Handling Larger Ships and More TEU Efficiently

• One of the recent developments in the world's largest marine terminals is the increase in the volume of goods transported by the global container fleet by more than double to reach over 200 million TEU annually. 
• The cargo volume increase has resulted in the use of larger ship sizes, with the biggest vessels carrying up to 21,000 TEU and 23,000 TEU.
• While fewer larger vessels have an advantage over many smaller vessels, the world's biggest ports are grappling with the challenge of adjusting to the bigger vessels. 
• One example is the port of Hamburg, which now has to handle peak workloads and move many containers in a short time. After moving the containers, "the piers often remain empty until the next mega boxers arrive."
• To fix this problem, the port of Hamburg relies on automation. The automation solutions to optimize operations at the terminal include upgrading one of its container terminal (CTB) by creating a highly efficient block-type storage yard.
• The port also deployed three new, fully automated stacking cranes (ASCs), which doubled the storage capacity at CTB. The terminal modernization and automation also "improved the Hamburg port operator’s environmental footprint."

Optimizing Operations to Improve Productivity

• In a survey conducted by Navis, 76% of the respondents admitted that optimizing operations to improve terminal efficiency and productivity as their biggest challenge.
• Some technological ideas and solutions being considered to or implemented to solve the challenge include using Navis' N4, a Terminal Operating System (TOS) that enhances operational efficiency in ports/terminals all over the world.
• According to Navis, the N4 TOS helped terminals move greater volumes of cargo faster than before, improve yard productivity, improve gate productivity, improve reporting quality, improve safety, and improve IT staff productivity.
• According to Richard Ceci, Senior VP of Technology and Projects, Virginia International Terminals, Navis' N4 product has helped them deliver a world-class experience to their port stakeholders.

Cost Reduction

• According to the Navis survey, 67% of the respondents, who are terminal operator/port operators, said that their biggest challenge was reducing operational costs. 
• Leading terminals in the world are leveraging Navis' N4 TOS to cut on their operational costs.
• As per the survey, more than 50% of Navis customers have reduced their operational costs by 5%, while 35% lowered their operational costs by 15% or more.
• The cost reduction has been achieved in the following areas of terminal operations:
•  61% lowered costs in yard planning
•  59% reduced costs in yard and vessels operations
•  49% cut costs in gate efficiency
•  46% decreased their cost in monitoring and reporting

Current Challenges in the Port Industry

• The EPA released a primer on current challenges facing the port industry.
• This report notes the following as key challenges: congestion, container management, environmental sustainability, and climate resilience. Each of these challenges is explored in detail below.

Congestion

• Ports are faced with spatial limitations when it comes to physical expansion due to competition for surrounding land.
• When the transportation infrastructure around a port becomes congested, "it can limit the flow of goods to and from a port, even if the port's internal capacity to handle cargo has expanded," according to the EPA.

• According to the National Customs Brokers & Forwarders Association of America (NCBFAA), out of the 10 busiest ports in the U.S., at least seven are challenged with congestion on a regular basis.
• According to NCBFAA, gridlock at ports results in "ships [that] are stranded offshore for days, even weeks, waiting to unload. Containers are buried in enormous stacks in clogged terminal yards. Trucks wait in line for hours (up to eight or nine hours in some cases) to pick up a single container. And customers throughout the country experience shipment delays lasting weeks. The congestion and bottlenecks reverberate throughout the supply chain, becoming a significant trade barrier for both exports and imports with a corresponding negative impact on the economy."
• Hive Maritime is a company that uses predictive analytics, machine learning, and operations theory to help "reduce congestion in shipping lanes and ports around the world." The company states that their solution can save over $26 billion in expenses and cut 10% off voyage costs. The technology works to optimize routes by "predicting the future location of ships."

Container Management

• One of the key challenges ports face in regard to container management is the storage of empty shipping containers until they are ready to be reused. The EPA notes that some ports also "lack on-site capacity to manage all the full containers they handle" in addition to needing to store empty containers.

• Furthermore, the cost related to moving and storing containers tends to be higher than the actual value of the containers themselves. According to the Boston Consulting Group, empty container repositioning costs the industry around $20 billion per year.
• One solution for this challenge is a technology called AssetMetrics, created by Transmetrics. According to Transmetrics, this solution "consists of three main modules — data cleansing and enrichment, AI-driven demand forecasting based on the historical data and the external factors, and predictive optimization." The technology allows logistics teams to plan and calculate a more optimal empty container repositioning strategy, while also accounting for all expenses related to container movement.

