Big ships equal bigger challenges for ports and equipment manufacturers

The global marine terminal business is estimated to be a $63 billion industry annually and at an estimated 4% plus per annum is still out pacing worldwide GDP growth. In the past four decades, Asia has been the biggest reason for growth in container terminal operations. It takes only a cursory look at a list of the world’s largest container ports to see where the growth has come from over the last forty years. Even now as trade growth in China slows, volumes on the Asia to Europe and Asia to North America trade lanes still remain the principal drivers behind container terminal expansion.

But the terminal industry is facing some significant hurtles as the next generation of boxships enter service. The rapid increase in the size of container ships has created a challenge for both the terminals and the manufacturers supplying the terminal equipment. The rise in size has been phenomenal. Back in 1972 the containership Liverpool Bay at 2,500 TEU represented the upper end of line haul ships. The Liverpool Bay stored her ocean containers in 13 rows across. Sixteen years later, the Marchen Maersk at 4,300 TEU, still stowed the boxes at 13-across. When the first of the 6,000 TEU ships entered service in 1996, the standard width was up to 17 across. In 2004 with 9,200 TEU, MSC Pamela inched up to 18-across, and shortly later, the 15,550 Emma Maersk checked in at 22 across. Now the new generations of near 20,000 TEU ships like the Maersk Mckinney Moller are 23 across. With such rapid changes, how does a terminal keep up? Terminal Productivity Trying to keep pace with the continual increase in containership size has put tremendous stress on productivity, both on and off the terminal. In the simplest of terms, how does a terminal increase lifts to support the new size ships? There is no easy answer. Over the years, ports have had to adjust to each new generation of box ships that containership operators have deployed. But there is a serious disconnect between what an ocean carrier can do in a given period versus that of a port. It’s far easier for a carrier to order the next generation of ships, than it is for a port to dredge deeper, find more land, build higher bridges and ultimately create greater terminal egress and access. Providing an ocean carrier can afford the newbuildings, there are no restrictions on what they can build. On the other hand, it is very difficult for ports, especially ports located in urban areas, to alter what they are. The difference between port and carrier is nearly immeasurable. In many respects the easiest way to bridge the distance between new mega-ship deployment and terminal productivity is better technology. Its biggest expression is in bigger, more efficient gantry cranes. But equipment represents an enormous capital investment – gantry cranes can easily hit $10 million apiece and supporting yard equipment also adds to the tally. The irony is that these onsite costs often pale to the offsite costs of dredging and or bridges not to mention rail and road infrastructure. The problem for the ports - there is no guarantee that even after arranging a lifetime’s worth of port financing for equipment that ships will call. On the other hand, it is certain they will not, if the facilities can’t handle the new ships. Port and terminal productivity are the real issue. In Asia, berth lifts have long out run both North America and Europe averaging around 90 per hour. In Europe, the lifts have averaged around 70 and in North America 65. There are many factors involved, but for carriers, it is a bottom line business: the better the terminal productivity, the more likely a quick turn around and greater chance for voyage profits. For a very long time the baseline thinking has been larger ships, enabling the most moves, equal the best productivity. To a degree this theory still holds up in Asia, where the larger ships still have the greatest productivity. But the circumstances are changing. It’s a matter of space. The length and width of ships is leading to the wastage of berth space. In simple terms, it was easy to fit in three 8,000 TEU ships in just under 8,000 feet of space and send multiple gantry cranes swarming to discharge. Now ships approach 10,000 TEU take 10,000 feet or more… and there is no way to add more cranes. Add in the factor that the real mega-ships are up to 23 containers across and the problem is magnified. With well over half the orderbook ships larger than 10,000 TEU, the need to improve productivity is now and the reality that big ships are no longer necessarily more efficient in port is proven daily with global landside port congestion problems. The answer is more automation but what does that mean in real terms. Botany Bay Australia’s Botany Bay might provide a glimpse. Recently, 24/7 unmanned terminal operations debuted in Sydney and Brisbane. Last month, Kalmar, probably the world’s largest supplier of terminal equipment (part of the Helsinki-base conglomerate Cargotec), delivered an automated straddle carrier to Patrick Stevedores’ Port Botany terminal in Sydney, which offers unmanned 24/7 container handling service. The “AutoStrads” can operate unmanned 24/7, and the company reported that the conversion from manual operations at Port Botany was made in only four days, setting a benchmark for the whole container terminal industry. Patrick’s Port Botany is now the world’s second fully automated AutoStrad terminal, operating with 45 Kalmar AutoStrads and real time control systems. It follows the automation success of Patrick’s Fisherman Island terminal in Brisbane, which was converted to an automated straddle carrier operation in 2005. The technology is based on a radar-based navigation system, maximizing operating efficiency from gate to quayside. Said Kalmar regional vice president Peter McLean, “The implementation of AutoStrad technology both in Brisbane and Sydney demonstrates the concept is ready to be deployed globally in terminals seeking substantial improvement in productivity.”