Transportation industry coalesces against the Ocean Shipping Reform Act of 2021

ClaireInstonereportsonthepending OceanShippingReformActof2021 andhowitwillimpacttheongoing congestionissueacrossglobalports.

Congestion in the supply chain has reached remarkable levels. Increase consumer demand, rising shipping d costs,driver shortages and shrinking warehouse space are all contributing factors leading to bottlenecks at every point along the chain especially at ports. For example, from 2011 - 2019, the average annual container TEU volume increase for the Ports of Los Angeles and Long Beach combined was 3.9%. However, when looking at the TEU growth for the first eight months of 2019 vs. 2021 (using 2019, as 2020 was artificially impacted by COVID), the increase is 20%.In recent weeks,both the aforementioned ports announced they would be testing extended operating hours at truck gates to try to mitigate congestion. However, the lack of available labour and truck drivers would jeopardise the efficacy of this approach. So, what other measures can be taken? According to the lower house of the United States Congress, the Ocean Shipping Reform Act 2021 (HR 4996) is needed…

The bill

On August 10th 2021, two members of the US House of Representatives introduced the Ocean Shipping Reform Act 2021 (HR 4996). A component of the bill aims to address terminal congestion by reducing beneficial cargo owners (BCOs ’) responsibility to collect cargo from marine terminals. Before one container can come into a space, another has to be removed. When containers are unloaded from ships, they are allowed a period of “free time ” on the terminal. However, when containers are not picked up within the agreed-upon time, the BCOs are charged.These charges demurrage and detention - are critical incentives for BCOs to pick up cargo. In essence, the legislation - if passed - would undermine financial incentives for BCOs to move their cargo from terminals in a timely manner. This presents issues to an already hurting supply chain that has witnessed remarkable growth and is currently facing a labour shortage.

Negative unintentional consequences

Stakeholders have warned that key components of the proposed Ocean Shipping Reform Act of 2021 (HR 4996) would have unintended negative consequences.As a result, more than two dozen prominent transportation entities have joined together to oppose the proposed legislation, citing that removing the ability for terminals to charge BCOs for extended demurrage and detention will only lead to more congestion. Furthermore, with the current growth and labour shortages the supply chain and surrounding economy will struggle. The legislation would undermine the demurrage and detention charges BCOs and importers would be required to pay, which as a result, would encourage these organisations to store containers on the terminal, further clogging ports and impacting the ability to keep freight moving.Without these charges incentivising retailers and importers to pick up cargo, the supply chain would suffer additional setbacks from delays in inbound shipments and exports.

When discussing the potential of increasing storage of containers across terminals, it is essential to note that at ports on the West and East Coasts of the United States,terminals are considered full when filled to 80% capacity. Many terminals on the West Coast have been at 95% capacity in 2021. Increased consumer demands, shortages of labour and equipment, and complex global trade and travel constraints resulting from the pandemic have caused record-breaking container volumes and “dwell times ” at ports - the time a container sits on the terminal. For example, the local

delivery dwell time for containers on theWest Coast has doubled in the past year;the on-dock rail dwell times have quadrupled, now averaging eleven days,and the on-terminal container count has increased by 43% resulting in congestion and slower velocity.Further,warehouse vacancy rates are at an all-time low of 1.2%, with many at capacity, prolonging container and truck chassis dwell time outside the terminal. The culmination of these events has led to cumulative of the entire logistics supply chain.

Extending working hours to increase capacity at terminals has been discussed but is ill-advised. For a 24/7 operation model to be effective, other transport groups, including truckers and warehouse operators,would also need to commit to working those hours. Numerous sources cite the lack of available drivers needed to handle the current volumes of freight. For example, Bloomberg reported the trucking crisis is creating demand for drivers from other countries.

Shared concerns

John Martin, a leading maritime economist, commented on the activities in the early days of pandemic- related port congestion across terminals,stating, “Labour responded dramatically well during this time period.What we really started to see was the constraints were building up outside the terminals.The constraints built up at the warehouses, and the constraints built up at the rail, with respect to intermodal rail. ” This data indicates that container volume is still rising,warehouse space is at capacity,and BCOs are not removing their cargo from terminals. Disincentivising import cargo from being picked up from terminals, as the legislation would do, would increase container dwell time and congestion without enhancing proper resources, such as space, or labour to handle shipments.

