(Bloomberg) -- Next year, deckhands on ships docked at MiddleHarbor on California’s San Pedro Bay won’t see many people on thewharf. Remote-controlled cranes towering 165 feet overhead willpluck containers from vessels’ holds, and driverless trucks guidedby magnets embedded in the asphalt will carry cargo to robotichoists in a sorting yard.

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The automated future is part of an efficiency drive at the portsof Los Angeles and Long Beach, the first- and second- biggest inthe U.S. They’ve been losing market share for nearly a decade tonimble rivals including Prince Rupert, British Columbia, andSavannah, Georgia. One reason: It takes four days or less to unloada ship at those ports and as many as six in SouthernCalifornia.

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“We need to redefine normal,” said Noel Hacegaba, a managingdirector of the Port of Long Beach, where the Middle Harborterminal is nearing completion of a $1.3 billion modernization byoperator Orient Overseas International Ltd. “We are concerned whenwe look at the numbers. When you’re the biggest, you have a targeton your back.”

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The twin ports are in a race to stay on top. A fresh threat willarrive early in 2016 when new locks and a deeper channel will givethe Panama Canal room to handle big ships from Asia that want tobypass the West Coast to get to the eastern U.S.

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“I don’t see that we can move increased volumes of containerswith the current model,” said Chris Parvin, executive vicepresident of marine operations for Mediterranean Shipping Co. SA,which owns 465 ships and leases berthing space at Long Beach. “Theonly way we can do that is with increased efficiency, which isdependent on automation and technology.”

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Stranded ships

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The Port of Los Angeles recently put an automated terminal intoservice, and along with the adjacent Port of Long Beach is spending$3.7 billion to boost capacity and unravel bottlenecks that strandships in the bay and idle trucks on land. A $1 billion replacementis being built for the 47-year-old Gerald Desmond Bridge, which istoo low for today’s mega-vessels.

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The ports, which share a harbor, moved $470 billion in cargolast year, more than double that of the next-biggest, the Port ofNew York and New Jersey. Still, their grip on the lead has beenslowly loosening since 2006. Los Angeles and Long Beach handled35.5 percent of all U.S. cargo nine years ago and today areresponsible for 32.8 percent.

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“When Southern California loses 1 percent, it translates to a 15percent increase for a smaller port” somewhere else, said Daniel S.Smith, a trade consultant at The Tioga Group Inc. in Moraga,California.

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Discretionary cargo

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At the Port of Savannah, where shipments have grown 10 percentor more for 18 out of the past 24 months, traffic rose 51.5 percentin March, a record since Bloomberg began compiling data in 2009. Atthe Port of Prince Rupert, it was up 58.7 percent, after threestraight months of double-digit expansion.

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Business was up in Southern California in March too. LongBeach’s import traffic increased 27 percent, the biggest rise sinceJanuary 2013. Los Angeles’s growth was 31 percent, the most sinceMarch 2014. In April, the L.A. port’s containerized cargo volumesslipped 6.1 percent; the month’s numbers for Long Beach haven’tbeen released yet.

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Gene Seroka, executive director of the Port of Los Angeles, saidrising volumes wouldn’t be enough -- especially considering thatabout a third of the cargo passing through the ports is what hecalled discretionary, meaning shippers could easily choose anotherpath into the U.S.

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“In any business you want to grow with or in advance of themarketplace,” Seroka said. “Loss of market share concerns us. Wehave to heighten our capability.”

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Congestion perils

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U.S. retailers in particular have a keen interest in the twoports’ efficiency efforts. “Any delays, no matter how small orlarge, have an impact on retail’s ability to get products wherethey need to be,” said Jonathan Gold, vice president of supplychain and customs policy at the National Retail Federation. As themain U.S. gateways to Asia, smooth operations at the ports arecrucial to the economy, he said.

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For port managers, the perils of congestion were reinforcedduring a contract-negotiations standoff between the dockworkers’union and shipping lines and terminal operators on the West Coast.From November through February, as many as 35 ships were strandedin San Pedro Bay. After dockworkers slowed down cargo handling andmanagers cut weekend and night shifts, shippers diverted cargo andeven sent goods by plane.

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Operations largely returned to normal after a tentative contractwas brokered in February. Dockworkers are voting on the deal now,with results expected May 22.

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“The last nine months have been a catalyst for us,” Hacegabasaid. “We are bullish on Southern California.”

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Copyright 2018 Bloomberg. All rightsreserved. This material may not be published, broadcast, rewritten,or redistributed.

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