“whether they are open or closed, many American ports rank among the least efficient in the entire world. The ports in New York, Baltimore, and Houston—three of the largest of the 36 ports that could have been shut down by the ILA strike—are ranked no higher than 300th place (out of 348 in total) in the World Bank’s most recent report on port efficiency. Not a single U.S. port ranks in the top 50. Slow-moving ports act as bottlenecks to commerce both coming and going, which “reduces the competitiveness of the country…and hinders economic growth and poverty reduction,” the World Bank notes.”
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“The problem is that American ports need more automation just to catch up with what’s considered normal in the rest of the world. For example, automated cranes in use at the port of Rotterdam in the Netherlands since the 1990s are 80 percent faster than the human-operated cranes used at the port in Oakland, California, according to an estimate by one trade publication.
It’s worth noting that the lack of automation, and the resulting inefficiencies, at American ports was a major factor in the supply chain issues that popped up during and after the COVID-19 pandemic.”
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“Additionally, the tradeoff between automation and jobs is not a zero-sum game. A study published in 2022 found that the partial automation of the Port of Los Angeles had resulted in “significant gains in throughput, productivity, and efficiency, resulting in more hours than ever for workers.” As with other forms of automation, some job losses are inevitable, but efficiency gains benefit dockworkers too—and the truckers, manufacturers, and others in the supply chain who are waiting for goods to be loaded or unloaded.
Indeed, if maximizing the number of union jobs at ports was the highest value to society, Daggett and the ILA might want to change their demands. Why not demand a ban on cranes, forklifts, and tractor-trailers too? It would take a lot more workers to unload a freighter if everything had to be lifted by hand, after all.”
https://reason.com/2024/10/04/automate-the-ports/
The demand for protections against automation sound outrageous. Preventing automation costs everyone more money. They are threatening to sharply increase the price of everything temporarily, if we don’t let them gradually increase the price for everyone overtime due to inefficient practices. It’s selfishness–hurting everyone else for their own gain. If we want an economy that grows and creates the most good for the most people, we have to let inefficient jobs die.
“The striking workers essentially load and unload the giant containers that go onto ships, trains or commercial trucks, which can contain all manner of goods, from building materials to auto parts. People expecting new cars may not get them, some factories may not have the raw materials they need and some items, such as bananas, may become hard to come by — especially the longer the strike persists.
Vessels used by other industries — for instance, oil tankers and cruise ships — will not be affected by the strike, because they are not loaded or unloaded by ILA members. And ports on the West Coast aren’t part of the contract dispute.
Even the appearance of such a sharp blow to the economy just weeks before the election presents an enormous opening for Republicans to hammer their message that Democrats are worse for Americans’ wallets. It’s happening just as Harris is trying to convince voters that having her in the White House would mean more jobs and more affordable housing, among other promises.
Democratic New York Gov. Kathy Hochul tried to reassure residents Monday that her state — one of the strike’s biggest targets — has enough essential goods to keep it from suffering the kind of immediate supply chain problems that hit it during the early days of the pandemic.
She said her team is working to make sure the strike doesn’t bleed into people’s lives, and said she doesn’t expect it to affect the election, particularly in the state’s close congressional contests.
“In preparation for this moment, New York has been working around the clock to ensure that our grocery stores and medical facilities have the essential products they need,” Hochul said in a statement shortly after the strike became official. “It’s critical for USMX and the ILA to reach a fair agreement soon that respects workers and ensures a flow of commerce through our ports.”
New York has stockpiles of medical supplies, many prescription drugs come by plane, and the U.S. produces lots of its own food. Even much of the food that the U.S. imports comes through land borders with Canada and Mexico that the strike will not affect.
Still, New York and New Jersey are home to the East Coast’s largest port. One hundred thousand cargo containers are sitting at port facilities in the two states, and dozens of cargo ships are preparing to anchor offshore until the strike ends, according to regional port officials.”
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“The strike comes after a six-year master contract between the union and the shipping industry expired on Monday. The union has asked for major wage increases and protections against automation. The shipping industry has accused the union of not coming to the table.”
https://www.politico.com/news/2024/10/01/dockworkers-strike-east-gulf-coast-00181807
“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.”
“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.””
“Right now, distribution networks across the world are massively congested.
“Los Angeles — which is a major port of entry for the United States — New York, and New Jersey are all pretty full up,” says O’Leary. “We’re hearing reports of delays of weeks for getting things cleared.”
“Containers are not moving out of ports and onto trains quickly enough,” explains Chris Tang, a UCLA business professor specializing in global supply chain management. “And on top of that, all of the warehouses in the Midwest are full. So everything is stuck.”
An increase in online shipping in part of what’s driving the congestion. Meanwhile, the complications of Brexit and the internet’s beloved container ship Ever Given — both of which dramatically disrupted global supply chains — certainly aren’t helping ports empty themselves out faster.
Even more pressing, however, is a shortage of truck drivers. There just aren’t enough trucks on the road to pick up as much stuff as we’re currently shipping around the world. “We’re talking tens of thousands fewer truck drivers than we need,” says O’Leary.
And as stuff sits in warehouses, waiting to be picked up by increasingly scarce truck drivers, the price of storage goes up, adding to overall shipping costs. “It used to be around $3,000 per container,” Tang says. “Now the price is closer to $20,000.” The skyrocketing costs mean that companies selling luxury goods will take more warehouse slots, since they can afford them, while lower-priced goods, like books, compete for what’s left.
Barnes & Noble CEO Daunt notes that books do have one big advantage over other goods when it comes to shipping: They’re durable. “The reality is that books are fantastic because they don’t really perish, so you’re able to print lots of them in advance,” he says. “They’re incredibly robust, so you can send them through the most basic of supply chain routes. They’re not strawberries or peaches or delicate things.”
But right now, even the most basic of supply chain routes are finding themselves overwhelmed.”
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“One of the big underlying problems when it comes to printing and shipping books is the same labor shortage that’s currently roiling the rest of the country. There aren’t enough press operators to get books printed, and then there aren’t enough truck drivers to get them to bookstores. Wages have gone up, but there still aren’t enough people working.
“In the whole national workforce, you’ve got 8.4 million unemployed but 10.9 million open jobs,” says Baehr. “That’s a two and a half million-person shortage, period, and that’s across all buckets. The book industry is getting hit with that just as much as the paper industry is getting hit with that just as much as the transportation industry is getting hit with that. It all just compounds on itself. It’s just a rough spot right now for the book business.”
“Simply put, the working-age population in the US has stopped growing,” says Gad Levanon, founder of the Labor Market Institute. “And the working-age population without a BA is shrinking quite rapidly.” That’s a major issue for the industries we’re discussing here because in general, people with college degrees prefer not to work in warehouses, as truck drivers, or in printing presses.”