Posted on November 26, 2024
Globalised trade, the lifeblood of modern economies, is here to stay. Yet, as international commerce expands, the world’s ports face an unavoidable challenge: their physical and operational limits. Shorelines suitable for deepwater facilities are finite.
Expansions, such as Vancouver’s Roberts Bank Terminal 2 – built on reclaimed land in a river estuary – highlight the immense effort and expense required to increase port capacity. Even if new terminals and rail connections materialised overnight, constraints on available space make the existing ports indispensable, bestowing extraordinary leverage upon port workers.
This sway, however, has come at a cost. Labour action has secured significant gains for workers but left third parties – farmers, miners, manufacturers and consumers – to shoulder the burden of such disruptions.
In 2014, a protracted stand-off between the International Longshore and Warehouse Union (ILWU) and US West Coast terminal operators left billions of dollars worth of goods in limbo, paralysing trade for months.
Last year, British Columbia port workers froze operations at Vancouver and Prince Rupert during a 13-day strike, affecting shipments also worth billions of dollars. More recently, strikes from Maine to Texas on America’s East and Gulf coasts further underscored the fragility of a system reliant on human labour at critical junctures.
Meanwhile, ports like Singapore and Rotterdam have embraced automation, setting new benchmarks for throughput and reliability. PSA Singapore’s port terminals are equipped with autonomous cranes and vehicles. With continuous operations, it handles 39 million container units annually, making it a world leader.
Rotterdam started automating in 1993. Today, its systems have been able to reduce dwell time – the interval it takes for containers to get from ship to truck or rail – to less than three days, a fantastic feat for a port of its size. These facilities show the transformative potential of prioritising robotics and artificial intelligence over manual processes, creating efficient, resilient supply chains.
A robotised truck moves a container at a terminal in Rotterdam, Netherlands, in 2003. Rotterdam, Europe’s largest port, was the first in the world to operate an automated terminal in 1993.
Despite protests and lobbying, employment in horse-dependent industries had more than halved by 1915. This lesson resonates today: resisting technological progress delays the inevitable and risks obsolescence.
For many port workers, the stakes are both economic and cultural. Union membership often embodies a form of dynastic privilege, preserving the intergenerational tradition of secure, well-compensated employment within port communities.
Dockworker Meikysha Wright and others strike outside the Virginia International Gateway in Portsmouth, Virginia, in the US, on October 1.
Unions argue that automation will devastate these communities, a legitimate concern given ports’ central role in local economies. Yet the stakes of inaction are just as significant. Ports are the arteries of global trade, and their efficiency – or lack thereof – affects consumers and businesses worldwide. Each day’s delay amounts to an ad valorem tariff on traded goods.
Every strike, slowdown or derailment disrupts operations and tarnishes each affected port’s reputation. Shippers, faced with delays, incur financial losses and begin seeking alternatives.
Some suggest the move was merely a tactical effort to clear shipments ahead of the holiday season. It also allowed time to bypass affected ports in the event of a subsequent impasse. Maybe.
A resolution appears increasingly likely. Expect agreement on a bifurcated system: full automation at some terminals and limited automation at others, mirroring compromises on the US West Coast. This approach allows union leaders to claim victory while granting port operators the flexibility to modernise where it matters most.
But such compromises only delay the inevitable. Ports lack the financial capacity to overhaul their operations overnight, and while senior workers will retain their roles for now, the future of less-tenured employees looks uncertain. Many jobs will vanish before new workers join union ranks. This shrinking labour pool will diminish union influence in future negotiations, further accelerating the march towards automation.
The imperative is clear: adapt or be left behind. Ports must evolve, not out of convenience, but necessity. Automation will disrupt port communities, but failure to adapt risks even greater harm. Automated ports will continue to attract trade and bolster adjacent industries, while those resisting change will stagnate, fading into irrelevance.
The world moves with a force beyond sentiment, and halting its course is as futile as commanding the tide to stand still. Labour resistance may delay automation, but history shows that progress ultimately prevails. Ports that embrace change will secure their role in a rapidly shifting global economy; those that resist will become relics of the past. Ask your local horse-drawn cart driver.
