Authors: Dr. Jean-Paul Rodrigue, Dr. Theo Notteboom and Dr. Athanasios Pallis
Terminal automation is a full or partial substitution of terminal operations through the use of automated equipment and processes.
1. Automating Terminals
Since the emergence of containerization, mechanization has been an ongoing process for freight terminals as more efficient intermodal equipment was developed. Still, all that equipment needed to be operated by trained labor such as crane operators and drivers. Since the 1990s, there has been a push toward automation as global trade surged. In combination with growing ship sizes, this has encouraged ports to improve their productivity, namely throughput and ship turnaround time, to be in the range of 30% more than standard terminals. Another important driver has been the large diffusion of information technologies, making it possible to integrate information and physical systems that automation depends on.
Both port and intermodal rail terminals can be automated according to similar principles and technologies since automation revolves around handling containers; a standard load unit. The container thus becomes the unit around which physical and information handling systems are built and organized. Automation can be comprehensive when involving several stages of terminal operations or specific when only one stage is involved at a time. Comprehensive automation is becoming standard for greenfield terminals (new projects), while existing terminals electively automate part of their operations as comprehensive automation could be highly disruptive and costly. Automation involves three main dimensions; within the terminal (yard), its interface, and the foreland and hinterland.
A. Yard automation
Within a freight terminal, several processes can be automated. Container yard management has been automated for decades, using information systems to manage the stacking of inbound and outbound containers. Thus, automated yard planning allows for more effective positioning of containers and equipment to increase throughput with the same assets. Horizontal movement automation involves using Automated Guided Vehicles (AGVs) such as straddle carriers (AutoStrads) or shuttles. These vehicles bring containers back and forth from Automated Stacking Cranes (ASCs), which are rail-mounted gantry cranes managing stacks of containers that are usually aligned perpendicular to the pier. The pier side of the stack is used for loading and unloading containers coming from the pier, while the gate side of the stack is used for pick up or deliveries of containers to or from the terminal gate. Such movements are usually done with trucks and chassis. Yard automation requires container position determination systems 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.
B. Terminal interface automation
Automated mooring systems are able to quickly dock and undock a ship, improving ship turnaround time. Automated Ship to Shore Cranes (ASSC) are automated versions of standard portainers that are remotely controlled. An operator can control several cranes instead of one. For intermodal terminals, Automated Intermodal Cranes are a modified version of ASCs and are usually wider since they serve as loading and unloading, and stacking equipment.
Automated gate systems (AGSs) have received wide diffusion because of the substantial benefits they provide for terminal access. They need to have documentation electronically provided before picking up or dropping at the terminal, which improves processing time and reduces the risk of errors with their associated delays.
AGSs commonly rely on optical character recognition and radio frequency identification to quickly capture data about inbound and outbound containers. Photos of containers and equipment can also be automatically taken and stored. The above has substantially accelerated gate time, which is a common hurdle in terminal operation. Further, truck drivers can use mobile technologies to schedule appointments to pick up or drop containers and even swap equipment such as chassis. This is linked with demand planning and prediction, allowing for a better understanding of terminal gate access time and frequency distribution.
C. Foreland and hinterland automation
Foreland and hinterland automation relates to processes that are not directly linked with terminal automation but can support its benefits upstream (foreland) or downstream (hinterland) along the transport chain. Although automated ships are not to be envisioned within the foreseeable future, many aspects of ship operations have been automated (propulsion and power monitoring, ballast), reducing crew size substantially. The same issue applies to rail transportation (control systems, signaling, crossings). Automated trains are a distinct reality since they operate on their own guideways and automated trains are already common in public transit systems. The introduction of automated trucks carrying containers between terminals and their hinterland is a distinct possibility, particularly along selected high-volume corridors. Warehouses with automated storage and retrieval systems have also been introduced in recent years, which has improved distribution efficiency, particularly for e-commerce.
Terminal operations require equipment such as portainers, gantry cranes, straddle carriers or reach stackers, all of which can be automated. Since terminal equipment involves maintenance, predictive maintenance technologies supported by sensors allow for a better assessment of the wear and tear terminal equipment is facing, irrespective of whether this equipment is automated or not. The equipment life-cycle is improved through better maintenance as well as a reduction of the frequency and duration of equipment downtime due to unanticipated failures.
