The labor dispute isn’t over, though. The union said it had accepted “a tentative agreement on wages” and extended the current contract until Jan. 15 to reach accords on “all other outstanding issues,” which means it will push the Maritime Alliance to give it the power to impede the adoption of automation technology.
The Maritime Alliance, which represents port operators and ocean carriers, should stand its ground on the union’s demands to halt the adoption of modern equipment and software systems in a bid to protect jobs. The union wants to freeze in time the tools that are available to port operators at the expense of productivity gains that allow for the big worker pay raise without driving up the costs for moving goods through East Coast ports.
A deliberate obstacle to the adoption of technology would push higher freight-processing costs on to consumers and curb the potential cargo volume growth at East Coast ports. Except for freight destined directly to cities along the East and Gulf coasts, shippers have the alternative of bringing in their cargo through the West Coast and using rail and truck for the rest of the journey.
East Coast ports had won market share from their counterparts in the West during the pandemic. Lately, they’ve lost some of that volume because of the strike threat and drought conditions that had restricted the Panama Canal. Less volume at the ports means fewer of the jobs that the union wants to protect.
Now that port workers have won a large wage increase, the union will have much less support from the public if it decides to strike again in January over the automation issues. A port strike has immediate and severe impacts on the economy and consumers, which increases the importance of who is assigned the blame for goods not flowing as they should.In the argument over whether automation should be stifled or accepted, the union will find itself on the losing end. Most people have benefited from new technology and have had interaction with automated equipment, whether it be Ring doorbells at their homes or RFID badges that give them access to their workplace. A US General Accountability Office report earlier this year detailed how the top 10 US ports are behind on automation compared with 10 of the largest foreign reports. The World Bank ranks US ports among the least efficient in the world in its annual Container Port Performance Index. This is well known and comes as no surprise to people. They also know that the unions are a primary reason that the US — the world’s leader in technology development— is trailing in port automation and efficiency.
One of the surprises in the GAO report is that even if the US port operators and carriers were given free rein to adopt all the automation available, the ports here would likely remain behind the curve on technology adoption. The reasoning is that the US is mostly a destination for goods; the nation’s ports don’t handle a huge volume of transshipments — when a huge ship transfers containers to several smaller ships that then call on multiple ports — which are easier to automate.
Automation has both advantages and disadvantages, the GAO report says. While automated cranes can often stack containers more tightly together, which saves valuable port space, they sometimes can’t work during inclement weather or can be even slower than a human-operated crane, the report says. In other words, it’s not a given that all US ports would rush to automate.
The upshot is that port workers should be paid well, which they are, but the zeal to protect jobs shouldn’t come at the expense of progress. I’ll never forget when many years ago I stepped on an elevator in Mexico City to visit a government official and saw a man sitting on a stool. He asked me to which floor I was going and proceeded to push the button for me. This was his job. In a small way, he was contributing to the overall inefficiency of an economy stuck at the developing stage. Not all jobs are good for the economy.
The 45,000 port workers along the East and Gulf coasts achieved a large wage increase. In return, they shouldn’t stand in the way of improved efficiency. If they resume a strike in January, the public will know which side to blame.
