Unions Are Resisting Tech Advances That Make Ports More Efficient

In today’s world, I’ll cripple ya. And you have no idea what that means. Nobody does.”

With that menacing utterance, Harold Daggett, boss of the International Longshoremen’s Association (ILA), introduced himself to the American public last September. Daggett and his 45,000 dockworkers exercise near-total control over ports up and down the Atlantic and Gulf Coasts. It’s an enviable position—and one that lent credibility to his threat to the wider economy. Though the ILA’s October strike would, in the event, last only three days, the union sent a tremor across industries as diverse as manufacturing, retail, and agriculture.

ILA-controlled ports, including the Port of New York and New Jersey, the Port of Baltimore, the Port of Virginia, the Port of Savannah, and the Port of Houston, among others, account for just over half the country’s total container-shipping capacity by volume. The union handled more than 90 percent of total U.S. import value across a range of commodities, such as iron, aluminum, and titanium ores, rubber, and cocoa beans in 2023. More than 30 percent of cars and car parts shipped to the U.S. arrive through these ports.

Daggett recognized his leverage. “First week, be all over the news every night,” he warned ahead of the strike. “Second week, guys who sell cars can’t sell cars because the cars ain’t coming in off the ships. They get laid off. . . . Construction workers, they get laid off because the materials aren’t coming in. The steel’s not coming in. The lumber’s not coming in. They lose their job.” With self-satisfaction, he crowed, “Everybody’s hating the longshoremen now because now they realize how important our jobs are.”

Dock jobs are indeed crucial to an economy reliant on global trade. But for how long can Daggett and the ILA keep them that way? The union’s fundamental dispute with the shipping conglomerates that own the ports concerns technology. Key global trade spots like Rotterdam, Shanghai, and Singapore have embraced artificial intelligence, automation, robotics, and remote operation, using smart cranes to hoist and lower containers and self-driving transporters to move them out to the wider rail and road networks. These ports still employ thousands of workers, but they do so in a way that puts man and robot in tandem.

The biggest West Coast ports, the side-by-side Port of Los Angeles and Port Long Beach, are beset with their own labor issues, but they, too, have adopted technology relatively quickly. Not so on the East Coast, where the ILA has ruled the roost for the better part of a century. Leaving no ambiguity about his position on new tech, Daggett stated in 2022: “Automation does two things. It makes the companies rich and the longshore workers unemployed. . . . Automation doesn’t improve productivity. It destroys lives and livelihoods.” Expressing their hostility even more bluntly, picketers carried signs during the October strike reading, “Fight Automation, Save Jobs.”

The ILA agreed to a temporary deal to get longshoremen back to work in October. In December, it found an ally in Donald Trump. The president-elect met with Daggett in Florida and then wrote on Truth Social, “I’ve studied automation, and know just about everything there is to know about it. The amount of money saved is nowhere near the distress, hurt, and harm it causes for American workers, in this case, our Longshoremen.” The stance is consonant with Trump’s nostalgic populism, yet clashes with the newfound prominence of techno-optimists within the MAGA movement.

In January, just ahead of Trump’s inauguration, the ILA and the firms that own the ports signed a multiyear contract. The terms—that ILA pay will rise by 60 percent over the course of six years, that the ports will hire one new longshoreman for every new semiautonomous crane added to terminals, and that fully autonomous cranes will be barred—ensure that U.S. East Coast ports will remain behind the global curve.

As it has done in the past, the waterfront serves as a vivid staging ground for the conflict between traditional blue-collar work and technological change. Now it also highlights tensions within the president’s political coalition.

Daggett, who hails from Queens and now represents a local in Bergen County, New Jersey, is carrying forward a long ILA tradition of resistance to change. In the 1950s and 1960s, an earlier innovation came to the docks: the container. As Marc Levinson recounts in The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger (2006), containerization expanded the world’s economic possibilities—by eliminating work for longshoremen.

Before containerization, the physical limits of human muscle and the arcane labor systems that governed the docks created a chokepoint that hindered the development of global shipping. To discover just how costly that chokepoint had become, a 1954 government-sponsored study cataloged one ship’s journey from the Brooklyn docks to Bremerhaven, Germany, documenting the time and cost breakdown from a good’s point of origin (at, say, a New Jersey factory) to its final destination (say, a Hamburg retailer).

