Contents. Economic Trends. Market Dynamics. Building a Sustainable Organization. Integrated Partnerships. Open Dialogue

Transcription

1 Contents Economic Trends Market Dynamics Building a Sustainable Organization Integrated Partnerships Open Dialogue 1

2 2 Economic Trends

3 Market Size & Growth Rate Overall Growth outlook is expected to be positive in 2013 for all trades. Asia Europe trade projected to be near stagnant. Intra Asia is anticipated to have the highest growth TRANS-ATLANTIC 2012 Size: 7.6 m TEU 2013 HH Growth: ~ 4.2% ASIA-EUROPE 2012 Size: 28.1 m TEU 2013 HH Growth: ~ -0.9% TRANS-PACIFIC 2012 Size: 21.8 m TEU 2013 HH Growth: ~ 4.1% INTRA-ASIA Est size: 35.3 m TEU 2013 Overall Growth: ~ 4.3% LATIN-AMERICA 2012 Size: 14.4 m TEU 2013 HH Growth: ~ 2.8% Note: 1. Market size is based on GI Dec TA, ASEU, and TP HH growth rate is based on Drewry CFQ Q4 2012, while IA and LTAM growth rate is based on GI Dec 2012 Source: GI Dec 2012, Drewry CFQ Q

4 Global GDP Promising signs of recovery emerging across major economies Middle East & North Africa = Growth in the non-oil sector remains solid, with the improvement in private sector activity looking increasingly broad-based Market Exchange Rates 2012 Others 25% 23% Europe Stronger 2Q GDP showed signs of improvement across currency bloc. However, uncertainty apparent as consumption remains relatively week 4 India Growth has lagged as the Rupee hits all time low and manufacturing stalled Brazil Depreciation of the Brazilian real has helped boost export growth, which contributed to the strongerthan-expected growth outturn in Q2 Source: WEO, GPS Analysis 4% 3% 3% 8% 11% 22% China Japan Solid recovery boosted by strong growth in consumer spending and Yen depreciation that has helped to stoke exports USA Underlying economy projects modest growth in Q3. Although, rising interest rates and stagnant wages are starting to hurt consumer optimism Rate of economic growth seem to be stabilizing as exports and domestic demand supports the recovery

5 GDP Growth Global 2013 outlook continued to show signs of stability and sustained economic growth 15% 10% 5% 0% YoY % 7.8% 5.6% 3.1% 2.5% 1.7% 0.0% China India Global Brazil US EU27 Analysts CAGR Consensus ( ) (2014F) Percent Range (%) % 00 Note: F 14F 15F 16F 17F (1) Whereas GDP forecast for EU27 is not available, Euro area is used as proxy for consensus range purposes (2) Updated quarterly Source: WEO, Deutsche Bank, UBS, Goldman Sachs

6 Recent US economic data suggests modest growth in Q3, however consumers remain cautious over sustained growth momentum US GDP Composition -16% 71% Consumption Investment Government Spending Consumption 15% 13% 17% Second quarter GDP was revised up from a 1.7% annualized gain to 2.5% Exports Imports 1, Consumption, Investment & Export 0 New home sales bounced back in August after July's slump New Home Sales (000) New home sales rose 7.9 per cent to an annual rate of 421,000 units Mfg activity heats up in Aug at 28 month high Purchasing Mgr s Index Mfg PMI jumps to 55.7 in Aug from 55.4 in July Jobless rate fell as the economy added 169K new jobs USA Unemployment Rate (%) Unemployment rate drops to 7.3% in Aug Source: CEIC, GPS Analysis, Bloomberg Consumer sentiment lowest since May Consumer Confidence Index Retail sales grew at slower pace MoM% In Aug Core sales, excluding autos, gasoline Consumer confidence declined to and building materials, were up in Sep from 81.8 a month earlier percent after rising 0.5 percent in July 6

7 Top 10 Trans-Pacific Import Commodities Footwear showing stable short term growth, in line with similar industries FEU Source: JOC Data 7

8 Evolution of the Largest Containerships: Source: Alphaliner 8

9 Ports with VLCS Capabilities Source: Alphaliner As Of December

10 VLCS Global New Build Orders Vessel sizes above 7,500 TEU only 10 Source: Alphaliner

11 Vessel Delivery by Carrier 11 Source: Alphaliner

12 Capacity Management Challenging container shipping environment is forcing liners to manage capacity 12 Source: Alphaliner

13 13 Market Dynamics

14 Market Dynamics Significant industry losses have forced carriers to drastically reduce costs The formation of super consortia is enabling carriers to operate bigger ships at reduced slot costs MSC and CMA G6 EU and USEC Evergreen, CHKY, China Shipping, Zim Ambitious cost savings goals have been announced USD500 million USD400 million USD350 million USD300 million Carriers are more conscious of equipment matchback opportunities in order to reduce repositioning costs 14

