ChatGPT & DALL-E generated panoramic image of a bustling container port during daytime

Maersk’s APM Runs 8% of World’s Ports, Says Electrification Is The Answer

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Container shipping is a big deal. It’s been an amazing success story in global trade and pivotal to making shipping cheaper and cheaper. It’s not too much to say that it’s been a big part of bringing people around the world out of poverty. But unsurprisingly, moving those metal boxes around takes energy.

The water side of the equation is the actually hard problem, although it’s not nearly as hard as many make it out to be. Ships carrying 24,000 containers blazing across oceans at 24 knots use a lot of fuel. But there are innumerable ways to reduce the energy required and obvious replacements for sources of energy.

You’ll note I’m not saying ‘fuel’, but energy. That’s a necessary abstraction for repowering discussions because otherwise you can get sidetracked into inanities like green hydrogen, synthetic methanol, or ammonia. No, the question is one of energy, and where energy is required, electricity rules. As such, in my projection of maritime shipping through 2100, all inland and two-thirds of short sea shipping will be battery-electric.

Only transoceanic and very long coastal routes will actually require the energy density of burnable fuels, and those will be biodiesel made from our massive waste biomass streams that are currently emitting a lot of high global warming potential methane. The solution for maritime shipping (and transoceanic aviation) is also a solution for our waste biomass global warming problem. Oh, and longer haul ships will likely be hybrid for cost efficiency and to avoid noise and air pollution in ports.

But what about those ports? There are over 800 big container ports around the world. The computer or phone you are reading this on undoubtedly had raw materials, components, and finished products traveling through those ports. Wherever you are sitting or standing, you probably have dozens or even hundreds of products within a few meters of you that were in containers in some of those ports at some point in their value chain.

That’s just the world we live in. I recommend reading the great book The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger to get a better appreciation for this innovation.

Those ports are a big deal, in other words. Modern and developing economies depend on them, even if most of us, most of the time, give exactly zero thought to them unless we are watching a crime drama with port scenes, or a movie like the Cruise vehicle War of the Worlds which feature container cranes.

Back to the question of power, there are three types of vehicles outside of the actual ships in ports. The first are the big cranes and overhead gantries that move containers on and off ships and port stacks. The second are the ground vehicles that move the containers around and often on and off semi trucks and trains, whether short distance flatbed trucks or mobile cranes. For convenience sake, I’ll include the various midges of people and maintenance equipment in the second category, as compared to moving the containers, they are a rounding error. The third are port water vehicles like tugs and tenders.

The first two categories are container handling equipment (CHE), tethered and untethered. There are about 100,000 to 120,000 CHE moving over 800 million containers worth over US$8 trillion annually. The third help ships dock, port pilots get to and from ships, and get fuel into ships. APM Terminals — the A.P.Moller-Maersk division that runs about 8% of the ports in the world — just released a white paper, The Case For Electrified Container Handling, on what to do about container handling equipment. It compares the total cost of ownership.

My acquaintance Sahar Rashidbeigi, global head of decarbonization for APM Terminals, has been instrumental to it and told me it was in development back in May. Now that it’s out, we’ll be reconnecting as we record a couple of episodes for my Redefining Energy – Tech podcast where we dig into it (subscribe to hear Rashidbeigi and many other STEM and economics literate innovators and leaders go deep on decarbonization solutions). My acquaintance Toh Wee Khiang, Director @ Energy Market Authority of Singapore, has been keeping me up to date on decarbonization of port water vessels in that very high volume port city-state. Let’s go through the categories one by one.

Tethered Container Handling Equipment

This category is a no-brainer. Most of them already run off of electricity. They are easy to plug in and run. And of course the electricity is easy to decarbonize with renewables, and that’s happening globally. There are still hydrogen for energy proponents who think hydrogen will be in the electricity value stream, but that number is shrinking every month as more and more spreadsheet jockeys get involved.

