Maximpact Blog

Maritime Shipping: Energy Efficiency Rules the Bottom Line

Saudi Arabia’s King Abdullah Port is the region’s first port to be fully owned, developed and operated by the private sector. It has been listed as the fastest growing container port in the world and tops the list of the world’s 100 most efficient ports. (Photo courtesy King Abdullah Port) Posted for media use
By Sunny Lewis for Maximpact

LONDON, UK, March 20, 2023 ( Sustainability News) – “The decline in private equity and venture capital dealmaking is widespread across sectors of the global economy, with just a few exceptions. One of them is energy efficiency,” declares the S&P Global Market Intelligence report published in November.

Nowhere is energy efficiency sought more eagerly than in the hundreds of container shipping ports of the world. More than four-fifths of all global merchandise trade by volume is carried by sea, according to the World Bank, and 35 percent of total volumes and over 60 percent of commercial value is shipped in containers.

In these busy places “operational efficiency results in energy efficiency, so most of the optimization studies related to the better planning of port operations contribute to the energy efficiency,” Dr. Çağatay Irisa of the University of Liverpool and Dr. Jasmine Siu Lee Lam of Singapore’s Nanyang Technological University have found in their 2019 study of the world’s ports. 

“The number of studies in the field of energy efficiency and eco-friendliness for green ports increases,” they wrote in 2019. “The topic has a strong industrial relevance since many ports and terminals aim to reduce the energy consumption (pollutant and GHG emissions consequently) and become more sustainable.”

The availability and preparedness of future low- and zero-carbon marine fuels and technology is being explored as part of a new project steered by the International Maritime Organization (IMO).

The decarbonization of international shipping is a priority for the IMO. By mid-2023, the organization aims to have in place a revised and strengthened Strategy on Reduction of GHG Emissions from Ships.

A comprehensive website is being developed as a dedicated online hub for IMO members to find and share information and data on the uptake of alternative fuels and new technology as part of the decarbonization of shipping as quickly as possible.

The site will provide easy access to materials on the latest advances in the decarbonization of the maritime sector. It will offer education and training materials, as well as details of related activities and events. 

Middle East and China’s Ports Most Efficient

The world’s two top-ranked container ports are King Abdullah Port in Saudi Arabia, the first privately owned, developed and operated port in the Middle East, which claimed first place, followed by the Port of Salalah in Oman, which took second place. 

In fact, ports in the Middle East took four of the top five spots in the latest edition of the global Container Port Performance Index (CPPI) developed by the World Bank and S&P Global Market Intelligence. This index of global container port performance is intended to serve as a reference point for key stakeholders in the global economy.

Jay New, CEO of King Abdullah Port, commented, “We are confident that our continuing success, our strategic Red Sea location, and our state-of-the-art facilities built to the best standards will provide us with a strong foundation for further growth.” King Abdullah Port serves as a regional logistics hub connecting three continents on the East-West trade route, a key commercial network that accounts for 13% of global trade. 

The Container Port Performance Index is based on the length of time vessels needed to spend in port to complete workloads over the course of 2021, a year that saw unprecedented port congestion and disruption to global supply chains.

“Increasing the use of digital technology and green fuel alternatives are two ways countries can modernize their ports and make maritime supply chains more resilient,” said Martin Humphreys, Lead Transport Economist at the World Bank and one of the researchers behind the index. “Inefficient ports represent a significant risk for many developing countries in that they can hinder economic growth, harm employment, and increase costs for importers and exporters. In the Middle East, heavy investments in container port infrastructure and technology are proving to be effective.”

The CPPI report also highlights the resilience of East Asian ports and the capacity of Chinese ports in particular to effectively handle challenges brought about by the pandemic.    

Three of the large Chinese gateways, Shanghai (Yangshan), Ningbo and the southern port of Guangzhou, feature in the CPPI’s top ten, while last year’s most efficient port, Yokohama in Japan, dropped to 10th place overall.

The index and underlying data are intended to identify gaps and opportunities for improvement that would benefit all key stakeholders in global trade, including governments, shipping lines, port and terminal operators, shippers, logistics companies and consumers.

Key port performance metrics show large discrepancies in global port efficiency in 2021, with top performers such as King Abdullah Port achieving an average of 97 container moves per hour of vessel port time compared with just 26 container moves per hour at the main ports on North America’s West Coast. A majority of the busiest U.S. sea gateways ranked in the bottom half of the 2021 CPPI Index.

The Evolution of Ports 4.0

Ports and terminals have evolved and from the 2010s have entered into a stage of evolution characterized by their digital transformation and alignment with Industry 4.0 practices

Industry 4.0, known as the Fourth Industrial Revolution, is a concept that originated in Germany in 2011 to address future challenges in industrial environments. The mechanical loom in 1784 is considered to be Industry 1.0, electricity and mass production in 1870 is Industry 2.0, and programable logic controllers and information technology systems in 1960 is Industry 3.0.

