Global port productivity static while mega-ship pressure rises

Global port productivity static while mega-ship pressure rises

The Port of New York and New Jersey.

“Automation is not a panacea,” said Dean Davison, technical director/maritime for the engineering firm WSP, at the JOC Port Performance North America Conference in Newark, New Jersey, on Tuesday. “There’s no point having an efficient automated terminal if the gate or the truck becomes the logistics bottleneck.” (Above: The Port of New York and New Jersey.) Photo credit: Shutterstock.com.

North American container terminals have made little progress in catching up with their European and Asian counterparts when it comes to productivity, as efficiency globally fails to meet rising mega-ship pressure.

Terminal productivity in North American terminals compared with ports in Asia and northern Europe has stayed relatively the same over the past six years, Dean Davison, technical director, maritime, for the engineering firm WSP, told approximately 200 attendees at the JOC Port Performance North America Conference in Newark, New Jersey.

Terminal productivity not keeping pace with the mega-ships

In his Tuesday keynote address, Davison said the gap in productivity and the bigger global issue afflicting terminals in all regions is dealing with large volumes of cargo from bigger container vessels.

“Productivity gains are not keeping pace with increased vessel and consignment sizes,” he said. “The relative position has actually gone backwards. The question is, with more bigger ships coming next year, are we going to go further backwards? All container ports and terminals have to keep improving, and they’re under pressure to do so.”

Global container moves per hour, the top-line measure of port call productivity, decreased 4 percent, effectively meaning ships spent an extra 70,000 hours in port in the first half of 2018 compared with the first half of 2017, according to an analysis of JOC Port Productivity data. After an extended period of high growth, average call sizes, or the number of containers exchanged per call, did not increase in the first half of 2018, compared with the same period in 2017.

Davison said with another influx of bigger vessels coming online in 2019, it’s quite likely terminals will continue to struggle, but he said North America is not suffering significantly worse than other regions. He noted that 15 ports tracked in North America have seen a 10 percent increase in port productivity, measured in ship-to-shore crane moves per hour, over the last six years. He called that improvement negligible, and said those terminals may even be performing worse now, relative to the average and maximum size of vessels they are tasked with handling.

But, he said even ports with better absolute productivity, like Rotterdam, are similarly not keeping pace with the demands being placed upon them. “Ports themselves tend to be running in parallel [in terms of productivity]. The gap that existed a few years ago is still in effect.”

Automation — part of the solution, but not a panacea

Ports in the Middle East, such as Jebel Ali in Dubai, are making marginal productivity gains over North American terminals, he noted. The keynote was framed within the broader idea that terminal automation might be a solution to ports coping with the increased volumes in shorter windows that are a consequence of larger vessel sizes.

“Automation is not a panacea,” Davison said. “There’s no point having an efficient automated terminal if the gate or the truck becomes the logistics bottleneck.”

Automation in terminals provides consistency of operations within the facility and gives terminal operators the ability to know and predict flow, Davison said. It also improves safety, since there are fewer people in yards and at berths, and provides the ability to lower emissions. But automation projects require a high financial outlay — $500 million to $1 billion for full automation, he said.

“High capital and lower operating costs is the tradeoff.”

He also disputed the perception that North American ports are, on aggregate, less automated than those in Europe and Asia. In terms of confirmed automation projects by 2020, only 5 percent of global terminals will be fully automated. Only a handful of US terminals are fully or semi-automated.

“Is the US and Canada that far behind?” Davison said. “I don’t think so.”

Contact Eric Johnson at eric.johnson@ihsmarkit.com and follow him on Twitter: @LogTechEric.