The future docked at the Port of Long Beach earlier this month.

The ship itself wasn’t that notable – super-size vessels won’t regularly start calling on the local ports for several months yet. But the automated systems that offloaded its cargo as part of a $1.3 billion rethinking of the modern terminal could have a profound impact on operations, labor, and the environment around the port complex.

The nine-year Middle Harbor Terminal Redevelopment Project, now nearing the end of its first phase, will join the TraPac Terminal at the Port of Los Angeles as the most technologically advanced facilities on the West Coast.

Now in the testing phase, the state-of-the-art facility is expected to speed the loading and offloading process by using robots to help transfer cargo from ships to trucks. Port officials declined to comment on the opening, preferring to wait until after the tests.

Union officials were unavailable for comment, though automation is bound to impact their ranks.

“Any time you can replace people with machines, you have a chance of some significant cost savings,” said Jock O’Connell, an international trade analyst for Westchester’s Beacon Economics. “You don’t have to pay machines pensions. They don’t have to take breaks or time off for lunch, and they can operate 24 hours a day and seven days a week.”

Investing in automated machinery to boost productivity will allow savings on labor, according to Mark Sisson, a senior port planner for Century City construction and engineering giant Aecom.

“The labor in Long Beach is the most expensive terminal labor in the world,” he said. “If you can automate it, the business becomes really compelling.” 

Robots won’t completely replace human workers, but in the long run, less labor will be needed, Sisson said.

Testing times

The first vessel to dock at the terminal, operated by Orient Overseas Container Line and its subsidiary, Long Beach Container Terminal, under a 40-year, $4.6 billion lease, was offloaded by remote-controlled cranes that loaded driverless trucks that produce 50 percent less emissions than traditional vehicles.

The 300-acre terminal will ultimately have ship-to-shore cranes capable of lifting two 40-foot containers at once. Two older docks at the site have been combined, allowing the reconstituted terminal to handle up to 3.3 million 20-foot container units annually. That’s equal to nearly half of last year’s volume at the Port of Long Beach.

There is an expectation that automation could ease congestion at the port, where logjams in 2014 and last year paralyzed the movement of goods and hurt warehouse operators and retailers across the region.

And volume only threatens to increase.

First-quarter cargo volume at the Port of Long Beach was up 6 percent over the same period a year earlier, making it the busiest quarter in nine years. Nearly 1.5 million 20-foot equivalent unit containers moved through the port in the first three months.

Added to the mix, French freight line CMA CGM announced it would regularly deploy megaships – those capable of carrying up to 18,000 20-foot containers – between China and the West Coast beginning next month.

It’s against that backdrop that the port funded the reconstruction of Middle Harbor with some of the proceeds from a $4 billion bond offering and Orient Overseas put up an additional $600 million for equipment.

“Continued investments on the West Coast are essential in helping respond to competitive challenges from ports in Canada, as well as along the U.S. Gulf and East Coasts, facilitated by the expansion of the Panama Canal,” said Wade Gates, spokesman for the Pacific Maritime Association, a shipping company trade group, in an emailed statement.

Extremely costly

For all its promise, like most monumental, technologically advanced projects, Middle Harbor is running behind schedule and over budget. It originally penciled out at $750 million.

That has led some industry analysts to suggest it might take as long as a decade for the terminal operator to see a return on the investment. 

“The problem with automated terminals in the U.S. is that you need to justify significant return on the investment because they’re extremely costly,” said John Martin of maritime consulting firm Martin Associates in Lancaster, Pa. 

Then there are the unions, which can be counted on to try and protect workers covered under a 2008 contract between shippers and the International Longshore and Warehouse Union.

“They said you can do whatever you want, but you can’t give a union job to a nonunion human being,” Sisson said. 

The automation of terminals might even create more jobs, Martin, suggested, because higher cargo volume will nevertheless need more manpower to move through the port.

“You have to make those investments to guarantee an additional throughput,” he said.

Rise of robots

The robot invasion of Long Beach has been a long time coming. In 2008, after permission was given to build the terminal, the recession hit and no one had funds to proceed with construction.

A year later, the Board of Harbor Commissioners and the Long Beach City Council approved the project, but construction didn’t start until 2011.

Hong Kong-based Orient Overseas signed its lease the following year.

The entire project is due to be completed in 2020.

It could take time for other terminals to follow the automated example.

With the deepening of the Panama Canal set to be completed in June, Gulf and East coast ports will be accessible to the new generation of huge cargo ships, putting competitive pressure on the ports of Los Angeles and Long Beach. That might chill such large investments by other terminals

“Because of those uncertainties it’s perfectly understandable why other terminals are going to say: Well, let’s see how this works out,” said Beacon’s O’Connell.