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Corporate Partnership
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Container Port
Automation
Impacts and Implications

Case-Specific Policy Analysis

Container Port
Automation
Impacts and Implications

Case-Specific Policy Analysis

The International Transport ForumThe International Transport Forum is an intergovernmental organisation with 63 member countries. It acts
as a think tank for transport policy and organises the Annual Summit of transport ministers. ITF is the only
global body that covers all transport modes. The ITF is politically autonomous and administratively
integrated with the OECD.
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Case-Specific Policy Analysis Reports
The ITF’s Case-Specific Policy Analysis series presents topical studies on specific issues carried out by the
ITF in agreement with local institutions. Any findings, interpretations and conclusions expressed herein arethose of the authors and do not necessarily reflect the views of the International Transport Forum or theOECD. Neither the OECD, ITF nor the authors guarantee the accuracy of any data or other information
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Cite this work as: ITF (2021), “Container Port Automation: Impacts and Implications”, International
Transport Forum Policy Papers, No. 96, OECD Publishing, Paris.

TABLE OF CONTENTS

Table of contents

Executive summary .............................................................................................................................. 5
Introduction......................................................................................................................................... 8
Categorising port automation .............................................................................................................. 9
The port cargo handling process ..................................................................................................... 9
Yard operations ............................................................................................................................. 12
Landside operations ...................................................................................................................... 13
Fully and semi-automated terminals ............................................................................................. 13
Drivers of port automation ................................................................................................................ 15Port automation across the world...................................................................................................... 17
Effects of port automation ................................................................................................................. 20
Port performance .......................................................................................................................... 20
Handling costs ............................................................................................................................... 21
Safety and labour conditions ......................................................................................................... 21
Externalities ................................................................................................................................... 22
New automation frontiers for ports? ................................................................................................. 24
Remote quay crane operations ..................................................................................................... 24
Inter-terminal transfers ................................................................................................................. 25
Policy implications ............................................................................................................................. 30
Identification of costs, benefits and alternatives ........................................................................... 30
Social relations ............................................................................................................................... 31
Social costs of automation ............................................................................................................. 33
Conclusions........................................................................................................................................ 34
References ......................................................................................................................................... 35

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TABLE OF CONTENTS

TablesTable 1. Cargo handling sub-processes ................................................................................................ 9
Table 2. Vehicles for transfer from quay to yard ................................................................................ 11
Table 3. Feasibility of automation of container handling activities ..................................................... 14
Table 4. Automated container terminals throughout the world ......................................................... 17
Table 5. Inter-terminal transfers in selected world container ports ................................................... 26
Table 6. Multi-terminal port calls selected world container ports ...................................................... 27

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EXECUTIVE SUMMARY

Executive summary
What we did
This report provides an overview of the current state of container terminal automation in ports. It shows
which terminal activities have been automated in different ports and which additional activities might beautomated in the future. It assesses the effects of automation on port performance, handling costs andsafety, and the extent to which automation projects have achieved their objectives. Finally, the report
identifies policy issues related to container terminal automation. The report benefits from interviews with
relevant stakeholders and data collected from port authorities.

What we found
Fully automated container terminals do not yet exist. Across the world, 53 container terminals are now
automated to a certain degree. This represents around 4% of global container terminal capacity. Most
automated systems are deployed in the container yard. Only a few terminals have automated the transport
between quay and yard. No terminal has completely automated quay cranes.
Automated ports are generally not more productive than their conventional counterparts. Port
organisation and specialisation, geographical location and port size are more important determinants ofport performance than automation. This explains the limited automation of container ports to date.
Comparatively, high handling costs also make the case for automation not entirely convincing. Althoughautomation of container terminals reduces labour costs, capital costs are higher as automated equipment
is more expensive than manually operated equipment. Whether or not automation has led to lower overall
handling costs is place-specific. It depends significantly on local labour costs and on the degree to whichmachines replace port labour.
Finally, it is often assumed that automation improves the safety and health of terminal workers. Whilst
automating processes that expose workers to risk is clearly beneficial, there is so far little robust empirical
data to demonstrate significant overall improvement in outcomes in practice.
A few container terminals have recently introduced remote quay-crane operations. Instead of operatingfrom a cabin on the crane, the operator works from a distance in an operations centre on the port
premises. This innovation has yielded mixed results so far in terms of productivity.
Automated systems for inter-terminal transport have been discussed but have not been implemented
because of their limited feasibility. The port of Rotterdam sought to introduce an automated system forinter-terminal transfers but finally decided against it because of the costs and financial risks.
Container terminal automation appears to offer benefits only under certain conditions and thus for alimited group of terminals. Container terminals that face a relatively stable market with guaranteed
throughput are more suitable for high levels of automation because of their regular cargo flows. In
contrast, terminals with fluctuating throughput are better served by less automation as this maintains
greater flexibility. Container volumes are more volatile in transhipment terminals, so more flexibility andlow levels of automation are advantageous. Gateway terminals, by contrast, generally have a certain levelof captive container volumes, so they tend to be more suitable for automation.

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EXECUTIVE SUMMARY

Consolidation of carriers, the market power of alliances and the rise of mega-ships have increased peakloads, volatility of cargo flows, and transhipment. These developments require terminals to be more
flexible to assure ship-to-ship connections. They make the case for automation less convincing and flexible
arrangements for port labour more appropriate, provided enough labour is available. Yet these factors are
sometimes absent from policy considerations.
The costs and benefits of port automation projects are rarely spelt out. Automation projects can deliverclear benefits under some assumptions but not under others. No clarity on assumptions means thatstakeholders will not be able to assess the merits of automation projects. Bigger ships do not necessarilyneed automation, and automation is not required to reduce emissions. Evaluations of port automation
projects are not commonly made public and policy making internationally would benefit if more werereleased.
Port automation projects are regularly the subject of social conflict in ports. When the benefits ofautomation are ambiguous, some stakeholders will interpret any push for it as an attempt to diminish
dockworkers’ unions. Polarisation between the positions of employers and employees has resulted incases of automation in the face of opposition from port workers but also attempts by legislators to restrict
automation. At the same time, there are instances of unions, port authorities and terminal operators
cooperating constructively to introduce automation under conditions considered appropriate by all
involved. Various port automation projects have shared the benefits of automation with port workers. Thishas taken the form of wage increases, early retirement programmes for older workers or other benefits,often part of a package negotiated with the introduction of automation. When labour is locally scarce,
workers displaced by automation are likely to be rapidly re-employed elsewhere in the economy.
The social costs of port automation are not usually quantified in port investment strategies. Costs such associal security expenditures (in case of redundancies) and tax revenues foregone (when machines replace
port workers that cannot be reintegrated into the labour market), which are passed on to other parts ofthe public sector, are naturally disregarded by most port stakeholders, but they do need to be taken into
account by government.

What we recommend
Put more focus on flexible labour arrangements
The current situation in container shipping requires flexibility to deal with peaks and troughs related tolarger ships and increased volatility of container flows. With present technology, automated terminals are
not particularly well suited to deal with these requirements. Flexible labour arrangements, such as port
labour pools, make it possible to vary labour inputs depending on the container volumes to be handled at
any given moment. Governments should consider how such flexible port labour arrangements can befacilitated.
Better identify the costs and benefits of port automation projects
Terminal operators, trade unions and governments should have access to assessments of costs andbenefits of port automation project proposals and their underlying assumptions. This knowledge
guarantees that all stakeholders can assess the merits of the automation project based on the sameevidence. Any evaluations of port automation projects should be made public. Findings will help policy
makers to identify under which conditions automation could be effective.

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EXECUTIVE SUMMARY

Stimulate social dialogue and co-operation between employers and workers on port automation
Co-operation between port stakeholders implies a social dialogue between employers, workers, andgovernment representatives on the economics of cargo handling in ports. This should cover wider
developments in container shipping that affect the desirability of automation, such as industry
consolidation and ever-larger ships, as well as automation itself. Agreements to share productivity gains
with workers can also facilitate the introduction of automation.
Address social costs of automation
Analyses of port automation projects should include estimations of societal costs, including impacts on
local employment and tax revenues. Governments need this information even if issues related toautomation are much broader than the port sector and subject to economy-wide policies on the balance
between the taxation of capital and labour.