Environmental Sustainability

• Marine port activity has a clear impact on the environment in terms of air and water pollution. Ports must adhere to federal and international standards surrounding environmental friendliness.

• According to the EPA, many ports are "investing in cleaner technologies and environmentally-friendly operating practices" in an effort to meet this challenge and "have also adopted Environmental Management Systems and Clean Air Programs that guide environmental decision-making. Some ports have also established Clean Air Programs."

•  20% of all marine litter is generated by the shipping industry and 34% of garbage from ships is disposed of in the water. Ships also generate a range of other pollutants such as oil waste and sewage. Pollution is also generated by the trucks that have to arrive and wait at the port to transport import/export goods.
• According to an academic report published by the Columbia School of Professional Studies, "by offering clean power alternatives, ports can be environmental stewards and protect their near port communities. One such alternative is onshore power supply (OPS), which allows ships to effectively 'plug in' to a land-based electrical grid while at port docks. By doing so, ships can use electrical energy, which can be sourced from renewable or clean sources, for dock-side needs."

Climate Resilience

• Ports are at risk when it comes to extreme weather conditions and rising sea levels.

• According to insights published by Copernicus, the European Union's Earth Observation Programme, coastal areas are among the most heavily impacted when it comes to climate change, especially port operations. Extreme weather events can cause disturbances in port operations, such as preventing ships from docking and results in costly delays.

• To help work against extreme weather, technologies such as intelligent weather routing systems can be used to provide real-time weather data that is used to optimize voyages for ships. Additionally, similar types of technologies, such as those created by StormGeo, can be used in ports in order to help manage operations that would be affected by things like high winds, such as the use of cranes.
• Other types of technologies such as computer modeling and geospatial analysis have been used to analyze the risks of natural disasters in specific ports to help build resilience management strategies. Such technologies were used to accomplish this at the Port of Miami.  

Trans-Atlantic Trade Tensions

• Over the past three years, total container trade between the United States and Europe has grown. However, tariffs implemented by the Trump administration may threaten trade relations. According to a state visit by the president in early December, the office of the US trade Representatives may increase existing US tariffs on the European Union over subsidies paid to Airbus.
• According to data from PIERS, the total laden volume on the US-North Europe trade has increased by 4.5% to around 3 million TEU. US imports grew 4.3% year over year during the January to September period of 2019 while exports increased by 4.7%.
• Based on the World Trade Organization (WTO) decision to allow US sanctions on the EU, US shippers may need to be prepared for EU counter-tariffs on US goods.

Sourcing Shifts

• Offshore manufacturing is experiencing a gradual shift from China to Southeast Asia. Capacity in manufacturing and ports has made the option of reaching eastern US markets via the Suez Canal competitive versus traditional routes.
• Freight buyers are starting to negotiate new westbound trans-Atlantic volumes versus eastbound trans-Pacific trade routes. Sourcing shifts could have an impact on terminals and ports.
• Operators, buyers, and traders are shifting resources to focus on Atlantic and Gulf ports which may be influenced by shippers in 2020.

Cybersecurity Threats

• With the rise and implementation of technology and automation in the shipping industry, cybersecurity risks and threats could have a significant impact. Cyberattacks could be carried out to gain access to systems in order to seize a ship. Attackers could also close a port or terminal to access sensitive information such as pricing documents, manifests, container numbers, and others.
• In June 2017, the worldwide operations of Maersk experienced delayed shipments as a result of terminal closures in several ports. The attack involved ransomware that hijacked computer system control and ordered payment in return for restoring access to data and systems.
• In 2013, the Port of Long Beach reported several cyberattacks and developed systems to defend against further attacks. These developments included a computer network that integrated secure data, investments in applications to monitor network activity, intrusions, and firewalls, and designating controlled access areas for servers.

Coronavirus Disruptions

• The shipping industry may see months of delayed delivery due to the novel coronavirus in China. Shipping schedules are being affected by port workers in China who are unable to go to work due to travel restrictions.
• Warehouses around dock areas in China are not fully functioning which has led to ships being diverted to ports in South Korea. Busan port in South Korea, which has a usual container level of 70%, is experiencing spillover with container capacity at 78%. Increasing container levels over 80% could affect the efficiency of the port’s operations.
• Chinese ports are expected to see reduced cargo volumes by over 6 million TEUs with a forecast global container throughput growth reduction of at least 0.7% in 2020.

