Leveraging Automation To Enable Yards Run Round-The-Clock Operations
Autonomous operations can help increase yard throughput even amidst crippling labor shortage the industry is witnessing today
A hearty welcome to the 26th edition of The Logistics Rundown, a weekly digest that aims to put some perspective on what’s brewing within the logistics industry. This is a space where we religiously dissect market trends, chat with industry thought leaders, highlight supply chain innovation, celebrate startups, and share news nuggets.
New day, old story. Congestion across ports and intermodal hubs continues to wreak havoc across North America. There’s an almost universal shortage of labor force—be it in ports or intermodal hubs or warehouses—which further punishes logistics networks. Vessels stranded across the San Pedro Bay had crossed 70 the last week, even as we approach the holiday shopping season.
The situation is simple—more containers are flowing into ports than land-side operations can cope up with at the moment. The ports of Los Angeles and Long Beach saw a 23% increase in loaded inbound containers in the first half of 2021 compared to its pre-pandemic levels. But interesting enough, this is not because the ports have maxed out on their throughput capabilities.
The ports of Los Angeles and Long Beach saw a 23% increase in loaded inbound containers in the first half of 2021 compared to its pre-pandemic levels.
Unlike most major ports across the world that work 24x7 across the year, American ports only work around 16 hours a day during the week and remain closed during the weekends. While this setup was okay during the pre-pandemic years, unnaturally high inbound volumes and delays have forced the port management to finally relent this week, announcing their gates will stay open for extended hours during the week.
That said, this would likely be a temporary situation, and the port will go back to working 16-hour days once the bottlenecks clear up. But let’s be honest—the pressure to increase throughput at the West Coast ports is an absolute certainty. The growth of e-commerce and the consequential import growth will inevitably force ports to keep their gates open 24x7.
However, there’s another long-standing issue that is expected to get worse—labor availability. Worker shortage is a crippling issue today and threatens to continue well into the post-pandemic future, considering the millennial generation’s aversion to physical labor. This can be seen with the general increase in hourly pay for workers, even as companies struggle to recruit and retain talent.
Set in a scenario of burgeoning import volumes and labor shortage, the idea of automation makes a lot of sense. “Automation can drive dramatic improvements in efficiency, safety, and sustainability of yards and terminal quays,” said Andrew Smith, the CEO and founder of yard automation startup Outrider.
Automation can drive dramatic improvements in efficiency, safety, and sustainability of yards and terminal quays.
“Billions of tons of freight move worldwide, and a vast majority goes through a port or an intermodal terminal or a distribution yard. These are critical links in the supply chain that has been operating the same way for several decades—it’s time we change that.”
Smith contended that automation in yards is no longer a nice-to-have but rather a need today. “Automation moves people away from the dull, dirty, dangerous, and repetitive jobs into work that provides a higher value of human capital. At Outrider, we understand the need to develop automated vehicles to create yard operations of the future,” he said.
In a way, yard operations can serve as a petri dish for testing truck equipment automation before its mainstream expansion to the highways. Unlike highways, yard traffic is tightly monitored, making autonomous driving easier and manageable in a controlled environment.
How does automating a yard help overall logistics operations? Workers can now transition to higher-value jobs, like managing warehouses, hauling freight over-the-road (OTR), and even working at vehicle dispatch rather than sitting behind the wheel.
Smith also spoke about the importance of scaling automation by integrating operations across several yards. “By integrating the front end—including the autonomous vehicle, the robotic systems associated with connecting and disconnecting from trailers, and the basic site infrastructure—with a back end management software, will allow us to scale automated systems across hundreds of distribution yards and terminals,” he said.
In essence, yards of the future will see personnel who can remotely dispatch multiple autonomous trucks that move thousands of tonnes of freight within a yard environment, where it’s dropped back and forth between loading docks and then loaded and re-loaded onto OTR truck trailers.
To encourage adoption, Smith explained that the automation-as-a-service model can help, allowing yard and terminal management to directly see benefits from day one with autonomous systems versus recruiting, training, and staffing vehicles. These autonomous vehicles are mostly electrified, which would help yards hit emissions targets—an essential operational metric going forward.
Automation-as-a-service model can help, allowing yard and terminal management to directly see benefits from day one with autonomous systems versus recruiting, training, and staffing vehicles.
Automation can enable round-the-clock yard operations, critical to achieving e-commerce fueled same-day and next-day delivery targets. “It’s great to have overnight package delivery, but nobody wants to work in a yard hauling freight while sitting inside a truck cab at 115 degrees. Automation will help yard operations transition to a more sustainable and humane environment,” said Smith.
The Weekly Roundup
While the ports of Los Angeles and Long Beach have extended their gate hours to speed cargo throughput, there aren’t enough takers for the additional time windows. Thirty percent of all trucker appointments each day go unused, which shows that while ports are looking to expedite cargo flow, downstream logistics operations aren’t moving as expected. Meanwhile, truckers blamed the port authorities, claiming that appointments were missed due to late-night allotment and restrictive empty box return requirements.
Mergers and acquisitions within the logistics ecosystem are growing at a healthy pace, even as money flows in from private equity and venture capitalists. It is estimated that out of around $1.5 trillion available in private equity, roughly 10-12% of it is expected to be invested in the transport and logistics space. While the industry saw a slowdown in M&A over the last year due to the pandemic, 2021 has been a strong year, with pent-up demand likely elevating the market.
Electric vehicle manufacturer Rivian has announced its plans to build its batteries in-house, stating that its own battery cells would “complement third-party cell procurement which will provide supply continuity” while supporting its anticipated growth. The EV startup has high-profile backers in Amazon and Ford and has a solid battery partner in Samsung SDI. However, logistics bottlenecks and delays in battery sourcing over the last year might be reasons enough for the company to look at controlling that crucial part of operations.
Shippers feel like they are behind an iron curtain as it gets increasingly harder to book cargo on shipping lines. Customer service has apparently gone for a toss, with shippers berating phone calls that never get picked and emails that never get responses. Shippers are caught between a rock and a hard place as they struggle to give credible responses to their frustrated customers, even as they can’t find answers themselves.
...said who?
“So far, we have had zero deliveries.”
- Bill Peratt, the CEO of Total Terminals International LLC, one of the largest terminals at Long Beach, on how the terminal has not seen any truckers coming up to pick containers between 3 and 7am after the port opened its gates for extra hours every day.
Want to talk with us? Have something you'd like us to cover? Drop your thoughts to vishnu@truckx.com
We are TruckX, the Internet of Things plug to logistics. Check us out at
www.TruckX.com