Trade Represented 60% Of Global GDP In 2019

By Taimur Lodhi, Strategic Marketing Director at Ericsson

According to the World Bank, trade represented more than 60% of the global gross domestic product (GDP) in 2019. And 90 percent of the world’s trade is facilitated by the shipping industry, according to the International Chamber of Shipping.

According to statistics data from the United Nations Conference on Trade Development, of the four main types of shipping vessels (oil, bulk cargo, general cargo, and globally standardized containers), the container vessels carry most of the world’s non-bulk items.

Many marine terminal operators are seeking new ways to optimize operations through automation. However, container ports have made the most strides in automation to date. This is primarily due to the consistent and standardized nature of the cargo.

In the past, ports operated independently from their peers and exhibited little international collaboration. With a globally standardized container, ports were able to form global container alliances, creating more scalable and automated processes.

As smart, connected facilities document additional gains and efficiencies, port operators are increasingly interested in deploying new solutions. However, the high density of devices in a mature smart port presents new challenges and connectivity requirements to manage.

Ericsson’s latest research shows that future ports can create new cost reductions—with an ROI of 178% – as well as increased port worker safety and more responsible environmental impact.

The future of ports: an ocean of opportunity 

The shipping industry is set to grow over the next decade. Cargotec, in its Investor presentation (2020), indicated a compound annual growth rate (CARG) of 3.6% for the global container throughput from 2013 to 2024. To handle the growth and increased traffic, future ports will need to adopt smarter and more efficient operations.

Ericsson’s report, “Connected Ports – A guide to making ports smarter with private cellular technology,” details the challenges that ports face. We examined how private cellular networks — typically 4G and 5G — will play a critical role in overcoming these by delivering high-speed connectivity, low latency, and strong performance in environments with high device density. Further, the report features a deep-dive analysis of five high-value use cases that illustrate how 5G-ready networks address specific pain points and offer a path to the future.

To map the connected ports opportunities, Ericsson collaborated with researchers from Arthur D. Little and experts from ifm electronic GmbH, a global leader in sensor technology and the Industry 4.0 journey.

Navigating stormy seas 

The increasing international populations and economic development are also causing consumer and industrial trade demands to grow, and so too must container shipping adapt to keep up. The swell in activity ahead puts more pressure on ports to be more efficient and sustainable while offering more competitive pricing to keep attracting major shipping lines. Port operators are turning to automation and digital transformation to manage any growing pains or choppy waters ahead.

The report details the key challenges faced by ports and how digital transformation can help companies innovate around risky and time-consuming operations to reap returns. For example, if ports adopt remote control or automation for cranes or other equipment, they reduce the risk of harm to onsite human operators and improve efficiency.

Additionally, the report shares the path necessary to bridge the connectivity gaps in future ports. Since previous automation and digital transformation efforts relied on communication technologies that can no longer handle the density, bandwidth, and latency required today, teams need a new approach. For instance, automated guided vehicles navigate throughout the ports as driverless forklifts and other materials handling vehicles. These moving vehicles require ample bandwidth and a reliable connection.

5G-ready private cellular networks enable mission-critical communication services, like voice and data services. In the future, this will help prevent injury, minimize economic impact during disasters or emergencies, and decrease future financial or economic risk.

5G also means smooth sailing in the future when it comes to positioning accuracy, reliable connectivity for moving objects, as well as using only one backhaul for all services. This ensures port operators can streamline the approach instead of installing several pieces of network equipment on a crane, for example.

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Charting the course 

To test the value in connected ports, we devised a baseline port with ifm electronic GmbH. The baseline port represents one of the top 100 container ports in the world with approximately 4 million TEUs (twenty-foot equivalent units) per year, generating roughly USD 400 million in revenue.

We analyzed 5 use cases according to their potential for generating strong value, as well as their feasibility. Use cases include: 

• Automated rubber-tired gantry (RTG) cranes
• Remote-controlled ship-to-shore (STS) cranes
• Automated guided vehicles (AGVs) 
• Condition monitoring 
• Drones for surveillance and deliveries 

Safe harbors 

Even though the potential for connected ports can span various applications, our research indicated the five use cases above are the most important, with automated RTG cranes, remote-controlled STS cranes, and cellular-connected AGVs among the most beneficial to ports.

What were the findings? 

All use cases would pay for themselves in two to three years, and if all five are deployed together, they provide complete payback within two years and a return on investment of 178% by year five. Beyond the tremendous financial benefits, connected ports create a substantial triple bottom line that includes increased productivity and efficiency, reduced costs, improved safety for workers, and a more responsible environmental impact.

The pre-condition for catching this “rising tide” is implementing fast, reliable, secure connectivity that only a 5G-ready private cellular network can provide. To see the full findings, read the report “Connected Ports” and check out the smart ports value calculator, which will allow you to see new ROI possibilities.