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2013 VA Governor’s Transportation Conference Ed McCarthy, SVP & COO

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Presentation on theme: "2013 VA Governor’s Transportation Conference Ed McCarthy, SVP & COO"— Presentation transcript:

1 2013 VA Governor’s Transportation Conference Ed McCarthy, SVP & COO
CMA CGM (America) LLC Sailing Distance (Nautical Miles) Via Panama Via Suez Vairance HKG/NYC 11,207 NM 11,593 NM 386 HKG/CHS 10,795 NM 11,996 NM 1201 SHA/NYC 10,582 NM 12,370 NM 1,788 SHA/CHS 10,170 NM 12,773 NM 2,603

2 Large Ships “You can debate their impact, but you cannot deny that they are coming!” – said by a Roman General referring to the Huns in 425 AD That being the case, planning and preparing for them is the responsible course. Large Ships These statistics are from Alpha Liner. Top Graph: 4% of current container vessels are over 10K size, but they make up 14% of the fleet capacity. On the orderbook, 24% of the number of ships, and 46% of the capacity falls into this category. Bottom Graph: Alphaliner projects that 20% of the fleet capacity will be in the >10K size range by the end of 2015. This phenomenal growth driven by EFFICIENCY

3 Raise Your Hand if You Remember the phrase “Trickle Down Economics”
Large Ships Who Has Them & Where? Most Grays Go To Here Who has ships >7500? Info: P3 = 270/545 Current, 336/778 Current + Order Book 83% of Vessels >7500K in the E/W Trades New Builds (Grays on Right Chart) will mostly go to FE/EUR trade Will displace larger (10K & Up) to Trans Pac CMA CGM already operating one service with 11’s on USWC, one with 85’s on USEC Big Ships Are Coming – It’s Inevitable. Raise Your Hand if You Remember the phrase “Trickle Down Economics”

4 Thank You! CMA CGM CORTE REAL, Long Beach CA
The largest CMA CGM vessel to call North America Large Ships Are Coming – Better to Plan For it Now and Find Ways to Leverage the Efficiencies They Bring Rates vs Inflation Using CCFI* with 1998 = 1000 Rates Aug 29 to USWC = 1070 (up 7%) in 15 years Inflation with 1998 = 1000 Today $ = 1433 (up 43%) in 15 years CCFI = China Containerized Freight Index, part of the Shanghai Shipping Exchange Only service that tracks prior 2009 for indexing Size of vessels up from 4500’s to 11,000’s in same time frame on FE/USWC Cost of Crude Oil from $18/bbl to $115/bbl Price of Bunker up from ~$100/ton to ~$625/ton Thank You! 13,830 TEUs

5 A Quick Size Comparison
CMA CGM MARCO POLO Class of Container Ships For a reference on how BIG – Little White Dot under the rudder of the Queen Mary is an Automobile The Charles de Gaule aircraft carrier is 857feet long, and would barely make it from the stern to the bridge wings of the Marco Polo. Notice that the new Queen Mary fits inside the Maro Polo profile, with plenty of space to spare. Main particulars Length over all ft Breadth ft Depth to main deck ft Draught, scantling ft Air draft (after tilting) ft Deadweight on Ts 187,626 Ton Lightship weight 54,400 Ton Service Speed 24,1 knots

6 Efficiency Comparison
Ships carry 99% of overseas trade in volume terms and 62% in value terms, the remainder being conveyed by air. 90% of all international trade moves by sea Globally, the ton-miles of freight moved by water are more than twice the total ton-miles moved by road, railway, and air combined. Water transportation is less costly and more efficient than other modes of transport: 99% of Overseas Trade moves via ocean. 90% of International trade (there is a lot of cross border truck/rail in many countries (i.e. US-Canada, Europe, etc) The chart bottom right shows the efficiency, safety, etc., comparisons of vessel versus rail or truck.

7 42 Comparison of Co2 emissions between different modes of transport
Rail car with container 42 No question that ocean transport is by far the ‘Greenest’ method of moving cargo. Airfrieght is by far the dirtiest.

8 Some Hard Numbers What can be expected operationally as ships get larger? 5100 = USEC Workhorse 8500 = USEC Largest The fact that this study exists must mean something (Hint – several of our current 13’s are named after US States Requirements for Large Vessels: 50’ of Channel Depth & Alongside (avoiding tide restrictions) Super PostPanamax Cranes (22 Across) 6 to 8 Cranes Available on Arrival (depending on stowage) Gross Moves Per Hour per crane (note that crane moves per hour productivity drops by 2-3 moves per hour on ships >11K) Sufficient Air Draft NOTE = Air Draft in this document = height from keel to top of vessel. Required overhead clearance is this number minus scantling draft.

9 Large Ships Large Ships Present Two Major Challenges
1 = Size of the ships 2 = Highly Concentrated Volumes of Cargo Rail Impact Longer Trains Flatcar Availability Double Stack On Dock Rail Higher Ramp Traffic Concentration Origin & Destination Dedicated Trains/Corridors Port Impact Harbor Depth (& Air Draft) Berths – 1300 Foot? Cranes – Reach (20+), How Many Per Berth? Moves Per Hour Critical On Dock Rail Back of Crane Infrastructure Gates Intense “Peak Days” Highways Pilots & Tugs Large Ship Challenges Size of the ships Concentrated Cargo Volumes Port Impacts Harbor Depth Longer Berths Enough Big Crates to hit moves/hour On Dock Rail – too much volume to dray to ramps “Back of Crane” infrastructure Yard Space, Container Handlers, Automation, etc Gates – capable of handling velocity spikes Highways - congestion is a risk, easy on/off critical Pilots and Tugs – special training, tugs with enough power to handle large sail area Rail Impacts Longer Trains to handle required velocity Flatcar availability On Dock Rail Higher Ramp Traffic Concentration Port area and Inland Hubs Dedicated Trains and Corridors Customer Impacts Concentrated Flows = High Velocity (Buckets vs Conveyor Belts) Potential Warehouse Stresses Drayage Challenges for Local Customers (see terminal above), and high peak demand Improved Schedule Reliability, Customer Impact Concentrated Flows = High Velocity Potential Warehouse Stresses Improved Schedule Reliability Dray Power Challenges Effectively Managing These Issues Will Result In Improved Efficiency Throughout the Supply Chain

10 The New Panama Canal CMA CGM AMERIGO VESPUCCI (13,830 TEUs)

11 13.000 teu Vessels will be capable of transiting the Panama Canal
By the end of 2015 – in just a couple of years - vessels of teus will sail through the Panama Canal. This will impact the structure of the liner shipping, and the networks of services. It will have an impact on the efficiency and cost of carriers to move cargo to the USEC from Asia, and at the same time will increase demands on USEC ports and infrastsructure. A 13,000 TEU ship carries over 49 MILES of containers if fully utilized … 20x13,000 = 260,000 Feet 260,000/5280 (ft/mile) = Miles That is a lot of volume no matter how it’s moved to the store door – rail, truck, barge… it doesn’t matter, it’s going to be new stress on the infrastructure

12 Baltimore Norfolk Charleston Savannah
Mid-Atlantic Terminals – Summer 2013 Capabilities Baltimore Norfolk Charleston Savannah The next few slides will look at the current (summer 2013) capabilities of the ports in the Baltimore to Savannah range. Baltimore Norfolk Charleston Savannah

13 SEAGIRT Baltimore NIT- Norfolk APM - Norfolk
Capacity – 1.2M teus / 705K lifts - occupancy 43% 284 acres of operating space 7 Post Panamax cranes / 4 Super Post Panamax RTG / Top Loader Operation 3127ft of berth On dock rail CSX / Near Dock NS Channel – 50ft MLW 3 45MLW with new Berth 50ft MLW Air draft – 185ft MHW Tidal Range – 1.5ft Turning Basin – 1350ft Capacity – 2.1M teus / 1.2M teus – Occupancy 52% 131 acres of operating space (Total Terminal space – 567 acres) 14 Super Post Panamax cranes (245ft reach / 27 across) 1 R0/RO berth 6630ft of berth Alongside – 55ft MLW Channel – 50ft MLW Turning Basin – No restriction Tidal Range – 2 to 3 ft Straddle Operation (Container yard) & Reach Stackers (Intermodal Yard) On dock rail NS / CSX off dock (100,000ft) Future = Expansion of acreage and order of new Super Post Panamax cranes as volumes warrant Capacity – 1.1M teus / 650K lifts – Occupancy 74% 260 acres of operating space 8 Super Post Panamax 3,225ft of berth RMG Operation On Dock rail (14,400ft track) Alongside – 55ft MLW Channel - 50ft MLW Turning Basin – No restrictions Tidal Range – 2 to 3ft Future build out = 4000ft of berth, 2 addt. Super Post Panamax cranes, 370 acres, 2.1M Teu capacity as volumes warrant

Capacity – 1.6M Teus / 940K lift – Occupancy 50% 246 acres of operating space 12 cranes – 8 Super Post Panamax / 4 Post Panamax 3,800ft of berth RTG Operation Off Dock rail (virtual on dock program) Channel - 45ft MLW Alongside – 50ft MLW Air draft – 186ft MHW Tidal Range – 5.5 ft Turning Basin – 2,110ft Capacity – 1.2M Teus / 705K lifts – Occupancy 50% 201 acres of operating space 6 cranes – 2 Super Post Panamax / 4 Post Panamax 2,500ft of berth RTG Operation Off Dock rail (virtual on dock program) Channel – 45ft MLW Alongside – 49ft MLW Air draft – 155ft MHW Tidal Range – 5.5ft Turning Basin – 1754ft Capacity – 4.2M Teus / 2.98M lifts – 71% occupancy 850 acres of operating space (1200 acres in total) 23 cranes - 6 Post Panamax / 12 Super Post Panamax Delivery of 4 new Super Post Panamax cranes in June 2013 RTG Operation (116 in operation) 9,700 feet of berth On dock rail (CSX & NS) Future Capacity – 6.5M teus / 3.6M lifts (2022) Investment 70 new RTG (Total build out of 186) Channel – 38ft MLW (w/o tide restriction) Alongside – 48ft MLW Air draft – 186ft MHW Tidal Range – 7ft Turning Basin – 1500ft x 1600ft

15 As you can see…. Norfolk and Baltimore are well positioned with plenty of draft and capacity, as well as on-dock rail. Charleston faces challenges without on-dock rail (although a virtual substitute is offered), and potential tidal sailing requirements. NCT’s shortage of super PPM cranes may be an issue as well. Savannah has on-dock rail, but limited channel depth. However, Savannah has the advantage of major customer distribution centers directly adjacent to the terminal facility.

16 Thank you for your time and attention.

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