Like mechanization previously, automation is promoting a further standardization of terminals over three main dimensions:
- The configuration of the terminal to make it suitable for automation.
- The automation of the processes handling containers.
- The automation of the systems controlling the equipment.
2. The Port Automation Drive
There is an increased interest in the automation of container terminals to improve quayside and land productivity. Port terminals are particularly prone to automation since they directly improve cost, efficiency, safety, and reliability performance indicators. Terminal operators are trying to realize productivity leaps to deal with the scale increases in container vessel size and container volumes. Advances in port productivity have resulted in disproportionately lower growth of port turnaround times as a function of vessel size. Terminal operators have fully or partially absorbed the potential port-related diseconomies of scale linked to larger vessels. Therefore, shipping lines are encouraged to pursue consecutive rounds of scale increases in vessel size.
Automation is often aimed at reducing generalized costs per unit handled in terminal operations. The expectations are that automation can reduce operating expenses by 25% to 50% and increase productivity by up to 30%, but these expectations remain unfulfilled. This is further underlined by handling standard container box sizes using conventional equipment, which is susceptible to automation. Terminals facing severe land availability issues show a higher willingness to consider automation. Still, automation takes place at different rates depending on the technology involved.
The drive towards automation can partially be explained by a cost/benefit perspective where the least costly and most beneficial forms of automation will be adopted first. Adoption is a risky proposition since it often involves untested systems with uncertain outcomes, but it can lead to substantial benefits if successful. The willingness of stevedoring companies to invest in new cargo handling technology and automation is partly related to the perceived labor productivity benefits and cost savings at the level of dock labor. Technological innovations and developments in cargo handling should increase labor productivity expressed in TEUs handled per docker per time unit, as fewer dock workers are typically needed. If a technical innovation allows a reduction in labor per gang (or, in the case of full automation, even eliminating labor), then the terminal operator will only benefit from the labor cost savings if the gangs are reduced in size. If such a reduction in labor is not possible within the terms of the dock labor employment system, then the stevedoring company will be far less eager to introduce technological innovations. The trade-offs that need to be made when introducing new automated cargo handling technology can lead to disputes between labor unions and the terminal operator.
Automation usually involves new terminal developments since there is an opportunity to automate terminal-wide without disrupting existing operations. As automation is implemented, it creates further pressures on other components to the terminal to improve productivity in order to keep pace. Eventually, the whole terminal can be automated. Further, effective automation technologies promote their adoption by other terminals needing to remain competitive and keep up with the most efficient operational practices. Once about 25% of the terminals have adopted a form of automation, a rapid diffusion is expected since the technology has proven to be effective from a cost and an operational standpoint. By the time it reaches 50% of terminals, automation will enter a maturity phase with well-established equipment, standards, and modes of operation. It will cease to offer a competitive advantage and be a standard mode of terminal operation.
The push towards automation appears to be an irrevocable trend, further increasing the capital intensiveness of container terminals. This is likely to consolidate the competitiveness of the largest terminals able to first invest in automation or afford existing solutions. If the cost of automation goes down as expected, it will diffuse into smaller terminals, and the competitive advantage of automation will recede. Automation will become an industry standard for freight terminals.
Still, automation creates an asynchronism in terminal operations since it may not be implemented at the same rate in terminals being reconverted. For instance, improving gate access may place pressure on yard operations (and vice versa), so careful consideration must be given to the impact of automation on the whole terminal operations.
Despite the possible advantages of automation, only a limited number of terminals are fully or partly automated. As of 2018, about 8.8% of all the major container terminals were fully or partially automated. Several terminal operators show a reluctance concerning automation and adopt a wait-and-see approach. The main obstacles to automation include:
- High and irreversible investment costs. Automation equipment cannot be effectively provided in increments, but as a complete and integrated system.
- Availability of skills and trained personel. The new set of skills to operate, supervise and maintain automated equipment require additional training in the workforce and the recruitment of talent in a competitive market.
- Disruption to terminal operations during conversion. As a terminal is getting close to operational capacity, automation becomes an increasingly attractive option. However, converting a footprint to automation will be disruptive to operations, impacting the terminal performance, revenue, and customer satisfaction.
