When Long Beach Container Terminal President Anthony Otto and his planning team set out to design what, in less than 10 years, will be the most automated and efficient container terminal in the U.S., they turned to those who would know best.
They visited the most productive container facilities in Europe, Asia and North America, asking operators an important question: If you could have done it differently, what would you have done? Armed with responses, Otto and his team of Orient Overseas Container Line engineers designed what will be an industry-defining and -altering container terminal, built with the kind of efficiency in mind that will elevate productivity to the highest of global standards.
For U.S. importers and ocean carriers, it can’t come soon enough. Terminal operators in the U.S., and especially in Southern California, are engaged in the race of their lives. For proof, one look back no further than last month, when the Fabiola, Mediterranean Shipping Co.’s 2-year-old shipping giant capable of carrying 12,600 20-foot equivalent container units, called at the Port of Long Beach. The largest container ship ever to visit North America, the Fabiola is about 50 percent larger than the biggest ships now serving West Coast ports.
By mid-decade, ships of similar size will be common in Los Angeles-Long Beach, placing a huge burden on terminals to raise productivity — to keep the ships in transit and shippers’ goods moving to destination.
Ports in Europe and Asia regularly handle vessels of that size and larger, but they are much more productive than U.S. ports. “The best terminals in the U.S. fail by a factor of 4-to-1 to match the productivity of the best terminals overseas,” John Vickerman, president of Vickerman and Associates, told a recent terminal operators’ conference.
European terminals are so efficient because they have automated two key functions: They streamlined the movement of containers from the vessel to the container stacks with automated guided vehicles, and they improved the transfer of containers from the stacks to truckers with automated stacking cranes.
At U.S. ports, those processes are time-consuming and labor-intensive. Here’s how it works: Longshore workers driving yard tractors position their vehicles under the quay crane. They receive the container from the vessel, then drive the container to a stack, which is positioned parallel to the vessel. A manually operated rubber-tire gantry crane transfers the container from the tractor to the stack.
Arriving truckers are directed deep into the container yard to pick up the imported container. Truckers often must wait for the manually operated RTGs to sift through stacks and retrieve containers. This process is time-consuming, often contributes to yard congestion and can be dangerous.
The automated, end-loaded automated terminal should be a godsend to truckers, engineers say, because truckers entering the gate will go a short distance to the landside of the stack, where the automated stacking crane is ready to place the container on the chassis. Because most shipping lines are jettisoning their chassis business, the trucker will arrive at the terminal with the chassis.
Managing this complex operation, which is reversed for export moves, is a computerized terminal operating system. There are no longshoremen in yard tractors to move the containers to the stacks, and no longshoremen in RTGs to transfer containers to the trucks. A longshore clerk sitting safely in the terminal tower will guide the container to the truck chassis during the last three feet of the move.
The Portsmouth, Va., facility formerly operated by APM Terminals and now operated by Virginia International Terminals is the only U.S. terminal with stacks perpendicular to the vessel and utilizing automated stacking cranes.
The process significantly reduces the time needed to move the container to the stacks, improving efficiency and environmental performance, said Jack Craig, chief operating officer at APM Terminals’ Americas region. It also enhances safety because it separates vessel operations from over-the-road truck operations, he said.
The Virginia terminal does not use AGVs. Introduced in Rotterdam two decades ago, these electric, unmanned yard tractors initially failed to yield the productivity operators anticipated, said Mark Sisson, who leads the marine analysis group at Los Angeles-based engineering firm AECOM.
Since then, however, the vehicles, processes and computerized operating systems have improved greatly, and AGVs are common in Europe. Now that the economy is showing signs of sustained growth and cargo volumes are increasing, it makes sense for U.S. terminals to invest in automation, Sisson said. Middle Harbor will use some form of automated transport system, either AGVs or small, automated straddle cranes, to move containers from the wharf to the stacks.
Middle Harbor also will improve efficiency with tandem dual-hoist quayside cranes that lift two 40-foot containers simultaneously from the vessel and place them on an elevated platform on the landside of the crane — in essence doubling the moves of today’s single-lift cranes and, critically, speeding vessel turnaround times.
Crane productivity is one of the glaring weaknesses of U.S. terminals, especially those on the West Coast, which rarely meet the European standard of 30 lifts an hour. Tandem dual-hoist cranes should achieve 45 container moves an hour, Sisson said, putting the Middle Harbor in an elite world class with the most efficient of European terminals.
Although operators at some U.S. ports use dual-pick cranes for 20-foot containers, those at Middle Harbor will be the country’s first to lift two 40-foot containers simultaneously.
But, although Middle Harbor will be modern, it won’t automate the movement of intermodal containers from the stack to the on-dock railyard. The TraPac terminal in Los Angeles is being expanded and redesigned with an on-dock railyard closer to the vessel, and transport of the containers to the railyard will be automated.
