As container terminals aim for more efficient operation and higher productivity, automation is making major breakthroughs all over the world. Container terminals are increasingly adopting automated solutions to meet the challenge of larger ships, taller cranes and bigger call sizes. Having the right design criteria and taking the correct decisions early in the project is crucial in order to meet the expected cost and performance targets. Therefore, designing an automated container terminal is no longer just a matter of acquiring the right port equipment and integrating the equipment with basic terminal operating systems (TOSs), it is becoming more of designing and implementing a complete smart automated system. Smart automation would enable Automated Guided Vehicles (AGVs) used in container terminals to automatically adapt to changing circumstances, optimizing performance and output. Most of existing research work considered pre-defined AGVs paths using different techniques without considering free path AGVs solutions that can potentially increase transportation efficiency This research work uses the concept of Internet of Things (IoT) to increase transportation efficiency of the Automated Guided Vehicles (AGVs) and reduce vessel discharging time in an automated container terminal. In addition, the research paper proposes an algorithm to increase efficiency in the automated container terminal and achieve the research objective. Finally, simulation results were used to prove the positive effects of using the proposed algorithm in decreasing vessel discharging time compared to existing benchmarks and optimum solutions.