February 25, 2015
Well, it turns out that for all my wanton alarmism and portentous warnings of impending doom, the economic apocalypse has been averted.
SAN FRANCISCO (Feb. 20, 2015) – The Pacific Maritime Association and the International Longshore and Warehouse Union today announced a tentative agreement on a new five-year contract covering workers at all 29 West Coast ports. The deal was reached with assistance from U.S. Secretary of Labor Tom Perez and Federal Mediation and Conciliation Service Deputy Director Scot Beckenbaugh. The parties will not be releasing details of the agreement at this time.
The agreement is subject to ratification by both parties. “After more than nine months of negotiations, we are pleased to have reached an agreement that is good for workers and for the industry,” said PMA President James McKenna and ILWU President Bob McEllrath in a joint statement. “We are also pleased that our ports can now resume full operations.”[source]
This is an excellent, relieving outcome, and though the end may never have been nigh, the damage has been done. And, so, while there may not have been any devastating supply-chain disruptions, I'll fall back on the old refrain: better safe than sorry.
Speaking of which, I think it's safe to say the agreement will be ratified by both parties. Considering their history, however, one has to look to 2020, when the five-year contract expires. Will we shippers, carriers, manufacturers, retailers, and Supply Chain Practitioners all have to go through yet another nail-biter? Do we have yet another dispute to look forward to in which we'll all be wondering if — in the midst of yet another series of protracted, acrimonious negotiations — longshoremen are going to slow their work down to a crawl and the PMA is going to lock the dockworkers out altogether while international trade and commerce languish?
While I'm not here to voice support for either side, I will unequivocally advocate anything that prevents or even mitigates the risk of a repeat performance. Like a bad joke, it's getting old, don't you think? So I'd like to propose a solution: Automation.
Have you ever heard of the Delta terminal at the Port of Rotterdam? Its nickname is the "Ghost Terminal." Take a look at this picture and tell me what's missing...
So … what's missing? People...warm bodies...living, breathing creatures! The Delta terminal is all but entirely automated, and yet it can completely unload a ship laden with over 8,000 TEUs in under 24 hours.
"The ECT Delta Terminal, among other things, is known for the fact that it was the first automated terminal in the world … At the ECT Delta Terminal, a fleet of 265 Automated Guided Vehicles (AGVs) takes care of transporting the containers between quay and stack; in this storage area, all the work is carried out by almost 140 Automated Stacking Cranes (ASCs). The stack has 3,250 connections for reefer containers. The company, Delta Reefer Care, sees to it that all these reefer containers are optimally handled 24/7. An advanced Process Control System is at the heart of the entire automated cluster."[source]
And, Delta terminal isn't the only one. Just before Christmas last year, the Maasvlakte II terminal at Rotterdam performed its first commercial volume test.
"To support the planned 2.7 million TEU capacity, APM Terminals [Maasvlateke II's developer] has also signed two additional contracts for advanced container-handling equipment. A contract was concluded for one additional STS barge crane with Liebherr Container Cranes for delivery mid-2016. The crane will complement the two barge cranes currently in operation.
An order has also been placed with Terex Gottwald for an additional 25 battery-powered Lift-AGVs and 58 storage racks. These will be deployed at the Automated Rail-Mounted Gantry (ARMG) crane container stacks, and at the rail terminal. The order increases the number of Lift-AGVs at the facility to 62, and the number of storage racks to 154. The rack installation will begin in February 2015, with vehicle deliveries beginning mid year."[source]
You know, Automated Loading Cranes don't demand health benefits as part of their compensation package. Automated Stacking Cranes don't slow down their work as a negotiating tactic. And Automated Guided Vehicles are really so docile, well-mannered, and downright loyal that they're just not inclined to unionize and engage in the whole collective bargaining bit.
As the Luddites of the early 19th century ultimately yielded to the inevitable forward march of textile manufacturing technology, so too will West Coast ports catch up with their European counterparts. By the time 2020 comes around, the ILWU may find itself in a much weaker negotiating position if the PMA decides that the "human factor" of port operations is too great a liability.
The excellent NatGeo documentary below is all about the operations at the Port of Rotterdam. Skip to 25:43 if you'd like to see the "Ghost Terminal" at work.