Between 2008 and 2023, the world’s GDP is expected to grow by more than three percent annually. The United Nations Conference on Trade and Development (UNCTAD) estimates that during this period, the world’s sea-borne trade will grow at a Compounded Annual Growth (CAG) rate of 3.8% led by containerised shipments and followed by dry bulk commodities.
While the shipping industry is preparing itself for this growth with new technologies like the Internet of Things (IoT), digitisation, robotics, automation, block chain and Artificial Intelligence (AI), ports seem cautious in making the shift.
According to McKinsey’s 2018 report – The future of automated ports – there are several challenges in automating ports including shortage of capabilities, poor data, siloed operations, and difficulty handling exceptions and very high up-front capital expenditures.
The report states ‘our recent survey of industry leaders indicates that the real-world performance of most automated ports doesn’t increase sufficiently in every material way. Safety improves, the number of human-related disruptions (such as shift changes) falls significantly, and performance becomes more predictable. But practitioners responding to the survey think that these ports, especially fully automated ones, are generally less productive than their conventional counterparts. The return on invested capital of assets at some automated ports is falling short by up to one percentage point from the industry norm of about eight percent.’
UNCTAD’s Review of Maritime Transport 2018 states, ‘Liner shipping alliances and vessel upsizing have made the relationship between container shipping lines and ports more complex and have triggered new dynamics where shipping lines have greater bargaining power and influence. Vessel size increases and the rise of mega alliances have heightened the requirements for ports to adapt.’ It also notes further that while liner shipping networks seem to have benefited from efficiency gains arising from consolidation and alliance restructuring, the benefits for ports have not evolved at the same pace.
‘Together, these trends have heightened competition among container ports to win port calls with decisions by shipping alliances regarding capacity deployed, ports of call and network structures being potentially able to determine the fate of a container port terminal. This dynamic is further complicated by the shipping lines often being involved in port operations, which in turn could redefine approaches to terminal concessions,’ the report adds.
“The whole logistic chain is getting more and more autonomous, which requires the different stakeholders to be able to support each other. This will be a driver to increase the level of intelligence,” explains Matteo Natali, General Manager, Port Business Development, Wärtsilä.
“A higher level of port electrification is required to charge hybrid or all-electric vessels, as well as provide the possibility for cold-ironing. Moreover, a new generation of infrastructure will be needed for auto-docking and automated cargo-management, and a continuous ship-to-shore data exchange will be essential to ensure timely, safe and efficient operations,” he adds.
Last year Wärtsilä successfully tested the world’s first automated dock-to-dock system. Norled Folgefonn, an 85m all-electric ferry, was able to leave the dock, manoeuvre out of harbour, sail to next port, manoeuvre through the harbour entrance, and dock alongside the terminal, all without human intervention.
“Autonomous navigation is not necessarily a priority for Wärtsilä,” says Natali however exciting it might be. “What really matters, is the enabling technology, and our end goal is not to remove crew members, but to improve their performance with data-led insights and enhanced situational awareness. We strive to make ships “smarter” and generate value in terms of better efficiency, lower emissions and, most important, greater safety.”
The British Port Association’s (BPA’s) report ‘Automation of Ships, Ports & Harbours’ enlists that the challenging areas for port automation include safety, security, cyber security, breakdowns in communication systems, fires on board, mechanical breakdowns, communication with Autonomous ships, pilotage, tugs & towage, alterations of quays needed for alongside berthing, reduction of crews on board, and how Ports Insurers (marine and non-marine) will view the risk of autonomous ships operating in confined spaces in the insured port.
Despite these challenges automation is a smart move as it can raise productivity by 10 to 35 percent and bring down operating costs by 25 to 55 percent. Experts say that as industry 4.0 unravels, port automation is no longer a matter of individual choice – it’s the inevitable.
That’s perhaps why despite the obvious challenges, BPA has suggested ports engage with owners, ship operators and customers to open up a dialogue on the capabilities of these autonomous or semi-autonomous ships. Wärtsilä’s SEA20 initiative is an attempt to do the same. It is an independent global forum that has been set up for marine cities to explore new solutions based on democratic values and shared interests. It is where industry, regulators, politicians and other decision-makers will come together to initiate cross-border dialogue and make key decisions.
“It is not just about developing new technology, but also about bringing all stakeholders together to make such technology possible and scalable. Co-creation with our customers allows us to deeply understand their business dynamics and needs, which is fundamental if we want to come up with innovative solutions that are truly beneficial. It is also important to test such solutions together with the end-users and continuously improve based on their feedback,” says Natali.
Consulting firm McKinsey estimates that almost 40 partly or fully automated ports now do business in various parts of the world, and an estimated USD 10 billion has been invested in such projects. It expects the momentum of these investments to accelerate to an additional USD 10–15 billion over the next five years. The big question that remains to be answered though is whether this investment will be enough to service the projected growth in the sector.