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INTRODUCTION

Introduction
This report explores automation in container terminals. Containerisation has rationalised cargo handlingand has been credited with large increases in global trade, but it was at its outset vehemently opposed bytrade unions because it would make many dockworkers redundant (Levinson, 2006). Already at an earlystage, containerisation was linked to automation: in 1967, when just a few ports had started to adapt tocontainerisation, management consultancy McKinsey predicted that most container ports would become
automated (Mc Kinsey and Company, 1967). For some actors this was highly desirable, as it would limit
the labour conflicts that were considered particularly high within seaports; for others, it was not.
More than six decades after the emergence of containerised maritime transport, it appears that
containerisation has indeed drastically reduced the number of dockworkers (see for example Hall, 2004),
but that automation is much less widespread than predicted. Although automation is applied in several
large container terminals across the world, it is far from universal practice. In 2021, around 53 container
terminals can be considered fully or partially automated, accounting for around 4% of total container
terminal capacity. At the same time, it has been predicted that around 90% of current dock work might
disappear by 2040 due to automation (Schröder-Hinrichs et al., 2019).
This study reviews the possibilities for container terminal automation and the extent to which automation
has taken place in container ports. It outlines the terminal activities that have been automated and the
additional activities that might possibly be automated in the future. It also assesses the intended andunintended effects of automation, including an assessment of the effectiveness in achieving its objectives.
Finally, the report identifies policy issues related to container terminal automation in relation to ensuring
automation projects generate public value.
The focus of this study is on container terminals. Around the world, there is a great diversity between
container terminals in the technical potential and the nature of automation in practice. In comparison,bulk terminals – in particular liquid bulk terminals – are more advanced in terms of automation (Khalili,2020). This is reflected in the very limited effect on employment today of increasing liquid bulk cargovolumes (Bottasso et al., 2013). The experience with container terminal automation to date could also be
relevant for other port terminal segments, for example, the roll-on/roll-off segment where automatedequipment from container terminals could possibly be deployed (Park et al., 2021).

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CATEGORISING PORT AUTOMATION

Categorising port automation
Port automation can be defined as the automation of a significant part of port cargo handling activities,
where automation refers to processes where manual labour is fully outsourced to autonomously operatingmachines. There are different degrees of container port automation; in order to understand the extent towhich automation has been pursued in container ports, it is necessary to understand the typical container
port handling processes. This section describes these processes, the cargo handling equipment that is usedduring these processes and the extent to which it has been automated.

The port cargo handling process
The container port cargo handling process is the set of activities taking place in ports to transfer containers
from a ship into the port area onto its next mode of transport and vice versa. Therefore, it is the processes
from the moment a ship arrives in port to the moment the truck (or train, ship, barge etc.) with thecontainer leaves the port, and vice versa. More precisely, from the moment a truck (or train, ship, bargeetc.) enters the port area until the moment the container is loaded on the ship. For the purpose of thisreport, the current or potential forms of automation in container shipping (autonomous ships), services toguide ships to ports – such as pilotage, towage and mooring – or the automation in hinterland transportmodes are not explored.
Three are three different sub-processes in port handling: quayside operations, yard operations andlandside operations. Quayside operations consist of the loading and unloading of container vessels fromship to shore (or shore to ship). This process can be sub-divided into four different sub-processes: lashing,operating the quay crane, twist-lock handling, transferring from quay to yard. Yard operations consist of
temporary storage of containers and assortment in areas called container yards. Landside operations
consist of dispatching containers to or receiving them from truck, train, barge or ship (Table 1).
Table 1. Cargo handling sub-processes
Sub-process

Activities

Quayside operations

Lashing
Quay crane operation
Twist-lock handling
Quay to yard transfer

Yard operations

Container stacking

Landside operations

Port gate checking

Lashing

Full container ships transport large stacks of containers: up to eleven levels on deck and up to nine levels
below the deck. These stacked containers are physically connected with twist locks: twist-and-plugconnectors inserted into the corner casting of a container that serves as a vertical connection between
stacked containers on deck. A sufficient number of twist locks are stowed in gearbox containers aboard

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CATEGORISING PORT AUTOMATION

the ship. In addition, containers on deck are secured with lashing bars, while the cargo holds below deckare fitted with cell guides on the walls of a container ship that secure the containers against slippage(Kugler, Brandenburg and Limant, 2021).
In most container terminals, when a container ship moors at a berth, lashers come on board to manuallyunlock the twist locks and lashing bars between the individual container layers on deck before theunloading process can begin. The unlocking process of twist locks depends on the type of twist lock that isused. Three types can be distinguished:Manual twist locks, which must be manually unlocked and locked before containers can be
unloaded or secured;

Semi-automatic twist locks, which lock automatically when the container is set down on the ship
but must be unlocked manually before unloading

Fully automatic twist locks, which are automatically locked by the container’s own weight andautomatically unlocked by a container crane’s tearing force (Bültjer and Schulze, 2013).

Securing and lashing containers on ship decks is a difficult and dangerous operation. A quayside container
crane generally requires at least two stevedores for manual unlocking work (Zhang et al., 2015). According
to some observers (Ma et al., 2014) fixing and removing twist locks is the most difficult process toautomate in container terminal handling.
Operating quay cranes

After the twist locks are unlocked, quay cranes, also referred to as ship-to-shore cranes, transfer thecontainer from the ship to the quay. Most container terminals use specialised container quay cranes forthis operation, which consist of a supporting framework that can traverse the length of a quay on a rail
track and a boom that is lifted over the ship. Container cranes are equipped with a specialised handling
tool called the spreader that can be lowered on top of a container and locks onto the container’s four
locking points (corner castings) using the twist-lock mechanism referred to above. The quay crane ismanned by an operator who sits in a cabin suspended from the trolley. The trolley runs along rails locatedon the top or sides of the boom and girder. The operator runs the trolley over the ship to lift the container.
Once the spreader locks onto the container, the container is lifted and moved over to the dock.
Quayside operations usually involve several quay cranes at the same time. There is a physical limit to thenumber of quay cranes that can maximally be deployed on container ships, considering the space theytake on the quayside. This physical limit acts as a constraint on quayside productivity.
There are no automated container quay cranes. Existing cranes are currently unable to autonomously lift
the containers on or off the vessels due to difficulties in aligning the container spreader with the container
slots. Another limitation is that vessels move slightly during container handling operations, which makes
determining the exact location of the containers on the vessel a complex task. The automation of quay
crane movements is possible in theory, but due to high operational complexity, quay crane automation isleast developed and seldom implemented. Only selected sub-processes are automated. A few container
terminals have remote crane operators, which means they no longer operate the crane in a suspended
cabin on top of the crane, but in a separate operations centre elsewhere in the port area.
Twist-lock handling

When the container is lifted from the ship, the unlocked twist locks are still connected to the upper
container and remain in its lower corner castings. Before onward transport of containers takes place, the10

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CATEGORISING PORT AUTOMATION

twist locks must be removed from the container and returned to the ship after completion of cargo
operations. The container is picked up by the quay crane, lifted from the ship, lowered over the pier andheld approximately 1.5 meters above the ground so that lashers can remove the twist locks from thecontainer and temporarily store them nearby. After that operation, the container is put down on the
ground, picked up by yard vehicles and transported to the container yard.
Some container terminals have container cranes that separate the collection of twist locks and thetransportation to the container yard. These cranes are so-called double-trolley quay cranes that have alashing platform where a container can be placed for twist-lock handling. In such systems, the first trolley– the main trolley – transports the container from the ship to the lashing platform where twist locks are
removed or inserted by lashers and the second trolley – the so-called portal trolley that runs on the portal
beams – transports the container between the lashing platform and the yard vehicles. Since both trolleys
operate independently from each other and from the twist-lock handling process, the twist locks can beinserted on or removed from the lashing platform independently of the trolley movement. Thus, thelashing platform eliminates the process of holding the container above the ground (Kugler, Brandenburgand Limant, 2021). The main trolley is manned, with the operator performing the set-down or pick-up on
the ship. The rest of the cycle – from above the safe height over the ship to set-down or pick-up on land –can be fully automatic. A portal trolley is generally unmanned and fully automatic (Christerson, 2008).
In case of loading, the container is positioned below the quay crane, lifted and held above the ground sothat lashers can insert the twist locks into the corner castings. When double-trolley quay cranes are in use,
the twist locks are inserted at the lashing platform. On board, the twist locks are locked and after securing
the containers with lashing bars, the ship is eventually ready for departure.
Moving containers from quay to yard

So-called horizontal transport vehicles perform the transportation of containers between quayside andcontainer yards. These horizontal transport vehicles can be classified as self-lifting or non-lifting (Table 2).
Non-lifting vehicles require external material handling equipment to load or unload a container; theseinclude yard trucks and automated guided vehicles (AGVs). Self-lifting vehicles are able to lift containers
from the ground, either manually or autonomously; this category of vehicles includes straddle carriers andautomated lifting vehicles (ALVs).
Table 2. Vehicles for transfer from quay to yard
Category

VehiclesNon-lifting

Yard trucks
Automated guided vehicles (AGVs)

Self-lifting

Straddle carriersAutomated lifting vehicles (ALVs)

The main vehicles for quay-to-yard transfer are described below:Yard trucks are the most commonly used transfer vehicles in large container terminals, given theircomparatively low investment cost and large capacity. Yard trucks simply haul containers placed
over a chassis. Yard trucks require a human driver; the engagement of the yard truck with thechassis can be done without human intervention, but the release of the chassis requires humanintervention.

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CATEGORISING PORT AUTOMATION

Similar activities are carried out by automated guided vehicles, characterised by the fact that they
are completely automated and controlled by a central computer that decides on the dispatching
and movement of each vehicle.



Automated lifting vehicles are similar to AGVs but, in addition, have the ability to self-lift
containers.

