The global trade landscape is facing disruption – and the United States’ infrastructure must adapt. The Trump administration’s proposed tariff hikes signal a renewed push to reshape global supply chains. While tariffs against China and other adversaries are often an appropriate approach, other steps must also be taken to make U.S. industry fit for competition in the 21st century.
The White House should overhaul U.S. maritime supply chains via automation. Robust maritime sector automation would not only make U.S. exports more competitive, but it would also help support U.S. logistics networks and shipbuilding, strengthening the U.S. in the competition with China.
Automation Benefits at U.S. Ports
U.S. port and maritime supply chains are the backbone of the domestic economy and global trade. Recent disruptions, however, ranging from the global pandemic to labor strikes, have laid bare vulnerabilities of the current supply chain system. Reliance on outdated, labor-intensive logistics systems leaves essential industries less resilient in the face of major disruptions.
During COVID-19, for instance, surging imports overwhelmed Long Beach and Los Angeles ports, causing historic bottlenecks due to skyrocketing demand for imported goods. Ships waited weeks offshore, quadrupling container rates. Worker shortages worsened delays, driving inflation and exposing the need for automated logistics.
U.S. supply chains need innovation through automation. AI and machine learning can enhance resilience by adapting to demand shifts, rerouting cargo, and recovering quickly from disruptions.
AI and machine learning enable real-time supply chain monitoring by collecting and analyzing data from suppliers, devices, and shipping hubs. The Port of Rotterdam’s AI-powered digital twin, for instance, uses Internet of Things (IoT) sensors to continuously monitor shipping data, weather conditions, and cargo movements to optimize port operations and reduce congestion.
Advances in automating trucking could greatly boost U.S. port productivity amid worsening driver shortages, which are already a persistent problem. Ports often underestimate automation’s impact on truck turn times, and remote-controlled cranes can improve safety. Autonomous vehicle technologies are only advancing. With Washington prioritizing autonomous trucks, the United States could collaborate with allies like Japan, which is planning an automated cargo transport corridor along the 500-kilometer (311 mile) route between Tokyo and Osaka.
By applying smart logistics technologies and automation to trucks, cargo tracking, cranes, vessels, rail, and more, the United States can strengthen its resilience against geopolitical and climate-related disruptions while maximizing economic efficiency. Failing to optimize port logistics and automation will damage U.S. economic competitiveness, especially vis-à-vis China.
Catching up to China’s Maritime Complex
In November 2024, the Chinese Ministry of Transport announced a plan to build world-class intelligent ports and digital waterways within three years. The Chinese government has also partnered with tech giants like Huawei and Alibaba to develop cutting-edge logistics technologies to further widen the innovation gap. As a result of this state-sponsored effort, China now operates 18 automated container terminals, with an additional 27 under construction or undergoing upgrades.
China’s logistics efficiency is unmatched, for now. Last year, Shanghai’s Yangshan Deep-Water Port, one of the world’s largest fully-automated ports, became the first to process over 50 million shipping containers. In contrast, the Port of Long Beach, one of the largest and most technologically advanced U.S. ports, handled just 9.6 million containers in the same year even with a fully-automated container terminal.
While automation is important, it’s not the only variable. Long Beach’s restrictive zoning laws have limited the expansion of port facilities for industrial waterfront areas, causing ships to idle while waiting for space to open up. Additionally, inconsistent appointment systems across terminals cause truckers to experience long wait times and often result in wasted trips and congestion. As a result of its systematic dysfunction, the Port of Long Beach lags behind global counterparts, ranking among the least efficient in the world.
If Long Beach and other U.S. ports continue to trail Chinese competitors, and U.S. maritime logistics networks falter, the effects could be significant. Not only could weak maritime logistics hamper U.S. economic competitiveness, but allowing Beijing to have an outsized – or even monopolistic – role in global maritime logistics supply chains could pose significant security risks. China could leverage proprietary trade data from its LOGINK port operations to undercut competitors. Meanwhile, the Chinese company ZPMC provides up to 80 percent of large U.S. port cranes, which are internet-connected. In a crisis, China could exploit these systems’ vulnerabilities.
