Download PDF Summer Bridge: A Vision for the Future of America’s Infrastructure June 15, 2018 Volume 48 Issue 2 The articles in this issue, by academic and industry experts, focus on what’s needed to prepare US infrastructure systems for the coming decades. Trends in Container Terminal Infrastructure and Technology Friday, June 15, 2018 Author: Omar A. Jaradat Container ports are the center of the cargo distribution transportation hub and the most significant contributor to the US economy. Port cargo activity contributes roughly $4.8 trillion to the economy yearly (26 percent of US GDP), over 23 million jobs, and over $320 billion annually in federal, state, and local tax revenues (AAPA 2017a). An ocean carrier’s greatest asset is its ship and a port owner’s greatest asset is its infrastructure. These assets use technology because of its ability to enhance productivity, data analysis, and integration. How these assets are managed and interact is crucial to provide seamless movement of cargo through the supply chain to consumers. Trends and changes in one part of the chain have a cascading effect on the rest of the chain. The ability to understand and forecast these changes helps stabilize and reduce risk in the process. There is a growing gap between infrastructure development and technology. Ongoing growth in ship size requires an integrated approach to infrastructure development and technology to ensure technology advancement, infrastructure resiliency, terminal operations, and sustainability at future container terminals. As port planners, engineers, and scientists look forward, the continued growth in the use of containerized cargo, ever-increasing ship size, and need to modernize container terminals at US ports require a review of the evolution of container terminals, current and future trends, and needed investments. This article provides insight into future infrastructure development and technology needs based on these factors and suggests steps to maintain resilient port systems. Evolution of Container Ships and Terminals The use of modern ports as hubs for transportation, shipping, and logistics was transformed in 1956 when -Malcom McLean first lifted entire truck trailers onto and off ships. Soon after, containers became the standard method of shipment worldwide. Today, containerized ships carry 90 percent of global cargo (Alfred 2012). Over the past 20 years, increasing container ship size has been a key market driver. Port planners and engineers cannot predict the upper limit for future ship size based on past trends, it can only be extrapolated. There are three main triggers for recent significant increases in containerized cargo at US ports: (1) -expanded growth of Pacific trade in the 1990s; (2) optimization of port systems, tools, and technology in the 2000s; and (3) greater use of terminal automation (spurred by cargo volume). Figure 1 shows the evolution of container terminals to accommodate increases in containerized cargo capacity since the 1960s. Figure 1 Throughout the 1990s, increased cargo trade volume with Asia spurred the growth of not only terminal infrastructure but also ship requirements at berth. The physical dimensions and features of terminals were sized for larger future classes of ships, from 6,000 to 8,000 twenty-foot equivalent units (TEU). Terminal features included larger container yards (of 150–250 acres), larger cranes to handle bigger ships, and dedicated on-dock rail to allow for direct loading to transcontinental double-stack container trains. In the early 2000s the commissioning and completion of new “mega” terminals at the Port of Los Angeles (Pier 400) and Port of Long Beach (Pier T) facilitated the expansion of US-Asia trade and spurred other US ports to construct similar facilities. These mega terminals enabled shippers to enhance efficiency and system reliability through improved wharf and building design, faster information technology (with fiber optics), truck gate process automation, and terminal planning tools. By 2010 these terminals, in some cases exceeding 350 acres, housed even larger cranes, on-dock rail, -deeper shipping channels, and more robust berths to handle the newest class of cargo ships, the 9,000–10,000 TEU. Conventional wisdom originally held that no ship owner would build vessels larger than what could pass through the third set of locks planned for construction through the Panamanian Isthmus. The maximum ship size that can pass through the Panama Canal is 13,000 TEU, called the Neopanamax. However, to further reduce unit cost for each container and to offset higher fuel costs, ship builders started to deliver even larger vessels, from about 15,000 to more than 20,000 TEU. These were mainly deployed between Asia and Europe, but started calling at US ports in 2015. Worldwide, increases in cargo volume and the need for reliable handling facilities have led to the development of a new wave of automated terminals. In the past decade such terminals have been or are being implemented in Europe, North America, Australia, and -China; semiautomated terminals are also coming online (Ying 2018). Forecasts for the Next 20 Years Since 1968 container-carrying capacity has increased by approximately 1,200 percent, and by 2040 ports and container terminals will be able to handle the world’s largest ships, which, by extrapolating ship growth over the last 20 years, could reach 30,000 TEU or more (figure 2). (Another prediction theorizes that 50,000 TEU ships could be built and launched by 2060; Bebbington 2017.) Figure 2 Malchow (2017) forecasts container ship size to grow to 30,000 TEU as a practical limit: such a ship, the Malaccamax, would require the scaling and optimization of cranes, berths, channels, container yards, gates, and a rail system to handle peak