Straddle carriers are capable of stacking containers up to several levels high, so not only are theyused to transfer containers from the quay to the yard, but also to use them for stacking purposesin the container yard. Most straddle carriers are operated by dockworkers, but there are also
automated straddle carriers.

Most Automated Guided Vehicles (AGVs) travel on a fixed path guided by markers, wires, lasers, orcomputer vision. A new generation of “intelligent” AGVs do not follow a fixed path and are monitored byGPS, allowing more freedom of movement but resulting in more complicated traffic management. The
travel paths of AGVs are typically divided into zones; they must request permission before moving intoanother zone to avoid potential collisions, congestion and deadlocks. Such deadlocks are usually managedby two strategies: deadlock prevention and deadlock resolution. Deadlock prevention strategies typicallylimit access to zones to prevent deadlocks. Deadlock resolution instead detects and resolves deadlocks assoon as they become possible (Lehmann et al., 2006). Deadlock prevention and resolution are commonlyused together.

Yard operations
In some terminals, containers can be moved directly from the quayside to the port terminal gates to be
forwarded directly to their final destinations. However, in most cases, they spend time in container stacks
at the stacking area before being moved. Prior to a ship’s arrival, a pre-stowage is made at the terminal,
i.e. containers to be loaded are brought into the area of the berth for faster cargo operations. Currently,
three main stacking solutions can be distinguished, using:12



Straddle carriers or reach stackers are transport vehicles with the capacity to lift one (and in somecases more than one) container. Straddle carriers can move between rows of containers and canstack them up to four tiers. Reach stackers usually stack not more than two deep and three orfour high. Straddle carriers are more efficient for large operations than reach stackers and are
faster (Vis and Roodbergen, 2009; Wiese et al., 2013). Straddle carriers and reach stackers aremostly used in non-automated terminals.

Rail-mounted gantry (RMG) cranes are specialised yard handling equipment that run on rail
tracks; they can lift containers by a spreader attached to cables. Stacking operations using RMGs
decouple the seaside and landside operations. RMGs are used to stack containers in container
blocks – also known as stacks – with multiple tiers, rows, and bays. Container stacks are typicallyoriented perpendicular to the quay. RMGs are often automated, in which case they are also called
automated stacking cranes (ASCs).



Rubber-tired gantry (RTG) cranes are gantry cranes running on rubber tyres so that rail tracks are
not needed. RTGs, like RMGs, are capable of lifting fully loaded containers to great heights. RTGs
are often used to streamline the movement of containers from one ship to another by orienting
containers stacked parallel to the quay, a design more common in transhipment terminals. In

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CATEGORISING PORT AUTOMATION

such terminals, RTG cranes are used to stack containers one behind the other (Gharehgozli,
Zaerpour and de Koster, 2019).

Landside operations
Landside operations in a port cover the transport of a container from the container yard to its nexttransport mode beyond the port gate and vice versa. Moving containers from stacks to trucks and trains
is generally done with the yard equipment described above. An essential activity of landside operations ischecking the containers and trucks entering (and leaving) the port.
This check of containers and trucks is carried out at the port gate. The essential data to be identified,
checked and transmitted are data such as container number, type, size, condition, weight, owner andvoyage-related information. Not only must the container be identified but also the driver’s informationand the license number of the truck and chassis that need to be linked with the container.
Many container ports have automated a significant part of these gate operations. In many advanced
terminals equipped with specially devised devices, truck drivers can swipe their driver licenses through thewindow without getting out of the cabin. Therefore, the driver information can be verified and recorded
efficiently (Chao and Lin, 2017). In order to identify containers and the license plate numbers of trucks andchassis, two main technologies are used:Radio-frequency identification (RFID) systems need every object to be tracked to be identified
with a “tag” or transponder and use radio waves to transmit data. The main advantages of thistechnology are the longer read distance and the large number of assets that RFID is able toidentify and locate at the same time: an RFID tag on a container or truck can be read from almosta kilometre away in some cases.

Optical character recognition (OCR) systems capture images from the top, both sides and theback of a container and then recognise container numbers from these images. OCR is used forthe recognition and identification of equipment markings, such as the container number, truck
and trailer license plates, and to record the condition of the equipment itself. The main benefitof OCR technology is the fact that it provides a reliable method of identification without any need
to apply a dedicated tag or device to the asset.

Fully and semi-automated terminals
Quayside operations have so far been automated to only a limited extent, with limited potential for
automation; yard operations and port gate operations can be automated to a large extent, as implemented
by a considerable number of container ports (Table 3).
Generally, there is consensus that “automated container terminal” usually refers to automated container
handling in the yard, in particular use of AGVs, autonomous straddle carriers or autonomous stacking
cranes (ASC) (Gupta et al., 2017; Kumawat and Roy, 2021 Vis et al., 2001). However, the difference
between a fully and semi-automated terminal has not been defined in similar ways and depends onwhether sub-processes or entire process chains are automated (Martín-Soberón et al., 2014), whether
both yard cranes and horizontal transport have been automated or only one of those activities (Pamungkas
and Saut Gurning, 2020) and whether all or only one or two of the three main port handling operations

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CATEGORISING PORT AUTOMATION(quayside, yard and landside) are automated (Wang, Mileski and Zeng, 2019). For this reason, theterminology of fully- or semi-automated terminals is avoided in this report to avoid misunderstanding.
Table 3. Feasibility of automation of container handling activities
Sub-process

Activities

Automation feasibility

Quayside operations

Lashing

Low

Quay crane operation

Low

Twist-lock handling

Low

Quay to yard transfer

High

Yard operations

Container stacking

HighLandside operations

Port gate checking

High

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DRIVERS OF PORT AUTOMATION

Drivers of port automation
Container terminal operators are the main driving force for terminal automation projects. These are thecompanies in charge of container handling in ports, a right granted to them by port authorities, often via
concession or lease agreements. Under such agreements, terminal operators commit to exploit port
berths and make the necessary investments in terminal handling equipment, such as quay and yard cranes.
In most parts of the world, terminal operators also employ and/or pay port workers so they can deal withtrade-offs between labour costs and automation costs.
The main motivations for terminal operators to automate are related to productivity gains and lower
handling costs. The extent to which these ambitions have been realised is assessed later in this report. The
major terminal operators have terminals throughout the world, which allows them to duplicate goodpractices from one terminal into other terminals, but there is still a large variety in automation levels incontainer terminals, even between those of the same company. The reason is that terminal automation
attractiveness depends on the local labour costs and the terminal profile. In countries with low labourcosts for dockworkers, terminal operators have less financial incentives to automate, considering thatprices for automated equipment are set globally. The rationale for automation also differs according to
the terminal profile. Terminals that face a relatively stable market with guaranteed throughput volume are
more suitable for high levels of automation because of their regular cargo flows, whereas terminals withhigh throughput uncertainty are better served with low levels of automation because it can provide more
flexibility. As container volumes are more volatile in transhipment terminals, these require more flexibility
and thus are better served with low levels of automation. Gateway terminals generally have more captive
container volumes – implying less throughput uncertainty – so they tend to be relatively more suitable for
automation (Wang, Mileski and Zeng, 2019).
Concerns about security and congestion have driven many port gate automation projects by port
authorities. The 9/11 terrorist attacks increased the requirements for container security in ports
throughout the world. Time-intensive checks at the port entrance easily congest port cities; automation
at the port gate can speed up information exchange and control and thus help avoid such congestion.
Some port authorities also stimulate automation projects by terminal operators, e.g. via granting ofconcessions to automated terminals and promoting port digitalisation projects. Port authorities promote
their businesses as the “smartest of the smart ports” and automation projects feature heavily in such smart
port programmes.
Container shipping companies request their ships to be loaded and unloaded in the fastest possible times
in order to minimise the costly time ships spend in port and to keep vessels on tight schedules while
operating at lower, more fuel-efficient ship speeds (Stahlbock and Voss, 2008). The introduction of megaships has increased the pressure on terminal operators and port authorities to improve terminal
productivity, with container carriers suggesting this might need to be provided by more terminal
automation. Many of the largest container lines have integrated terminal companies, some of which
operate automated terminals.
The position of trade unions for dockworkers towards automation projects has ranged from outrightnegative to constructive, depending on the possibility to negotiate package deals favourable to existing or
new dockworkers. Trade unions in several ports have been engaged in implementing port automation
projects, whereas discussions in other ports have been highly confrontational, often fuelled by the

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DRIVERS OF PORT AUTOMATION

suspicion of unions that port automation projects are primarily motivated by employers’ desire tominimise union power.
Governments have taken divergent positions on port automation. Several governments have formulated
strategies on maritime innovation or maritime clusters, in which port automation forms a part. For
example, the 2030 Port Policy and Implementation Strategy of the South Korean government focuses on
the establishment of a smart logistics system, which includes port automation. China’s 13th five-year plan
(2016-2020) promotes the development of smart ports, which includes automation to improve
productivity. For some governments, the focus is the safety of workers. In most cases, government
strategies and the preferences of port authorities are aligned. Some governments, however, are moreconcerned about possible job losses related to port automation, which has resulted in legislative action to
restrict port automation projects in some US states (see Box 3 further on in this report).

