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September 30 2019

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4 The Journal of Commerce | September 30 2019 www.joc.com Mark Szakonyi US AND CANADIAN governments, from the federal to the local levels, are beginning to wrestle with how to respond to pushback against port auto- mation. Whether a US or Canadian marine terminal becomes automated is between the employer and labor, but how governments respond to pressure from longshoremen will have ramifica- tions in the greater labor market. Those potential impacts go beyond the shaping of public perception, which if fiercely negative could cause terminal operators to hesitate on their automation plans. How governments respond could impact the permitting process, as APM Terminals found in its ultimately successful pursuit of automation at the Pier 400 terminal in Los Angeles in July. But the expected increase in US port automation — as forecast by a Moody's Investors Service report published on June 24 — is also spurring a behind-the-scenes debate on whether federal grants should support automated port projects. To a larger degree, the clash over port automation hits the nexus of two of the major forces shaping North American labor: increased robotization of work once handled by humans and shrinking union membership. While these issues have been bubbling into general public consciousness in recent years, the Democratic presidential candidate Andrew Yang has specifically referenced the threat of automation as a top issue, warning that robotiza- tion of labor will bring Great Depres- sion-level unemployment. Mean- while, candidate Sen. Bernie Sanders, D-Vermont, has released a plan to double union membership. The share of US workers in unions was 10.5 per- cent in 2018 compared to 20 percent in 1985, according to US Department of Labor statistics. While US and Canadian longshore unions have shielded themselves from such deep membership declines, the slow creep of port automation has rattled them, driving efforts to curb automation or at least shape the perception thereof in the public and among local politicians. Following the International Longshoremen and Warehouse Union's (ILWU) unsuc - cessful six-month effort to block the automation of the LA terminal, the Long Beach City Council has directed city officials to determine the economic impact of automation on the city. Separately and as part of an agreement with the ILWU to create workforce training, Los Angeles City Councilman Joe Buscaino will lead a commission studying the issue of automation, while the Los Angeles County Board of Supervisors will also study the issue after prodding from Janice Hahn, now-supervisor and a former US House representative who enjoys strong ILWU support. On the state level, legislation (AB1321) has been introduced that would mandate that California's State Lands Commis - sion and the governor's business and development arm hold meetings on the impact of automation on ports on granted public trust land. How the federal government approaches funding port automation is also beginning to take shape. Language within proposed legislation authorizing a $600 million Mari- time Administration grant program would prevent such funding from going toward "fully automated cargo handling equipment that is remotely operated or remotely monitored with or without the exercise of human intervention or control" if the Depart- ment of Transportation secretary determines it will cause a net loss of jobs relating to port and rail operations. Senate and House leaders are finalizing the vehicle for the port grants, the National Defense Authorization Act. The various US legislation, along with a recently commissioned study by ILWU Canada, show that long- shore labor's effort to shape political will and public perception will focus on not just the union jobs lost but the broader impact of the job loss will have on the community. Beyond the potential of marine terminal digiti- zation and automation to slash dock- worker jobs by 50 to 90 percent, the job loss would hit the larger Prince Rupert economy but impact Vancou- ver to a much lesser degree, according to the study by Prism Economics and Analysis for ILWU Canada. Longshore employment accounts for 26 percent of all jobs paying more than $70,000 and 66 percent of $100,000-per-year jobs in Prince Rupert, but just 2 per- cent of the $70,000-per-year jobs and 3 percent of the $100,000-per-year jobs in Vancouver, the report stated. Ultimately, marine terminals in North America will seek automation only when space limitations force them to make better use of their footprint — and the labor contract allows them to do so. The ILWU's US contract, for example, allows for full terminal automation, while its Canadian counterparts have agreed to a framework for automation, the details of which have not been made public. The International Longshore - men's Association's contract, on the other hand, only allows semi-automa- tion on the US East and Gulf Coasts. But how governments, under longshore labor lobbying pressure, wade into the issue will impact the pace of such projects as they move forward, as well as how they will respond to the greater forces of auto- mation and union decline. email: mark.szakonyi@ihsmarkit.com twitter: @mark.szakonyi Governing automation The Journal of Commerce (USPS 279 – 060), ISSN 1530-7557, September 30, 2019, Volume 20, Issue No. 20. The Journal of Commerce is published bi-weekly except the last week in December (printed 25 times per year) by JOC Group Inc., 450 West 33rd St., 5th Floor, New York, N.Y. 10001. Subscription price: $595 a year. Periodicals postage paid at New York, N.Y., and additional mailing offices. © All rights reserved. No portion of this publication may be copied or reprinted without written permission from the publisher. POSTMASTER: Please send address changes to The Journal of Commerce, Subscription Services Department, 450 West 33rd St., 5th Floor, New York, N.Y. 10001. Letter From the Editor Robotization of work once performed by humans is increasing as union membership declines.

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