volumes. These facilities would need to be open 24 hours a day, 365 days a year and be fully automated, robotic, and electrified to provide rapid storage and retrieval, allowing owners and logistics providers immediate access to each container. Electric autonomous or semiautonomous ships, trucks, and trains would be needed to accommodate the volume of cargo. Facilities, terminal operating systems, utilities, and infrastructure would need to be resilient and redundant to avoid disruptions from natural hazards or man-made failures. Advances in container shipping technology include the introduction of the “Tesla of canals,” the first all-electric, emission-free barge, developed by Dutch manufacturer Port Liner. Five of these barges, scheduled to be deployed in August 2018, will be fitted with batteries (“power boxes”) that provide up to 15 hours of -power. The 52-meter-long, 6.7-meter-wide barge does not require engine rooms, has up to 8 percent more cargo space, and can carry 2 dozen 20-foot containers with a total weight of up to 425 tonnes. Port Liner has plans to produce larger, 100-meter-long barges capable of carrying 270 containers and powered by four power boxes for 35 hours of autonomous driving (Lambert 2018). The Port Liner innovations illustrate the electrification of this industry, which has been highly dependent on the internal combustion engine. Emerging technologies are forcing other rapid changes. Contrasting Development Trajectories Technology Advanced technology solutions are being integrated along the supply chain from waterside port operations to yard logistics and the distribution chain of truck, rail, and air transport. Understanding the technology development lifecycle helps to determine what technologies will be useful to the future container terminal. Technology generally advances exponentially and follows a recognizable trajectory. The Gartner Hype Cycle for Emerging Technologies (Panetta 2017) provides a graphic representation of this trajectory for the maturity and adoption of technology innovations. Depending on the technology type and its application, the cycle, which consists of the following stages, can range from 2 years to 10 years or more. Technology trigger: This stage comprises emerging technology products with unproven commercial viability, such as artificial general intelligence, smart robots, volumetric displays, and the smart workspace. Peak of inflated expectations: In this category are prototypes and product success stories, such as virtual assistants, machine learning, autonomous vehicles, and blockchain. Trough of disillusionment: Momentum wanes as experiments and implementations don’t find consistent support or market acceptance; technology stalls or fails, as with software-defined security and augmented reality. Slope of enlightenment: Benefits to the industry become more widely understood and accepted; second- and third-generation products emerge, as with virtual reality products. Plateau of productivity: Adoption takes off; provider viability is clear; applicability and relevance pay off, as with overnight shipping. Infrastructure Infrastructure developments advance at a linear rate and require longer evolution time than technology. The typical cycle to plan and develop a container terminal is 5–10 years, with 25–30 years of use and another 20 years of repurposing for further return on investment (figure 3). This equates to a potential 30-year gap between a terminal construction planning cycle using current technology and the cycle for container terminal infrastructure development and use. During the lifecycle of most existing container terminals, there has been enormous change in ship size and tremendous advances in technology. To bridge this gap, it is crucial to have careful planning that considers future technology and its impacts on infrastructure development and redevelopment. Figure 3 Bridging the Gap A more integrated approach to technology, engineering, and infrastructure development should be included in rigorous upfront planning and decision making. Current trends indicate that key characteristics of the future container terminal may include technology advancement, infrastructure resiliency, multigeneration terminal operations, and sustainability. Technology advancement A conveyance system in open seas or near the coastline; ultralarge (50,000 TEU) ships may not even dock at a port. Wharves designed to accommodate “mega” ships (25,000–35,000 TEU). Large, automated cranes that onload and offload simultaneously. Automated or semiautomated electrified tractors, trains, trucks, and ships. Infrastructure resiliency Infrastructure designed to survive and operate with all-hazard protection in the event of storms, typhoons, floods, tsunamis, fire, and earthquakes. Sensors or other technology to provide advance warning of natural disasters. Multigeneration terminal operation Smart artificial intelligence controls that fully integrate all port operations. On-demand cargo pickup using technology like that for on-demand car services. Reuse and repurposing of terminals to minimize the use of new resources. Sustainability Green technology throughout the supply chain to minimize environmental and community impacts. Reduced community impacts through holistic, integrated planning of logistics chain with stakeholders. Challenges and Opportunities for Ports More than 50 years of containerization have resulted in continuous building of most of the unused and unbuilt US port lands. As ships increase in size and trade lanes become more heavily trafficked, US ports will experience intense pressure to modernize old facilities or risk losing market share to competitors. Canadian and Mexican ports, which can service inland US destinations via rail, are already taking market share from