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PORT AUTOMATION ACROSS THE WORLDPort automation across the world
Across the world, there are around 53 automated container terminals (Table 4), representing around 4%of the total global container terminal capacity. Most of these automated terminals have emerged sincethe 2010s, after very gradual uptake in the 1990s and 2000s. Most of the automated container terminals
are in Europe (28%), Asia (32%), Oceania (13%) and the United States (11%). The majority of theautomated terminals are new terminals (greenfield); only a few of them existed as manual terminals thatwere turned into automated terminals (brownfield).
Table 4. Automated container terminals throughout the world
Terminal

Port

Since

Quay cranes

TransferYard

ECT Delta

Rotterdam

1993

AGV

ARMG

Pasir Panjang

Singapore

1997

APMT-R

Rotterdam

2000

AGV

AMRG

Thamesport

London2000

Altenwerder

Hamburg

2001

Fishermans Island

Brisbane

2002

Wai Hai

Tokyo

2003

ARMG

Evergreen Marine

Kaoshiung

2005

ARMG

DPW Gateway

Antwerp

2007

ARMG

Virginia InternationalPortsmouth

2007

ARMG

Korean Express Busan

Busan

2007

ARMG

Euromax

Rotterdam

2008

AGV

ARMG

Tobishima Pier South

Nagoya

2008

AGV

ARTG

Newport (Hanjin, HMM)

Busan

2009

ARMG

Newport (DPW)

Busan

2009

ARMG

Isla Verde

Algeciras

2010

ARMG

Taipei Port CT

Taipei2010

ARMG

Kao Ming

Kaoshiung

2010

ARMG

Burchardkai

Hamburg

2010

ARMG

Khalifa CT

Abu Dhabi

2012

ARMG

BEST

Barcelona

2012

ARMG

London Gateway

London2013

Global Terminal

New York/New Jersey

2014

TraPacLos Angeles

2014

SSA Manzanillo Int.

Colon

2014

ARMG
DTQC

CONTAINER PORT AUTOMATION: IMPACTS AND IMPLICATIONS © OECD/ITF 2021

AGV

ARMG

Auto SC

Auto SC

ALV

ARMG
ARMG

Auto-SC

ASC
ARMG

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PORT AUTOMATION ACROSS THE WORLD

Yuan Hai

Xiamen

2014

AGV

ARMG

DP World

Brisbane

2014

ARMG

HPH Brisbane

Brisbane

2014

ARMG

SICT-HPH

Sydney2014

ARMG

Lamong Bay

Surabaya2014

ARMG + ARTG

Jebel Ali 3

Dubai

2014

ARMG

APMT-MV2

Rotterdam

2015

RemoteLift AGV

ARMG

Rotterdam World Gateway

Rotterdam

2015

RemoteAGV

ARMG

Patrick Stevedoring

Sydney2015

Auto SC

Auto SCPPTSingapore

2015

ARMG

Middle HarborLong Beach

2016

ARMG

Tuxpan Port Terminal

Tuxpan2016

ASC

Hanjin Incheon CT

Incheon

2016

ARMG

APMT

Lazaro Cardenas

2016

ARMG

Liverpool 2

Liverpool

2016

ARMG

Victoria International CT

Melbourne

2016

Yangshan Phase 4

Shanghai

2017

Qianwai CT

Qingdao

2018

AMPT

Vado Ligure

2019

ARMG

Tanger Med 2

Tanger2019

ARMG

Ferguson Terminal

Auckland2019

Belfast Container Terminal

Belfast2019

Vizhinjam Port

India

2019

Tianjin FICT

China

2019

Norfolk International Terminal

Virginia

2021

Haifa Bay Terminal

Haifa

2021

Long Beach CT

Long Beach

2021

APMT

Los Angeles

2021

Auto ShC

ARMG

RemoteAGV

ARMG

RemoteAGV

ARMG

Auto SC
ATRG

ASC

Auto-SC

Auto-SC

Notes: ARMG (Automated Rail Mounted Gantry), ASC (Automated Stacking Crane), ARTG (Automated Rubber
Trued Gantry Crane), AGV (Automated Guide Vehicle), Auto SC (Automated Straddle Carrier), DTQC (DoubleTrolley Quay Crane). The column on quay cranes also mentions when quay cranes are remotely operated.
Source: PEMA (2016), PEMA (2020) and data collection of the author.

The first automated container terminal was the ECT Delta terminal in Rotterdam that started its
automation in 1993. It used automated stacking cranes (ASCs) in the container yard and automated guided
vehicles (AGVs) for the transfer of containers between quay and yard, setting the standard for subsequentautomation of container terminals. Another milestone in the history of automated container terminals was
the automation of the Altenwerder terminal in Hamburg in 2001, consisting not only of ASCs and AGVs but
also of double trolley quay cranes. A further innovation was implemented at the Maasvlakte 2-terminals

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PORT AUTOMATION ACROSS THE WORLD(APMT-MV2 and Rotterdam Gateway) in Rotterdam in 2015 that introduced remote quay crane drivers,
deployed by some other terminals after that as well.
All of the automated container terminals identified have automated their yard operations, using
automated RMGs or RTGs or other ASCs. Around a-third of the automated terminals use automatedtransfers from the quayside to the yard, either via AGVs, automated straddle carriers, or other automatedtransfer equipment. None of the automated container terminals has completely automated quay cranes,
but some have remote crane drivers and some have double trolley quay cranes.

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EFFECTS OF PORT AUTOMATION

Effects of port automation
Container terminal automation has undoubtedly resulted in job losses for dockworkers. According to Prism
Economics and Analysis (2019), labour reductions at various terminals that were automated amounted to40-50% at the TraPac terminal in Los Angeles, 50% at Patrick’s terminal in Sydney and up to 85% at the
automated terminal in Qingdao. The effects of port automation in this report focus on the most frequently
cited objectives for port automation: port performance (productivity and efficiency), handling costs andsafety. The societal costs of automation relevant to trade unions and governments are also explored.

Port performance
It is often assumed that automated ports are more productive. In manually operated terminals, it has beenargued; there is a reduced production during shift changes, which is no concern at an automated terminal.
Another argument is that the performance of automated equipment remains constant, unlike theperformance of manually operated terminals (Jole, 2014). Many of these assumptions on the productivityof port automation are based on modelling and simulation exercises. For example, simulation experiments
based upon real-life yard operational data from Norfolk (United States) show that the performance of a
non-automated terminal could be substantially improved by automation using AGVs (Liu et al., 2004).
However, in practice, automated ports are generally less productive than their conventional counterparts.
A McKinsey survey in 2017 indicated that the productivity of automated ports is 7-15% lower than nonautomated ports. According to the same survey, in order to justify the high capital investments related toport automation, the operating expenses of an automated green field terminal would have to be 25%
lower than those of a conventional one, or productivity would have to rise by 30% in case operating
expenses fall by only 10% (Chu et al., 2018).
The effects of automation on port efficiency – a slightly different concept than port productivity – are also
ambiguous. Port efficiency is here defined as the ratio between sets of inputs and outputs into ports.
Although there are many studies on port efficiency, few of those actually look into the effect of automation
on port efficiency. A notable exception is a recent article by Ghiara and Tei (2021) that considers not only
the status of automation (fully-automated, semi-automated or non-automated) but also indicators suchas port size, specialisation and localisation. Both size and specialisation seem to be important factors forincreasing efficiency, while automation and location seem to have a reduced impact on the overall
productivity value. They conclude that automation alone cannot be considered to have a highly significant
impact on port terminal performance but should always be linked to the general port context to achieve
real benefits. Port organisation and specialisation, as well as the geographical location and port size, arefactors that impact more on the performance of analysed ports rather than simply technology.
Another assumption of automatising ports is that it would increase reliability, as automated terminals
would be able to work constantly, without interruption, even when it is dark. This argument has also
increased in relevance recently when port workers in several ports contracted the coronavirus, which
reduced the labour capacity of certain ports. On the other hand, various automated container terminals
have witnessed challenges with malfunctioning automated equipment, resulting in breakdowns, accidents
or irrational routing that slowed down operations. Automation provides less flexibility to deal with
unexpected circumstances, such as peaks and troughs related to ever-larger container ships.

