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Terminal Automation Systems Market Driven by Increased Complexity and Regulation

Fuel, petrochemicals, asphalt, and other product terminals represent an important link in the petroleum supply chain. Here, profit can be made or lost and exposure to regulatory penalties and other risks is high.

While thousands of fuel terminals are in operation, relatively few are automated, and those that are often use equipment and systems that are not up to the task of handling an increasingly complex business and regulatory environment.

As a result, bulk fuel terminal owner/operators will make investments to upgrade their automation systems, driving the market at above average rates over the next several years, according to a new ARC Advisory Group study.

Considering the high value and hazardous nature of many of the products involved in terminal transactions, and the variety of different functions per-formed, a surprisingly large percentage of the world’s petroleum product terminals still operate with minimal automation.

Terminal automation systems can certainly help increase efficiencies, improve accuracy, reduce labour and operational costs, enhance safety, and ease regulatory compliance.

“Due to the increasing number of different products and additives handled, thin profit margins, price volatility, an onerous regulatory environment, and other considerations, including the need to operate around the clock, terminal automation is no longer optional,” says Senior Analyst Paul Miller, one of the principal authors of ARC’s Terminal Automation Systems Worldwide Outlook.

Virtually every terminal requires some degree of automation to be able to operate in a safe, secure, compliant, and optimally profitable manner. Terminal automation systems are also being used in some very creative ways to help increase customer satisfaction.

This can include providing customers with real-time inventory and transaction status via the Internet, and supporting their demanding e-commerce or data exchange requirements.

The typically closed, proprietary, and relatively inflexible terminal automation systems of the past have evolved into much more open and flexible systems that can be configured with relative ease to match specific terminal requirements.

This is important, because even within the same company there is no such thing as a “cookie cutter” terminal. Modern systems are also much more adaptable than the systems of the past, enabling them to be modified to meet constantly changing product, market, commercial, customer, and regulatory requirements.

The strongest growth in the terminal automation market will occur in the Asia Pacific region, particularly in China and India, where demand for refined fuels will increase substantially as automobile ownership ramps up and both countries build hydrocarbon supply chain infrastructures. Greenfield projects will drive the majority of growth, which should be steady for the foreseeable future.

In North America and Europe, where fuel terminals have long been a part of the landscape, growth will be more modest in comparison. However, terminal operators in these regions will be working to upgrade their facilities to handle a broader variety of additives and fuel blends (including biofuels), improve terminal safety, and better integrate supply chains with corporate business systems.

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