Dive Brief:

• The Los Angeles City Council voted unanimously Friday to veto a permit that was approved a week earlier by the Port of Los Angeles Harbor Commission. The permit would have allowed APM Terminals to begin automating parts of its operation.
• The permit will now go back to the Commission where it will study the permit more closely for the potential job and economic impacts this decision could have on the community and can ask Maersk to resubmit the permit or seek more details. The International Longshore and Warehouse Union (ILWU) was a vocal opposition to this permit, fearful of the potential job losses that would accompany automation.
• The automation equipment arrives at APM Terminals later this month, a spokesperson told Supply Chain Dive after the Commission approved the permit. It's not clear what will happen to this equipment now that the City Council has vetoed the permit.

Dive Insight:

Councilman Mike Bonin said this kind of permit should be minor in nature — as in not having a large impact on the port or its operations — as detailed by the Port Master Plan.

"Who in their right mind would consider the total automation of the largest terminal at the nation's largest port to be minor?" he said, according to to the Los Angeles Times.

Tom Boyd, a spokesperson for APM Terminals, issued a written statement to multiple media outlets following the vote, saying "We are disappointed by the L.A. City Council, who disregarded the actions of the Port of Los Angeles Board of Harbor Commissioners vote — and like Councilman Buscaino mentioned, we hope the situation will be resolved in the near future."

This vote came after the Harbor Commission approved the permit 3-2 in front of an ILWU-heavy audience.

On Nov. 5, 2018, APM Terminals applied for a permit with the Harbor Department for seaside development, which must be approved given its proximity to the coastal zone. The port's executive director approved the permit, but the ILWU filed an appeal at the Feb. 21, 2019 board meeting to have this decision overturned.

This permit would have allowed APM Terminals to begin some infrastructure upgrades required to operate the automated straddle carriers, including the installation of WiFi antennas, reefer racks, traffic barriers and fencing, according to a staff report on the appeal.

A recent report from Moody's showed there can be benefits to automation for terminal operators, but these will often come along with job cuts, which then lead to political risk, the report said.

"Even if not explicitly stated, there is likely a limit to the willingness of many port authorities and their parent governments to support automation initiatives that result in meaningful job losses," Moody's writes.

The next Commission meeting is July 11.