America’s Ports Need More Robots, but the $1 Trillion Infrastructure Bill Won’t Fund Automation

“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.””

“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.”

With Ports Clogged, Some Retailers Are Looking for Alternative Supply Chains

“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.”

“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.”

“”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.””

The great book shortage of 2021, explained

“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.”

“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.”