2Large 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 ADThat being the case, planning and preparing for them is the responsible course.Large ShipsThese 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
3Raise Your Hand if You Remember the phrase “Trickle Down Economics” Large ShipsWho Has Them & Where?Most Grays Go To HereWho has ships >7500?Info: P3 = 270/545 Current, 336/778 Current + Order Book83% of Vessels >7500K in the E/W TradesNew Builds (Grays on Right Chart) will mostly go to FE/EUR tradeWill displace larger (10K & Up) to Trans PacCMA CGM already operating one service with 11’s on USWC, one with 85’s on USECBig Ships Are Coming – It’s Inevitable.Raise Your Hand if You Remember the phrase “Trickle Down Economics”
4Thank You! CMA CGM CORTE REAL, Long Beach CA The largest CMA CGM vessel to call North AmericaLarge Ships Are Coming – Better to Plan For it Now and Find Ways to Leverage the Efficiencies They BringRates vs InflationUsing CCFI* with 1998 = 1000Rates Aug 29 to USWC = 1070 (up 7%) in 15 yearsInflation with 1998 = 1000Today $ = 1433 (up 43%) in 15 yearsCCFI = China Containerized Freight Index, part of the Shanghai Shipping ExchangeOnly service that tracks prior 2009 for indexingSize of vessels up from 4500’s to 11,000’s in same time frame on FE/USWCCost of Crude Oil from $18/bbl to $115/bblPrice of Bunker up from ~$100/ton to ~$625/tonThank You!13,830 TEUs
5A Quick Size Comparison CMA CGM MARCO POLO Class of Container ShipsFor a reference on how BIG –Little White Dot under the rudder of the Queen Mary is an AutomobileThe 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 particularsLength over all ftBreadth ftDepth to main deck ftDraught, scantling ftAir draft (after tilting) ftDeadweight on Ts 187,626 TonLightship weight 54,400 TonService Speed 24,1 knots
6Efficiency 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 seaGlobally, 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.
742 Comparison of Co2 emissions between different modes of transport Rail car with container42No question that ocean transport is by far the ‘Greenest’ method of moving cargo.Airfrieght is by far the dirtiest.
8Some Hard NumbersWhat can be expected operationally as ships get larger?5100 = USEC Workhorse8500 = USEC LargestThe fact that this study exists must mean something(Hint – several of our current 13’s are named after US StatesRequirements 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 DraftNOTE = Air Draft in this document = height from keel to top of vessel. Required overhead clearance is this number minus scantling draft.
9Large Ships Large Ships Present Two Major Challenges 1 = Size of the ships2 = Highly Concentrated Volumes of CargoRail ImpactLonger TrainsFlatcar AvailabilityDouble StackOn Dock RailHigher Ramp Traffic ConcentrationOrigin & DestinationDedicated Trains/CorridorsPort ImpactHarbor Depth (& Air Draft)Berths – 1300 Foot?Cranes – Reach (20+), How Many Per Berth?Moves Per Hour CriticalOn Dock RailBack of Crane InfrastructureGatesIntense “Peak Days”HighwaysPilots & TugsLarge Ship ChallengesSize of the shipsConcentrated Cargo VolumesPort ImpactsHarbor DepthLonger BerthsEnough Big Crates to hit moves/hourOn Dock Rail – too much volume to dray to ramps“Back of Crane” infrastructureYard Space, Container Handlers, Automation, etcGates – capable of handling velocity spikesHighways - congestion is a risk, easy on/off criticalPilots and Tugs – special training, tugs with enough power to handle large sail areaRail ImpactsLonger Trains to handle required velocityFlatcar availabilityOn Dock RailHigher Ramp Traffic ConcentrationPort area and Inland HubsDedicated Trains and CorridorsCustomer ImpactsConcentrated Flows = High Velocity (Buckets vs Conveyor Belts)Potential Warehouse StressesDrayage Challenges for Local Customers (see terminal above), and high peak demandImproved Schedule Reliability,Customer ImpactConcentrated Flows = High VelocityPotential Warehouse StressesImproved Schedule ReliabilityDray Power ChallengesEffectively Managing These Issues Will Result In Improved Efficiency Throughout the Supply Chain
10The New Panama CanalCMA CGM AMERIGO VESPUCCI(13,830 TEUs)
1113.000 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 Feet260,000/5280 (ft/mile) = MilesThat 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
12Baltimore Norfolk Charleston Savannah Mid-Atlantic Terminals – Summer 2013 CapabilitiesBaltimoreNorfolkCharlestonSavannahThe next few slides will look at the current (summer 2013) capabilities of the ports in the Baltimore to Savannah range.BaltimoreNorfolkCharlestonSavannah
13SEAGIRT Baltimore NIT- Norfolk APM - Norfolk Capacity – 1.2M teus / 705K lifts - occupancy 43%284 acres of operating space7 Post Panamax cranes / 4 Super Post PanamaxRTG / Top Loader Operation3127ft of berthOn dock rail CSX / Near Dock NSChannel – 50ft MLW3 45MLW with new Berth 50ft MLWAir draft – 185ft MHWTidal Range – 1.5ftTurning Basin – 1350ftCapacity – 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 berth6630ft of berthAlongside – 55ft MLWChannel – 50ft MLWTurning Basin – No restrictionTidal Range – 2 to 3 ftStraddle 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 warrantCapacity – 1.1M teus / 650K lifts – Occupancy 74%260 acres of operating space8 Super Post Panamax3,225ft of berthRMG OperationOn Dock rail (14,400ft track)Alongside – 55ft MLWChannel - 50ft MLWTurning Basin – No restrictionsTidal Range – 2 to 3ftFuture build out = 4000ft of berth, 2 addt. Super Post Panamax cranes, 370 acres, 2.1M Teu capacity as volumes warrant
14SCSPA - WANDO SCSPA - NCT GPA Savannah Capacity – 1.6M Teus / 940K lift – Occupancy 50%246 acres of operating space12 cranes – 8 Super Post Panamax / 4 Post Panamax3,800ft of berthRTG OperationOff Dock rail (virtual on dock program)Channel - 45ft MLWAlongside – 50ft MLWAir draft – 186ft MHWTidal Range – 5.5 ftTurning Basin – 2,110ftCapacity – 1.2M Teus / 705K lifts – Occupancy 50%201 acres of operating space6 cranes – 2 Super Post Panamax / 4 Post Panamax2,500ft of berthRTG OperationOff Dock rail (virtual on dock program)Channel – 45ft MLWAlongside – 49ft MLWAir draft – 155ft MHWTidal Range – 5.5ftTurning Basin – 1754ftCapacity – 4.2M Teus / 2.98M lifts – 71% occupancy850 acres of operating space (1200 acres in total)23 cranes - 6 Post Panamax / 12 Super Post PanamaxDelivery of 4 new Super Post Panamax cranes in June 2013RTG Operation (116 in operation)9,700 feet of berthOn 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 MLWAir draft – 186ft MHWTidal Range – 7ftTurning Basin – 1500ft x 1600ft
15As 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.