We Need To Stop Talking About The Terminal Of The Future

[By: Rory McBride - Midstream Lighting]

Even in the most difficult times for public finances, governments are continuing to recognise the importance of world-class port infrastructure in delivering jobs and prosperity. 

In the last quarter we've seen Puertos del Estado announce that the Spanish state-owned port system's budget would double in 2021. We've seen ICTSI sign an investment contract to develop the Port of Guayaquil in partnership with the Ecuadorian government. We've even seen a major proposed investment in Somaliland at the Port of Berbera from Trafigura. 

Why are they – and many others – investing? 

The global pandemic has increased demand for technologies that can improve business resiliency. It would also be accurate to note that compliance with shipping’s growing list of environmental laws requires upgraded technology. But first and foremost, it’s because they believe that they will reap outsize rewards for doing so. 

Investment criteria

It seems an obvious thing to say, but not all investments maximise efficiency and safety, and even the best-run companies can find it difficult to achieve their full return on investment. For example, the chief executive of a large global port operator, recently stated in an interview, that it took nearly a decade of implementation for automation to improve the number of manual lifts, which one of his terminals had been completing each hour. 

There’s no shortage of processes in shipping which could be improved. But it’s all too easy to pick the wrong one and suffer a huge cost. Take the Bill of Lading, for example. It’s one of – if not the – single most important document in shipping. People have been trying to digitise it for decades, and it’s only recently started to get traction. There are Master Mariners working today who were in nursery when the Comité Maritime International first adopted its Rules for Electronic Bills of Lading. 

There are also few investments that are right for everyone. Blockchain, for example, is regularly touted as a cornerstone technology for the ports of the future. It certainly has enormous latent potential, but the value is many years away from being fully realised. Yet it, and other similar technologies, dominate newspaper editorials and the agendas of conferences.

The longer we spend contemplating the 'ship of the future' or the 'terminal of tomorrow' and ignoring the tech that’s already proven and available at scale, the longer we'll continue to live with avoidable inefficiencies, risks, and emissions.

The evolution of ports and terminals

One area which provides immediate benefits as well as long term gains, from an upgrade, is port cranes and terminal lighting. The right lighting is critical to the smooth and safe running of all port and maritime terminals – whatever their size. But most ports are still using high-pressure sodium, metal halide, or other similarly dated technology. 

A metal halide lamp, for example, can deliver a high lumen output. But it will also lose about 20% of its lumen output in the first six months while still consuming 100% of the energy. 

Similarly, a high-pressure sodium system will provide poor colour rendering for your CCTV systems as well as being equally costly to maintain.

By contrast, LED lighting provides the safest working environment due to the light clarity, the reach of the light, and by eliminating shadows and improving colour recognition at night. LEDs also enable better security at a facility, minimise your carbon footprint, and eliminate the light pollution glow that you see around so many ports. The reality is that LED lighting, when implemented to the highest standard, has a multiplier effect on the value of your other investments, as well as reducing the evergreen risks at every terminal.

LED lighting pays for itself

We recently worked with Fenix Marine Services (FMS), which handles about 2.9m TEU across 300 acres at the Ports of Los Angeles and Long Beach. For many decades FMS had been using high-pressure sodium lighting. However, to reach its goal of becoming one of the most environmentally friendly terminals in the world, it recognised the need for change. The reality was that high-pressure sodium lighting was neither meeting FMS’s environmental nor operational standards. Today, thanks to the 906 lights we installed – a reduction of 10% on their previous setup – FMS is saving 2.8 million Kwh per year. To put that in perspective, the savings will be enough to buy an RTG crane every two years. 

In addition, because the Los Angeles Department of Water and Power was supporting the California Clean Air Action Plan with its CLIP rebate program, we were able to secure a $750,000 saving for FMS. When coupled with the huge annual savings in electricity and maintenance, it means that the project will be cash flow positive in 15 months. 

There are always many competing interests in how a port will invest in its future development. While major expenditures like new cranes or terminal expansions often garner the most attention, these types of investments will, at best, take several years to begin to see positive returns. In contrast, returns on energy efficient lighting are safe and guaranteed if the port is operating, and become cash positive in the same amount of time it takes to order and receive delivery of a new ship-to-shore crane - around 16 months.