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Port automation imperative for Singapore: Kalmar


AUTOMATION is not a matter of choice for the Singapore port - it is an imperative if the port nation wants to continue to draw large box ships and major shipping lines to its shores, says a leading port equipment supplier.

Kalmar's senior vice-president of APAC Peter Mclean tells The Business Times that with automation, a port gains consistency in its service standards - a trait that is much sought-after by major shipping lines aiming to stand out from the pack by offering on-schedule premium services to customers.

Towards this end, he says that one port in Melbourne has pursued extensive automation to attract larger ships to its berth. Elsewhere, the ports of Rotterdam and Qingdao are way ahead of their rivals in embracing the automated guided vehicle (AGV) technology for the transfer of cargoes between yards and quaysides.

Singapore may not be the first to kick-start port automation but Mr Mclean concurs with PSA International group chief executive Tan Chong Meng's observation that the island nation with a strong maritime heritage still stands to benefit from "resetting" its port operations with the development of the Tuas mega port now being built from scratch.

Mr Mclean says for PSA Singapore, the development of the new port is akin to "buying a brand new laptop", with automation being a "natural transition" because a port, like a new laptop, has to be packed with "new features not made available before".

Port automation in Singapore is also driven by one other operational reality - the labour supply challenge here. So, even if port operators have to initially run up bigger tabs to build automated terminals, they would eventually gain in the long run from having "far more cost certainty", says Andy Lane of CTI Consultancy.

The Tuas mega port project represents a huge business opportunity for port equipment suppliers. Mr Mclean acknowledges that it is with the intent of getting its foot in the door earlier than later that Kalmar - a unit of Finnish cargo handling services and solutions provider Cargotec - chose to participate in the tenders for the AGVs now on trial at PSA's Pasir Panjang terminals.

Kalmar supplied 18 all-electric AGVS and two diesel-operated units that are on the 30-strong fleet now running trials at PSA Singapore's Pasir Panjang terminals. It was also responsible for providing the navigation technology that has been integrated into PSA Singapore's AGV fleet.

Beyond the promise of service consistency, the use of all-electric automated equipment also helps bolster a port operator's environmental credentials. Mr Mclean says that port operators are able to cut down their hefty fossil fuel bills by switching to battery-powered equipment. This can represent significant cost savings for an oil-importing nation such as Singapore. For ports located in areas with higher population density, the use of all-electric equipment including AGVs generates less white noise compared to fossil-fuelled units.

Notwithstanding the obvious benefits of automation, Kalmar's parent group Cargotec says that orders for automated port equipment have not picked up in a big way. In its full-year 2017 results statement, Cargotec notes that while interest in efficiency-boosting automation solutions continued to be high, the "uncertainty" in cargo flows resulting from consolidation of shipping lines have not helped to convert enquiries into actual orders.

One key stumbling block in port automation is cost. For example, while Kalmar has already developed its first fast-charge, electric-powered straddle carrier - an alternative to an AGV - about two years ago, each unit costs "twice as much", says Mr Mclean.

While this has no doubt set back the product's take-up rate, he is optimistic that in time to come, costs could come down once production hits the required economies of scale.