TheWorld Shipping Council (WSC) shares this concern. John Butler, President and CEO, said, “HR 4996 will not solve supply chain congestion because it focuses solely on marine terminal operators and ocean carriers, but the congestion problems are supply-chain wide. Carriers have deployed every available ship and container, but our ships are waiting to get into port and our containers are sitting at our customers ’ facilities waiting to be unloaded because of landside bottlenecks. ” Leaders at the National Association of Waterfront Employers (NAWE) also share concerns about the amendment. “This signal from Congress - that the US is seeking unrestricted regulation of its ocean commerce without regard to regulatory costs or international shipping practices - would be extremely concerning for the MTO community, ” said Lauren Brand, President of NAWE.

The way forward

Moving forward, the National Association of Waterfront Employers has offered to have discussions with members of the US House of Representatives to develop solutions that aid supply chain healing and address critical needs facing US ports.The editorial team at World Port Development will keep abreast of the on-going situation and bring readers updates in due course.

The legislation announced by Congress is concerning and does no address the multifaceted nature of “ t congestion as a complete supply chain issue. If enacted, it would provide a temporary financial relief to importers and BCOs, but impose tariffs for ocean carriers, worsen operating conditions for marine terminal operators and other transportation stake to “ holders, and hinder the capacity solve the true supply-demand problem at hand. Ed DeNike, President, SSA Containers

“This is not the ri formulate and impose Given current economic ght time to new regulations. and trade trends, government agency intervention in the port and terminal industry outside of helping improve communication is ill-advised. The existing global trade logistics system was not built to handle simultaneous surges in demand and shortages of labour. Intervention could result in negative “ unintentional consequences that could worsen the situation for all shippers as well as transportation service providers. Walter Kemmsies, Chief Economist, The Kemmsies Group

Organisations opposed to the proposed The Ocean Shipping Reform Act of 2021 (HR 4996):

(at the time of print)

* Ambassador Services International * APM Terminals * Charleston Stevedoring Company * Cooper/Ports America, LLC * Enstructures Refrigerated Terminals * Gateway Terminal * Global Container Terminals (GCT) USA * InternationalTransportation Service LLC * Long Beach Container Terminal * Luis A.Ayala Colon Sucrs., Inc. * Maritime Association of the Port of NY/NJ * Maritime Exchange for the Delaware River and Bay * Nautilus International Holding Corporation / Metroports * NewYork Shipping Association * Pacific Maritime Association * Pacific Merchant Shipping Association * Port Houston * Ports America * Ports of the Delaware River Marine Trade Association (PMTA) * South Carolina Stevedores Association * SSA Marine * The National Association of Waterfront Employers (NAWE) * TranSystems * The United States Maritime Alliance, Ltd. (USMX) * West Gulf Maritime Association * World Shipping Council * West Coast MTO Agreement

Pandemic hastens digital transformation

HastheCOVID-19pandemicgiventerminal operatorsthechancetositbackand considerelectricdrivenequipmentin preferencetodieselenginesinorderto reduceemissions?WorldPort Developmentinvestigates…

Over the years, terminal operators have been moving towards ‘ going green ’ in their operations. By applying eco-friendly solutions they were able to reduce (or completely eliminate) not only exhaust emissions of their equipment but also, in some cases, noise emissions. Equally,cargo handling equipment manufacturers are offering environmental-friendly solutions, and in the context of this article,Mobile Harbour Cranes with different configurations reducing diesel consumption and lowering emissions.

Manufacturers also looked at offering an electric Mobile Harbour Crane (MHC), which can be achieved on a diesel-hydraulic configuration, with the installation of an electric motor in the engine room, powered by a cable reel that draws the power supply from the berth (for those that have electrified quays). The use of electric MHCs compared to hydraulic MHCs is often based on the operator ’ s experience in the type of cranes owned and the capability of the maintenance people. In addition, terminal operators can be ‘forced’ into making such a decision by local politics due to environmental concerns (as electric cranes are perceived as cleaner and somehow less noisy compared to hydraulic ones).

Going electric

In 2021, across the board manufacturers are reporting to have seen an increase of orders in more environmental friendly mobile harbour cranes and in particular electric driven ones. According to a statement by Germany-based Liebherr-MCCtec Rostock, in 2021 demand for Liebherr mobile harbour cranes with an e-drive has risen sharply. Compared to 2019, the number of units equipped with an electric motor has even doubled.

