PORT PLANNING, DESIGN AND CONSTRUCTION

RETROFIT TERMINAL
AUTOMATION
MEASURING THE MARKET
Neil Davidson, Senior Analyst, Drewry Maritime Research, London, UK

To date, most of the 44 automated Project has seen OOCL develop a fully number of greenfield terminal projects
container terminals already in operation automated facility using ASCs and in the pipeline reduced, the opportunity
around the world have been developed as AGV s on the footprint of older terminal to develop these terminals as automated
new projects, that is; built from scratch on infrastructure. However, this example is facilities is similarly affected. However, the
a blank canvas. However, there are notable perhaps closer to a greenfield development flip side of terminal operators’ reduced
exceptions where existing manual terminals than a retrofit due to the extent of the interest in greenfield terminals is a much
have been retrofitted with automation as redevelopment work undertaken. greater focus on optimising their existing
part of a major redevelopment, such is the terminals. Part of this may well involve
case at terminals in Germany and the USA OPTIMISING EXISTING TERMINALS consideration of conversion to semi or full
for example. Figure 1 shows the existing and planned automation, but how big is the potential
In Hamburg, HHLA is undertaking a automated terminals across the world, global market for such retrofit terminal
phased redevelopment of the Burchardkai giving an insight into container terminal automation
Terminal, the largest and oldest container automation as it presently stands globally. Figure 2 shows the proportion of existing
handling facility in the port, which dates Looking ahead, it is clear that long-term container handling terminals worldwide
back to the late 1960s. The company is container port demand growth has been that are automated. Of the 1,300 or so
gradually installing ARM yard blocks and reset to a lower, “new normal” rate. Gone facilities, only just over 3 can be classed
turning the terminal into a semi-automated are the days of double-digit growth and as automated. On one hand, this might
facility. most observers expect a more mature be viewed as disappointingly low given
In Los Angeles, the TraPac terminal has rate of no more than 5% per year. This, the high profile of automation and the
been re-equipped and re-developed into together with greater risks and potentially potential benefits it offers. However, on the
a fully automated facility using ASCs in the lower returns from greenfield terminal other hand, it does indicate huge potential
yard and automated straddle carriers for projects, has led to a much more cautious pool of existing facilities that might be
horizontal transfer. In neighbouring Long approach to such projects by many retrofitted with automated equipment.
Beach the Middle Harbor Redevelopment terminal operators and investors. With the

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 PORT PLANNING, DESIGN AND CONSTRUCTION

Figure 1: Existing and planned automated container terminals

Liverpool

Dublin
Rotterdam Hamburg

London
Antwerp Incheon
Thamesport Tokyo

Jebel Ali (Dubai) Busan Nagoya

Source: Drewry Maritime Research

Algeciras Vado
Los Angeles New York Khalifa Port Tianjin
Norfolk
Barcelona Qingdao
Tanger Med Shanghai
Long Beach
Xiamen Taipei
Tuxpan

Lazaro Cardenas Kaohsiung

Vizhinjam
Colon Fully automated 1.1% Singapore
Semi automated 2.3%
Semarang (Tanjung Emas)

Fully automated - Operational

Not automated 96.6%
Fully automated - Planned (greenfield) Brisbane
Source: Drewry Maritime Research
Surabaya (Tanjung Perak)
Sydney (Port Botany) Auckland
Semi-automated - Operational
Semi-automated - Planned (greenfield) Melbourne

Semi-automated - Planned (retrofit)

1%
2%
RETROFITTING IN LARGER TERMINALS

Source: Drewry Maritime Research

Figure 3 digs deeper into the picture by
Fully automated
showing the number of existing container
terminals worldwide by size. Over 70 of Up to 100k teu 516 Semi automated
the world’s terminals are small (under 500k 100-250k teu 239
Not automated
TEU throughput per year) and so unlikely 250-500k teu 190
(or less likely) to be suitable for retrofit
500-1,000k teu 174
automation, given that the high capital
cost and “lumpy” nature of automated Over 1,000k teu throughput 193
97%
capacity tends to suit larger facilities. On Source: Drewry Maritime Research
the face of it, this suggests that over 750
terminals globally can be discounted as Figure 2: Proportion of automated container terminals worldwide (by number of terminals)
sites for retrofit automation potential.
However, Figure 4 shows the number of
existing terminals again by size but also in 193
terms of throughput. In this analysis it can
be seen that the terminals handling over Up to 100k teu

Source: Drewry Maritime Research

500k TEU per year account for over 80% of
516 100-250k teu
world throughput. 174
Up to 100k teu 2.7%
The natural focus for retrofit automation 250-500k teu
is the larger terminals around the world, of 100-250k teu 5.5%
500-1,000k teu
which there are over 300 not yet employing 250-500k teu 9.6%
automation. While they are in the minority Over 1,000k teu throughput
500-1,000k190
teu 17.0%
in terms of the overall industry total, they
account for the vast majority of global
Over 1,000k teu throughput 65.3%
throughput. Source: Drewry Maritime239
Research

