Shippers to gain reliability from US terminal automation


LONG BEACH, California — Importers and exporters will benefit as container terminals in North America are automated because automation will result in “reliable productivity” for beneficial cargo owners, according to a marine engineer.

“Why do BCOs care about automation? Because it results in less exposure to interruption,” Mark Sisson, senior port planner and analyst at AECOM, told JOC’s 16th annual TPM Conference here last week. Automated terminals deliver consistent performance hour after hour each day, and reduce the chances of interruption due to job actions.

However, terminal operators warned the almost 600 BCOs in attendance at TPM not to get too excited too soon about automation because it is hugely expensive. Also, terminal operators are waiting for the approximately 25 automated container terminals worldwide to achieve the level of productivity they were designed to reach.

Ed DeNike, chief operating officer at SSA Marine, said his company has scrutinized the vessel, yard and gate productivity at automated facilities, and given the container volumes SSA handles at its three conventional terminals in Long Beach, “we couldn’t have done it with the current automation we have seen,” he said.

Five terminals in the U.S. and Mexico are automated or will be soon. The semi-automated APM terminal in Norfolk was the first to open, in 2007. The semi-automated Global Terminals in New York-New Jersey and the semi-automated APM terminal in Lazaro Cardenas will open this year. Semi-automated terminals feature automated stacking cranes, but they use conventional yard tractors to move containers from the ship-to-shore cranes to the stacks.

The TraPac terminal in Los Angeles last year opened the first phase of what will be a fully-automated terminal. TraPac deploys unmanned autostrad machines to move containers from the ship-to-shore cranes to the stacks. Next month, the Middle Harbor terminal in Long Beach will open the first phase of its fully-automated terminal. Middle Harbor will use unmanned automated guided vehicles for its ground transportation.

Full automation is costly — about $500 million or higher — which is why many operators in North America, Europe and Asia are not rushing to do it. BCOs, however, can realize immediate benefits from those terminals that automate. The main drivers of automation are mega-ships with capacities of 10,000 to as much as 18,000 twenty-foot-equivalent units that are now calling at North American ports. These ships place tremendous stress on the yard and gate operations that directly affect BCOs’ ability to receive delivery of their containers.

Big ships require longer marine terminal operating hours and higher terminal capacity to handle cargo surges of 10,000 or more container moves per vessel call, Sisson said. Containers can be stacked more densely in an automated terminal, and the operators can afford to conduct yard operations virtually round the clock because their automated stacking cranes significantly reduce labor costs.

Automated terminals are cleaner, safer and quieter than conventional terminals, and they deliver containers much faster to truckers than do conventional terminals. Harmful diesel emissions are also slashed because the cargo-handling equipment is powered by electricity and batteries.

Yard productivity improves because the container stacks are positioned perpendicular to the vessel and the gates. Trucks travel a short distance from the gate to the landside end of the stacks to deliver and receive containers. This process allows for efficient dual transactions in the same location. Trucks move quickly into and out of the terminals. Even more importantly, street truck traffic is separated from the machines that move the containers from the cranes to the stacks. This should significantly enhance yard efficiency and safety.

BCOs in Southern California who suffered through four months of work slowdowns during the longshore contract negotiations this past year heard that automation improves terminal reliability because it neutralizes a key form of leverage the International Longshore and Warehouse has over the terminal. The ILWU during the contract negotiations slashed its daily dispatch of yard crane operators from about 110 per day to 35. Those jobs are mostly eliminated by the automated stacking cranes. The only manual involvement in ASCs is the lowering of the container the final three feet to the truck chassis.

Sisson noted that the downside of automation is its huge upfront capital cost, the inflexible layout of steel rails that are sunk in concrete and the complex electronic systems that need ongoing support from the information technology staff.

There is no doubt that the elimination of dozens of costly ILWU yard tractor and yard crane jobs, that pay well over $100,000 per longshoreman in wages and benefits, will significantly reduce labor costs at each terminal that automates. A Port of Los Angeles study said 40 to 50 percent of the jobs at the TraPac terminal will be eliminated when the facility is fully automated in the next two years.

DeNike, however, noted that most of the terminals that have automated, even those in Europe that continue to refine the technology, have not achieved the productivity that conventional terminals receive from longshoremen. “Productivity trumps manning,” he said.

Longshoremen employed at conventional terminals now have an added incentive to be productive because, if automated terminals like TraPac and Middle Harbor succeed commercially, other terminals will have to automate in order to compete. “We rely on the ILWU for efficiency,” said Alan McCorkle, vice president of West Coast operations at Yusen Terminals. “If they don’t get it, they will lose out to TraPac and Middle Harbor,” he said.

Dockworker productivity is especially important in operating the ship-to-shore cranes. DeNike said that each improvement of one container move per hour translates to a savings of $5 for the terminal. Therefore, if a terminal that handles 1 million lifts per year improves its productivity from 30 moves per crane per hour to 31 moves, it saves $5 million a year.

If operators of conventional terminals must automate to stay competitive, the biggest challenge they will face will be to maintain existing operations while removing portions of the facilities from production to install the automation, said Steve Trombley, managing director of APM Terminals in Los Angeles. Building an automated terminal on a greenfield site is much easier, he said.

Nevertheless, the need for consistent, almost non-stop operations to handle as many as 15,000 container moves generated by today’s mega-ships in a single call creates a compelling case for automation at the busiest ports, said Rolf Nielsen, senior vice president and head of North American operations at Maersk Line.

Sisson described this phenomenon as “smooth, predictable performance” hour after hour without a need for down time to change operators or to take lunch breaks. When that consistency is combined with 24/7 operations, lower operating costs, safer, greener operations and improved gate times for truckers, BCOs may find that shipping their cargo through automated terminals in this era of big ships is something they should certainly care about, Sisson said.

Contact Bill Mongelluzzo at bill.mongelluzzo@ihs.com and follow him on Twitter: @billmongelluzzo.

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