Port of Los Angeles punts on approving APM Terminal project in wake of ILWU ire

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28-day cooling off period now in works after contentious debate about automation; Union reminds officials that ‘robots do not pay taxes.’

A project at a Maersk (Nasdaq OMX: MAER.B) container ship terminal has split stakeholders at the largest U.S. seaport, pitting dock workers and local political leaders against the march of automation and ocean carriers serving the nation’s busiest import gateway.  

The issue highlights the myriad issues hitting the Port of Los Angeles, which is trying simultaneously to ease truck congestion, meet high environmental goals and beat back competition from other North American ports.

The project at APM Terminals in Los Angeles has also drawn in an endangered seabird and the next generation of wireless technology.

Gene Seroka, the executive director of the Port of Los Angeles, presented a staff report in support of a permit for Maersk’s APM Terminals subsidiary to install additional equipment at its Pier 400 site at the port.

Seroka said the project was small enough that it did not need review from other state agencies and that the project was in keeping with the port’s goal of increasing efficiency and reducing pollution. The staff report also recommended that an appeal of the permit’s approval be denied.

Known by the bland name “Coastal Development Permit 18-25,” Seroka said the permit “was issued in compliance with the Port Master Plan and the California Coastal Act” and asked the Los Angeles Board of Harbor Commissioners to “adopt the findings of fact in the staff report.”

But the Board meeting was anything but bland, as it drew a standing room-only crowd and lasted four hours as numerous speakers voiced their opposition to the plan.

Despite the staff report’s recommendation, the Board of Harbor Commissioners did not act on the matter. Rather Los Angeles Mayor Eric Garcetti asked for a 28-day cooling off period so dockworkers and APM Terminals can reach an agreement over the project’s future.

An APM representative said it appreciated the Port of Los Angeles’ staff recommendation on the permit’s approval and the appeal of the denial. APM also welcomed the Mayor’s help in talks with dockworkers.

“We are confident that modernizing (the terminal) will keep the Port of L.A. competitive in an increasingly challenging environment,” APM said in a statement.

In the permit which was filed last November, APM asks for permission to install electric charging stations, scaffolding for a vertical racking systems for refrigerated containers, traffic barriers and antenna poles.

The $1.5 million project increases terminal efficiency and decreases emissions by swapping out diesel-power yard equipment with electric equipment, APM said in its permit application.

However, International Longshore and Warehouse Union (ILWU) Local 13, which represents dock workers at APM, say the project’s real goal is to use electrified automated straddle carriers to replace manually operated top-loaders to stack containers.

In prepared remarks, Gary Herrera, vice president of ILWU Local 13, said Maersk wants to use straddle carriers from Finland’s Kalmar at the Los Angeles facility.

Herrera said automation at the biggest terminal at the biggest port in the U.S. will have a ripple effect throughout the local economy.

“This is first and foremost about eliminating labor,” Herrera told the Commissioners. “Robots do not pay taxes, robots do not shop at our stores, robots do not buy homes ... robots do not vote.”

Herrera also disputed the idea that automation increases efficiency. Without citing specific evidence, Herrera said productivity at two other automated sites – TraPac in Los Angeles and Long Beach Container Terminal – is lower relative to other local terminals.  

APM Terminals’ statement to the Board of Harbor Commissioners does not explicitly list the use of straddle carriers at the site. But John Ochs, who heads West Coast labor and regulatory affairs for APM, said the project does include “the introduction of self-guided container handling equipment.”

But Ochs dismissed the view that the project would result in job losses at APM, saying that the scaffolding for the vertical container rack would allow ILWU mechanics to repair the refrigerated container boxes.

Jim McKenna, president of the Pacific Maritime Association, which negotiates labor contracts on behalf of carriers and terminals, said the 2002 and 2008 contracts with the ILWU allow for the terminals to automate processes.  

“Thanks to the 2002 contract, we were able to replace clipboards and chalk with scanners, GPS and optical character recognition technology,” McKenna said. “Since that time, the waterfront has thrived with the ranks of longshore members growing by more than 60 percent.”  

APM said the automation plan will partially relieve one of the biggest issues for shippers that use Pier 400 – the long delays for drayage truck drivers. Reconfiguring traffic patterns within the 484-acre complex would reduce drayage-truck transit miles by up to 65 percent, from about 25,500 miles to about 8,500 miles on a typical day.

“Where we think we will see the gains in efficiency is in our yard operations where we transfer the container to the outside trucker,” Ochs said. “The new process will bring cargo to the truck in a more efficient manner which should reduce the trucker’s turn time.”

“This is an important metric for the drayage folks,” he added.      

The delays facing drayage trucks at the Port of Los Angeles is an increasingly critical issue for shippers deciding on where to bring goods into the U.S. Harbor Board Commissioner Ed Renwick said the port’s congestion has driven up the landed cost of an imported container at Los Angeles by $400 to $450. In comparison, drayage costs for a loaded container at ports in the Southeast or Gulf Coast run about $250.

Renwick estimated that the higher costs for bringing goods into Los Angeles have meant a 20 percent market share loss to other North American ports.     

The electric-power container handling equipment and the reduced idling of drayage trucks aligns with the port’s own goals to reduce emissions, Ochs said.   

Opponents to APM’s project also brought up concerns about the antenna poles that will be used to guide the container handling equipment.

The ILWU cited the project’s use of “5G” wireless technology, the latest wide area cellular standard that is being rolled out across the U.S. ILWU submitted articles that raised concerns about the potentially adverse health effects of 5G.  

But Ochs said the permit is for the use of Wi-Fi technology that uses the 5 gigahertz spectrum, similar to what is used in home networks.  

Opponents of the project also raise concerns about its impact on the habitat of the least tern, a  federally listed endangered seabird that nests at Pier 400. But the Port of Los Angeles’ report noted that the project will likely not have any impact on the birds’ habitat.