The current faint hope for hydrogen in the electricity value stream is very long duration seasonal storage, which will be required on average every ten years in the UK archipelago and every 50 to 100 years on continents. However, there’s nothing about the molecule that makes it the obvious right choice for that use case except wanting to use hydrogen for energy somewhere, so it’s unlikely to be there either.

Regardless, renewable electricity through wires to ports to tethered container handling equipment is such a no-brainer that it doesn’t merit much discussion in the white paper.

Untethered Container Handling Equipment

So let’s talk about this category of vehicles a bit. They mostly drive around at lower speeds on level ground. Port working areas have speed limits that vary from 30 to 50 kilometers per hour. Air resistance at highway speeds isn’t an issue. Elevation changes aren’t an issue. This category is mostly wagons and forklifts for containers.

But the containers can weigh up to 40 metric tons and can be 16 meters long. It’s a non-trivial mass and set of dimensions to pick up with a forklift and drop on a wagon. And it’s a non-trivial mass to set in motion and brake to a stop.

Unsurprisingly, most of these vehicles run off of diesel. This category of equipment has emissions in the range of 10 to 15 million metric tons of greenhouse gas emissions every year, about as much as the country of Slovenia for a sense of scale. For another sense of scale, when the Canadian province of Ontario shut down its coal generation fleet, that eliminated 37 million metric tons of greenhouse gas emissions. In other words, port ground vehicles are not the most burning issue in addressing climate change.

But that is zero reason not to address them. 15 million tons is still 15 million tons. At today’s social cost of carbon, that’s almost US$3 billion in future damages to the world and our economy. At today’s EU emissions trading scheme price, that’s about US$1.3 billion in emissions pricing. And as of 2026, everything imported to the EU, the third largest economy in the world, will be paying that price under their carbon border adjustment mechanism. Budgetary guidance from the EU has the carbon price at US$203 in 2030 and $287 in 2040, so if not avoided, that’s an additional $3-4.5 billion in extra costs.

And while I project a slower growth in container shipping than the boom since 1960, there still will be growth as containers continue to displace bulk shipping, and the world’s economy shifts to more local processing of raw materials that are then shipped by containers.

Shipping to the EU, a major importer from pretty much everywhere in the world, is going to get more expensive if ports don’t decarbonize. Shipping is a deeply competitive, low-margin world, so ports that don’t decarbonize won’t be favored as much as ones that do. The EU’s Pigouvian taxes will work, and other geographies will establish carbon border adjustment mechanisms too.

So the question becomes, what replaces the energy in untethered container handling equipment? This seems like a no-brainer to me and to most people. The characteristics of high torque, low speeds, no air resistance and flat ground make using batteries trivially easy compared to 1,000+ km trips of heavy goods vehicles at highway speeds over mountain passes with headwinds.

But of course a lot of people are still mentally invested in hydrogen for energy, so a lot of people forced the APM Terminals’s team to justify, again, that hydrogen is not fit for purpose for that use case either.

Chart of total cost of ownership comparisons between current diesel and alternatives of battery electric and hydrogen for port ground vehicles
Chart of total cost of ownership comparisons between current diesel and alternatives of battery electric and hydrogen for port ground vehicles

It’s pretty simple to do the comparison. As always, it turns out that fuel cell vehicles cost more to buy and cost more to operate than battery-electric vehicles. As with all total cost of ownership comparisons, even if you are very generous to the hydrogen energy stream, it just doesn’t make any sense.

So the white paper concludes what every study does, that battery-electric ground vehicles will be used. Yet another potential hydrogen for energy use case dissolves, proving that the game is all snakes and no ladders.

But the problem is also shown in the graphic above. At least right now, battery-electric ground vehicles are more expensive to purchase and take longer to charge. There are cost inhibitors for 24/7/365 container ports that make them hard to swallow.

The paper’s focus, once it’s slapped hydrogen upside its molecular head in the first few pages, is sensibly on that gap. The gap will close by itself as battery-electric vehicles spread, with all three forms of technology achieving total cost of ownership parity by 2030, but there things the industry can do to speed that parity’s arrival.

