Shippers have always been on the lookout for ways to make shipping more efficient and profitable. This need has driven the development of everything from block and tackle to more accurate clocks.
Sixty years ago, containerized shipping turned the shipping industry upside down. Today, shippers pack cargo into standardized containers that can quickly and easily be loaded and unloaded by crane. Now, container terminal automation is poised to revolutionize the industry again—however, it may have unintended consequences.
1. Lost Jobs
The most obvious consequence of container port automation is lost jobs. When machines do more of the work, we need fewer people. In June 2019, a Los Angeles Times article on automation at the Port of Los Angeles reported that automation would cause 500 lost jobs.
2. Reduced Tax Revenue
When people lose jobs, reduced tax revenue is an inevitable result. Federal, state, and local governments in coastal regions already bear a significant burden of responsibility. Asking these agencies to continue to do their jobs while facing a significant reduction in revenue is a recipe for disaster.
3. Secondary Business Failure
Jobs at the port affect far more than just the port. Other businesses, ranging from restaurants and theaters to medical clinics and construction companies, exist to serve port workers and their families. Automation threatens these businesses.
Clearly, the consequences of automating ports may be significantly negative—but if automation makes ports more efficient, won’t we all enjoy lower costs for imported goods? Perhaps not. When McKinsey & Company investigated container port automation in 2018, they found that it may reduce operating expenses but will probably not deliver the expected productivity gains and cost savings. Global shipping is a complex issue. If you want to see how more efficient shipping can improve your bottom line, you will want to have the right partner in your corner. At Global Shipping Services, we specialize in providing logistics management services at all major ports worldwide. We are a fully licensed NVOCC (Non Vessel Owning Common Carrier) with the experience and industry connections to get your job done right. Contact us online or call us at (908) 922-4290. We’ll show you how efficient global shipping can make your business better.