LA terminal automation delayed, but not derailed

LA terminal automation delayed, but not derailed

The 12 container terminals that make up the Los Angeles-Long Beach port complex handled total of 17.5 million loaded and empty TEU in 2018. Shutterstock.com.

The International Longshore and Warehouse Union agreed to a delay to APM Terminals’ automation of part of its Los Angeles terminal, but its coastwide labor contract won’t prevent the eventual implementation of automated straddle carriers to shuttle containers.

A decision on whether APM Terminals will be granted a construction permit to prepare a 100-acre portion of its container terminal at Pier 400 in the Port of Los Angeles for automation has been delayed until later in March, with the president of International Longshore and Warehouse Union Local 13 approving of the delay, though maintaining the union’s adamant opposition to the spread of automation.

Dozens of ILWU members filled a Los Angeles Harbor Commission meeting Thursday evening, and the overflow gathered outside the facility, to learn the fate of a project that would result in the third automated container terminal in Southern California. The harbor commission indicated a formal public hearing, possibly in a larger venue, would likely take place at its next scheduled meeting on March 21. The port community will be given at least 15 days advance notice of the hearing.

At stake is a relatively minor construction permit that is necessary for APM to automate 100 acres of its 440-acre terminal. The ILWU, like its counterparts at the International Longshoremen’s Association on the East and Gulf coasts, adamantly opposes further automation of cargo-handling equipment because longshore jobs are eliminated. Employers note that in addition to the environmental and cost-reduction benefits of electric and battery-powered equipment, automation produces steady, although unspectacular, improvements in cargo-handling productivity that result in greater throughput per acre on scarce waterfront land, and in improved truck turn times at congested container terminals.

The ILWU’s intense interest in the APM project is a last-ditch effort to block the spread of automation at the largest US port complex. The TraPac terminal in Los Angeles and Long Beach Container Terminal’s (LBCT’s) Middle Harbor facility are automated. Employers were able to automate those terminals because the ILWU, in the 2008 coastwide contract on the West Coast, agreed to allow individual terminals to introduce automated cargo-handling equipment at will. In return, the Pacific Maritime Association agreed to increase the ILWU pension benefits to a maximum of more than $95,000 per year.

Since the ILWU locals in Southern California can not block the spread of automation through the coastwide contract, they have focused their efforts on a construction permit that APM requires in order to install the infrastructure needed to operate battery-powered equipment. The Level 1 permit, the lowest level of construction permit under California’s coastal regulations, must be approved by the harbor commission.

After briefly addressing the commission on Thursday, confirming the union’s opposition to the construction permit, ILWU Local 13 president Mark Mendoza agreed to a postponement of testimony until a formal public hearing can be held next month. Vice President Gary Herrera also approved of the delay in order to facilitate a longer discussion. At previous public forums in recent years, ILWU representatives stated that automation of the type implemented in Los Angeles-Long Beach reduces jobs by 40-70 percent at container terminals.

Known as "full" automation, the Southern California model uses automated guided vehicles or automated straddle carriers to shuttle containers within the terminal. The East Coast’s semi-automated model in use at Global Terminals in New Jersey and in Virginia, employs traditional yard tractors, each one driven by a longshoreman, to shuttle containers. A terminal operator generally assigns nine or 10 yard tractors to each of the four or more ship-to-shore cranes that unload containers from vessels.

Some terminal operators resist automation, which can cost $500 million to more than $1 billion to implement, noting that a productive work force driving manually-operated cranes and equipment can produce gross container moves per hour of 35 to 40. Terminals generally consider 30 moves per hour to be good. Experience with automated terminals in the US and Europe show productivity levels in the mid to high 20s. However, yard operations at automated terminals can operate round the clock, using the nighttime hours when the gates are closed to groom the yard and position containers for the next day’s activities. Felix Kasiske, a partner at Hamburg Port Consulting, told the JOC Port Performance conference in 2017 that while manually-operated terminals can hit higher peaks than automated facilities, the consistent, machine-like productivity of an automated terminal is superior when measured over a 24-hour day.

Harbor truckers, who are paid by the trip and not when they are waiting in long lines at the terminal gate, note that another feature of the automated terminals is rapid delivery of containers to truckers. The Harbor Trucking Association, which tracks turn times in Los Angeles-Long Beach each month, reports that the turn times at LBCT’s Middle Harbor consistently run 40 minutes or less, even during peak-volume periods. The portwide average is closer to 80 minutes and can reach 90 minutes during busy periods such as occurred the past few months. Gate times at the automated Virginia terminals also average 40 minutes or less.

Fully automated terminals are also safer because most of the longshoremen work remotely in the terminal tower, rather than servicing the container stacks. Also, since street trucks are served in an area close to the entry gate and therefore are not driven deep into the container stacks as in manual terminals, automated facilities are safer for truck drivers.

Cost savings is also a major driver of automation. Longshore earnings on both coasts average in excess of $100,000 a year for a full-time dockworker. However, the total number of longshoremen at the two largest US ports with automated terminals, Los Angeles-Long Beach and New York-New Jersey, have increased since the dawn of US terminal automation more than five years ago along with growing cargo volumes.

On the other hand, in order to recover the large investment in automation, a terminal must handle about 1 million TEU or more per year. That is achievable in Los Angeles-Long Beach, where the 12 container terminals in 2018 handled a total of 17.5 million loaded and empty TEU, as well as at the larger terminals in other West and East coast ports.

The APM facility in Los Angeles is expected to be less costly to develop because it will not require the type of extensive construction work experienced at TraPac and Middle Harbor, where the terminals, closer to the European model, use costly automated stacking cranes and sensors imbedded in the pavement to guide the automated yard tractors. Opponents of automation are concerned that if the lower-cost auto-strad model is successful at APM, it could spread to other terminals and ports that otherwise don’t generate the large container volumes needed to justify fully-automated terminals.

Contact Bill Mongelluzzo at bill.mongelluzzo@ihsmarkit.com and follow him on Twitter: @billmongelluzzo.

Comments

The port of LA can end all of this. They are the landlord and APM terminals is the tenant. The Port of LA can tell their tenants that they cannot automate on their land.