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Handling costs
The automation of container terminals generally results in lower labour costs and higher capital costs, as
automated equipment is more expensive than equipment that is manually operated. The question ofwhether automation has resulted in lower handling costs is place-specific and depends, to a significant
extent, on the local labour costs and the extent to which port labour is reduced due to automation. The
higher the local labour costs, the higher the potential savings from automation, provided that automation
actually replaces workers. This is one of the reasons why most of the port automation projects have been
implemented in high-wage countries: in low-wage countries, automation projects simply make less sensein terms of cost savings. Reduction of labour costs only takes place insofar as automation actually reduces
the workforce. This might seem trivial, but automation projects can be overly optimistic about this.
Although terminal operators might realise reductions in handling costs, these are likely to be lower than
expected, as pointed out in Oliveira and Varela (2017). In their study, they assess the claims of equipment
manufacturers on the labour cost reductions that can be realised due to automation. While ABB, a leading
crane manufacturer, has advertised a 45% to 55% reduction of labour time per crane due to automation,
Oliveira and Varela show the labour cost savings to be 33%, more than 10 percentage points lower than
ABB’s advertised savings.
Automated processes need to be designed, supervised and managed, for which staff is still needed, often
at the same cost as dockworkers. The existing workforce often is not qualified to perform the tasks
associated with an automated terminal. According to Gekara and Nguyen (2018) in their study on humanresources management at Australian ports following terminal automation, this leads to additional hiringcosts. Whereas recruitment at the port is typically conducted internally, such that lower-level workers are
retrained to occupy more highly skilled positions, automation has seen an increase in external recruitment
from the open labour market, as the appropriate skills can no longer be harnessed from within.
Considerations on handling costs need to be placed in the current context of liner shipping: a highly
consolidated industry operating with mega-ships that generate significant peaks and troughs in ports
where these ships operate. Consolidation in liner shipping has resulted in a highly concentrated liner
shipping industry, further highlighted by their co-operation in alliances and consortia. This has createdhuge market power in relation to ports, resulting in more volatility of port cargo due to carriers shiftingcargo from one port to another depending on the advantages they can receive there (ITF, 2018). The
introduction of mega-ships on various trade corridors, notably the Asia-Europe corridor, has resulted in
more cargo peaks and troughs within the ports along these corridors. Automated ports could make sense
in ports with a regular and steady flow of containers, but this is much less the case in ports with volatileand peak-and-trough cargo flows. In those situations relying on dock labour is actually more cost-effective,
as labour can be organised more flexibly to meet the irregularity of port cargo flows, especially in portsthat have labour pools.

Safety and labour conditions
It is often assumed that the safety and health of terminal workers have been improved by automation.
However, there is little robust empirical data to support this assumption. One of the rare studies that try
to quantify potential reductions of injury rates, in support of US West Coast ports turning to automation,bases its main assumptions on anecdotal evidence (Sisson, 2012). Company data suggest reduced
accidents in many container terminals over time. However, such high-level data do not distinguishbetween improvements in operational practices and the extent to which reductions are the result of fewer

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EFFECTS OF PORT AUTOMATION

dockworkers being exposed to risk as a consequence of reduced employment in operational tasks.
Moreover, the comparability and quality of company data are severely limited by variations in reporting
practices from terminals in different parts of the world (Walters, Wandsworth, Bhattacharya, 2020).
Automation in container terminals could reduce human errors, but automation is also likely to require
greater operation competencies and unlearning of old routines and may even lead to new kinds of humanerrors (Walters and Wadsworth, 2021). Several automated ports have been confronted with accidents
related to automated equipment. Two such incidents prompted the port authority of Auckland in New
Zealand to temporarily halt the usage of automated straddle carriers in 2021 out of safety concerns (Ports
of Auckland, 2021).
One of the most dangerous parts of the container handling process relates to lashing on board ships andtwist-lock handling at the quay. Dual trolley quay cranes – as implemented at Hamburg’s Altenwerderterminal – have a lashing platform that makes twist-lock handling considerably safer (Kugler, Brandenburgand Limant, 2021). Yet, this has rarely been introduced in other container ports. A significant number oflashing incidents relate to self-handling, that is, lashing activities carried out by seafarers rather than bydockers that have much more experience in these activities. So another way to reduce lashing accidents
would be to ban self-handling, or at the least, to stop subsidising self-handling activities. Several highly
favourable tax schemes for shipping companies – tonnage tax schemes – cover self-handling, which meansthat profits related to these activities are subject to effective tax rates of 0.5-2.5% instead of the regular
corporate income tax rate that applies to terminal operations (ITF, 2019).

Externalities
Researchers interested in port innovation usually approach port automation from the angle of port
competitiveness, taking the automation trend for granted, without challenging the externalities related toit, as has been rightly observed by Bottalico (2019). One of the relevant negative externalities to bementioned here is offloading the costs of redundant workers on public unemployment or social security
schemes, together with tax revenues from employment foregone.
Reduction of dock work also runs counter to an often-implicit social deal: that elderly workers can do lessintensive work after having done years of hazardous and dangerous work. Automation of this less intensive
work, e.g. driving yard trucks, undermines this inter-generational solidarity.
Quantifications of social effects for redundant workers are rare. A study on the potential effects of agreenfield automation container terminal project in the Canadian province of British Columbia estimateda net reduction in tax revenue of around CAD 100 million, most of which are federal tax revenues foregone(Prism Economics and Analysis, 2019).
Possible positive externalities are sometimes included in assessments of automation projects. Some
reports cite lower air emissions and smaller spatial footprints. As automated equipment is powered either
by electricity or battery power, the introduction of automation could reduce terminal emissions. Moody’s(2019) observed that Long Beach Container Terminal (LBCT) is already almost fully compliant with the goalof zero-emission cargo-handling equipment by 2030 stipulated in the Los Angeles-Long Beach Clean Air
Action Plan (CAAP). In contrast, the ten non-automated terminals would need to invest considerable sumsin equipment replacement in order to comply with the CAAP. A similar claim is made with regard to theland productivity of automated equipment. As automated stacking cranes can stack containers densely,
semi-automated terminals would be able to achieve high throughput per acre of port land. Moody

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EFFECTS OF PORT AUTOMATION

estimates that conversion to a semi-automated system at Norfolk International Terminal South would
increase capacity by 47% on the same footprint (Moody’s, 2019).
It is, however, electrification, not automation, that reduces air pollutant emissions and it is perfectly
possible to electrify manually operated terminal equipment. This is happening in various container
terminals (ITF, 2021). As for the spatial footprint, the relevant comparison is not between automatedstacking cranes with straddle carriers; the relevant comparison would be to compare automated stacking
cranes with non-automated stacking cranes or automated straddle carriers with non-automated straddle
carriers. Such comparisons would result in similar spatial footprints between automated and nonautomated terminals.

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New automation frontiers for ports?
It is generally accepted that automation of yard functions and horizontal transport (between quay andyard) could be appropriate functions for automation, provided that certain conditions are fulfilled(terminal size and captive cargo). One could expect that an increasing number of terminals will deploy
these automated systems in the future. What is much less certain is whether additional terminal activities
will get automated. This section focuses on remote quay crane operations and inter-terminal transfers as
areas for automation and the barriers to both.

Remote quay crane operations
In almost all container terminals, quay cranes are operated by a crane driver who sits in a cabin suspended
from a trolley that runs along rails located on the top or sides of the boom and girder. The driver runs thetrolley along the boom over the ship to lift the container. A few container terminals have recently
introduced remote quay crane operations: instead of operating the crane in a cabin on the crane, theoperator is in an operations centre on the port premises, working the crane from a distance. Even though
discussed here, it cannot actually be considered automation: it does not result in a reduction of port
workers, each quay crane still needs an operator, and there is no way in which one remote crane operator
could operate two or more cranes at the same time.
Remote quay crane operations were introduced in the Maasvlakte 2-terminals in Rotterdam in 2015
(APMT-MV2 and Rotterdam Gateway). They have since been deployed in a few other terminals as well,including in Dubai’s Jebel Ali 4-terminal, Melbourne’s Victoria International Container Terminal, Shanghai’s
Yangshan Phase 4-terminal and Qingdao’s Qianwan Container Terminal.
Remote quay cranes have shown mixed results so far. One could wonder if remote operations actually
improve productivity. The productivity of the APMT-Maasvlakte 2 terminal cranes has lagged the rates of
those in other container terminals in Rotterdam. During 2019-21, the average number of moves per crane
per hour amounts to 25 moves per hour; there was hardly any week in which the rate exceeded 30 moves
per hour. However, experiences appear to be different in Qingdao, where average crane productivity rates
reached 43 moves per crane per hour in January 2020 (Baptista, 2020). Disappointing crane productivityof remote operations could be explained by the fact that remote drivers have difficulties gauging the effectof wind on the container, considering that they do not feel the wind, which they do in their cabin on topof the crane. Some consider these more comfortable labour conditions an advantage of remote
operations, but a certain number of workers report remote operations as diminishing their work
satisfaction.
Several stakeholders consider that remote operations are only at their first stage. Trade unions worry thatquay crane operations might be outsourced to low-wage countries. For example, the Australian Maritime
Union warned that the terminal operator International Container Terminal Services International (ICSTI),
who operates the automated Victoria International Container Terminal (VICT) terminal in Melbourne,
might outsource their quay crane operations to the Philippines, where ICTSI is headquartered (Prism
Economics and Analysis, 2019). Following the slowdown of port work in Californian ports due tocoronavirus-infected port workers, it has been suggested that the work of remote crane drivers currently
done at centralised control centres could be moved out of offices and directly into worker’s homes(Watkins, 2020).