The paper lists three big levers:

  • A major decrease in the TCO of BE-CHE (of close to ~10% on average) can come from technology learning effects, lowering capex.
  • The introduction of technology standards for battery packs, management systems and charging solutions, notably to decouple battery procurement from equipment production, could bring down the TCO of BE- CHE by 7% on average.
  • Re-thinking the way terminals are operated can optimise for charging and reduce downtime.

That translates into building and buying a lot of the same battery-electric equipment as opposed to every port pretending it’s a special flower and custom designing unique solutions will save a lot of money and time. And that’s a cultural problem in the port and maritime industry. They all think that they are building unique engineering solutions to unique problems and so sub-optimal choices are made. Remarkably, that’s even in a massive industry that’s centered around highly standardized, modular containers.

The paper ends with a set of calls-to-action for different stakeholders in the ports, the terminal operators, OEMs, port authorities, affiliated government entities, and shipping line operators. They are all bog standard and obvious things, but very worth calling out. I’ll explore them with Rashidbeigi in our discussion, as there are nuances in there.

But for untethered container handling equipment, the mobile workhorses of modern ports, the answer is the same as for all other forms of ground transportation: batteries. It’s time to end that senseless debate and get on with it.

Port Water Vehicles

While I’m unaware of any white paper that’s as crisp as the APM Terminal release for port water vehicles, this is a place that’s also an obvious one. While the occasional hydrogen vessel is commissioned by various people, electric ferries, electric tugs, and electric tenders keep slipping into the water in droves.

Singapore is a good case in point on this. Its Maritime Decarbonization Blueprint has seven focus areas, and domestic harbor craft is one of them. What does it say?

“All harbour craft will operate on low-carbon energy solutions by 2030”

Note the language: low-carbon energy solution. They aren’t falling into the seductive trap of ‘low-carbon fuel’ that so many vendors of fuels and hydrogen for energy types deeply wish they would.

From my perspective, that means that all of the replacement water craft will end up being battery-electric and that attempts to make hydrogen work on the water will fail as well.

But Singapore isn’t there yet. There is a lot in the blueprint about importing hydrogen and developing use cases for hydrogen and developing infrastructure for hydrogen. There’s also a lot about importing renewable electricity from countries both nearby — Malaysia is only a kilometer away across the Johor Strait and Indonesia is 16 km away across the shallow Singapore Strait — and distant, with the Suncable effort that’s back on the table to bring Australia’s sunshine to the Little Red Dot via subsea HVDC cable.

As I’ve been saying to Toh for a few years now, it’s going to be all electricity, all the time with an ASEAN Supergrid developing and tying into China’s Asian Supergrid. The use cases for hydrogen won’t pencil out, and the country will decarbonize with electrons, just like everywhere else.

But that’s a process and there will be a million tiny experiments, each of which will yet again recreate the total cost of ownership process and find that hydrogen for energy doesn’t make economic sense. Singapore being Singapore, those assessments will likely be done before they commit too much money to hydrogen as a fuel, unlike the case of Lower Saxony with its hydrogen train debacle and reversal.

In the future, all of the ground and water equipment in ports will be grid-tied or battery-electric. The ships that berth in them will come in and leave silently under battery power and plug into megacharging buoys and swap depleted containers of batteries for charged ones. They’ll use electrons for onboard power instead of generators. The ports will be much quieter, much less polluted, much less of a greenhouse gas emitter, and much more efficient. Everyone will be better off at the end of this process. Well, except for the people who invested heavily in hydrogen for energy.


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Michael Barnard

is a climate futurist, strategist and author. He spends his time projecting scenarios for decarbonization 40-80 years into the future. He assists multi-billion dollar investment funds and firms, executives, Boards and startups to pick wisely today. He is founder and Chief Strategist of TFIE Strategy Inc and a member of the Advisory Board of electric aviation startup FLIMAX. He hosts the Redefining Energy - Tech podcast (https://shorturl.at/tuEF5) , a part of the award-winning Redefining Energy team.

Michael Barnard has 647 posts and counting. See all posts by Michael Barnard