Can U.S. ports find a middle ground on automation before a second strike?

In early October, the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) ended a three-day strike at Eastern and Gulf of Mexico ports after agreeing to an interim agreement to extend the union’s contract until January 15, 2025. However, as negotiations continue in the meantime regarding a long-term contract, both sides still have to overcome the thorny issue of automation.

In the run-up to the October shutdown, the ILA made clear it had two priorities. First, the union demanded clear guarantees that ports on the East Coast and Gulf Coast would not implement automated technology during the term of the new agreement. Secondly, the ILA was adamant that it would not agree to anything less than a significant increase in longshoremen’s wages. The latter issue was addressed as part of the interim agreement, with USMX approving a 62% salary increase over the next six years. However, when it comes to automation, this remains a point of contention.

“My observation is that the ILA is buried deep in the sand on this,” says Margaret Kidd, program director and associate professor of supply chain and logistics technology at the University of Houston.

Read more: A strike at U.S. ports is sparking the automation debate front and center

Throughout the negotiation process, the ILA asserted that automated technology would ultimately directly lead to port job losses. That being said, Kidd notes that virtually every modern industry in the U.S. has had to adopt new technology at some point. But she says concerns over automation have left the country decades behind shipping hubs in Europe and Asia.

“If you look at America’s competitiveness, we are the weak link in the global supply chain,” Kidd says. “We can’t do the same job for 130 years and not change the technology we use to make us more efficient and more effective.”

While he emphasizes that it is reasonable for ILAs to be concerned about the impact of automation on their jobs in the coming years, not all automated technologies involve replacing a machine-performed task with a human-performed one on a one-to-one basis. one. These include remote-controlled ship-to-shore cranes that can be operated by a worker located elsewhere, automated frame dollies that lift and stack containers with the help of an operator, and driverless guided vehicles that still require human monitoring and management on site every day.

“I think there’s a middle of the road,” Kidd says. “The human element is very important and it is vital that we look at upskilling and providing training.”

Approaching deadline

If the ILA and USMX do not reach an agreement by January 15, eastern and Gulf of Mexico ports could face a second strike in three months. The first time around, retailers spent months rushing to get their shipments ready for the October shutdown, one of several factors that helped shift the peak freight season from August-October to May-August. For this reason, the effects of the first three-day strike were minimal, even though it occurred at the beginning of the period when American consumers begin their holiday shopping.

A second strike would create its own set of challenges, given that China’s Lunar New Year – when most factories in China close and production declines – falls on January 29. Before that, importers should already start preparing for the possibility of a port strike coinciding with the holiday, says Container xChange CEO Christian Roeloffs.

“Container operators should start contingency planning now,” he advises. “This includes securing inventory, diversifying supplier networks and considering alternative shipping routes to reduce delays. These types of proactive steps will be key to meeting the challenges we anticipate in January.”

Given that the ILA and USMX agreed on pay increases in October, Kidd says there’s a chance there will also be “a little wiggle room” in the negotiations. “If I were part of the ILA negotiating team,” she says, “I would negotiate to guarantee a certain number of jobs, and then training and upskilling (for automation) would be that human element, because technology doesn’t operate in a silo — you still need people.” There is also a chance that both sides will agree to challenge again through another interim agreement, but that would create even more uncertainty ahead of the next potential strike date.

“It’s in everyone’s interest to resolve this issue and provide some stability,” Kidd says.