APM Terminal’s automation at LA foreshadows more

APM Terminal’s automation at LA foreshadows more

The Port of Los Angeles.

Automation at Los Angeles-Long Beach includes a strong pollution-reduction component. (Above: The Port of Los Angeles.) Photo credit: Shutterstock.com.

A decision by APM Terminals Los Angeles to automate a quarter of the largest container terminal in Southern California, sparking fierce pushback from longshore labor, is a precursor to more US port automation.

The challenge of handling mega-ships on smaller terminal footprints and California environmental regulatory pressure are pushing APM Terminals to automate 100 acres of its 440-acre facility, and similar challenges are mounting for other US ports — even if the pressure to reduce emissions isn’t as daunting as it is for Golden State ports. Like with APM Terminal’s LA effort, the longshore labor will push back hard.

“Maersk wants to deepen its pockets and hurt working families that daily, put their lives on the line to help move and transport every day necessities across the country,” Mark Mendoza, president of International Longshore and Warehouse Union (ILWU) Local 13 wrote on Facebook. “Longshore men and women will fight to prevent automation — I can promise you that.”

Like the ILWU, the International Longshoremen’s Association (ILA) has also drawn a line in the sand in terms of automation. Amid now-completed contract extension negotiations, the ILA ended talks with employers December 2017 over disagreement on the distinction between fully automated terminals and semi-automated terminals, which have automated features but are operated by dockworkers.

Automation in Los Angeles-Long Beach includes a strong pollution-reduction component. The ports’ joint Clean Air Action Plan (CAAP) includes a deadline of 2030 for the 12 container terminals in the harbor to achieve near-zero to zero emissions. Automation of cargo-handling equipment is one of the paths that terminals can take to meet that deadline.  

Automation implementation

Two terminals in Southern California are wrapping up automation programs, the TraPac terminal in Los Angeles and Long Beach Container Terminal’s automated facility known as Middle Harbor. Terminal operators in New York-New Jersey and Norfolk have semi-automated operations, which feature automated stacking cranes in the container yards but maintain dozens of longshore jobs driving yard tractors. The Southern California terminals are considered to be fully automated because the automated guided vehicles at Middle Harbor and the automated straddle carriers at TraPac are driverless.

A half-dozen ILWU representatives who addressed the Los Angeles Harbor Commission Thursday said they don’t like any kind of automation. “Local 63, my local, saw a 70 percent reduction in the workforce,” said Joe Gasperov, president of the marine clerks local, in reference to the terminals in Los Angeles-Long Beach that have been automated. Employers can argue that automation reduces emissions, Gasperov said, “but there are other options that don’t put people out of work.”

John Ochs, APM Terminals’ West Coast senior director of regulatory affairs, said that meeting the environmental requirements in the Los Angeles-Long Beach CAAP was a factor in the decision to automate, but the West Coast waterfront contract allows terminal operators to make business decisions, including the use of automation, on how to handle cargo in the way they feel is best for their facility. He cited the 2002 contract that opened the door for the use of technology and the 2008 contract that specifically permits the use of automated cargo-handling equipment. “This language has been in the contract for 11 years,” Ochs said.

Automating a terminal is costly. Long Beach Container Terminal’s (LBCT's) automated facility will end up costing about $1.5 billion, so a terminal operator that decides to do so must be confident it will generate a large container volume each year over the term of its lease with the port. Terminal operators usually cite 1 million TEU a year as the minimum volume needed to support automation. LBCT, which is expected to finish the final phase of its project in 2020, will have an annual throughput capacity of about 3 million TEU.

An APM Terminals spokesperson said the automated portion of the facility will feature container stacks that are positioned perpendicular to the gate and the vessel. The ship-to-shore cranes, like those at most terminals today, will be electric, and the self-guided automated straddle carriers that will shuttle containers between the vessel and the stacks will reduce the extensive construction work on the berth that is involved in the use of automated guided vehicles (AGVs).

The 100-acre portion of the 440-acre APM Terminal that is to be automated is vacant. APM had been subleasing the space to California United Terminals, but the HMM affiliate pulled out in 2017. This will make the construction process easier and less disruptive than attempting to install automation while that portion of the terminal would be carrying on day-to-day operations.

In addition to allowing greater density, which increases throughput per acre, automation has been proven to be beneficial for truckers because the perpendicular positioning of the stacks separates street truck traffic from vessel traffic performed by the automated strads or AGVs. Also, the automated stacking (gantry) cranes in the yard can operate round-the-clock, which allows the terminal to position import, export, and empty containers in each stack so that truckers arriving at the facility can usually complete a dual transaction, in effect doubling their productivity. The Harbor Trucking Association’s truck mobility project consistently lists LBCT as among the top two terminals in the harbor with turn times consistently around 40 minutes, compared with an average of about 85 minutes for the 12 terminals.

Automation — consistent productivity ‘like a machine’

However, the records of automated terminals in the US and Europe indicates that automation does not increase total terminal productivity per hour. Rather, as was discussed by Felix Kasiske, a partner in Hamburg Port Consulting, at the 2017 JOC Port Performance Conference, the automated terminal produces consistent productivity “like a machine” 24 hours a day.  

Nevertheless, it is also a fact that automation, especially a fully automated terminal, can reduce headcount at least by 40 percent, which the ILWU representatives who addressed the harbor commission argued was the real reason why APM Terminals is choosing to automate the 100-acre portion of the facility. Danny Miranda, president of ILWU Local 94, said the ports’ master plan and CAAP encourage automation as a way to reduce pollution, but he urged the commissioners, “Don’t use the CAAP as an excuse to eliminate jobs.”

Gene Seroka, executive director of the Port of Los Angeles, said that as terminal operators in Southern California invest in their facilities with an eye toward the CAAP’s 2030 deadline for zero or near-zero operations, each company will choose how it feels is the best way to achieve pollution reductions. “There are a number of pathways to reaching the 2030 goal,” he said.

The harbor commission on Thursday was scheduled to consider a request by APM Terminals to make structural changes to the facility to prepare for automation, but pulled the agenda item in order to hear testimony from the ILWU and APM. However, the decision to move forward with automation is covered contractually by the coastwide contract agreed to by the Pacific Maritime Association and the ILWU. “APM Terminals absolutely has the contractual right to automate their facility,” said PMA President James McKenna.




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





The ILWU position says a lot about how this all works out. Understandably they want to protect headcount, and that can be accommodated through negotiations. But to take a no-automation position means no real gains in productivity, meaning the west coast will continue to lose market share to the east coast and gulf, where productivity is 25-20% higher and headcount cost are 25-30% lower. Some form of compromise has to be reached to increase productivity at least to east coast levels, and get closer to real world major global terminal productivity which is 75% higher. Both sides have to be part of making it happen to be able to really help in making the west coast an attractive alternative and getting the congestion issues addressed and resolved.

Did Mark forget about the M&M Agreement? What a joke! Stand with the ILA? What has Mark been smoking?