Understanding the return on investment of port sustainability
With the shipping industry’s historically thin margins, particularly due to the supply chain crisis caused by COVID-19, port operators need to focus on profitability. At the same time, local and federal regulations, as well as global treaties such as the Paris Climate Agreement, have warned ports that port sustainability must be a priority. The Port of Rotterdam, one of the busiest ports in the world, has pledged to be zero emissions by 2050 – many others around the world are sure to follow suit.
Strategic initiatives such as the United Nations Sustainable Development Goals (SDGs) may seem ambitious, but we see them as not only achievable but also essential – and the information and communication technology (ICT) industry can be a major catalyst. According to the Exponential Climate Roadmap, the ICT sector has the potential to enable a 15% reduction in global carbon emissions in other sectors, such as transport. While shipping is currently only responsible for 2-3% of global greenhouse gas emissions, this figure is expected to rise to 17% if left unchecked. Adding renewable energy sources alone will not meet this challenge – digitalization is essential.
It is important to note that ports do not have to sacrifice one thing to achieve another – productivity, efficiency and sustainability are linked. In other words, sustainability improvements can generate a return on investment (ROI) for all players in the shipping value chain.
Sustainability meets the bottom line
Here are some of the ways that improving port sustainability, productivity and efficiency through digitization enabled by a private cellular network can generate a return on investment.
Energy consumption: Limiting vehicle idling time and optimizing routes can significantly 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 lead to an estimated annual fuel consumption saving. to nearly 15,000 gallons per year.
At the same time, these 5G technologies would reduce CO2 emissions for a terminal operation by 8.2% overall, thanks to improved yard movements in the container terminal.
Intelligent assets connected to a private virtual network and asset management platform give equipment operators and field supervisors the ability to keep valuable assets running.
It’s not just for things like forklifts and cranes. We have found that optimizing vessel berthing can lead to an average cost reduction of 20% per year, or more than $2.7 million. And the fewer ships idling in port or on the road, the fewer emissions there are – a great example of technology that lowers TCO and helps meet sustainability goals.
Another strategy to increase OEE is predictive maintenance. Telematics solutions that monitor engine health can send alerts that a machine needs to be taken offline for repair or maintenance, preventing unplanned downtime and maximizing the useful life of an asset.
Increased OEE can be achieved through autonomous vehicles, such as forklifts, cranes and container trucks, which automatically optimize acceleration, braking and speed, thereby increasing fuel efficiency while reducing emissions. Ensuring an efficient route has taken place can also reduce emissions. Ericsson Routes, a new service, enables autonomous and unmanned vehicles to have consistent and reliable connectivity throughout a planned route for all applicable wireless service providers.
In addition to autonomous vehicles, the electrification of trucks transporting materials in and out of the port is a major factor in reducing emissions. Companies like Einride, which recently announced a partnership with the Port of Helsingborg, are supplying all-electric trucks to ports across the United States, and cellular networks can help these fleets operate efficiently, as well as keep track of maintenance needs.
Determining a port’s sustainability return on investment is a complex calculation. To help port operators, together with ifm and Arthur D Little, we have created the Smart Ports Value Calculator. This can help understand 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 the deliveries.
Models of the future
Digital transformation is well underway in several ports, and it is driving sustainability initiatives. Vancouver’s Port 2050 initiative aims for a post-industrial, post-carbon model that meets Canada’s business needs while maintaining a healthy environment and fostering prosperous communities. In the United States, the Port of Long Beach strives to be a zero-emissions port.
Rotterdam, Europe’s largest port, aims to become the smartest and most sustainable in the world. It includes fully automated or remotely operated cranes and automated guided electric vehicles that transport containers to storage facilities. When it became clear that Wi-Fi was too unreliable and insecure, Ericsson provided a private LTE network for robust and cost-effective data communications for 100 customers in the RWG terminal in the Port of Rotterdam.
Towards the port of the future
The port of the future will use always-on sensors and enhanced IoT applications that control and make decisions in real time through secure and reliable networks. Through intelligent insights into port status and operations, further optimization potential will be revealed – enabling ports to achieve sustainability goals through things like energy efficiency, electrification and more again.
The introduction of new technologies taking into account the environment and offering wider benefits will enable the transition to the port of the future. Private 5G networks and digital technologies are key to meeting this challenge and transforming port operations.
It is important to note that in the United States, the Infrastructure Investment and Jobs Act devotes $450 million specifically to decongesting ports by improving infrastructure, out of a total of $17.1 billion going to seaports. This is the largest injection of funds ever given to the Port Infrastructure Development Program.
While port sustainability was not specifically named as a key part of the grant applications, growing concerns over fossil fuel availability and the climate crisis should make it a primary consideration.
Smart Ports: At the Gates of a New Maritime Era
Activation of a digital port with private LTE in Rotterdam
Ericsson’s Italian 5G smartport findings showcased at UN Global Goals Week