REGIONAL VARIATIONS IN POTENTIAL Figure 3: Number of container terminals (by terminal size, 2016)
Figure 5 provides a breakdown showing
how many of these large, non-automated 3%
terminals there are in each world region. 5%
It also places them in a matrix. Along the
Source: Drewry Maritime Research

10%
vertical axis is a broad assessment of labour Up to 100k teu
costs in each region. In some regions
100-250k teu
this is a straightforward assessment as
all the countries are similar, but in others 17%
250-500k teu
the picture is more mixed, for example 500-1,000k teu
Southeast Asia as a region has a number of 65% Over 1,000k teu throughput
countries with varying degrees of a uence
and hence labour cost. The Middle East
meanwhile is a region of mainly wealthy
countries but labour costs in terminals are
relatively low due to the use of migrant
labour. Figure 4: Share of global terminal throughput (by terminal size, 2016)

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PORT PLANNING, DESIGN AND CONSTRUCTION

High
North Asia
North America South Europe / Black Sea

North Europe
Oceania
Southeast Asia

Labour cost

Central / Latin America Greater China

Source: Drewry Maritime Research

South Asia Africa Middle East

Low
Limited Appetite for automation Strong

10 Size of circle represents number of existing non-automated terminals in each region handling >500k teu p.a.

Figure 5: Number of potential retrofit automation terminals by world region

On the horizontal axis is an assessment also part of the story (indicated by the Adani’s greenfield terminal planned for
of the appetite for terminal automation in size of the circle for each region), and not V izhinjam in India is to be provided with
each region. This is much more subjective, surprisingly reater China has the highest an automated solution by PMC.
and more nuanced. For example, there amount. reenfield projects have not gone
may be a strong appetite for automation This potential is mitigated by the away, there are over 100 confirmed
from terminal operators and investors relatively low labour costs which may call developments currently in the pipeline
due to high labour costs, but if there are into question the validity of automation around the world, albeit so far only a
also strong dockworker unions against even with the prestige and cutting edge handful have opted for automation.
the concept, this appetite is counteracted motivations. The regions able to combine But for the time being at least, the
to a degree. Hence, the overall appetite the best potential for retrofit automation opportunities for retrofitting automation
in North America for example has been (high labour costs and strong appetite) in existing terminals appear to be in the
judged as moderate. There is also the together with significant numbers of ascendance. The locations offering the
influence of prestige and a desire to existing suitable terminals are North most plentiful and suitable terminals are
be at the cutting edge of technological Asia and Europe (North and South). The Europe, North Asia and reater China. It
development, meaning although labour region least likely to attract retrofitting will be interesting to see which locations
costs in the Middle East and reater China automation is South Asia, with its low take the lead and why.
are low by world standards, suggesting a labour costs and apparent limited interest
lesser appetite for terminal automation, in in the prestige rationale. That said, it T his analy sis is t ak en f ro m D rew ry ' s
fact it is strong in these locations due to is interesting to note the news that q uart erly P o rt s & T erm inals I nsight rep o rt .
the aforementioned prestige and cutting
edge reasons. Another consideration is
the newness of terminals, on the basis ABOUT THE AUTHOR 1970, the company has over 40 years’
that locations with long-established, experience within the maritime sector,
older terminals may be more ripe for Neil Davidson has over 30 years’ employing over 90 specialists across offices
redevelopment and re-equipping, whereas experience in the port sector. He in London, India, Singapore and Shanghai.
those with newer terminals less so. This joined Drewry in 1997 and founded The company provides research reports
favours more mature market locations the company’s ports practice. Neil has and consultancy services with a brand
such as North America and Europe. spoken at over 100 industry conferences, renowned for its quality. Drewry reports
seminars and private briefing sessions are sold in more than 90 countries and
NORTH ASIA AND EUROPE worldwide and regularly contributes consultancy services are commissioned by
The top right of the matrix has a expert insight and analysis to the trade over 70 countries.
combination of high labour costs, as well as press and British national newspapers, as
a strong appetite for terminal automation. well as TV and radio. ENQUIRIES
Regions in this quadrant are likely to offer
the best potential for retrofitting. By the ABOUT THE ORGANIZATION Neil Davidson,
same token the bottom left quadrant 15-17 Christopher Street,
is least likely to offer potential, with its Drewry is one of the world’s leading London, EC2A 2BS
combination of low labour costs and international maritime consultancy and Tel: +44(0)20 7538 0191
limited appetite. However, the number publishing organisations. Founded in Email: [email protected]
of potential terminals in each region is

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