If you compare U.S. ports to ports in Asia or Europe, the U.S. is definitely way behind... at most ports outside the U.S. there’s a much higher degree of automation.
Driving the news: The largest East and Gulf Coast port strike in 50 years has ended with a tentative wage agreement, but the real battle over automation in the shipping industry is far from over.
- The six-year deal between the International Longshoremen's Association (ILA) and the United States Maritime Alliance includes a 61.5% wage increase, but issues surrounding automation remain unresolved as negotiations continue.
- The strike, which involved 50,000 union members, disrupted port operations and stranded thousands of containers, highlighting the fragility of U.S. supply chains.
More than just wages: The fight over automation is not just about wages—it’s about keeping up in an increasingly automated world. Hardy Haenisch, Managing Director at Logimark International, an international supply chain management and freight forwarding company, said the U.S. lags behind other countries when it comes to port automation. “If you compare U.S. ports to ports in Asia or Europe, the U.S. is definitely way behind... at most ports outside the U.S. there’s a much higher degree of automation.”
- Automation could be key to staying competitive. “For the U.S. not to slip behind, some degree of automation is going to be necessary,” Haenisch added.
[OEMs] have invested heavily in improving their visibility of material flows to better anticipate disruptions and have a better sense of where goods are at.
Zoom in: Some companies have already begun investing in technologies to mitigate future disruptions. Jason Miller, Interim Chairperson of the Supply Chain Management department at Michigan State University, noted that “automotive original equipment manufacturers (OEMs) have invested heavily in improving their visibility of material flows... to better anticipate disruptions and have a better sense of where goods are at.”
What’s next: Despite the wage increase, the ILA made it clear that their battle is far from over. In a letter to members, the union emphasized that their fight against automation is not just about job preservation, but also ensuring it continue to play an essential role in port operations.
- But cross-industry trends indicate automation is here to stay, and workers will likely be forced to adopt a more complementary relationship with tech sooner rather than later.
- At least one terminal at each of the 10 largest U.S. container ports is already using some form of automation technology, according to the Government Accountability Office.
- The wage agreement buys time, extending the contract until January 15. But the next round of negotiations could determine the future of U.S. port labor in an increasingly automated global market.
