The Robots Will Win in the End
Why the ILA Strike was a Wake-Up Call
Introduction: The ILA Strike Update
Will this be remembered as a victory for robots over humans? As the ILA strike reaches a temporary resolution, I can’t help but wonder how these labor negotiations will play out long-term. Deep down, I remain very suspicious that anyone can stop a relentless automation industry that is so clearly on the horizon. The details in stopping automation, if it was sincere or not, was never going to result in a long-term victory for The International Longshoremen's Association (ILA). Were some of us fooled to think that Capitalism was going to just halt to a grinding stop because workers can’t compete with Robots? Although key agreements include a 61.5% wage increase over six years, there will be further discussions on automation protections to come in the coming months. This resolution temporarily alleviates the immediate strain to the U.S. economy, but the conversation around automation and job displacement remains highly relevant.
Josh Brown’s Insight From 2017: "Just Own the Damn Robots"
In his 2017 blog post "Just Own the Damn Robots," Josh Brown delivers a key message to investors: automation is inevitable, and it’s all about profit margins. He explains that industries incorporating robotics and AI are poised to thrive, not just because of the sheer technological advancement, but because of the significant cost savings and efficiency improvements that automation brings. Brown’s thesis emphasizes that robots can work non-stop, don’t need wages, benefits, or breaks, and they can vastly outperform human labor in terms of output and precision. This makes them essential for industries looking to scale while controlling operational costs.
Brown points out that many industries—especially labor-intensive ones—will face a crossroads: embrace automation to stay competitive or risk falling behind. For investors, he suggests a proactive approach by owning stocks in companies leading the automation revolution. Brown’s advice was simple but powerful: “Just own the damn robots.”
Brown’s foresight is even more relevant today as industries like manufacturing, shipping, and logistics are rapidly adopting automation to increase efficiency and reduce reliance on human labor.
For more insights, you can visit his original blog post: Josh Brown’s Blog post here
Investing in the Future of Automation
Let’s focus on companies driving automation, particularly in industrial equipment and semiconductors, integrating 5G and AI technology:
Lam Research ($LRCX): A leader in semiconductor manufacturing equipment, producing the chips critical for robotics and AI systems. Their technology will be instrumental in shipping yard automation, logistics, and warehousing.
Texas Instruments ($TXN): Texas Instruments is a semiconductor giant that provides chips essential for automated systems in logistics and factories, including the 5G-enabled robots that drive today’s industrial processes.
Heavy Equipment Stocks: Caterpillar ($CAT) and John Deere ($DE) are integrating robotics and AI into their heavy machinery. These companies are creating autonomous tractors and self-driving construction equipment that reduce labor needs.
The next phase of automation is going to see the integration of AI and 5G technology. Real-time data systems powered by data centers will evolve, enhancing precision, labor safety (driving down insurance costs), productivity (robots don’t sleep or take breaks), and overall create more efficiency.
Automation in Chinese Ports vs. U.S. Lag
Chinese Ports: If you want a glimpse into the future, research how China has rapidly automated its ports, using robots and AI systems to increase efficiency and reduce labor dependency. Ports like Yangshan Deepwater Port in Shanghai utilize fully automated cranes and vehicles, optimizing cargo handling and minimizing delays and becoming more efficient during the post-Covid era. New automation technologies have allowed Chinese ports to handle vast amounts of cargo more efficiently than their U.S. counterparts, who have been slower to adopt these systems due to labor concerns.
U.S. Ports: While all of the top 10 U.S. container ports use some form of automation, they remain less automated than foreign counterparts. U.S. operators are cautious, balancing the benefits of automation with concerns about job loss and operational costs. The recent ILA strike highlights this tension, with dockworkers pushing back against automation despite the technological and efficiency gains it offers. For example, some terminals use automated cargo handling equipment and semi-automated double-trolley cranes, but their deployment is limited.
For further reading, explore the GAO Report on Port Automation, which provides insights into the mixed performance of port automation technologies and their adoption across U.S. ports.
Why Capitalism Will Drive Automation to Win
Historically, capitalism has been driven by a pursuit of efficiency, cost reduction, and profit margins. Automation aligns with these goals by reducing operating costs and increasing productivity. Several key moments in history illustrate this trend. The Industrial Revolution replaced manual labor with machines, particularly in the textile industry, which eventually displaced many workers. The Assembly Line, introduced by Henry Ford revolutionized manufacturing forever, reducing labor requirements while increasing mass production.
In the long run, automation and AI will win out, and there is no stopping Capitalism. While I can’t simply advise people to hedge by investing in automation companies that may be facing temporary job loss due to automation, the situation does remind me of a story from Josh Brown’s blog. He wrote about a friend of a friend that owned a small grocery store chain who felt compelled to buy Amazon stock, recognizing the disruption it was causing to stores around him. Whether that was a hedge on his livelihood or not, I don’t know, but it’s a reminder of how people have an instinct to evolve during these times in history.
Conclusion: The Inevitable Triumph of Automation
In the end, capitalism will drive automation to win. Robots never sleep, eat, or complain. The economic advantages are too strong to ignore—robots work more efficiently and at lower long-term costs. The ILA strike and its temporary resolution underscore the resistance labor groups have toward automation, but as industries move toward AI and robotics, there is no stopping this train as automation evolves with Artificial Intelligence.
For investors, the message is clear: own the companies driving this future. From semiconductors to heavy machinery, automation will only expand into every industry soon, and those who invest in this shift will be rewarded. Own the damn robots—it’s the key to long-term growth that’s compounding before our eyes.
Reminder: This blog is not intended as financial advice. Always do your own research before making any investment decisions.
Full Disclosure: I’m long LRCX 0.00%↑ , TXN 0.00%↑ , CAT 0.00%↑
References:
· https://thereformedbroker.com/2017/10/16/just-own-the-damn-robots/