Date: 2016-08-12

Automated Shipping Terminals Lead to Greater Productivity and Reduced Labor Costs

Lucas Blankenship

As container ships continue to grow larger and as global trade increases, the need for automated shipping terminals is apparent. The United States has four such terminals, where computer-operated robots automatically load and unload shipping containers from massive cargo ships. There is no doubt that automation boosts productivity and cuts labor costs; however, it remains to be seen whether automation is worth the hefty investment.

Currently, the United States is lagging behind other major shipping hubs in terms of terminal automation. The Port of Rotterdam in the Netherlands alone has more automated shipping terminals than the entire United States. Experts believe that the U.S. has been slow to adopt this new technology because of strong push back from longshore labor unions, as robotic container handling can reduce the need for human labor by 50%. Additionally, the investment needed to build an automated terminal is estimated at $1 billion, which is out of reach for many U.S. ports, particularly those on the East Coast.

Using automated robots instead of human crane operators increases reliability and efficiency and reduces human error. In fact, it is estimated that automation can improve productivity by as much as 30% and decrease the amount of time ships spend docked in port. To effectively and competitively service the largest container ships, automated shipping ports may become a necessity. It will be interesting to see which ports are willing to make the large investment and whether long-term profitability increases because of it.

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