COSCO SHIPPING Ports signs deal with Navis

Mar 2018

COSCO SHIPPING Ports Ltd. revealed Thursday that it has entered into a subscription agreement for Navis’ N4 terminal operating system (TOS) with the goal of further enhancing the efficiency of its port operations.

COSCO operates and manages 269 berths at 38 ports, with 179 of those berths for containerships. “With N4 serving as the brain and localized source of information for the day-to-day operation of our terminal business, we are better equipped to meet the needs of today’s carriers and large container ships coming to call,” said Zhang Wei, vice chairman and managing director of COSCO SHIPPING Ports.

Benoit de la Tour, president of Navis, said that with the deal, his company was “continuing on our path towards large, strategic agreements with the biggest global terminal operators and shipping lines in the world.”

The deal came as Navis prepared to hold an “automation summit” in London this Tuesday for about 50 current and potential customers.

Scott Peoples, the president of the TOS business line at Navis, said participants will “take stock of the state of automated terminals,” particularly with automated container handling equipment such as automatic stacking cranes, fully automated container terminals with automated guided vehicles or shuttle carriers.

Cargotec, the parent company of Navis, said in an investor presentation this month that “only 40 (out of 1,200 terminals) are automated or semi-automated currently globally.” Peoples said about half of those are using a Navis TOS. Cargotec told investors while “over 50 percent of port software market is in-house, in long term internal solutions are not competitive.” Peoples says that Navis has made a significant investment to support automated containers, which he said is “ where a lot of the industry is moving." Navis’ sister company Kalmar makes a variety of different sorts of automated container handling equipment such as automated stacking cranes and automated straddle carriers.

In the U.S. there are four terminals that are highly automated including the Long Beach Container Terminal Pier E facility, the TraPac Los Angeles facility, the Port of Virginia’s Virginia International Gateway in Portsmouth, and Global Container Terminal in Bayonne, N.J.

Automation has become a key issue in current contract negotiations between the International Longshoremen's Association and its employers. Peoples says Navis believes “the technology around automated container terminals is improving and maturing… that creates the foundation for the next phase of growth of automated terminals globally.” “There are a lot of people who see this is where the market is going—how fast …I’m not sure anyone can predict with certainty,” he added. “But the long game is going to create a lot of focus on automated terminals.”

He said there is growing discussion about “how do we automate and optimize the broader container supply chain—whether that is the optimization of trucks and trains in and out of container terminals, or the collaboration between the ocean carrier and the container terminal around ship stowage or planning.”

“As we pull back the lens, there is a lot of value to be created outside of the individual terminal,” he said. “There is a global container supply chain that very much needs visibility end-to-end and end-to-end optimization.”

He pointed to OOCL’s Long Beach Container Terminal where he says truck turn times have been speeded because of the “uniformity and consistency of processes” within the terminal because of its automated gate, automated staging area and automated truck transfer zone.

One focus of the Navis conference this week is on the user interface and user experience. Peoples explained that as new technology--optical character recognition, camera systems, control systems, TOSs—are added to terminals, the roles of workers change and there is an opportunity to streamline the user experience.

Historically many of the actions and decisions at container terminals are made by workers, but as technology evolves, Peoples says some of those actions and decisions will be made by software and operators at terminals will play more of a role monitoring and managing exceptions.

Consolidation in the ocean carrier and container terminal industry means that both ship sizes and spikes in container volumes at terminals are growing, said Peoples.

He added that the growing focus on “digitization” by the senior leadership of carriers and terminals means for Navis “more meaningful conversations, more openness to invite us into executive conversations and more willingness to invest. It has been a very positive driver for our business.”