In those pre-container days, the 100,000 items that would ultimately steam across the Atlantic on the S.S. Warrior arrived in 1,000 separate shipments to the docks, some as early as a month before the ship set off. Once loading began, longshoremen needed six days to get the irregularly packaged goods aboard, largely by hauling and stowing items manually. The journey across the ocean took ten days. It then took four days in Bremerhaven to unload, meaning that half the duration of the ship’s journey was spent docked. Cargo handling at the two ports accounted for 37 percent of the total shipping cost to get the goods from origin point to final destination. The study’s authors called for “a fundamental rethinking of the entire process. Perhaps the remedy lies in discovering ways of packaging, moving, and stowing cargo in such a manner that break-bulk is avoided.”

The container was that remedy—and it would arrive in its first standardized and mechanized form in the coming years. But just as the container emerged to revolutionize shipping, the ILA was consolidating its hold on the ports.

The same year the S.S. Warrior study was conducted, 1954, would prove a violent one across the New York region’s docks. One year earlier, New York’s Waterfront Commission had banned “public loaders”—gangs, as Levinson describes them in The Box, “that claimed the sole right to load and unload trucks on a particular pier, backed by the muscle of the International Longshoremen’s Association.” Despite the ban and the desire of rival unions—including the Teamsters and the American Federation of Labor—shipping companies, and New York officials such as Governor Thomas Dewey to overturn “public loading” and other aspects of the system, the ILA continued to intimidate potential dock competitors with vandalism and physical harm.

In February and March 1954, the violence peaked with the savage beating of an ILA local secretary suspected of leaking information and a work stoppage during which more than 140 ILA men were identified as engaging in violence against strikebreakers. In an editorial the following month, the New York Times excoriated the “lawless elements which dominate the old International Longshoremen’s Association in a stubborn effort to retain their lucrative privileges,” describing its activities as “gangster penetration masked in the guise of genuine unionism.”

Marlon Brando’s Terry Malloy overcame union brutality in that year’s Hollywood valorization of stevedore life, On the Waterfront—but in the real world, the ILA’s “terror tactics,” as the Times called them, worked. In the years that followed, the ILA further consolidated its power, signing a 1960 deal with the association of shippers in New York and New Jersey that granted the union exclusive rights to supply dockworkers.

Amid the contract wrangling, though, the container’s labor-saving potential was becoming apparent. Foreshadowing Daggett, then-ILA leader Thomas Gleason fought containerization, saying, “The container is digging our graves and we cannot live off containers.” But the relative underdevelopment of the New Jersey side of New York Harbor created an opening. In 1955, New Jersey governor Robert Meyner inaugurated Port Elizabeth, adjacent to the existing Port Newark. It was the largest maritime infrastructure project in American history to that point. Designed for large container ships with deep dredging and piers parallel to the shore (rather than perpendicular to it, as was until then customary), the port would rapidly reshape the region’s commercial contours.

New Jersey’s share of New York and New Jersey cargo volume rose from 9 percent in 1956 to 18 percent in 1960. By 1966, almost one-third of cargo was moving through New Jersey; by 1970, almost two-thirds. The need for laborers on the docks of New York fell with astounding speed. According to Levinson, man-days decreased 90 percent on Manhattan docks between the mid-1960s and mid-1970s, while man-days in Brooklyn fell 60 percent. Despite the efficiencies of the containers and the cranes to lift them, man-days rose 30 percent on the New Jersey side of the Hudson, with the massive volume expansion.

Taking all capital and labor factors into account, economist David Hummels corroborated Levinson’s mostly qualitative assessment of containerization’s success quantitatively in 2007, finding that each doubling of container usage has lowered shipping costs by more than 13 percent globally.

The status quo established by the 1960 agreement for ILA labor to operate cranes and lift containers has effectively held for 65 years. The grand bargain is emblematic of American labor relations writ large, wherein labor and capital have reached agreements—facilitated and entrenched by local, state, and federal authorities—that sacrifice productivity for the sake of stability. “It happened in the same way on the railroads,” Patrick Allitt, professor of history at Emory University, told me, “which often had five employees per train into the 1970s when one, or at the most two, were needed. In the end, the railroad companies won out, but it took a lot of time, some hard bargaining, and terrific pay for the much smaller workforce that survived.” It is no wonder that dock labor still makes up about half the cost of total port operations.

In the decades since American labor’s mid-century heyday, the rest of the world has moved on. American ports, like much of the nation’s heavy industry, lag the performance of contemporaries, especially in Asia.

Today, America’s maritime efficiency is a national embarrassment, with not a single port in the U.S. ranking in the top 50 globally, according to the Container Port Performance Index (CPPI) developed by the World Bank and S&P Global Market Intelligence. Among the world’s 50 largest ports—those that move more than 4 million TEUs (20-foot equivalent units) annually—no American port ranks in the top 35, and three (Los Angeles, Long Beach, and Savannah) bring up the rear.

The top spot in the CPPI rankings belongs to China’s Yangshan Port, built in the early 2000s south of Shanghai in Zhejiang Province. Yangshan is highly automated. Its success corresponds with the general industry view that automation provides operational advantages. In a widely referenced December 2018 study, McKinsey determined that port automation could cut operating expenses by 25 percent to 55 percent and boost productivity 10 percent to 35 percent. Jean-Paul Rodrigue, a Texas A&M University transport and logistics researcher, argues that autonomous technology is too good for ports to pass up, if competitive forces are pressing upon them. “It’s available, it’s productive and it’s efficient,” he told the Financial Post last year.

In 2023, the U.S. Government Accountability Office (GAO) conducted a study of global port automation in accordance with the Ocean Shipping Reform Act of 2022, consulting dozens of port operators around the world. It concluded that the still-modest level of port automation in the U.S. is a factor holding back the logistics industry.

The case for automation as a performance enhancer can be overstated, though. Rotterdam, a world leader in port automation, comes in just two spots above the Port of New York and New Jersey in the CPPI. Some of the GAO’s interviewees reported that, in their experience, autonomous cranes did little to speed throughput and could even slow it down in adverse weather conditions. Some port operators cited higher maintenance costs for autonomous equipment. Rodrigue thinks the jury is still out on what degree of automation is most effective.

But the mix of experiences that the GAO study found and the lack of definitive analyses on adoption effects only strengthen the case against the ILA’s wholesale opposition. Conditions differ along the Atlantic and Gulf Coasts, with Houston and New York, for instance, facing distinct challenges. These ports would benefit from adopting technology that suits their needs.

The ILA struggle to save jobs takes place against a backdrop of disruption to traditional blue-collar work and the path that it once offered to middle-class life.

Following World War II, employment in fields like manufacturing delivered life-changing returns to laborers. Real annual earnings for manufacturing-sector workers climbed 50 percent from 1950 to 1970. These jobs, often union-supported, also delivered tertiary benefits and, as many individuals who performed them report, a sense of satisfaction at having contributed something tangible. Adjacent industries, such as shipping and trucking, also saw rapid wage increases from labor-market competition and their own productivity improvements. In the more than half-century since 1970, however, wages in these fields have risen only modestly in real terms. From 1970 to 2020, real hourly earnings for production and nonsupervisory employees across all industries rose from about $20 to about $27, using the personal consumption expenditure price index—an increase of less than 1 percent per year.

Global competition and technological change have also eliminated many opportunities that once existed. After 1970, manufacturing employment continued its upward climb for nearly a decade, even as wage growth halted. In the late 1970s, the total number of U.S. manufacturing jobs crested just shy of 20 million, and then slid slowly until 2000, when about 17 million jobs still existed in the sector. Thereafter, manufacturing employment plummeted, bottoming out following the global financial crisis to about 11 million jobs before rebounding to nearly 13 million in the early 2020s. Because the national population and total number of workers have grown by half since 1980, the proportion of manufacturing jobs in the economy fell by much more than those absolute numbers would suggest. At manufacturing employment’s peak, such jobs made up 22 percent of nonfarm employment across the United States. By 2019, they were just 9 percent.

What fundamentally distinguishes the work of longshoremen from that of manufacturing workers is that it is not what economists call “tradable”—i.e., the job can be done in one place, and the work product sold in another. Car production, for example, is tradable. Cutting hair is not—nor is dockwork.

The Port of New York and New Jersey cannot be offshored. And since the ILA has kept most advanced communication technology and robotics at bay, it has cocooned its work from tradability. Thus, the spots that it has protected represent an increasingly rare commodity: a stable, high-wage job for a worker without a college degree.

