Understanding the Return on Investment of Future Port Sustainability
Connectivity is essential not only for driving efficiencies and improving safety at ports, but to reach sustainability goals. As ports face more pressure in this area from public and government regulators, private cellular networks are the key to creating port sustainability for green ports of the future while providing a platform that will allow for a return on investment.
With the transportation industry’s historically thin margins, especially coming out of the supply chain crunch caused by COVID-19, port operators must focus on profitability. At the same time, local and federal regulations, as well as global treaties like the Paris Climate Agreement, have put ports on notice that port sustainability needs to be a priority. The port of Rotterdam, one of the busiest ports in the world, has pledged to be emission free by 2050 – many others around the world are sure to follow suit.
Strategic initiatives like the United Nations’ Sustainable Development Goals (SDGs) may seem aspirational, but we see them as not only achievable but also essential – and the Information Communication Technology (ICT) industry can be a major enabler. According to the Exponential Climate Roadmap, the ICT sector has the potential to enable a 15% reduction in global carbon emissions in other sectors, like transportation. While marine transportation is currently only responsible for 2-3% of global greenhouse emissions, that number is predicted to rise to 17% if left unchecked. Adding renewable power sources won’t be enough to meet this challenge – digitalization is critical.
It’s important to note that ports don’t have to sacrifice one thing to achieve another – productivity, efficiency and sustainability are linked. To put it another way, improvements in sustainability can deliver return on investment (ROI) for everyone in the shipping value chain.
Sustainability meets the bottom line
Here are some of the ways that improving port sustainability, productivity and efficiency through digitalization enabled by a private cellular network can deliver ROI.
Energy usage: Limiting idling time for vehicles and optimizing routes can substantially reduce fuel costs while simultaneously reducing emissions. In our pilot project with the Port of Livorno in Italy, we found that using 5G to optimize forklift actions, reducing total working time by two hours, could deliver an estimated annual fuel consumption saving of nearly 15,000 gallons per year.
At the same time, these 5G technologies would decrease CO2 emissions for one terminal operation by 8.2 percent overall, thanks to the improved yard movements in the container terminal.
Smart assets linked into a private virtual network and an asset management platform give equipment operators and supervisors in the field the ability to keep valuable assets working.
This isn’t only for things like forklifts and cranes. We’ve found that optimizing vessel berthing can lead to a 20 percent average cost reduction per year, amounting to more than $2.7 million. And the less ships are idling in the harbor or lying in the roads, the less emissions are created – a prime example of technology driving lower TCO and helping meet sustainability goals.
Predictive maintenance is another strategy for increasing OEE. Telematics solutions that monitor engine health can send alerts that a machine needs to be taken offline for a repair or maintenance, avoiding unexpected work stoppages and maximizing the useful life of an asset.
Increased OEE can be realized through autonomous vehicles, such as forklifts, cranes and container trucks, automatically optimize acceleration, braking and speed, increasing fuel efficiency while reducing emissions. Making sure an effective route has taken place can also reduce emissions. Ericsson Routes, a new service, enables autonomous and unmanned vehicles to have consistent and reliable connectivity along a planned trip for all applicable wireless service providers.
In addition to autonomous vehicles, the electrification of trucks moving materials in and out of the port is a major factor in reducing emissions. Companies like Einride, who have recently announced a partnership with the Port of Helsingborg, are providing fully electric trucks to ports across the US, and cellular networks can help these fleets run efficiently, as well as closely track maintenance needs.
Determining the ROI of port sustainability is a complex calculation. To help port operators, together with ifm and Arthur D Little we created the Smart Ports Value Calculator. It can help make sense of the impact of five smart transitions: automated RTG Cranes, remote control of ship-to-shore cranes, cellular connected AGVs, condition monitoring and the use of drones for surveillance and deliveries.
Models of the future
Digital transformation is well underway at several ports, and it’s driving sustainability initiatives. Vancouver’s Port 2050 initiative aims for a post-industrial, post-carbon model that accommodates Canada’s trade needs while maintaining a healthy environment and enabling thriving communities. In the US, the port of Long Beach is working toward being a zero-emissions port.
Rotterdam, Europe’s largest port, aims to become the world’s smartest and most sustainable. It features cranes that are either completely automated or remote-controlled, and automated, guided electric vehicles that transport containers to storage facilities. When it became clear that Wi-Fi was too unreliable and insecure, Ericsson delivered a private LTE network for robust and cost-effective data communications for 100 clients into the RWG terminal in the Port of Rotterdam.
Toward the port of the future
The port of the future will employ always-connected sensors and enhanced IoT applications that control and make decisions in real time through secure, reliable networks. With intelligent insights into the port’s condition and operations, the potential for further optimization will be revealed – allowing ports to meet sustainability goals through things like fuel efficiency, electrification and more.
Introducing new technologies that factor in the environment and have wider-reaching benefits will enable the transition toward the port of the future. Private 5G networks and digital technologies are crucial in addressing this challenge and transforming port operations.
It’s important to note that, in the US, the Infrastructure Investment and Jobs act directs $450 million specifically to unclog ports by improving infrastructure, out of a total of $17.1 billion going to sea ports. It’s the largest infusion of funding ever for the Port Infrastructure Development Program.
While port sustainability hasn’t been specifically called out as a key component of grant applications, worsening concerns about the availability of fossil fuels and the climate crisis should make this a prime consideration.