Industry 4.0 brings technologies like machine-to-machine communications, the Internet of Things (IoT), cyber-physical systems, big data analytics, intelligent robots, cobots, Artificial Intelligence (AI), virtual reality (VR), augmented reality (AR), and intelligent controllers.

The main advantages of Industry 4.0, and by extension, Ports 4.0 are the integration of technologies, levels of connectivity, understandability, performance, decision making, monitoring, flexibility, and control. When these are accomplished, energy efficiency increases.

For instance, the automation of cargo loading and unloading cuts vessel waiting time and improves supply chain efficiency. Safety under Ports 4.0 is improved with threat detection technologies, such as artificial intelligence and data analysis. And supply chain sustainability is improved as energy efficiency and automation slash greenhouse gas emissions and lower the environmental impact of port operations.

A worker at Spain’s Algeciras Port uses Artificial Intelligence to control operations. 2021 (Screengrab from video courtesy Travesia de la Innovacion) Posted for media use

Some of the key technologies used in Ports 4.0 are:

  • Artificial Intelligence: AI can improve the efficiency of port processes and decision making. AI systems can analyze large amounts of data to detect patterns and trends, optimize shipping routes, and improve inventory management.
  • Augmented Reality (AR) and Virtual Reality (VR): AR and VR are used to improve the training and safety of port workers through simulations of hazardous situations or work procedures to reduce accident risk.
  • Automation: Automation allows for autonomous operation of equipment such as container cranes, forklifts, and automated conveyors, improving the efficiency and safety of port operations.
  • Big data: In Ports 4.0, big data systems are used to analyze traffic patterns, energy consumption, greenhouse gas emissions – all the factors that affect the efficiency and sustainability of the port.
  • Blockchain: Blockchain technology enables secure and decentralized recording of transactions, reducing fraud risks, and improving trust.
  • Cloud computing: Cloud computing enables better cargo loading and unloading management and planning as data is analyzed in real time to identify challenges and improve port efficiency.
  • Drones: Drones can perform infrastructure inspections, detect problems in real time, and provide information for decision makers.
  • Internet of Things: IoT allows devices to connect and communicate with each other to collect and transmit data. In Ports 4.0, IoT sensors are used to monitor and control the movement of containers, vehicles, and other equipment, permitting more efficient cargo loading and unloading management and planning.
  • Lidar: Lidar, which stands for Light Detection and Ranging, is a remote sensing method that uses light in the form of a pulsed laser to measure variable distances. Lidar has ushered in a new era of autonomous technology with the provision of real-time, surround view imaging. It enables intelligent infrastructure, autonomous vehicles and advanced driver assistance systems.
  • Renewable energy: Ports 4.0 are moving towards the use of renewable energy sources such as solar, wind, and biomass to reduce their dependence on fossil fuels and decrease their carbon footprint. These renewable energy sources can also reduce the port’s energy costs.
  • Robotics: Robotics is used in Ports 4.0 to perform tasks that require precision and strength, such as container handling. Robots can be autonomous or human-controlled and can work in tandem with automation systems.

To attract, support and facilitate the application of talent and entrepreneurship to improve port efficiency, Spain has created the Ports 4.0 Capital Fund, a corporate open innovation model adopted by State Ports and the Spanish Port Authorities. 

The government agencies hope to involve the Spanish public and private port-logistics sector in modernizing its 15 major shipping hubs in the context of the 4th industrial revolution.

The Ports 4.0 Fund, the largest open innovation fund for the Spanish port-logistics ecosystem, collected 79 applications in the first call for commercial projects, held last year. Nine projects have been selected to receive the subsidy provided by the Ports 4.0 Fund, which ranges from €100,000 to €2,000,000. 

The nine winning projects are: Guardian IIoT, Smart Eco Reefer, Clever Volume, Transport with drones in logistics-port operations, WEC Plant, Guideme Port City Solutions, Parvamap 3D, Paula and Posidonia Port CDM.

For instance, the company Vifemar Constructions and Systems won support for its Wave Energy Capture (WEC) Plant project, which deals with the development of energy that comes from sea waves for the generation of electrical energy. WEC is a system capable of harnessing the kinetic energy of waves and storing hydraulic energy in its structure. WEC systems can be attached to docks or vertical structures that already exist as energy collectors, making large-scale implementation with high levels of system durability easy.

See detailed descriptions of the nine winning innovations here.

Improving Your Ports

All ports can benefit from an analysis of their energy efficiency and recommendations on how to improve their efficiency with newer technology, lower carbon fuels and innovative problem-solving.

Maximpact energy efficiency experts can conduct this type of analysis and provide recommendations that will increase efficiency and improve the bottom line. Contact Maximpact experts at: