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Port Report: Canada’s future port automation cause of union angst

Project that would increase Vancouver's box throughput by one-third once complete is latest front over automation.

Automation is once again a flashpoint at ports, with a major Canadian container terminal project becoming the latest instance of a stand-off between labor and management.

As FreightWaves Nate Tabak reported, the International Longshore and Warehouse Union (ILWU) Local 502 is standing down from a full-blown strike at Vancouver’s ports. Instead, ILWU members will refuse overtime and take other measures at the third-largest container port on the North American west coast.

The ILWU said the action was prompted by concerns over automation at the ports “and the potential devastation to our communities.”

The issue at stake is the Roberts Bank Terminal 2 project at the Port of Vancouver. The proposed $2 billion project would have a 25 percent larger footprint than the existing Roberts Bank container terminal, GCT Deltaport.

Once all phases are done, Roberts Bank Terminal 2 would add 2.4 million twenty-foot equivalent (TEU) in capacity to Vancouver. Last year, all Vancouver port terminals handled about 3 million TEU in total.

To get to that capacity, Roberts Bank 2 will be semi-automated. The degree of automation is uncertain as the project is ten years from completion, said Cliff Stewart, who heads infrastructure projects for the Vancouver Fraser Port Authority.

It “would be something that the operator would decide very much later in the process and largely, I think, would be a function of the technology that was available,” Stewart said in testimony about the project.

Automation comes down to what the industry calls “horizontal transport” from off the ship to rail or truck.

Terminals are eyeing a wide variety of capital equipment and projects for automating horizontal transport, according to an industry consultant who was not authorized to speak publicly.

The current technology includes automated stacking cranes and automated guided vehicles. Both are being used at the Long Beach Container Terminal, which is known for being one of the most automated on the west coast. Other methods include automated straddle carriers, which Maersk’s APM Terminals subsidiary wants to test at its Los Angeles terminal.  

“There is a great deal of interest in automation, particularly in those regions with the most volume where these investments could pay off,” the consultant said. “The goal is to increase reliability of a container terminal’s performance.”

But Local 502 wants Canadian regulators to put a limit on how much can be automated at Roberts Bank 2. Tom Doran, President of Local 502, said “the track record of automation to deliver promised efficiencies is spotty, at best.”

“Experience elsewhere suggests automation and digitalization of marine terminal operations may not actually be the panacea that some promise,” Doran said.

Local 502 is not outright opposed to automation, Doran said. The union supported GCT Deltaport’s decision to install semi-automated stacking cranes in place of rail mounted gantries.

But Doran said the promise of automation has been oversold. He cited a report from consulting firm McKinsey that says the reduction in labor costs from automation also means lower productivity.

“In many cases, after significant investment, automated terminal operations have failed to achieve the promised improvements to productivity,” Doran said. “In fact, many terminal operations that have not automated have better productivity.”

Roberts Bank 2 is expected to employ up 1,500 once completed. But Local 502 is concerned that automation will keep a lid on those jobs or eventually reduce them all together.

ILWU’s Doran said the Long Beach Container Terminal “the interface on the water side to the interface on the land side is completely automated.” The result is upwards of a 70 percent reduction in the terminal’s workforce, he added.

“For every one of the 60 automated guided vehicles that could be deployed at any given shift at Long Beach Container Terminals, those are 60 jobs that are gone.”

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Michael Angell, Bulk and Intermodal Editor

Michael Angell covers maritime, intermodal and related topics for FreightWaves. His interest in transportation stretches back several generations. One great-grandfather was a dray horseman along the New York waterfront and another was a railway engineer in Texas. More recently, Michael has written about the shipping industry for TradeWinds, energy markets for Oil Price Information Service, and general business topics for FactSet Mergerstat and Investor's Business Daily. When he is not stuck in the office, he enjoys tours of ports, terminals, and railyards.

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