“Liebherr has been successfully using a hybrid drive concept consisting of a diesel engine and an electric drive for the mobile harbour cranes product segment for over 20 years, ” states Philipp Helberg, Marketing Manager. “In addition to emission-free handling, the benefits of e-drive include cost savings and less maintenance. ”

It is obvious that a significant shift in focus for electrified cranes can be observed in the port industry from the more traditional ‘hybrid drive concept’ . Electrification is entering a new market phase - something we have seen happening in the car industry. There is no secret about the hybrid drive concept offered by all manufacturers it connsists of a diesel engine and an electric motor - something that Liebherr has been offering for well over 20 years for its maritime mobile harbour cranes.

Italgru has six MHCs heading towards India.

The diesel engine is used exclusively for moving the crane along the quayside.As soon as the crane has reached the desired position, the machine is connected to the local power grid by cable.The actual handling of goods is thus possible without emissions.

If required, during operation with an electric drive, the energy recovered from the lowering can be fed into the local power grid. In this way, the operational cost of electrically driven cargo handling can be reduced even further.

“It is noticeable that the demand for electric motors with power from the local electricity grid has increased enormously in the last two years, ” said Helberg. “More than a third of all Liebherr mobile harbour crane orders have an e-drive installed and the trend is rising. Retrofitting electric drives is also possible and is increasingly being used by mobile harbour crane customers. ”

For emission-free operation of the MHC, it can be connected to a low-voltage network from 400 volts or a high-voltage network up to 20 kV. In the case of a high-voltage supply, this is converted into low voltage via a transformer mounted on the undercarriage, so that only low voltage is present in the crane itself. Liebherr offers the option of a cable-reeling drum for the safe movement of the crane with the cable. Cable lengths of between 70m and 200m can be accommodated, depending on the voltage present at the feed point.This ensures emission-free electrical travel of the crane along the quayside, as well as e-powered lifting.

Hydrostatic drive

Similar stories are coming from Italy-based Italgru who report that in order to meet customer expectations the company is able to supply both diesel-hydraulic and diesel-electric cranes. By choosing sub-vendors that can supply low-emission engine motors and eco-friendly components, the company can offer energy saving features on their MHCs, such as an accumulator that stores energy during the lowering phase to be redistributed to other movements available.

Such accumulators can be installed on the diesel-hydraulic configuration of an MHC, whilst on the diesel-electric configuration, a series of regenerative inverters can be installed, which are able to redistribute the energy stored during the lowering phase to the electrical grid of the berth. The accumulator is something we have also seen installed on the Liebherr MHC - they name it the hydrostatic drive concept.The principle (of the accumulator and hydrostatic drive) is based on a main drive that supplies power to pumps and a hydraulic transfer gearbox.The main drive can be a diesel engine or an electric motor.

All energy-consuming movements are connected to a closed hydraulic circuit and are fed by it when required. Closed hydraulic loops are used for all main functions such as hoisting, slewing and luffing.The benefits of all this are extremely precise control, a minimum number and size of components and reduced fuel consumption thanks to the standard use of reverse power. Such innovative drive systems generally saves diesel or energy during crane operation and enables sustainable and efficient operation.

According to Mauro Cacciatore at the Commercial Department at Italgru, the company has introduced a new design for all models, with electric drives on both hoisting and slewing movements,dedicated to customers focused on eco-friendly solutions. In August, Italgru delivered one diesel-electric IMHC 2120 E toVolos Port in Greece.The MHC is a single winch with a maximum capacity of 125 tonnes and is equipped with a cable reel in order to plug-in to the electricity supply on the berth.

Despite the global pandemic, Italgru is running at full capacity and has recently completed some interesting projects.A total of six MHCs were heading towards India - four of these were diesel-hydraulic and electric IMHC 2120 with a maximum of 100 tonnes capacity under hook. Just like the unit forVolos Port they are equipped with a cable reel to draw electricity from berth. In addition, two MHCs will have a maximum capacity of 140 tonnes under hook.

Currently, they are working on a dieselhydraulic IHMC 1580 (maximum 80 tonnes capacity) for Azov port in Russia and one diesel-hydraulic IMHC 2120 (125 tonnes capacity) for Barletta port in Italy. Italgru is also completing work on three dieselhydraulic IMHC 1580 units for the ports of Ravenna and Oristano for delivery towards the end of 2021 - early 2022. In early 2022 the company will also start commissioning one IMHC 2120 for Durres port in Albania and one IMHC 1580 (with a maximum capacity of 63 tonnes) to the port of Rijeka in Croatia.

