Port Automation Might Not Be for Everyone, and Here’s Why
The first moves towards port automation began 25 years ago, and over the last two decades, technology has continued to develop, offering a full range of automation options and opportunities for fully automated ports.
Given this technology, some in the industry argue that full automation is the most efficient option for ports and the inevitable future for the shipping industry. Yet, even as the technology becomes increasingly available, only around 10% of ports are fully automated.
There are several reasons for this, but the real answer is that, despite its benefits, automation is not the answer for every port right now. Here are some reasons why.
It Creates Staffing Issues
One of the advantages of automation is that it enables ports to run more efficiently while not requiring as many employees for operation. While this is beneficial, it comes with two substantial problems.
First, it can be difficult to meet the staffing needs of automated ports. Ports around the world are able to find terminal workers and managers for manual systems. These are jobs that are well understood, and there is no shortage of employees with the right skill sets. In contrast, finding employees trained as robotic technicians or with the necessary engineering skills to work in automated ports can be more difficult.
Second, port automation is leading to issues with labor unions, especially those in North America and Europe, which see automation as an attempt to eliminate jobs. Highlighting some of the pain points between unions and port authorities, a report by Moody’s Investors Service found that “peak productivity at automated terminals does not always exceed conventional facilities and there is a significant political and social risk associated with labor unions due to the impact on employment.”
A recent walkout at the Victoria International Container Terminal (VICT) in Melbourne highlights this ongoing tension. VICT, Australia’s only fully automated terminal, now has fewer employees on longer shifts. Workers argue that they are working too many hours because there are not enough employees. VICT asserts that the shifts are appropriate for the type of work employees are doing and that unions are trying to negotiate terms associated with a manual terminal, which would make the automated port nonviable.
Upfront Costs and Scaling
Automated ports require a major upfront investment in equipment. In addition to equipment, many ports require the building of a new operating terminal or a complete restructuring of terminals to implement automation.
This means that ports must find public funding or private financing in order to implement automated systems. It can be difficult to find investors that are willing to fund this type of project, particularly for smaller ports or those where long-term returns are not certain.
This challenge is exacerbated by the fact that automated ports are harder to scale, unlike manual terminals where resources can easily be added or taken away as volume and demand change.
While automation is spreading throughout the shipping industry, many ports continue to rely on manual systems. Until some of the key concerns around automation are addressed, this is not likely to change.
While technology can make things more efficient and streamlined, there are certain functions that require a personal touch. Using a balanced human and technological approach, here at ClearFreight, we are able to provide our customers the best of both worlds. Our team of logistics experts and our technology tools allow us to provide customers with customized logistics solutions tailored to their unique needs. To find out how ClearFreight can support your supply chain, contact us today.