, retailers like Walmart are hoping to bypass the backlogs by landing at smaller ports up and down the east coast. That will cost more money—and those costs will be passed onto consumers—but that’s better than running out of inventory during the Christmas rush. Home Depot, for example, is relying on chartered ships to deliver only a small percentage of its overall inventory with a focus on high-demand items like plumbing supplies, power tools, holiday decor, and heaters, the Journal reports.
Getting goods onshore is only half the battle. There are plenty of other bottlenecks to be navigated, like a 25-mile freight train backup that occurred at a major shipping facility outside Chicago earlier this year. At the port in Savannah, Georgia, The New York Times reports that workers are “running out of places to put things” as they unload ships, snarling both ground- and sea-based transportation.”
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“”The coronavirus pandemic has snarled global supply chains in several ways. Pandemic checks sent hundreds of billions of dollars to cabin-fevered Americans during a fallow period in the service sector. A lot of that cash has flowed to hard goods, especially home goods such as furniture and home-improvement materials. Many of these materials have to be imported from or travel through East Asia. But that region is dealing with the Delta variant, which has been considerably more deadly than previous iterations of the virus. Delta has caused several shutdowns at semiconductor factories across Asia just as demand for cars and electronics has started to pick up. As a result, these stops along the supply chain are slowing down at the very moment when Americans are demanding that they work in overdrive.””