The ports of LA and Long Beach, the two busiest in the nation, are also not fulfilling their legal mandate to provide economic and environmental benefits for Californians, according to that 130-page report, which came out Thursday, June 30, and takes aim at foreign shipping companies and defends dockworkers against increasing terminal automation.
The report, nearly three years in the making, was underwritten by a grant from the International Longshore and Warehouse Union, Coast Longshore Division.
The timing of the study’s publication is conspicuous, as the union and the Pacific Maritime Association are currently negotiating a new contract — with the existing one set to expire on Friday, July 1.
The union-funded study also comes more than a month after a PMA-sponsored study touted the benefits of automation.
The Port of Los Angeles declined to comment. PMA also declined to comment, citing an agreement to refrain from making any related public comments during contract negotiations.
But Mario Cordero, executive director of the Port of Long Beach, defended his port’s benefit to the community.
“The ports have a role in furthering public and community benefits,” Cordero said in a statement, “and I believe the Port of Long Beach is a model of that very stance.”
The Economic Roundtable, a nonprofit research group that has been active in L.A. County since the early 1990s, compiled the report, titled, “Someone Else’s Ocean: Shipping and Jobs in the San Pedro Bay.”
Despite the longshore union providing a grant to pay for the study, one of its co-authors, Daniel Flaming, said the report was objective.
“It’s an independent report, so we controlled the content,” Flaming, who holds a doctorate in public policy and has a long background in preparing similar studies, said in an interview. “They (the union) didn’t have any voice in the content.”
Still, the study is largely critical of automation, foreign shipping companies and the ports themselves.
Those findings contrast sharply with the results of the PMA-sponsored study, led by Michael Nacht, a professor of public policy at UC Berkeley and a former U.S. assistant secretary of defense. That study found that cargo handling was accelerated, terminal capacity was expanded and longshore work was generated “significantly faster” there than at conventional terminals.
Taken together, though, the dueling reports shed light on some of the most pressing issues at the LA and Long Beach ports, which are expected to dominate contract talks — primarily terminal automation.
Both the union and PMA have said they anticipate the discussions to go past Friday.
Flaming and co-author Patrick Burns took “a broad look at the context of port operations,” the former said, including how the ports impact local and state economies, communities and businesses.
Foreign shippers, consolidated into three international shipping alliances, dominate the twin ports, owning nine of the 11 container terminal companies there and handling 81% of the containers that go through the San Pedro Bay.
“Overall, I think we’d like to see more of the community in the L.A. region and in California seeing themselves as stakeholders in the ports,” Flaming said, “rather than the center of interest emanating from these very large foreign shipping alliances.”
Some shipping companies, the report said, want to increase automation and reduce their reliance on American workers — even with doubtful benefits.
The Organization for Economic Cooperation and Development’s International Transportation Forum, the report said, found “that the productivity of automated ports is 7% to 15% lower than for non-automated ports.”
The earlier study came to a different conclusion, saying automation increased growth and effeciency, and lowered costs — while not reducing job opportunities for dockworkers.
Frank Ponce De Leon, ILWU Coast Committeeman, denounced the PMA-sponsored study as a “self-serving document” while Nacht called automation a “win-win strategy.”
Ponce De Leon, in a Wednesday statement, did not directly discuss the study from Flaming and Burns — but did urge terminal operators to protect dockworkers.
“It is crucial that the privately operated terminals at our publicly owned ports provide economic security for every worker who moves cargo,” he said, “and support the communities that endure the inevitable downsides of shipping, like traffic and infrastructure costs.”
The union-funded study, meanwhile, found that not only did automation reduce hours for dockworkers, but also nixed related jobs — both of which hurts the economy.
Jobs for 13,000 dockworkers are the primary economic benefit from the ports, the report said. The wages they spend create jobs for another 7,000 workers and $1.4 billion in annual sales by California businesses.
“This automation shrank the economy,” the report said, “eliminating 254 year-round linked jobs.”
All of the figures in the report were derived from internal research done by the authors. The authors also used public records from both ports going back to 2010, Flaming said.
The study also found that:
- In 2021, the LA and Long Beach ports moved more than 20 million twenty-foot equivalent units, with fees to foreign shippers increasing from $2,000 per container before the coronavirus pandemic to as high as $20,000.
- Seventy-two percent of outbound containers from the ports are empty.
- Each year, trucks leaving the ports carrying import containers travel 6.7 billion ton-miles — defined as one ton of freight shipped one mile — and cause $279 million in uncompensated annual public costs, including road wear, congestion, accidents, criteria pollutants, greenhouse gas emissions and noise.
- The ports can use their logistical assets to help restore critical manufacturing industries that align with U.S. “super preferences” for domestic technology and the recently invoked Defense Production Act to accelerate clean energy manufacturing.
- The value of imports is 25 times greater than exports in industries with good blue collar jobs, such as machinery, electrical equipment, batteries.
“We have detailed data that we analyzed on every call for every ship in every berth for over about a decade,” Flaming said. “We also asked for employment records (from PMA) so we have over 25 million records since 2010, how many hours each person worked, what the wages were. We used detailed source records.”
Automation, the report said, will eliminate 3,818 year-round non-port jobs currently supported by consumer spending from local dockworkers who live in the general area.
When asked about other reports, such as the PMA-sponsored one, that indicate automation increases both efficiency and labor hours, Flaming said part of the problem is comparing the ideal with reality.
“There’s not this steady, even rhythm,” Flaming said.
The idea of the San Pedro Bay ports operating seamlessly on a 24/7 schedule so far hasn’t been met with reality, he said, alluding to the ongoing supply chain crisis that has led to aging terminals on the docks, a shortage of truck chassis and drivers, and a lack of warehouse space, among other issues.
“You have huge ships coming in but you don’t have truckers who want to come (for pick ups) at night,” Flaming said. “Warehouses aren’t open (overnight). So this projection of an even rhythm and 24-hour unbroken operation doesn’t correspond with real world events.”
The report also says exports need to be a more serious focus, something both the ports of Los Angeles and Long Beach have long stressed as well, with the U.S. having a major trade imbalance for years.
The study, though, also offered several recommendations, including that
- The cities of Long Beach and Los Angeles should enact a displaced worker impact fee on any new automated equipment to offset public costs.
- California should enact a tax on automated terminal equipment that generates public revenue equivalent to the revenue from income and payroll taxes when containers are moved by dockworkers without automated equipment.
- The ILWU should play an active role in reviewing and providing public comment on terminal lease agreements.
- The San Pedro ports should withhold approval of plans to automate terminals unless it can be demonstrated that the automation will produce net benefits for California workers.
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