(America) LLC. The Impact of Super Container Ships & VSAs. Todd Rives SVP & CCO

Transcription

1 (America) LLC The Impact of Super Container Ships & VSAs Todd Rives SVP & CCO

2 CMA CGM GROUP Statistics CMA CGM 11.4m Employees TEUs carried in 2013 Offices Worldwide Operated vessel Port OF calls The 3 rd Largest Container Carrier in the World 2

3 CMA CGM GROUP Volume and Growth CMA CGM CMA CGM: 17% Average Volume Growth over 13 Years Period 3

4 CMA CGM GROUP MARKET SHARE & RANKING CMA CGM CMA CGM: Ranks 5 th in the US Market, with a market share of 6.2% 4

5 Why Are We Talking About Large Ships Today? Savings of Fuel Consumption/TEU is tremendous as vessel size increases Bunker costs had risen to over $700/ton before the recent drop, and fuel has become the largest cost factor in vessel operation, more than even the vessels themselves, composing over 50% of the total operating cost of a liner service. Alphaliner SeaIntel 5

6 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 Source: Alphaliner That being the case, planning and preparing is the responsible course. 6

7 Existing Mix Versus Order Book 2,392,913, 14% 5,997,209, 35% TEUs By Vessel Size Existing Fleet 6,332,274, 36% 2,603,023, 15% >10,000 5,100-9,999 2, <2,000 Number of Vessels By Size Existing Fleet 2,218, 45% 200, 4% 871, 17% 1,678, 34% >10,000 5,100-9,999 2, <2,000 Order Book - Feb 2014 TEUs by Vessel Size Order Book - Feb 2014 Number of Vessels by Size 422,058, 10% 114,528, 3% 1,412,646, 35% 2,087,622, 52% >10,000 5,100-9,999 2,000-5,099 <2, , 24% 79, 15% 149, 29% 166, 32% >10,000 5,100-9,999 2,000-5,099 <2,000 Source: Alphaliner 7

8 How Big is BIG? CMA CGM JULES VERNE (Pictured) 16,022 TEUs 175,368 GT 396M (1299Ft) LOA 53.6M (176Ft) Beam 16M (52.5Ft) Sdraft 70M (219.8Ft) Air Draft CMA CGM MELISANDE (Currently on USEC Service) 8,465 TEUs 91,498 GT 335M (1099Ft) LOA 42.8M (140.5Ft) Beam 14.65M (48Ft) SDraft 8

9 A Quick Comparison CMA CGM MARCO POLO Class of Container Ships Main particulars Length over all Breadth Depth to main deck Draught, scantling ft ft ft ft Air draft (after tilting) Deadweight on Ts Lightship weight Service Speed ft 187,626 Ton 54,400 Ton 24,1 knots 9

10 OK, I ve Convinced You that Large Ships are the Future So what does it all mean? Some Facts --- Large ships are simply a requirement to compete at today s rate levels and cost structures It requires between 4-16 vessels to make a liner service, depending on the tradelane and route served (@ a cost of well over $100M each for newbuild large vessels) Large ships are only economically feasible when operating near full No single carrier can offer sufficient market coverage AND still fill the vessels to an efficient level So how is this going to work? 10

11 VSA s and Alliances First, Some definitions VSA = Vessel Sharing Agreement Legal Speak for multiple carriers utilizing the same ship Must be approved by various government agencies in the countries where they operate (USA = FMC) Alliances = Collection of VSAs with the same core group of carriers in multiple trade lanes Allows members to swap capacity between trades Allow carriers to leverage efficiencies amongst the members to provide a broader scope of coverage VSA s and Alliances can be exclusive or non-exclusive in permitting partners to work outside of the agreements in various trades. 11

12 Four Main Global Alliances There s us: Ocean Three CMA CGM China Shipping UASC And some other guys: G-6 APL Hapag Lloyd OOCL Mitsui OSK NYK Hyundai CSAV 2M Maersk MSC CKYHE Hanjin COSCO K-Line Yang Ming Evergreen We believe the table is now set, and this will be the general appearance in container shipping for the next few years. It is extremely difficult and disruptive (read: expensive!) to disengage/reengage between alliances. 12

13 Large Ships Who Has Them? Source: Alphaliner 13

14 CMA CGM CORTE REAL A part of our latest generation of vessels CMA CGM CORTE REAL arriving at Long Beach in October 2013 (13,830 TEUs)

15 LARGE SHIPS Large Ships Present Two Major Challenges 1 = Size of the ships 2 = Highly Concentrated Volumes of Cargo 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 Rail Impact Longer Trains Flatcar Availability Double Stack On Dock Rail Higher Ramp Traffic Concentration Origin & Destination Dedicated Trains/Corridors 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 15

16 What does the future hold? Bunker Pressure Big Ships Expansion of VSAs/Alliances Learning Curve for Supply Chain Improved Efficiency For Everyone Afterwards Returning Economic Growth Industry Cycles Continue 16

17 Thank you! 17