Risk of Global Recession and Impact on the Industry

• In the possible case of another global recession, outcomes for maritime trade may be different compared to the 2008-2009 recession based on changes in the industry. Described as a global GDP growth of 2% in 2020 versus a forecast 3.3%, a recession could affect charter rates in the industry.
• As estimated by a report from Clarksons Platou, vessel demand will be supported by slower speeds (decreasing effective vessel supply) due to efforts to conserve on fuel due to the IMO 2020.
• For 4,400-TEU ships, it currently expects rates to rise from $11,000 per day this year to $14,600 per day in 2020. In a recession case, it sees 2020 rates falling back to $8,800 per day.

1) 5G Networks

• According to the Maritime Authority, there are number of initiatives in Asia that are aimed at bringing benefits of 5G network to ports.
• 5G network technology is aimed to solve problems in ports/terminals such as delays, security, staffing problems, and costs.
• Apart from making bandwidths larger and speeds faster, the 5G technology which is referred to as the fifth-generation cellular network will "play a role in the emerging Internet of Things applications".
• The technology can be used in a wide range of applications with different capacities, speed, and response time. It also supports up to "a million devices per square kilometer".
• Ports around the world have started initiatives that are aimed at making use of 5G technology. Examples include Port of Hamburg and Port of Qingdao.
• Port of Hamburg has tested the 5G network and intends to use it to "support engineers on-site to monitor and optimize construction planning".

2) Digital Twin Technology

• The digital twin technology is a virtual port that enables port operators to "run different scenarios, using real-time information to improve decision-making and problem-solving, and support predictive planning".
• The digital twin is a "digital 3D map of the port that contains a huge amount of real-time information".
• The technology is aimed at solving port problems such as data flows, wastage of energy, and resource allocations.
• Digital twin technology can help improve the efficiency and operation of the ports.
• Examples of ports implementing the technology include the port of Rotterdam and the port of Hamburg.
• According to Axians, the digital twin of the port of Rotterdam will help the port to track the movement of ships, weather, infrastructure, and data of water.

3) Automated Stacking Cranes

• In commercial ports, automated stacking cranes are used for loading, storage, and unloading.
• The technology solves port/terminal problems such as high loading and unloading costs, speed, and handling of containers.
• DP World London Gateway in the UK has automated stacking cranes that load and unload about 1,800 trucks per day. It uses sensors and cameras for quick loading and unloading of trucks.
• According to Kalmar, the technology "enables the highest possible capacity and stacking density". The cranes reduce footprint size and are space-efficient.

4) Blockchain for Port Connectivity

• Blockchain provides a secure way to connect various systems used in ports, port operators and hauliers to record and track goods, thus reducing the amount of time spent in manual data entry.
• The technology solves port/terminal problems such as data accuracy, speed, and transparency.
• Blockchain technology if adopted can provide a "transparent, secure and accurate way of capturing and sharing data with key parties".
• In 2018, the port of Antwerp pioneered a secure and efficient document workflow. The documents are transferred using blockchain technology. The flow is automated by smart contracts.

5) Smart Cameras: Computer Vision

• Smart cameras are used for "safe and efficient shipping of cargo". The cameras are fitted on the trolley and light sources used as markers.
• The technology helps in solving security and productivity problems in the ports.
• According to Matrox Imaging, computer vision increases productivity and can remain functional during bad weather such as rain.
• The port of Antwerp is using about 600 smart cameras for security. Another example of a port using smart cameras for security purposes is the port of Ostend.

Age

• The Logistics Training Council reports that the average age of seafarer employees is 44 years old, and the average age of deckhand employees is 48 years old.
• The Logistics Training Council states that about 94.5% of all marine transport employees are 25 years old or older.
•  57% of marine transport employees are between 35 and 54 years old, according to the Logistics Training Council.

Income

• The U.S. Bureau of Labor Statistics reports that the median annual income for water transportation workers in May 2018 was $54,400 with a median hourly pay rate of $26.16.
• According to the U.S. Bureau of Labor Statistics, ship engineers earned a median annual salary of $71,130, captains and pilots of water vessels earned a median annual salary of $69,180, motorboat operators earned a median annual salary of $50,290, and sailors and marine oilers earned a median annual salary of $40,900 in May 2018.
• The U.S. Bureau of Labor Statistics reports as of May 2018 that marine engineers and naval architects made a median annual income of $92,560.

Education

• According to the U. S. Bureau of Labor Statistics, marine oilers and sailors do not typically have an education higher than a high school degree.
•  IMarEST reports that globally, marine port employees generally do not have formal education. Instead, most employees receive specific training and certifications for their careers.
• The U.S. Bureau of Labor Statistics reports marine port employees, other than sailors and marine oilers, generally have high school degrees and have completed career-specific training programs approved by the U.S. Coast Guard.
• The U.S. Bureau of Labor Statistics states that marine engineers and naval architects typically have bachelor's degrees.

Gender

• According to the International Maritime Organization, men make up about 98% of all the employees within the maritime industry.
• Globally, the industry has been predominantly male-dominated. The United Nations Conference on Trade and Development (UNCTAD) reports that, globally, women account for about 12% of operations jobs, 22% of port authority jobs, and 34% of management jobs in the maritime transportation industry.

Location

• The U.S. Bureau of Labor Statistics reports that in the United States, Louisiana, Florida, Texas, and Virginia have the highest number of sailors and marine oilers. Louisiana has about 6,280 employed sailors and marine oilers, and Florida has about 3,660 employed sailors and marine oilers.
• The U.S. Bureau of Labor Statistics reports that in the United States, Virginia, Texas, Maryland, and Washington employ the largest amount of naval architects and marine engineers. Virginia is home to about 2,560 marine engineers and naval architects.

Research Strategy:

Current Challenges

Shortages

• The necessity for new workers is primarily driven by long-term workers' withdrawal and the increased cargo volumes.
• PIERS' data show that umber of freights loaded from port terminals increased by 5.1% to 2.57 million TEU in the first half of 2019.
• In 2018, the volume of port cargo increased by 6.6% compared to the previous year, according to the figures.

• At the end of summer 2019, most marine terminals were sporadically labor-intensive. APM Terminals told customers that it was congested by a lack of labor on its entry and exit doors.
• Officials at other terminals noted that the facilities had labor shortages during the summer and had days when they were operating with 20-30% less labor force than the necessary, which has forced terminals to extend opening hours.

Safety

• Recruitment at international maritime terminals sees a challenge due to the safety problems and lack of adequate safety measures to remedy the situation.
• In the EU, port labor can be described as a transitional market with a tendency to apply the general labor law instead of specific legislation and rules. In the majority of the EU countries, specific laws and health and safety regulations for port work have been adopted.
• While signs of significant progress over the last few decades has been seen, fragmented data suggests that the port workers still have one of the most dangerous jobs in the EU. However, only a few member states post specific national accident statistics for port labor.
• The deaths, accidents, and disease rate are higher than other staff in the United States at maritime ports, terminals, and harbor operations.
• The number of people employed in longshore activities in 2017 was nearly 98,000 in the U.S.
• On average, two fatal injuries occurred every year between 2011 and 2017, which represents a rate of 15.9 per 100,000 workers. An average of 4,916 nonfatal injuries were also registered each year during the same time frame, which is almost twice the rate as the overall US labor force.

Future Challenges and Issues

Safety considerations

• The need for better on-site safety regulations will continue.
• While the US government has posted several reports such as the OSHA Traffic Safety in Marine Terminals, the guidelines are consultative in nature, informative in terms of content and are meant to help workers to ensure a safe and secure workplace.
• The OSHA allows employers to comply with the OSHA safety and health standards and regulations.
• Furthermore, section 5(a)(1) of the General Duty Clause of the Act requires employers to provide employees with an environment free of recognized risk of death or severe physical injury.

Technology training and education

• The need for technologically-trained employees is predicted to increase in the near future.
• Younger, tech-savvy men and women will be more attracted to automated terminal facilities. The key to successful recruiting will be to provide an extensive on-the-job and classroom training program so that they can start their careers as members of the International Longshore and Warehouse Union (ILWU).

• When technology takes the lead in logistics, maritime terminals must reconsider their recruitment strategies, especially since there has been a rise in the number of hybrid workers in the shipping industry.
• Several businesses, in particular the major transit firms, have been trying to build a system that would replace the operating personnel internally.
• In general, longshore training programs on the West Coast of the US have a lot to do, especially compared to the strong training system maintained by employers for ILWU Canada members in British Columbia. The U.S. West Coast Employers can also rely on Southern California's model to prove that investing in ILWU produces results.

•  Maintenance jobs at automated terminals may increase because of the new types of equipment implemented throughout the facility.