Logistics and transportation of Container Cargo ship and Cargo plane with working crane bridge in … [+]
As we electrify everything everywhere all at once, it’s time to consider what will happen with The Box. Since the 1950s, containers have transformed logistics globally, taking bigger and bigger pieces of the growing maritime shipping pie. Containers can be 60 feet long, weigh tens of tons, be pulled dozens of meters upwards out of ships and moved kilometers inside ports. What’s going to happen with all of machinery that moves those loaded boxes of steel?
Why The Box? That’s the name of a strongly recommended book by Marc Levinson. The subtitle is more informative: “How the Shipping Container Made the World Smaller and the World Economy Bigger”.
In this series on transportation decarbonization, we’ve already stepped through urban densification, buses, light vehicles, trucks, railroads, pipelines and mining equipment. Empirical evidence from around the world, announcements from mining majors, total cost of ownership studies and the markets are making it clear that ground transportation is all electrifying, whether it’s grid-tied, operating on batteries, or a hybrid of the two.
But surely there must be a niche where hydrogen or a synthetic fuel is the answer, and if so maybe it’s the hard requirements of moving multi-ton containers on and off of ships?
Enter A.P. Moller Maersk’s APM Terminals, a division handling a significant portion of US$8.1 trillion of global container traffic through its network of roughly 70 of 800 terminals in ports globally. Led by Sahar Rashidbeigi, the global head of decarbonization, APM Terminals has been at the forefront of pushing for electrification in container handling. Their recent white paper, “Reaching a tipping point in Battery-Electric Container Handling Equipment,” marks a significant step in this direction.
Electrification, particularly for tethered container handling equipment, is relatively straightforward. Most stationary cranes already run on electricity. The upside down railroad gantries that carry containers through the air are electrified or run on diesel, but only civil engineering efforts to trench electrical cables to them is standing in the way of the solution everyone agrees upon.
The question lies in untethered equipment, various ground vehicles. There are flat-bed trucks with containers on top of them. There are long-legged wheeled straddle carriers that glide over containers to pick them up and carry them away. And there are reach stackers which are like upside down forklifts, dropping a mechanism which interlocks with the containers from above instead of sliding forks under them from below.
Total cost of ownership for battery-electric vs hydrogen container handling equipment
Despite the buzz around hydrogen as an alternative energy source, it falls short in the context of container handling in the same ways as it does everywhere else it is considered as a carrier of energy. The operational environment of ports — characterized by lower speeds, level ground, pavement everywhere, the absence of long-range travel and high torque requirements — makes battery-electric vehicles an even more obvious choice. Hydrogen fuel cells, while theoretically appealing, struggle with higher operational and ownership costs compared to BEVs. The detailed cost comparisons laid out in APM Terminals’ white paper underscore this point.
As I discussed with Rashidbeigi recently, while recording upcoming episodes of Redefining Energy – Tech, that she had to bother redoing a total cost of ownership calculation which was a foregone conclusion is a story in its own right. One of our conversations earlier in the year had been triggered by her wondering what motivations were driving the continuing drumbeat of proposals for hydrogen as an energy carrier she, her team and leaders at APM terminals around the world had to keep dealing with.
The motivated thinking of the fossil fuel industry is obvious. Without the hydrogen coming from the hydro in their geological hydrocarbon reserves, those reserves are worth pennies on the dollar. That’s the cause of cognitive biases skewing thinking on the part of their financiers as well. Without the reserves being worth something, the loans and investments are worthless as well. Governments which get large GDP boosts from fossil fuels are also subject to motivated thinking. The lack of STEM literacy in finance and government doesn’t help.
But ports have their own version of this. Roughly 20 billion tons of mostly single use fossil fuels are extracted, processed, refined and shipped annually, and a lot of them go through ports. Roughly 40% of all deepwater bulk shipping is for coal, oil and gas.
Unless they think about it carefully, it’s easy for port executives and analysts to think that those liquids, gases and solid will simply be replaced with something else, hydrogen or something manufactured from it. After all, if they realize that HVDC transmission is the new pipeline, oil tanker, coal carrier and LNG tanker and molecules for energy are going away, they have to accept a massive reduction in port volumes and revenues.
Rashidbeigi and team dealt with this weekly for the past two years, having to create FAQs and craft question sets for port executives and analysts to use when pitched a hydrogen solution.
The economic implications of this shift are significant, especially considering the European Union’s carbon border adjustment mechanism. Ports that lag in decarbonization efforts will face higher shipping costs, affecting their competitiveness. Electrification not only addresses environmental concerns but also aligns with the economic realities of a highly competitive, low-margin industry.
The future envisaged by industry leaders like APM Terminals is one where ports become quieter, more efficient, and significantly less polluting and warming. The shift to electrification in container handling is a key part of this vision. While the transition presents challenges, the direction is clear. The global container handling industry is steering away from diesel and hydrogen, embracing electric solutions for a sustainable future.
APM Terminals’ initiative, backed by Sahar Rashidbeigi’s leadership, is more than a technological upgrade, it’s a call to action for the industry. As we look towards a more sustainable future, the electrification of container handling stands out as a beacon, guiding the shipping industry toward a cleaner, more efficient horizon.
