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Port of LA stands its ground on automation

The Port of Los Angeles has not changed its mind on a permit for infrastructure for automated equipment at Pier 400.

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The Los Angeles Harbour Commission is due to meet on 11 July to revisit the International Longshore and Warehouse Union’s (ILWU) appeal of a Coast Development Permit (CDP) granted to APM Terminals for electrical infrastructure to support automated straddle carriers at Pier 400.


The Commission had previously voted 3-2 to deny the appeal, but its decision was then vetoed by the Los Angeles City Council, who referred the ILWU appeal back to the Harbour Commission.


There is an expectation at the Council that the Commission will consider the social and economic impact of automation in making its decision again. Harbour Commission staff have not changed their view, however, that the CDP can consider “environmental impacts” only, and that these “do not include social or economic impacts.”


The ILWU and the Council also challenged the permit process itself, on the basis that application from APM Terminals was incomplete, and should have been a considered a Level II CDP. A Level II CDP, it is argued, should involve a full public hearing process and consider all social and economic impacts.


In a report that includes a more detailed examination of the regulations and issues, port staff are standing behind the Executive Director’s original decision. On the procedural issues the report notes that the only difference between a Level 1 and a Level 2 CDP is a pubic hearing. “There is no higher standard of review for a Level II versus a Level I; there are no more stringent conditions that have to be met. A proposed project must be found to be consistent with the Coastal Act policies, whether its CDP follows the Level I or the Level II approval process.”


Furthermore, according to Port of LA staff, there is nothing in the Coastal Act that requires an economic analysis. “In fact, it would be improper to hold up the issuance of a CDP in order to complete such an analysis; it would abrogate the requirements and purpose of the Coastal Act.”


The port also has precedents to support its argument; both the existing automated terminals in San Pedro Harbour (LBCT in Long Beach and TraPac in LA) were issued CDP or equivalent permits without an economic analysis. The port also has an argument that to discriminate against APM Terminals now by adding other criteria would be a violation of the United States Shipping Act of 1984.


While the staff report stresses that the point is irrelevant, it does addresses the argument the ILWU and some Commissioners have made about the business, financial and operational consequences of automation. Opponents are trying to make the case that the project reduces capacity, would result in lower revenue to the port, and lower productivity.


The same could be said about the way Pier 400 operates now. US West Coast ports have long operated in their own peculiar vacuum, where somehow the lowest cost way to operate is a combination of top handlers and RTGs - even for a facility like Pier 400 that handled over 2M TEU last year. It is a land hungry model that does not scale, and Pier 400 is a stark contrast to LBCT, particularly on the landside.


The status quo is also a very expensive way to operate, and the Port of LA has known for a long time that is is losing market share. The staff report says that since 2002 the San Pedro ports have lost as much as 20% of their business to competitors on the US East and Gulf Coasts, and to terminals in Canada and Mexico that enjoy a “lower cost basis”. To address this the Port Master Plan encourages terminals to improve their operational efficiencies, “including through the use of automated technologies.”


That is what APM Terminals is trying to do now. Pier 400 has a theoretical capacity of 3.3M TEU and handled 2.2M TEU in 2018. That is a lot of boxes to handle with automated straddle carriers, but at 484 acres the terminal is so large it is actually berth, rather than yard constrained, according to the staff report.


For the Port of LA there is still no reason APM Terminals should not be allowed to proceed with its plan. “APMT’s Project is allowed under its permit with the Harbour Department and its agreement with the ILWU. The Harbour Department does not dictate a terminal’s mode of operation or its labor staffing choices. The Project supports the PMP’s environmental and efficiency goals. Therefore, the Project is wholly aligned with the Harbour Department’s environmental and business goals”.


The port is recommending that the Harbour Commission deny the ILWU appeal again. What would happen then is unclear. Lots of elected politicians in LA are on the side of the ILWU and are already looking for another way to stop the project. APM Terminals has indicated that if the permit is denied it will go ahead with the automation anyway, but not install the electrical infrastructure required to support battery hybrid straddle carriers, which obviously conflicts with state goals with respect to emissions and air quality.


This appears to have strengthened political resolve to have greater control over how private companies operating a public asset like a marine terminal use that land. A bill now before the California State legislature has been amended to give the State Lands Commission the power to approve automated technology after considering the impact on jobs and other factors.

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