some US ports. Other market forces on ports include consolidation among port authorities, operators, and shipping carriers. As carriers get larger, ships will need to increase in size and landside automation will need to compliment this increase in order to improve efficiencies. The largest ships are likely to bypass smaller, underfunded port facilities, forcing them to reorient to niche or specialized trades to avoid decline. There will be exceptions, as in the airport industry, where medium and smaller facilities can thrive where they have a cost, geographic, or special value-added proposition. Additionally, ports are responding to increased safety, environmental, and social requirements. Table 1 Investments in research are required to more -clearly identify challenges and provide solutions to better define the future terminal and supporting infrastructure needs. Table 1 presents a noncomprehensive list of strategic research areas for consideration and prioritization of investments in efficiencies and development initiatives for container terminals. What Is Next? There is a recognized need for additional investments in port infrastructure by the American Society of Civil Engineers, which assigned the US port system a grade of C+ (mediocre, requires attention) in its 2017 Infrastructure Report Card (ASCE 2017). In addition to being economically essential to US competitiveness, the port industry is vital to national security. In fact, it is one of 16 critical infrastructure protection sectors identified by the Department of Homeland Security. DHS defines these sectors as those “whose assets, systems, and networks (whether physical or virtual) are considered so vital to the United States that their incapacitation or destruction would have a debilitating effect on security, national economic security, [and/or] national public health or safety.” Given their importance to the US economy, ports are a growing market sector clearly worth strategic investments and protection. Policy goals related to port funding generally concern efficiency improvements to increase productivity, secure and stable financing, and support for regional and terminal-specific development initiatives. Also at the national level, it is important for researchers, practitioners, and government and agency representatives to come together to discuss objectives and define an approach to consider the strategic research areas shown in table 1. Such a forum could be organized by leading national agencies and initiated with federal funding for the collection of data on trends, gap analysis studies, and research on emerging technologies. At the local level, it is important that port experts publish a port-by-port infrastructure and technology development plan, reach out to and link port infrastructure and technology experts, create needs assessments, and conduct bench and pilot testing of promising emerging technologies. Based on past and current trends, the impacts of ship size on infrastructure development and technology can be predicted. A panel of experts in ports, technology, and funding can help develop a container terminal planning and investment toolkit, following the process outlined in the Port Planning and Investment Toolkit for infrastructure upgrades (AAPA 2017b). This resource would include guidance for data collection and planning, assessment of the feasibility of proposed projects, financing options, and a spreadsheet tool to evaluate cost benefits of various infrastructure and technology opportunities. Acknowledgments The author acknowledges the contributions of Doug Theisen and Bart Vermeer for technical content development, Larry Nye for review, Lisa Scola for research, Veronica Chocholek for line editing, Therese -Quesada for copyediting, and Cameron Fletcher for final editing. References AAPA [American Association of Port Authorities]. 2017a. Aspects of tax reform legislation could harm US economy, jobs, ports. News release, December 2. Online at www.aapa-ports.org/advocating/PRDetail.aspx?ItemNumber= 21887. AAPA. 2017b. Port Planning and Investment Toolkit. -Washington and Alexandria VA: US Department of Transportation Maritime Administration and AAPA. Alfred R. 2012. April 26, 1956: The container ship’s maiden voyage. Wired, April 26. Allianz Global Corporate & Specialty. 2015. Safety and Shipping Review 2015. Munich. ASCE [American Society of Civil Engineers]. 2017. 2017 Infrastructure Report Card: Ports. Online at https://www.infrastructurereportcard.org/wp-content/uploads/ 2017/01/Ports-Final.pdf. Bebbington T. 2017. 50,000 TEU … The future or not? Maritime Executive, November 9. Online at https://www.maritime-executive.com/editorials/50000-teu- the-future-or-not#gs.93xpQc4. International Transport Forum. 2015. The Impact of Mega-Ships: Case-Specific Policy Analysis. Paris: Organisation for Economic Cooperation and Development. Lambert F. 2018. Large “Tesla ships” all-electric container barges are launching this autumn. Electrek, January 12. Online at https://electrek.co/2018/01/12/large-tesla-ships-all- electri c-barges/. Malchow U. 2017. Growth in containership sizes to be stopped? Maritime Business Review 2(3):199–210. Panetta K. 2017. Top trends in the Gartner Hype Cycle for Emerging Technologies. Gartner, August 15. Ying W. 2018. Largest automated container terminal begins operation in China. Transport Topics, January 2.  The TEU is an inexact unit of cargo capacity based on the volume of a 20-foot-long container for transport on ships, trains, and trucks.  The name derives from the largest size of ship capable of passing through the 25-meter-deep Strait of Malacca between Sumatra and the Malay Peninsula.  https://www.dhs.gov/critical-infrastructure-sectors About the Author:Omar Jaradat is technical director, Moffatt & Nichol.