TraPac also will incorporate automated transport of containers from the wharf to the stacks, and will utilize automated stacking cranes to promote efficiency, said Frank Pisano, executive vice president. “The marriage has to be from the ship to the yard,” he said.
For others that want to attract the biggest ships afloat, automation won’t be an option; it’ll be a necessity. To make it work, however, ports must be able to attract — and handle — millions of TEUs a year to generate a return on investment.
That investment is massive, and until recently, is what kept U.S. terminal operators from venturing down that automation path. Middle Harbor will spend $500 million on equipment and technology, with much of the cost incurred upfront. Larry Nye, vice president of port planning at Moffatt & Nichol Engineers, said an automated stacking crane costs $3 million, and Middle Harbor will have more than 30. The dual-hoist quay cranes each cost more than $12 million. The AGVs each cost $750,000, and Middle Harbor will need about 60.
The Port of Long Beach will spend $1.1 billion to build the terminal and infrastructure, with Middle Harbor repaying the port with its lease payments, according to the terms of the 40-year agreement signed by OOCL.
Employers also were reluctant to automate because of the resistance of labor. Until the International Longshore and Warehouse Union contract of 2002, which allowed the use of computerization and free flow of information, and the 2008 contract, which permitted the use of automated vehicles and cranes, full automation was a non-starter.
The ILWU would not comment on Middle Harbor, but President Bob McEllrath and other union representatives were in Hong Kong this month to witness the lease signing between OOCL and the Port of Long Beach.
OOCL has had extensive discussions with the ILWU, Otto said. The union knows Middle Harbor is taking labor with it into a new era. “We have a training plan and budget to make the transition and define what jobs will be available in the future,” he said. The longshoremen at Middle Harbor “will be the most highly trained blue-collar work force in the country.”
Automated U.S. terminals of the future will be built on the European model. Asian terminals squeeze as many TEUs as possible from each acre because land is so expensive. Unlike in the U.S. and Europe, labor is cheap, so Asian terminals deploy huge numbers of workers and pieces of equipment. Yantian, in South China, has used as many as 10 cranes to work a single vessel, or twice what many U.S. terminals deploy, Sisson said.
“Asian terminals use an old-fashioned, brute-force type of operation versus the elegant automated European style,” Sisson said.
Automated terminals will reduce some longshore jobs while creating new positions. Two longshoremen now work against every rubber-tire gantry crane, but at an automated facility, “you can probably operate one driver per four automated stacking cranes, or about a seven-eighths reduction in your crane labor costs,” Sisson said.
Further, a Southern California terminal uses seven to nine yard manned tractors per quay crane, while an automated terminal needs only three shuttles, none of which are manned. This also will enhance safety. “Tractor drivers generate a large fraction of the injuries on the waterfront, so automation could potentially eliminate all of these,” Sisson said.
The fight for automation on the East Coast could be much more difficult, if International Longshoremen’s Association President Harold Daggett has anything to say about it. Speaking at last month’s TPM ocean shipping conference in Long Beach — just before the ILA embarked on negotiations with management about a new contract to replace the one expiring Sept. 30 — Daggett listed automation and technology as two of “four hurdles to jump over.”
“We can have the best contract in the world, but if we have automation, it will be bull,” he said.
Daggett softened his tone — and even expressed confidence in an agreement — after nervous shippers indicated they would consider diverting cargo from the East Coast if the talks were contentious this summer.
When completely phased in by 2020 — Phase 1 is set to open in late 2014 — Middle Harbor will have an annual capacity of 3 million TEUs, or one-fifth of the total containers handled last year at the 13 terminals in Los Angeles-Long Beach. That volume also would make it bigger than every U.S. port today except for Los Angeles, Long Beach and New York-New Jersey.
The efficiency and lower cost of container-handling should allow Middle Harbor to attract third-party business. As other terminals automate, carriers will have the opportunity to consolidate their terminal operations, and this will expand the total capacity of Long Angeles-Long Beach for years, he said.
While all U.S. terminals face pressure to improve efficiency, each terminal will incorporate improvements tailor-made to its operation, Craig said. “Automation is not a generic, predefined solution that can be implemented everywhere,” he said.
In high-volume ports, terminals built on vacant land likely will be highly automated. Los Angeles and Long Beach will certainly require that electric, low-emission operations be built on greenfield sites.
Reconfiguring an operating facility is quite difficult, however. Ed DeNike, chief operating officer at terminal operator SSA Marine, said his company plans to automate its facilities according to its own methodology, and that will require doing so in phases. Each phase will last two to three years and will take 80 acres out of production while automation is installed.
It’s clear, though, that to handle the 12,500-TEU vessels that will soon be serving both U.S. coasts, ports wishing to become true load centers must have highly automated container terminals.