- Existing labor contracts. Most port workers, particularly longshoremen, see automation as a disruption and a threat to employment opportunities. A terminal setting up a conversion towards automation may by facing labor movements and protests that may disrupt its operations.
While the risks for automation can be substantial, the rewards in terms of higher productivity and lower operational costs may not be entirely evident in the recent context. Comparative metrics about the benefits of automation remain to be better assessed.
3. Automated Container Terminals
Automation takes place at different scales, paces, and locations, and there are various degrees of automation. In many ways, automation is present in a large number of terminals depending on how it is defined and whether it focuses on infrastructure (e.g. stacking cranes) or information systems (e.g. yard management or port community systems). The most common definition classifies terminals as fully or semi-automated, but this definition is partial.
- A fully automated terminal is when the stacking yard and horizontal transfers between the quay and the yard are automated. This implies that a container is handled automatically from the dockside to the pickup area.
- A semi-automated terminal only involves an automated staking yard.
Such a definition does not consider automated terminal gates and other softer forms of automation such as appointment systems and yard planning systems. Further, as portainers become automated, the need to provide a more comprehensive perspective about port terminal automation will become even more salient. Therefore, comparing terminals by their level of automation is not a straightforward endeavor. Eventually, a term such as a completely automated terminal will be required to define a terminal where automation occurs from the portainer to the gate (and beyond).
As a capital-intensive and complex process, automation is thus more prevalent among large commercial gateways and transshipment hubs. An overview of existing terminal automation facilities underlines three main contexts in which automation is taking place:
- When an existing terminal facility has a footprint that is difficult to expand, automation becomes a strategy to increase throughput, cope with higher operating costs, and remain competitive.
- When a terminal acts as a major transshipment hub, automation becomes a strategy to increase the transshipment throughput. The hub can perform its function more effectively, particularly in light of larger containerships.
- When a new terminal facility is developed with the latest automation technology, automation becomes a strategy to attract customers in a competitive environment while reducing the necessity to train a port terminal workforce.
A positive impact of automation concerns safety since automated terminals are less prone to accidents with fewer (or no) workers directly present. Automated equipment also tends to be electrically powered, reducing local environmental externalities such as pollution and noise. Further, terminal automation can be effective in a context where labor is expensive or difficult to find and train.
A major challenge in automating an existing terminal facility is how to phase the process with existing operations. Removing old equipment and installing automated equipment requires a temporary loss of capacity and operational efficiency. The implementation period for an automated terminal is typically longer than for conventional terminals. Terminal operators have to invest large sums of money for a longer time period to achieve any ROI. The long implementation time is caused by extended terminal construction and testing periods. Converting an existing fully operational terminal to an automated facility can be complex. The operator will need to temporarily give up some of its terminal capacity and be faced with managing two operational systems (automated and non-automated) during the transition period. This may involve a decision to lose revenue while automation is taking place, but with the expected benefit of improved efficiency.
Since automation is a relatively recent process starting to diffuse through the container port system, its impacts are not well understood. Shipping networks, terminal operations, the footprint of containerization, and the interactions between key stakeholders such as shipping lines, cargo owners, and logistics service providers are all impacted. It also remains to be seen what are the applicable limits of terminal automation and at what level it does not generate significant additional value.
- Davidson, N., 2018. Retrofit terminal automation measuring the market. Port Technology International, 77, pp. 1-3.
- Ioannou, P. and H. Jula (2008) “Automated container terminal concepts”. Intelligent Freight Transportation, 27.
- ITF (2021), “Container Port Automation: Impacts and Implications”, International Transport Forum Policy Papers, No. 96, OECD Publishing, Paris.
- Kon, W.K., Rahman, N.S.F.A., Hanafiah, R.M. and Hamid, S.A. (2020) “The global trends of automated container terminal: a systematic literature review”. Maritime Business Review.
- McKinsey (2017) Expert interviews; McKinsey Container Terminal Automation Survey.
- Moody’s Investor Service (2019) Automated terminals offer competitive advantages, but implementation challenges may limit penetration, 24 June 2019.
- PEMA (2016), Container Terminal Automation; A PEMA Information Paper, Port Equipment Manufacturers Association.
- Port Technology International (2018) Navis Survey: Terminal Automation ‘Critical’ to Survival.
- Scott, J., (2012) Trends in marine terminal automation. Port Technology International, 54, pp. 82-85.