Jobs on ILA docks today are lucrative, especially relative to the level of formal education required. In fiscal year 2020, the last with reliable data, the median ILA dockworker at the Port of New York and New Jersey, from among 3,700 workers, earned more than $150,000. Six hundred and sixty-five earned more than $250,000. (Harold Daggett personally grosses more than $900,000 annually.)

For comparison, consider a comparable job, that of A crane operator outside of ports, which nets a median income of $65,000. Even in the high-wage New York region, longshoremen get paid far above other blue-collar workers. In the tristate area, the average nonunion worker in transportation and material moving occupations earns $23 per hour; the average unionized worker in those occupations makes $30. The newly negotiated ILA base rate, meanwhile, is $62.

From one angle, ILA wages appear as an achievement that aligns with a traditional left-wing goal of leveraging collective bargaining to lift pay for average joes and the right-populist concern about pathways for noncollege males. Yet this success—even setting aside its coercive origins—comes at a cost to other Americans, particularly those in the lower half of the income scale, and thus weakens its populist credibility. The extraordinary wage premium paid to ILA workers is embedded into the cost of every container that moves into or out of an East Coast port. Daggett warned the public that his strike would slow down business and cause job losses in the auto industry, in retail, and in construction. He didn’t mention that his union’s extractive position in the globalized economy already costs other Americans money every day.

Making the ILA’s recalcitrance against technological change even more troubling is evidence suggesting that Daggett’s outlook on automation is plain wrong. Just as New Jersey’s dock employment increased in the 1960s when container ships began to alight there, ports that have introduced significant autonomous technologies have grown more vital and have lost little in the way of jobs.

In 2022, the University of California’s Michael Nacht analyzed the productivity of Los Angeles’s and Long Beach’s autonomous terminals, finding that “automation at San Pedro Bay ports has added work, not come at its expense.” From 2015 (the last year before automated operations) through 2021, Nacht found, the union workforce in Los Angeles and Long Beach grew 3 percent faster than at the other West Coast ports. Over the same period, paid hours at the two automated terminals rose by over 30 percent, compared with less than 15 percent at the nonautomated terminals. While Los Angeles and Long Beach still rank at the bottom of the CPPI, Nacht argues that they would be even worse had they not implemented autonomous elements.

The Port of Rotterdam in the Netherlands is a bigger automation success. While not in the same class as the top Asian ports, Rotterdam outperforms the Port of New York and New Jersey and the other big American ports with a highly automated approach.

Like China’s Yangshan, Rotterdam deploys the most fully integrated automated system technology, with workers entering the yard only when they need to deal with irregularities. From their offices beyond a partition, the workers monitor autonomous stacking cranes that move containers vertically within the yard and autonomous ground vehicles that move them horizontally. Rotterdam and Yangshan are on the technical frontier in their use of remotely operated ship-to-shore cranes as well. By minimizing human touch points, automated ports can utilize acreage more efficiently than traditional ports, much as automated factories do.

In 2024, Rotterdam moved more than 13 million TEUs with fewer than 1,500 total port employees. Though employment statistics methods may differ between the two locales, Rotterdam’s labor efficiency undeniably puts to shame New York / New Jersey, where more than 3,700 ILA workers handle about 9 million TEUs. “I think you can safely say that the growth of the port of Rotterdam to, for a while, the biggest port in the world is largely due to the adoption of technology and the improvement of productivity, the increase of efficiency,” Albert Veenstra, professor of trade and logistics at Erasmus University in Rotterdam, told Marketplace Tech in January.

As in the U.S., dockworkers in the Netherlands have worried about their prospects as ports have automated. The Dutch longshoremen’s union, counting 6,000 members across three ports, went on strike in 2016 to protest adoption of the new system. Yet the feared job losses didn’t happen. In 2018, after the opening of two highly automated terminals, Craig Fuller, CEO of FreightWaves, an industry outlet, marveled at the port’s seamless implementation of the new technology. “To our surprise and delight,” he wrote, “the system has not resulted in job losses, but has resulted in far fewer safety incidents and issues. The yard staff has moved into an air-conditioned office and now operate George Jetson style in the control room, ensuring smooth operations among the robotic cranes and vehicles.”

