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Technology pushes South Carolina ports to plan, simulate for autonomous mega-ships

November 18, 2017

Within a few decades, autonomous mega-ships carrying 50,000 cargo containers will plow the seas as global trade swells up to five times beyond current levels and a fully automated transport chain moves products from ports to end-users without touching a human hand.

That brave new world of container transportation — transformed by digital technology — is outlined in a recent report by New York consulting firm McKinsey & Co.

McKinsey acknowledges that current land-side infrastructure constraints and cost concerns make such predictions hard to fathom. But the consultant adds that fast-emerging technologies are changing the industry in ways not imaginable just a few decades ago.

“As the pace of innovation accelerates,” the report states, “all bets are off.”

But not everyone is sharing that vision.

“My immediate reaction is, it ain’t gonna happen,” said Bill Rooney, vice president of strategic development for logistics firm Kuehne & Nagel.

Rooney told the South Carolina International Trade Conference last month that when he got his start in the business, “new ships were just coming out and I was amazed at their size — 2,950” containers.

“Now, you’re talking about 22,000,” he said, adding that McKinsey’s prediction of a 50,000-box vessel is, from a technology standpoint, probably possible.

“But the issue is shore side,” he said. “In many places, the facilities are too small.”

Nearing the limit?

Jim Newsome, president and CEO of the State Ports Authority, said he believes the largest vessels now being built — those capable of carrying about 22,000 containers — are probably nearing the limit of what global ports can handle.

Even with $2 billion being spent on infrastructure improvements — including a deeper harbor, taller cranes and stronger berths — the Port of Charleston couldn’t accommodate a ship the size McKinsey imagines.

“The major limitation on the size of ships is support infrastructure,” said Newsome, a former shipping line executive with Hapag-Lloyd. Newsome added that ships carrying more than 22,000 containers will require two engines to power them, something that’s not attractive to the shipping lines because of the added fuel costs.

But he isn’t entirely ready to discard the McKinsey report.

“I would have told you in 2000 that our viewpoint at Hapag-Lloyd was you wouldn’t see above a 5,000-container ship,” Newsome said. “You’d be looking at me now and saying, ‘Jim, you’re an idiot.’ But I have to have a feeling that they’re getting to their biggest size.”

Even if ships carrying 50,000 containers were to become a reality, industry analysts question where they would go and how they would get there.

The Panama Canal, despite a $5 billion expansion, can only accommodate vessels carrying up to about 14,000 containers. The Port of Charleston will have the East Coast’s deepest harbor when a $529 million dredging project is finished, but even then its maximum draft of 48 feet would be too shallow. Even the Suez Canal, with a maximum draft of about 66 feet, would be unable to handle a cargo ship carrying 50,000 containers.

A report on The Maritime Executive website says such mega-vessels probably could navigate Canada’s Northwest Passage a few months each year to reach U.S. ports on the East Coast. They also could sail trans-Pacific routes from Asia to the West Coast. But there are currently no U.S. ports with the infrastructure to handle such a ship.

It’s possible the vessels McKinsey envisions would sail from Asia and use deep-harbor ports in South Africa — such as Richard’s Bay and Saldanha Bay — as stopover points to trans-load cargo to smaller vessels, according to The Maritime Executive.

Tom Bebbington, a project manager with consulting firm Container Logic, says a 50,000-container ship is likely and probably much sooner than McKinsey’s 2067 target date. Technically, he said, there’s no reason such a ship can’t be built.

The problem, according to Bebbington, is whether such a large vessel is logical — a factor he says isn’t always considered in the executive suites at major shipping lines.

“Someone builds a bigger ship than theirs and, in return, they build something slightly bigger,” Bebbington said. “And so the cycle continues.”

While such a ship would float, he said, it wouldn’t necessarily be commercially viable.

Even now, with 18,000-container ships sailing Asia-to-Europe routes, shipping alliances “have to blank sailings or cancel services because they simply do not have the cargo to fill all these vessels,” according to Bebbington.

Forcing ports to invest in the infrastructure to handle bigger vessels has the potential to be “financially catastrophic,” he said. Not that shipping lines would be swayed by such a consequence.

Bebbington cited COSCO, a Chinese shipping line, as “a good example.”

“They have their sights set on being No. 1,” he said. “Do they need to be? Is it going to pay off commercially? Who knows. What I do know is that their goal is to be the biggest, no matter what it takes.”

Way out on the horizon

The McKinsey report does offer a futuristic alternative if shipping lines ultimately determine a 50,000-container vessel doesn’t make financial sense — modular, drone-like containers floating singularly across the ocean to their final destinations.

For Newsome, such technological possibilities are fun to imagine, but the present-day world beckons. And at the Port of Charleston, that means getting ready for a smaller step up from the 14,000-container ships that have been calling since the Panama Canal expansion was completed more than a year ago.

“I will tell you that we simulated at the request of one shipping line a 19,000 (container) ship,” Newsome said. “I don’t think they would have asked us to do that if they didn’t have some idea that they might want to deploy it to the East Coast.”

With natural restrictions due to harbor depth and man-made limitations like the height of the Ravenel Bridge, Newsome said that’s about the biggest ship South Carolina’s port can handle.

“I’m not going to say it’s going to be a dominant trend, but I would be surprised if at some point you don’t see a sling of 18,000 or 19,000 (container) ships on the East Coast,” he said. “Maybe one sling on a regular basis.”

Yet time — and technology — marches on, and who’s to say what the future holds.

“Be bold,” McKinsey tells industry executives in its report.

“The shipping industry was built on the vision of strong leaders who dared to sail through the storms,” the consultant writes. “Although it now once again faces a period of disruption — this time from digital technologies — there is a path forward for companies willing and able to seize the day.”

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