15 Trade Flows to/from Asia have shifted significantly Shifting pattern in Asia is producing a significant increase in equipment repositioning as inbound flows are growing in countries other than China where the outbound demand is highest. Top EB countries are not growing their WB volumes as fast as other Asian countries, creating increasing mismatch of in/ out volumes in Asia North China South China Japan Vietnam UAE Malaysia US Exports growing to SEA, M East which need longer transit Repositioning Boxes need to be repositioned to major exporting regions e.g. North China This relatively recent shift in flow creates longer equipment turn, drives up repositioning cost to get the boxes to China where they are needed to support outbound demand, and increases the size of the equipment fleet carriers must have to service the market.increasing costs. 15

16 World Containerized Trade Outlook World containerized trade estimated to have moderate growth this year. TP growth is expected to pick up in 2013 Intra- Asia Global - 4.2% - 7.1% 17.2% 16.0% 15.3% 15.0% 9.3% 8.3% 8.4% 6.9% 6.8% 6.7% 6.4% 5.9% 5.5% 4.9% 0.4% 2.4% Global Trade Growth Alphaliner (Mar 20, 2012) 7.7% 6.5% 7.5% Clarksons (Feb 21, 2012) 7.9% 7.7% 8.3% Drewry (Dec 22, 2011) 6.5% 5.4% - JP Morgan (Nov 29, 2011) 6.4% 4.5% 6.3% Global Insights (Sep 30, 2011) 6.9% 6.8% 6.7% Transpacific HH Trade Growth Clarksons (Feb 21, 2012) -0.4% 4.2% 6.1% Alphaliner* (Jan 10, 2012) -0.8% 4.6% 5.1% Drewry (Dec 22, 2011) 0.4% 3.1% PIERS (Dec 2, 2011) 0.2% 2.7% 4.9% Transpacific (HH) Asia- Europe (HH) % % E 2013E Asia-Europe HH Trade Growth Clarksons** (Feb 21, 2012) 3.3% 2.8% 6.1% Alphaliner* (Jan 10, 2012) 2.8% 1.5% 6.3% Drewry (Dec 22, 2011) 3.9% 2.0% - 16 Source: Equity analysts, shipping consultants and SLM estimates Note: *Alphaliner TP is FE-US, ASEU is FE-Europe **Clarksons growth is Far East to Europe

17 Panama vs Suez Canal: A Comparison Average Round Trip Slot Costs Tolls on a Fully Loaded 4,800 TEU Non-Stop Transit Time at 18 Knots Distance from Hong Kong to New York-New Jersey Total TEU Transited, % Change, 2012 vs Source: Journal of Commerce

18 Panama Canal Expansion: Update More Shipper Opportunities Larger vessels with increased deadweight Provide the capability to serve USEC from Asia and other locations Post Panamax trade patterns expected to shift, benefiting Atlantic Coast Ports Upgraded infrastructure is required to increase capacity and efficiently move products for global import and export customers 18

19 G6 Alliance USEC Services Six carriers Wide coverage Asia, Latin America, Mediterranean, Middle East, North America Multiple gateways to major markets More frequent departures from major ports Deployment of 50 efficient vessels with capacities between 4,500 and 8,000 TEU 19

20 20 Building a Sustainable Organization

21 Cost Saving Initiatives ELP 2012 savings of USD $500 million 2013 target of USD $400 million Eco Steaming Terminal Velocity Efficiency Leadership Program Capacity Management Efficiency Leadership Program Sustainable Savings SMART Procurement SMART Procurement Bunker Patterns IT/Telecommunications Sourcing Chassis Divestiture Oakland Terminal Change Equipment Matchback Strategy 21

22 Fleet Renewal Modernization Building a modern and cost-competitive fleet Upsizing of SAX and PS2 vessels 7,000-9,999 TEU 10,000-12,999 TEU > 13,000 TEU Number of vessels 250,000 TEUs , , , , Note: 5 out of the 10 x 14,000 TEU vessels for delivery between 2013 and 2014 will be chartered out to MOL 22

23 Service Options: Investing in our Network New CGG Facility 43 Acres Container Capacity: 1,600 Stalls, 400 Decked Gates: 4 Inbound/3 Outbound M&R: 19,000 Sq. Ft. Shop 10 Bay Chassis/ Container Repair 700 Gate moves daily Fleet Expansion 34 Vessels ordered Delivery between Q and 2014 Best fuel efficiency in the industry 10x14,000 TEU Vessels Productivity Improvements at GGS Crane Backreach Opens up more traffic lanes under the hook Better traffic flow, increased efficiency Increased safety Future growth/additional cranes 23

24 Continued Environmental Initiatives Eco-responsible operations for a sustainable future Enforcement of Emission Control Area (ECA) Speed Optimization, schedule, weather routing and best practices to reduce CO 2 emissions Low Sulphur Fuel Cold Ironing Seawater Scrubber Ballast Water Treatment Environmentally friendly paint on ship hulls Voluntary Speed Reduction in Southern California waters to reduce emissions Eliminating drayage thru on-dock rail Received Premier Marine Environment Award 24

25 APL New Builds - Environmental Features 25

26 Thank You