Automation not always inevitable

TJ Rucker pointed out that the massive financial investment involved in automation means that it’s not always suitable for terminals once a return on investment (RO) assessment is carried out as most terminals don’t have the spare cash for large projects readily available.

He said: “There are some instances where operating in a traditional environment is actually faster than automating. So, some companies have made the decision not to invest in automation just for the sake of it.”

Weighing up

If a terminal has a lot of land, its traditional operation is efficient enough and volumes are not expected to grow beyond its footprint “then it doesn’t make sense to automate,” said Mr Rucker.

If a terminal does decide that automation is worthwhile pursuing, then it needs to look at all the options on the market. For instance, depending on where it is geographically, it can decide to partner with a company with a local presence. “This will drive decisions on vendor choice,” he stressed, adding “you’re also somewhat beholden to the equipment type you have, your terminal operating system and vendors you have selected in the past.”

Despite Mr Rucker’s warning to exercise caution in deciding whether automation is the right thing to do, he stated that volume is key for terminals and automating a terminal is “a capacity play.” He added, however, that productivity will only take a terminal so far. “You can be a fraction more efficient than your neighbour and you’re going to make the same amount of money because terminals have become so heavily commoditised that investing too much technology into raising your productivity doesn’t generate the same money anymore.

“There’s so much downward pressure on the rates because of this (shipping) alliance creation. 15 years ago, if you did 34 moves an hour rather than 32 you were very much a differentiated terminal – that’s not the case anymore.”