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Inter-terminal transfers
Most of the world’s principal container ports have multiple terminals. Considerable flows of containers
move between these terminals in each port. There are various reasons for these inter-terminal transfers(ITT). Transhipment is the main reason: most maritime transport involves several sea legs, with cargo beingtranshipped from one ship to another ship in transhipment ports. For example, cargo being transferredfrom a ship operating a route between Jakarta and Singapore to another ship operating a Singapore toRotterdam route at a transhipment port in Singapore. Most ships generally get loaded and unloaded in
one terminal per port, as it takes time, money and the co-operation of various port actors – such as harbour
pilots, tug boats and mooring operators – to get a ship berthed. This means that the container that arrives
from one ship (coming from Jakarta) will not necessarily be unloaded in the same terminal where the next
ship (to Rotterdam) will be departing. Hence, an inter-terminal move of this container is needed. There
are other reasons for such moves. When vessels arrive late, they might need to berth in other terminals
than the ones previously assigned to them. This could mean that containers that need to be loaded onthat ship are stacked in another terminal, so would need to get transferred to the right terminal. Interterminal transfers are also needed when a container has been delivered to the wrong terminal.
Inter-terminal transfers can be numerous, especially in pure transhipment ports. These are ports thatfunction as nodes that bring together container ships of different sizes, operated by a range of different
operators on a huge variety of different routes. Container ships operating on regional feeder markets areusually much smaller than those on inter-continental routes. Using the quay cranes that are used for megaships for feeder ships will be inefficient, as they are not adapted to handle smaller ships and will block slot
space for the mega-ships.
Therefore, transhipment that involves ships with largely different sizes will likely result in inter-terminal
moves, as most terminals are designed to host similar-sized container ships and various ports haveseparate terminals for short sea shipping. Shipping companies have contracts with certain terminal
operators; transhipment often involves two different shipping companies that have not contracted thesame terminal operators. In gateway ports – where containers do not have an additional sea leg but are
directly transported to their hinterlands by truck, train and barge – there will generally be fewer interterminal moves. However, in such ports, not all terminals have direct access to trains or barges, so interterminal moves might be needed for the transfer to the multi-modal terminal.
Inter-terminal transfers have more negative impacts in ports where terminals are located far away fromeach other. In most global container ports, distances between terminals are less than 10 km. These
accounted for 27 out of 37 global ports covered in Nellen et al. (2020); in that survey, seven ports had
terminals with distances of more than 10 km and three ports with inter-terminal distances of more than
25 km. Large distances between terminals are frequent in expanding ports. There is a tendency for
expanding container ports to move towards the sea and away from city centres in order to accommodate
larger ships, which require deeper and larger terminals (Merk, 2018). This often leads to a division of workwhere the newest terminals deal with the biggest ships, whereas the older terminals host the smaller ships,
operating on regional trades or short sea shipping. Container transfers between terminals can lead tonegative traffic impacts in port cities. In Busan, for example, inter-terminal transport has to cross the city
centre (OECD, 2014).
There are surprisingly few quantitative data on such inter-terminal moves. Many ports do not collect dataon this. While this might make sense for pure gateway ports – like Los Angeles and Long Beach – whereinter-terminal moves are marginal, it is more surprising for ports that also have transhipment cargo. In

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NEW AUTOMATION FRONTIERS FOR PORTS?

some cases, it is terminal operators that collect these data, but not all terminal operators have been willingto share these data for reasons of confidentiality.
There is considerable variety in inter-terminal transport moves, even when comparing container ports withsimilar transhipment rates (Table 5). The ITT moves, as a share of total container volume handled,
represents between 2% and 13% in the data available for this study. The relatively high share in Busan
could be explained by the high number (eight) of different container terminals there, which obviously
increases the need for inter-terminal moves.
Table 5. Inter-terminal transfers in selected world container ports
Port

Inter-terminal transfer
moves per year

% Inter-terminaltransfer /total
containers

Number of terminals

Transhipment rate

Busan

1 863 500

13.4%

8

54%

Shenzhen West92 635

n/a

3

n/a

Valencia

68 696

2.2%

3

55%

Bremerhaven109 904

3.9%

2

55%

Notes: Data in this table provide the yearly average, based on calculations over 2019 and 2020.
Source: Based on data received from Busan Port Authority, CM Ports, Valencia Port Authority and North Sea
Terminal Bremerhaven.

Trucks carry out most of the inter-terminal transport. In some cases the inter-terminal moves are
subsidised: e.g. in Busan Port Authority provided a USD 5 million subsidy to the transhipment trucking
shuttle between Busan New Port and Busan North Port. Where terminals are located next to each other,
ITT is carried out by the terminal equipment, e.g. straddle carriers in Bremerhaven. Some ports also usebarges and trains for ITT. In Busan, two barges with 150 TEU capacity each were used a decade ago for ITT,
but these operations turned out to be twice as expensive as trucking, vulnerable to adverse weather
conditions, and less reliable for time-sensitive cargo. In Shenzhen west port, around 48% of the ITT moves
is carried out by barge, the rest by truck. In Rotterdam, a large share of the inter-terminal transport
currently takes place via barge, with trucks as a solution for last-minute changes.
A common strategy of carriers to avoid excessive ITT moves is to have a ship call at several container
terminals in the same port. It is mostly the feeder ships that do multi-terminal port calls, e.g. almost all
feeder ships in Rotterdam and Bremerhaven. In Busan, carriers apply this strategy more to avoid ITT
between the two main port sites (New Port and North Port), rather than avoiding ITTs within each port
site: port calls to both North Port and New Port represent 95% of the multi-terminal calls. Ports generally
charge ships only once for port fees in case of multi-terminal calls.

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Table 6. Multi-terminal port calls selected world container ports
Port

Number of multi-terminal calls% multi-terminal call/total container ship calls

Busan

1 893

14%

Shenzhen West

64

n/a

Valencia674

23%

Bremerhaven

1 300

55%

Notes: Data in this table provide the yearly average, based on calculations over 2019 and 2020.
Source: Based on data received from Busan Port Authority, CM Ports, Valencia Port Authority and North Sea
Terminal Bremerhaven.

Container shipping developments of recent years have affected the need for inter-terminal transport
ambiguously. Over the last few decades, the number of ports with intercontinental liner shipping
connections has decreased and for various countries the share of indirect connections – so, transhipment– has increased. This has likely increased the need for inter-terminal transport in various large container
ports. At the same time, liner shipping companies have consolidated, perfected their co-operation inalliances and consortia and have vertically integrated with terminal operating companies (ITF, 2018; ITF,
2019). As a result, most liner companies now have a services network with global coverage. One would
expect that this effect reduces the need for inter-terminal transport.
Inter-terminal transport is a significant challenge for large port areas or geographically separated terminals
within a port area. Longer distances make it more difficult to plan for container transport by truck, whichis the dominant mode of inter-terminal transport. Longer distances also increase the risk of delays. One
way to improve planning reliability and minimise the risk of delays is to use dedicated infrastructure forcontainer transports in the port. Of the 37 ports reviewed in Nellen et al. (2020), 28 use public roads forinter-terminal transport. Only nine ports have dedicated infrastructure for inter-terminal transport, fourof which are located in Europe. One of these is the Container Exchange Route in Rotterdam discussed inBox 1.
Automated systems could be used for inter-terminal transfers. Especially where ports have container
terminals that are lined up or adjoined. Container terminals that are lined up consist of a continuous row
of terminals, which means that there are no clear lines between the terminals, so that the terminals appear
as one large terminal, even if individual terminals can have different operators and have several entrancesand exits. Adjoined terminals are connected terminals, which means that they are located at very close
linear distance to each other (less than 1 km). Lined-up and adjoined terminals are considered to be themost appropriate for a connection through a dedicated infrastructure using autonomous vehicles.
Autonomous systems usually mean structural challenges for the port and terminals, especially in the caseof long distances between terminals (Nellen et al., 2020).
Automated systems for inter-terminal transport have not been deployed in ports with spread-out
container terminals. Various studies have looked into such possibilities (e.g. Duinkerken et al., 2006;
Schroër et al., 2014; Spruijt, van Duin and Rieck, 2017). Analytical models that are used in the research oninter-terminal transport most often are mathematical programming models, branch and bound models,queuing models, network models and simulation models that have limited applicability given the dynamic
nature of the terminal handling industry and process (Edirisooriya and Bandara, 2017). The port authority

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NEW AUTOMATION FRONTIERS FOR PORTS?

of Rotterdam sought to introduce an automated system for inter-terminal transfers but decided against it
because of the costs and financial risks (Box 1).

Box 1. Autonomous inter-terminal transfers in the port of Rotterdam
The port authority of Rotterdam has invested in a dedicated road, the Container Exchange Route (CER), to facilitate
inter-terminal transfers between the different container terminals, an empty container depot, multimodal terminals
and customs facilities. The construction of the 17 km connection started in 2019 and was achieved through aninvestment of the port authority of EUR 175 million. The objective was to speed up the transfer of containers
between terminals (facilitating smoother transhipment) and the transfer of containers to customs and intermodal
facilities (facilitating smoother inland transport).
Although originally planned as a connection to be used by manned vehicles, the port authority changed course in2020 and decided to have the CER used by autonomous vehicles instead. The motivation was that an autonomous
CER would be able to provide transfers at a lower cost, an estimated EUR 10 per TEU against more than EUR 20 using
manned multi-trailer systems (Port of Rotterdam, 2020a). The autonomous CER was also seen as a gooddemonstration project for the ambition of the port authority to be “the smartest port” (Port of Rotterdam, 2020b).
The assumption underlying the proposal was that the container volumes transported via the autonomous CER would
amount to 350 000 TEUs at the outset, growing to 1 million TEUs in the future (with no specific date).
To implement the autonomous CER, the port authority launched a tender in April 2020. The tender document statedthat the port authority was looking for an operator for transport services on the Container Exchange Route. In press
communications, the port director explained to be looking for “an innovative type of AGV” that would ideally havedouble-stack capabilities and a higher travel speed than the current speed of AGVs at container terminals (Wilt,
2020). The plan was for the selection of the contractor in the fourth quarter of 2020, tests in the first quarter of 2021
and full commercial operation in the fourth quarter of 2021.
The trade union for dockworkers, FNV Havens, is opposed to the autonomous CER as it would contradict an earlier
agreement with the port authority and terminal operators that included manning the CER with dockworkers fromthree specified container terminals covered by a collective labour agreement (Werkzekerheidsakkoord, 2016). A
manned CER would require 70-80 workers; an automated CER would not be able to accommodate these workers,
which could mean they would become redundant. Terminal operators were concerned about the interfaces between
the autonomous CER and the transport within their own terminals, as the landside terminal areas lack automatedvehicle guidance infrastructure as they are designed for access by container haulage trucks. In the initial period forthe operation of the autonomous CER, terminal operators would pick up the container with their own drivers as soon
as it arrived at the terminal. There were doubts as to whether the project would represent a viable market for vehicle
manufacturers, as not many ports were expected to deploy similar technologies (Wilt, 2020).
In May 2021, the port authority announced that it would withdraw its proposals for an autonomous CER and would
aim for a version with manned vehicles instead. This decision was taken because there were “too many risks anduncertainties” and because the desired automation solution was not available. The limited potential return on thecontract for basically a one-off project may have deterred the market (Wilt, 2021). The port authority does not
exclude that an autonomous CER might become a reality in a few years and is now looking into different modalities
for a manned CER.
The original business case for the autonomous CER is not available to the public. As such, it is not clear whether arigorous cost-benefit analysis was carried out for this project, and relevant stakeholders to the process have not beenable to provide more clarity on the assumptions for the project. This lack of transparency on the business case of asignificant investment by a public authority like the port of Rotterdam could be considered problematic. Concerns
could arise on the assumptions made in four different areas: the expected volume, the costs of the different options,estimated benefits and the social costs.

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According to the port authority, the volumes to be transported via the CER are 350 000 TEUs from the outset and
1 million TEUs in the future. Public information on current moves between the container terminals are not available,
but estimations from stakeholders range between 100 000 to 200 000 container moves, which would represent
between 170 000 TEUs and 340 000 TEU. So the higher estimate would be in line with the estimations for the CER
project. It is unclear what the timeframe is for the expected 1 million TEUs. If we assume that this is the volume thatis reached at the end of the depreciation period of the autonomous vehicles, the business case might have been
based on 1 million TEUs volume by 2030, assuming an average depreciation period of autonomous vehicles of nine
years. If the growth rates of the terminals connected to the CER over 2020-30 were in line with the TEU growth ratesof the port of Rotterdam over 2010-20 (29%), it would mean that 450 000 TEUs would be transferred between
terminals in 2030. In order to reach 1 million TEUs of inter-terminal moves in 2030, the share of inter-terminal moves(as % of total TEUs handled) would need to double from 2020 to 2030. It is not clear whether the assumption of sucha drastic increase is realistic: the transhipment share in the port of Rotterdam might increase slightly, but the upwards
effect from this on inter-terminal moves could be outweighed by the downwards effect from increased integrationof global liner networks. This discussion on estimated transport volumes is relevant because the fixed capital costs
need justification in terms of high volumes, not necessary for the more flexible costs of manned transport.
The assumptions of EUR 10 per transferred container for the automated option could not be verified. The main
reason for not pursuing the automated option was that the market could not supply the vehicles at the price set.
One of the intended benefits of the automated CER in comparison with the manned CER was superior speed. Apartfrom doubts over operating speed in practice (considering that the interface between CER and landside part ofterminals would require a driver, which would interrupt the smoothness of the process), one could also wonder whatvalue of time was used to capture the benefits of gained time. Especially in the context of transhipment, where mostboxes remain days in the port before being transhipped.
In terms of the social costs of the automated option, these would consist of costs to the Dutch public budget in thecase that 80 workers became redundant and unable to find employment elsewhere. It is an open question if the costestimations of the project took social costs into account.
Sources: Wilt (2020), Wilt (2021), Port of Rotterdam (2020a, 2020b).

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POLICY IMPLICATIONSPolicy implications
There is no automatic success formula for container terminal automation. This has important implications
for policy makers: their considerations on port automation should be based on a clear identification of
costs, benefits and alternatives, facilitated by constructive social relations, and grounded in a clear
understanding of ways to deal with the societal costs of automation. Fully automated container terminals
do not actually exist, contrary to what common port automation terminology would suggest. Most
automated systems are deployed in the container yard, only a few terminals have automated the transport
between quay and yard, and no terminal has automated quay cranes. The reason for gradual uptake ofport automation is that container terminal automation makes economic, financial and business sense only
for a limited number of terminals and only under certain conditions.

Identification of costs, benefits and alternatives
The costs and benefits of port automation projects are rarely spelt out explicitly. Automation projects canmake sense under some assumptions but not under others. Quite often, assumptions underlying
assessments are misleading, e.g. that bigger ships need automation or that automation is necessary to
reduce emissions. To build consensus around port automation projects it is therefore crucial that a broad
set of stakeholders, including trade unions and governments, have access to the assumptions underlying
proposals prepared by operators. Similarly, potential job losses and potential external costs need to bemade explicit.
A lack of publicly available cost-benefit analyses makes it difficult to evaluate the effects of automation
projects. Ex-post evaluations of port automation projects are practically not available. Terminal operators
are likely to have carried out such evaluations, but none seem to be available in the public domain. Instead,what is amply available are academic modelling exercises. However, it is a mistake to take model outcomesfor evidence of the effectiveness of port automation projects in practice. Some academic studies confuse
the two. For example, Kon et al. (2020) reviewed existing academic studies on container terminal
automation, observing positive outcomes but failing to mention that none of the evaluation studies
reviewed was of actual port automation projects.
Shipping developments will affect the potential of investments in automation to generate returns andshould be considered when discussing port automation projects. Developments in shipping markets(consolidation, concentration of market power, introduction of mega-ships) have increased peak loads,
volatility of container flows and transhipment volumes. This all requires more operational flexibility to deal
with peaks and troughs resulting from larger ships and increased volatility of container flows. This makes
the case for automation with current technologies less convincing and flexible port labour arrangements– as described in Box 2 – more appropriate. These factors often appear to be overlooked in policy making
related to ports. For example, in relation to port labour pools, the European Commission’s focus has been
perceived anti-competitive effects, requesting Belgium and Spain to reform their port labour systems
without identifying alternative tools that could help ports to be adaptive and flexible in the context of peakloads generated by mega-ships and consolidation.

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Box 2. Port labour pools in EU countries
The general idea of dock labour pools is to share available dock labour among different terminals in thesame port so that workers can be deployed from the pool depending on demand. This increases efficiency
as it allows terminals to deploy more workers if there is peak demand and fewer workers if there is little
demand. Employers and employees generally work together to define the working conditions (e.g. numberof workers per operation), which in turn determine the overall labour supply that is needed in the port tomeet current and future traffic needs. That way, they guarantee flexibility in labour quantity. The
dockworkers that are part of the pool need to be officially registered or licensed dock workers. Registered
workers are not employed at a particular terminal operator or stevedoring company but hired through acentral pool or hiring hall.
Fifteen out of twenty-two EU member states have some kind of port labour pool system. In eleven of thesesystems, pool workers have preferential rights, which means that they will get priority for assignments(Van Hooydonk, 2013). There are large differences in the use of labour pools within countries.
The extent to which dock labour pools are used depends on whether such use is mandatory or voluntary.
In Germany and the Netherlands, employers can hire permanent company employees directly from theexternal labour market but any additional (casual) labour must be hired from a regulated labour pool
(Notteboom, 2018).
The advantage of labour pools for workers is that they are no longer employed by the day but guaranteed
a quasi-permanent contract within the pool. This means they get paid even if they are left idle due to ashortage of ship arrivals during a particular day, week or month. They are paid either by the pool thatprovides them with a minimum monthly salary or by the pool in combination with unemployment benefits
paid by the state. Dock labour pools can be funded by special funds to which port employers contribute.
For example, the labour pool in Hamburg, called Gesamt Hafenbetriebs Gesellschaft (GHBG), pays poolworkers through a Fund financed by port operators (based on their turnover) and port customers, via amark-up on the price of stevedoring services.
Some pool workers are employed on a semi-permanent basis by port employers. In these cases, docklabour pool schemes often include a “continuity rule”, which means that a docker hired on a particular day
can be re-hired for the next day or days without having to be rehired every day by the central hiring place;so there often is automatic “repeat hiring” (Notteboom, 2018). Workers in dock labour pools are usually
covered by collective bargaining agreements. In some systems, surplus workers from terminal operators
can be offered to the labour pool. This is the case in Hamburg, where the dock labour pool functions as atransfer point for surplus dock workers. Terminal operators can offer excess capacity to the pool, but thepool is not obliged to take it (Notteboom, 2018).
Source: OECD (2021).

