| Written by Mark Buzinkay
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At one point in 2021, more than 100 container ships were sitting off the Californian coast and standing in line to get into Long Beach. A "traffic" jam that lasts in 2022. With an average container ship's load of about 14,000 containers, that's an immense number of containers waiting to be unloaded. Similar problems have been reported along the East Coast and some European mega ports.
This logjam is a symptom of a stressed supply chain with many different causes, such as COVID lockdowns in East Asian ports, the blocking of the Suez Canal by the Evergreen mishap and the disbalance of full and empty containers. The blockage of the Suez reduces the total global shipping capacity by 6% alone (based on the more extended routing around Africa). Shipping lines cancelled destinations or entire planned sailings to keep up with delays.
The impact on global trade and the economy is felt - directly or indirectly - everywhere: freight rates increased by approximately 200% compared to 2020. In addition, demurrage, detention and storage fees at ports and other storage facilities put additional costs on top. Rising costs in shipping and the fear of scarcity caused increased prices with end customers, fueling inflation worldwide.
The logjam effect becomes visible in the lack of schedule reliability. In the first half of 2022, schedule reliability is below 50%, a historic low mark. This is bad for ship owners, freight forwarders, dealers, consumers and container terminal operators as yard utilisation increases heavily.
To ease the logjam effect and avoid a similar scenario in the future, the shipping industry at large must plan long-term and cooperate industry-wide:
From the suggestions and solutions mentioned above, it is evident that a permanent fix for the current problem lies in the increased digitisation of all parts of the supply chain.
One way to reduce the stress on the supply chain is to digitise and then automate processes. Related to container terminals, the critical hubs of the supply chain network, it is vital to generate and connect the correct data in real-time. Furthermore, adequate data is the basis of informed decision making, and finally, to become more flexible in reacting in a short time to changing demands and scenarios.
Port automation can be defined as the use of integrated technology to develop intelligent solutions for efficient control of traffic and trade flows on the port, thereby increasing port capacity and port efficiency. In other words: all port assets must be connected and use the same protocols to be able to exchange data in real-time.
Due to optimised processes and better coordination between assets and the terminal operating system (TOS), port automation promises terminal capacity, container traceability and productivity to improve. In addition, high container move productivity reduces shipping liners' berthing time, thus reducing the logjam of waiting vessels.
The container terminal is a complex interface between different supply chains, technologies and processes. Automation happens along these lines and in many variants, such as automated trucks connecting containers out of the port into the hinterland, automatic stacking cranes for faster movement and placement of containers and automated mooring systems for shorter mooring procedures.
Port automation can be grouped into yard automation, the automation of the terminal interface and the automation of the connections of foreland and hinterland.
Automated yard planning enables better positioning of containers to increase throughput with identical vehicles. Automated guided vehicles (AGVs), automated stacking cranes (ASCs), ship to shore cranes, and trucks work together in a very synchronised, pre-planned way to optimise moving time and available space. Yard automation requires container position determination systems (PDS) that make the location of all the containers within the terminal known at any time through sensors. This enables their effective management, making them available to be quickly retrieved for loading on a ship or picking up for inland distribution.
Terminal interface automation covers automated gate systems (AGSs) for easy port access for trucks, automated mooring systems and even automated ship to shore cranes (ASSC). That said, an operator is still in charge but monitoring cranes instead of operating them. All systems rely on radio frequency identification (RFID) or optical character recognition to quickly identify containers.
Foreland and hinterland can be connected and automated too. Automated trains and warehouses are already a reality, and automated trucks and ships may follow soon.
Yet, even as the technology becomes increasingly available, only around 10% of ports are fully automated. There are several reasons for this, but the honest answer is that, despite its benefits, automation is not the answer for every port right now.
One challenge to port automation is common standards. To connect data in real-time, standard protocols, similar to the development of the internet, are necessary. Establishing common standards, like TIC4.0, will be crucial. An exciting part of TIC 4.0 is that it's not only the terminal operators or just the equipment manufacturers who sit together. It is all stakeholders: terminal operators, the equipment manufacturers, and the solution providers who try to promote, define, and adapt standards together. New solutions need to be able to talk to other existing solutions in a container terminal, independent from the manufacturer or solution provider.
One aspect of common standards is that they also need to be prepared for any future development, which brings us another challenge to automating ports: costs. For example, due to budget restrictions, automation is only possible for one part of the terminal, but in the future other parts are planned to be automated as well, maybe with another vendor. Therefore, it makes sense that all of these solutions easily communicate with each other so that implementation or replacement is "plug & play". As a result, the terminal operator has less risk, and implementation time will decrease. This will reduce the costs and encourage terminal operators to automate in steps instead of in complex, giant projects and avoid significant one-time investments.
Discussing investments always involves a return on investment calculation, and automation is one way to realise a clear return on investment because of more efficiency and, therefore, more profitability. It is not only about saving costs but also enabling much better planning and intelligent utilisation of equipment, in addition to knowing the status of the equipment, all in real-time. Terminal Operating Systems can only be as sound as the data input is. Making all your assets smart is very often the foundation for successful automation.
Automation is an excellent recipe for improving the productivity of brownfield and greenfield container terminals. It is fair to say that semi-automation may hold some advantages against a full automated port in most scenarios. Operational flexibility is needed as you want to keep your processes open to changing customer demands. TTI Algeciras is a good example. Being a semi-automated container terminal, they are the only European terminal listed at the Top-10 of the 2020 global Container Port Performance Index. TTI Algeciras has an accurate picture of its equipment in real-time and uses a fleet management module and automated asset utilisation. On top of that, they have had proper planning and scheduling because they have visibility through PDS.
The future of port automation is bright but challenging. Careful planning and implementation are necessary, based on proper process understanding, industry-wide standards, and the flexibility to adapt processes to customer demands. On the other hand, performance becomes more predictable at the price of high up-front capital expenditures if projects are not designed gradually. In total, operating expenses decline, but also productivity in fully automated terminals, which can reduce the ROI.
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