Above: Liebherr ’ s LHM 550 at Toledo-Lucas County Port. Below: Liebherr ’ s e-drive.

At the beginning of November 2021,Konecranes announced it received an order from North American terminal operator Logistec USA Inc. Logistec ordered two new electric drive eco-efficient Generation 6 Konecranes Gottwald MHCs for their terminal at the Port of Manatee in Tampa Bay, Florida, USA. The order was placed in August 2021 and the MHCs are expected to be handed over in February 2022. “This is great news for our customers,our community and the environment in Port Manatee, ” said Rodney Corrigan, President of Logistec USA Inc. “These new additions to our fleet of cargo handling equipment are well aligned with our focus on reducing our marine carbon footprint in support of our Green Marine initiatives. ”

The two new Generation 6 cranes with new electric drives will be the Konecranes Gottwald ESP.7 MHCs,with a working radius of up to 51m and a lifting capacity of 125 tonnes.They will be the natural successors of the two Generation 5 cranes already on-site.They feature a higher tower cab for a better view of the vessels in port and stronger lifting capacity curves for improved handling performance and a higher classification, which doubles their service life in container handling operations.Their on-board drive follows the strict EPATier 4 final standards. It’ s a smart hybrid drive combining a diesel engine with optimised fuel consumption and an ultracap.This allows for both eco-efficient operation and peak performance when necessary. In September 2021, Konecranes announced that Italy-based Terminal Flavio Gioia SpA. (TFG) exercised their option for a second eco-efficient MHC in August 2021 - the first order was placed in March 2021.The first crane is already in operation and the second will start in early 2022.TFG is the main terminal of Gruppo Bucci, specialists in international logistics based in Naples.

In September,Liebherr delivered a LHM 550 to Toledo-Lucas County Port Authority (TLCPA) in the US. Since 2010, two Liebherr HMC 280s have been in operation at the port of Toledo and primarily used for bulk handling.The new crane is equipped with a 4.8m tower extension and a 54m boom for best reach.It has a maximum lifting capacity of up to 144 tonnes able to use much larger grabs and thus handle more bulk material in a shorter time.The new machine was transported in a disassembled state from Rostock (Germany) to Toledo.At the port of Toledo, the crane was then assembled, tested, and handed over by experienced Liebherr service engineers. Liebherr also announced in October that following a period of rental, Mukran Port Terminals GmbH at the German port of Sassnitz has purchased its third Liebherr mobile harbour crane, type LHM 550. Mukran PortTerminals is a crucial link in the New Silk Road and acts as an interface for international transport chains for rail, sea, and road for goods to and from China. Mukran Port Terminals has been operating two LHM 400 mobile harbour cranes for many years.

The Konecranes Gottwald ESP.7 MHC.

The new normal..

The global pandemic and travel restrictions has forced manufacturers to come up with new ideas when it comes down to after-sales and maintenance. In our previous article we highlighted the fact that some manufacturers even assembled and commissioned their mobile harbour cranes, through a qualified third party, for their customers through the internet.

The use of the internet for remote maintenance as well as for collaboration with local technicians is now standard practice for all manufacturers and will become a new norm as cranes can be monitored through telemaintenance. “This is an effective tool that allowed us to oversee operations from our HQ, ” said Cacciatore. “The crane is connected, through the internet, to our offices in Italy or a local maintenance station, for a real time monitoring and troubleshooting of the crane. ” Cacciatore told us that remote support has always been a tool used by Italgru to help their customers. “The global pandemic and the restriction imposed to travelling has certainly increased the number of requests to operate directly from our headquarters. ” Apart from keeping an eye on the crane in operations it also serves as an excellent tool to keep in contact with existing customers and with potential ones, providing the opportunity to connect from your home or office thus avoiding a slowdown in negotiations or project management.

At Liebherr the coronavirus pandemic has given the digital transformation extraordinary impetus over the last year, demonstrating that there most certainly are solutions for performing work without being present on site. The company has been working for many years on various remote products, now allowing the company to make use of these and to further expand its innovative technologies. Such remote applications have many benefits and are currently experiencing a veritable boom.