If Washington fails to appropriately de-risk maritime supply chains, it faces dependence on Chinese technologies and logistics networks.
Automation’s Role in Strengthening U.S. Shipbuilding
Automation will play a critical role in enhancing the U.S. shipbuilding sector and making it much more competitive vis-à-vis China.
The U.S. shipbuilding sector has historically faced challenges, and today the situation is dire: China built nearly 1,800 large ships in 2023, while the United States built just five. Civilian and military shipyards are distinct but complementary: civilian shipyards do not have identical roles, capabilities, or functions as their military counterparts. Still, commercial shipyards nevertheless hold latent military potential, as China’s civilian shipyards could help repair the Chinese fleet in wartime conditions.
Key shipbuilding cost inputs include labor, industrial machinery, and materials. The U.S. shipbuilding sector has high labor costs. Steel prices in the United States can be twice as expensive as in China, while tariffs will only increase these costs.
Shipbuilding labor costs can be abated through automation, including for processes like routine, non-complex cutting; welding, and bending of steel; and shipbuilding design. Although manual work remains essential, analysts hold that “80 percent no-touch” solutions are feasible. While not a cure-all, automation can bolster U.S. shipbuilding, and policymakers should include it in the upcoming SHIPS Act meant to address U.S. shipbuilding deficiencies.
Tackling Automation-related Concerns
Automation can lead to job losses. Indeed, on October 1, 2024, 45,000 dockworkers from the International Longshoremen’s Association (ILA) went on a strike that shut down 36 major U.S. ports, from Maine to Texas, over unresolved issues regarding wages and automation. While the ILA vociferously rejects automation, the technology will benefit the overall U.S. workforce through port improvements and greater economic efficiency.
Increasing port capacity through automation can reduce congestion and boost trade volumes, generating positive spillover effects across industries. In addition, infrastructure investments can optimize maritime trade by alleviating congestion, mitigating demand shocks and producing better economic outcomes. While automation can pose short-term challenges, it offers long-term efficiency improvements that substantially increase nationwide productivity and employment while lowering cost pressures.
Balancing these considerations, the White House, in consultation with Congress, should pursue legislation that would buy out port workers impacted by automation.
Investments in automation should of course be coupled with policies that protect workers’ rights, including retraining programs, wage protections, and job transition support, ensuring that technological progress does not lead to aggregate job losses or disproportionately impose costs on specific workers or geographies.
Additionally, ports should pursue automation on a case-by-case basis, as an analysis by infrastructure analyst Brian Potter shows. In many cases, automation can be less significant than other issues, such as insufficient coordination, shortages of truck chassis, and more. Similarly, a 2024 GAO analysis found that automation had mixed impacts on overall terminal performance, although it noted that automation can “increase terminal capacity and allow for more efficient operations.”
Despite current limitations, AI-driven automation will improve, making it increasingly valuable for ports. As Potter wrote, “right now, automation is the worst that it will ever be.”
Cybersecurity poses the most pressing challenge for automation. As ports become more reliant on digital operational technology (OT) and information technology (IT) systems, they naturally become susceptible to cyber threats such as ransomware, insider threats, and advanced persistent threats (APTs). For example, a congressional investigation into ZPMC cranes revealed that the cellular modems embedded in these systems can pose espionage and operational risks. For ports to fully leverage the benefits of automation without compromising security and resilience, the Trump administration must develop a comprehensive cybersecurity strategy alongside its automation efforts.
Dominance and Overmatch Through Automation
Tariffs alone cannot build a resilient trade infrastructure. The Trump administration must overhaul supply chains via strategic investments in maritime logistics automation. Accordingly, the incoming U.S. maritime czar should comprehensively examine where the U.S. maritime supply chain can be optimized, and where automation is appropriate. By using innovative techniques, including automation, the U.S. can ensure its maritime sector competes effectively with China.