Social relations
Port automation projects regularly provoke significant social conflict within ports. In the United States andAustralia, announcements of port automation have resulted in opposition from trade unions, blockages,
or strikes include ports. In many cases, these social conflicts are related to the unclear articulation of costs
and benefits described above.

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POLICY IMPLICATIONSThis could be particularly problematic in periods of low growth of cargo volumes. In the case of negative
or moderate growth, a new terminal is most likely going to attract cargo that previously went to otherterminals in the port. If a newly automated terminal does this, it is likely going to mean net job losses
within a port. The situation is different in the case of strong cargo growth: a new terminal can benefit fromstrong growth without taking cargo from other terminals and will thereby create jobs, considering thatfully-automated terminals also need workers, albeit fewer than a non-automated terminal would havecreated. This cyclical effect is a double-edged sword: periods of slow cargo growth are generally economic
downturns in which unemployment rates rise; therefore, regional job losses are all the less desirable. The
2016 port strike in Rotterdam can be explained in these terms: automation of the two automatedcontainer terminals of Maasvlakte 2 would have passed more easily if they had started in a strong growth
period, as opposed to a turbulent market.
When the benefits of automation are ambiguous, some stakeholders will interpret pushing for automation
as a way to diminish dockworker unions (Oliveira and Varela, 2017). Paradoxically, strong union pushback– and strikes – seem to act as a confirmation for employers that they are right to automate: they will thenuse strikes as an argument for automation. As such, the case for automation could then become a selffulfilling prophecy: automation would reduce labour conflicts, but there would be less labour conflict if theprospect of automation was not raised.
Polarisation between employers and employees has resulted in cases of forced automation or automation
projects where worker concerns were not considered but also in attempts of legislators to restrict port
automation (Box 3). Governments often need to approve automation projects or have possibilities tohamper them, so they are in a position to arbitrate between divergent positions on port automation.

Box 3. Regulatory approaches on port automation in the United States
Various state legislatures in the United States have been discussing restricting port automation in different ways. In
February 2021, the Senate of the State of Washington adopted a new law, Engrossed Senate Bill 5026, stating that:“moneys available to a port district or a port development authority shall not be used to purchase fully automatedmarine container cargo handling equipment.” While the new law eliminates purchases of automated equipment by
a “port district or a port development authority”, that does not necessarily prevent purchases by port tenants suchas the operator of a terminal. So the Bill does not target banning port automation but intends to make sure that port
automation projects are not facilitated by federal or state subsidies. The Bill expires in 2031.
In 2019, lawmakers in California discussed a proposal for legislation titled AB 1321, aimed at creating a new statewide oversight body that would be empowered to approve or deny automation projects at state seaports. The
proposed legislation would remove decisions concerning automation in California’s ports from local harbour
commissioners and place them under state-wide control through a three-member committee comprised of thestate’s lieutenant governor, controller, and director of finance. Following pushback from the Pacific Maritime
Association, the proposal was amended. Instead of approving or denying automation projects, the committee would
hold a series of meetings to consider the impacts of automated technology at California’s ports and to report to theLegislature. In 2020, the proposed Bill “died” in the Senate inactive file.
Sources: Senate of State of Washington (2021), California Legislature (2019), Watkins (2019).

There are instances where unions, port authorities and terminal operators have constructively
co-operated to introduce forms of automation considered appropriate by all parties. Strong unions canhelp to advance automation and avoid deadlocks in port automation projects. In such cases, unions haveoften not only been seen as legitimate partners because they represent a large share of the workers but
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have also been recognised institutionally, for example, via tri-partite governance structures with coresponsibility for decision-making. Essentially, meaningful social dialogue between representatives of
employers, employees and governments is needed. Regulators need to be coherent in their approaches
as well, for example, taking similar lines in the way competition regulation is applied to port labour pools
and to the container shipping market.
In a good number of port automation projects, the benefits of automation have been shared with workers.
This can take the form of wage increases, early retirement programmes for elderly workers or otherbenefits that are often part of a package negotiated with the introduction of automation. For example, inthe 1990s, port automation in Rotterdam came with an agreement on better pay and early retirement
programmes for existing workers. Automation is much more attractive to workers if they get a share in its
productivity gains. This has been done very directly at the Container Terminal Altenwerder in Hamburg,where worker pay is linked to the overall productivity gains from automation as well as individual
productivity. Staff training is also part of the package required to ensure productivity gains actuallymaterialise.

Social costs of automation
The social costs of port automation are often ignored. These include social security expenses (in case of
redundancies) and tax revenues foregone (when port workers are replaced by machines). Most people getincome from work and personal income tax revenues are generally higher than corporate tax revenues.
Therefore the personal tax income lost due to the replacement of a worker by a machine is in many cases
not compensated by higher corporate tax revenues. There can be additional tax income related to the
profits that the manufacturing of automated equipment generates, but these are generated in the
countries where the equipment is manufactured, which is often not where the worker is replaced by themachine. The social costs of automation will naturally be disregarded by the stakeholders that benefit but
should be taken into account by governments in their decisions on port automation. This would befacilitated by making sure that ex-ante assessments of port automation projects always take these social
costs into account. Discussing societal costs as a standard part of the political discussion on port
automation should become the default.
When labour is scarce, automation can increase the number of workers that can be employed elsewhere.
In those situations, automation could provide social opportunities if wage and working conditions of the
new jobs are better than in their previous jobs.
Dealing with the societal costs of port automation is linked to wider tax considerations and the balance
between taxation on capital and labour (generally higher taxation of labour). In this context, there havebeen calls for taxation of automation in many parts of the economy with a “robot tax”. Leaders fromvarious dockworker unions across the world, including in Canada and the Netherlands, have supported thecall for the introduction of robot taxes (McKeen, 2019; Visscher, 2017), although, for the reasons outlinedin this report, ports are unlikely to be one of the sectors most affected by automation in the medium term.

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CONCLUSIONS

Conclusions
Port automation is not a magic bullet for more efficient port operations. Especially not for ports that are
confronted with huge workload peaks and troughs related to larger ships. Very few container ports haveintroduced extensive automation, probably because there is limited evidence that automation increases
productivity or reduces handling costs in practice in ports subject to fluctuating workload. In specificcircumstances – such as large terminals with highly captive and regular container flows – terminal
automation can be a cost-effective measure. It may also be cost-effective where there are labour
shortages. Consolidation in container shipping and the intensive co-operation between container lines via
alliances and consortia have increased the bargaining power of container shipping companies over ports.
This consolidated bargaining strength has made container flows to most ports less captive and terminals
less likely to benefit from automation. The introduction of automation often results in social conflicts.
Especially when there is little dialogue between representatives of employers and employees or whencosts and benefits of automation projects are not clearly spelt out. These factors lead to the following
recommendations for policy makers.
First, generally focus more on flexible labour arrangements. The current container shipping environment
requires flexibility to deal with peaks and troughs related to larger ships and increased volatility ofcontainer flows. Automated terminals are not particularly well suited to deal with these requirements.
Port labour is. Flexible port labour arrangements, like worker pools, make it possible to vary operational
inputs depending on the container volumes to be handled at any given moment. Governments should
consider how such flexible port labour arrangements can be best facilitated.
Second, better identify the costs and benefits of port automation projects. It is crucial that not only
operators themselves but also the wider set of stakeholders, including trade unions and governments,
have access to the estimations of costs and benefits of port automation project proposals and theassumptions underlying the proposals. This will facilitate informed debate and improve consensus
building. Evaluations of port automation projects need to be made public to facilitate this wider access to
information. This will help policy makers to identify under which conditions automation can be mosteffective.
Third, stimulate co-operation between employers and workers. Co-operation implies a meaningful social
dialogue between representatives of employers, workers and government that can facilitate discussions
on cargo handing in ports. As well as automation itself, such social dialogue should discuss developments
in container shipping that have an impact on the desirability of automation, such as industry consolidationand ever-larger ships. Co-operation between employers and workers has been particularly effective in
automation projects that share productivity gains with workers.
Finally, address the social costs of automation. Analyses of port automation projects should include
estimations of costs to society. Impacts on local employment and tax revenues should be considered in
the context of national policy towards automation.

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REFERENCES

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Container Port Automation

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Published: 10/2021 | Photo credit: VanderWolf Images / ShutterstockThis report provides an overview of the current state of automationin container ports. It shows which terminal activities have been
automated in different ports and which additional activities might
be automated in the future. It assesses if automation projects haveachieved their objectives and identifies policy issues related tocontainer terminal automation.