Fuller’s observation about safety, borne out by statistics, further undermines Daggett’s case. In Daggett’s lengthy September interview, he claimed: “The jobs on the waterfront are very dangerous. . . . We’ve had 17 people killed in the last three years. . . . That’s why I fight. I fight for jurisdiction, I fight for safety.” A genuine fight for safety, though, would include adoption of technology that takes workers out of harm’s way.

Still, the ILA’s concerns are understandable. Today’s autonomous technology is a complementary force, multiplying the efforts of longshoremen. But the tech will get only more effective and encroach on more of their tasks with time.

When I spoke with Rodrigue, the Texas A&M logistics expert, this spring, he said that while automation has “inched in,” the process is now accelerating. As he sees it, the market case for new technology—that it boosts efficiency—is applicable here. Automation boosts the productivity of each worker. Theoretically, with enough other variables lining up, this should mean an expansion of the commercial pie, in which workers get a bigger slice. That seems to have happened in Rotterdam. Rodrigue is not sure, though, whether the variables line up so favorably for labor at America’s prime ports in the Northeast. Rotterdam expanded massively by automating and building more on reclaimed land. Similarly, as Geraldine Knatz, formerly the director of the Port of Los Angeles and now a professor at the University of Southern California, explained to me, the autonomous terminals in Los Angeles and Long Beach were new builds, spurred partly by the competitive pressures that the Panama Canal poses to West Coast inbound traffic. The Port of New York and New Jersey, by contrast, is painfully land-constrained and, with the ILA’s dominance of the Eastern Seaboard, faces no real competition.

Where Rodrigue sees the data most strongly supporting automation is on the labor-cost axis. Automated terminals are not necessarily moving more cargo; they are just doing it with fewer people. If footprint expansion isn’t an option, automation could mean reductions in the labor force. Rodrigue thinks that it’s hard to obtain performance records comparing automated and traditional terminal performance because port operators worry that the numbers will yield politically unpopular results.

Given this uncertainty—and the wealth that the ILA continues to accumulate—it’s no surprise that Daggett and the union are fighting automation tooth and nail. Yet using a wider economic lens, their stance deserves little sympathy. For now, AI and automation tend to complement blue-collar jobs like dockwork rather than eliminate them. The real disruption is happening in lower-paid service jobs, such as retail and customer service. And over the next decade, those most at risk of technological unemployment won’t be workers handling physical goods in real space but those whose jobs revolve around thinking and typing—accountants, computer programmers, and, for that matter, writers—as AI language and reasoning models improve.

The ILA is, in effect, denying other Americans the benefits that would disperse through the economy and household and firm budgets from labor savings at the docks. And it’s doing so while netting pay so far out of the league of other blue-collar workers that it could not be sustained but for the ILA’s artificial restrictions on the labor supply. The ILA, then, is a kind of cartel, extracting payments from the rest of us.

The path out of this impasse, as is so common in modern America, may run through the Sunbelt. The legacy ports in Boston, New York, Philadelphia, and Baltimore—all places governed and managed by the alliance between labor and the Democratic Party—are dooming themselves to irrelevance as automation rapidly improves. In the 1950s and 1960s, land constraints and labor politics in Manhattan and Brooklyn incentivized the development of the grand build-out of the New Jersey side of New York Harbor. Today, the Port of New York and New Jersey faces the same predicament that the boroughs did 75 years ago: its natural advantages have run their course, and self-defeating politics is accelerating decline. As Rodrigue explained, the ILA is playing a game of tug-of-war that sends an obvious message to the port operators: “implement automation strategies.”

By contrast, the Ports of Virginia, Savannah, Jacksonville, and Houston—all in states with Republican governors and business-friendly legislatures—may prove less receptive to the ILA leadership’s zero-sum approach. These are regions where development is still happening, where ports have room to expand with new autonomous terminals, and where workers can afford homes without needing to extract a top-decile national income through political leverage. They are also ports where ILA wages are lower due to lighter traffic. If Sunbelt stevedores can be persuaded to break from their northern overlords, automation could have a real future in the U.S.—not as a threat, but as a driver of opportunity.

The case for technology adoption remains compelling, provided that it is tied to the promise of shared prosperity in an expanding economy. Harold Daggett may seek to stall progress by blocking automation—and another powerful Queens native may back him—but by looking beyond legacy ports for innovation and receptivity to change, the U.S. can still build a thriving, modern port system.

Top Photo: An automated port in China (Costfoto/NurPhoto /AP Photo)