INTERMODAL ENVIRONMENT 2015 CCIB CONFERENCE July 28, 2015 1
Ships At Anchor Waiting To Get Into LALB
Congestion To Enter Maersk Terminal
Containers Waiting To Get Into Maersk Terminal For Export 4
Lunar New Year Shadow Effect 5
Cargo Returns to Pre-Recession Levels and Worst Effects of Labor Disruption
22 Containers Across Requires Newer, Larger Cranes 7
The world's biggest ship - for 53 days 8 China Shipping 19,100 TEU to be eclipsed by MSC 19,224 TEU
What Does It Take to Unload A Mega Container Ship 9
Drewry Says Carriers Will Struggle To Break Even This Year As many as 129 ships of 8,000 TEUs and above need homes in second half of 2015. Drewry : Avgerage Global Freight Rates Could Decline Fastest Pace Since 2011. Maersk orders nine 14,000 TEU Ships after their order for eleven 19,630 TEU Triple-E Vessels. COSCO orders nine 20,000-TEU ships for Europe Service. Elusive peak season and excess capacity drives trans-pacific rate to record lows.
Carriers Preparing for Panama Expansion April 2016 container ships of 13,000-TEUs. Six new Asia to U.S. East Coast since Jan. Cap in AWEC pricing Shanghai to New York vs Los Angeles shrunk from $2800 during disruption to $1700 by May. Recent surge in AWEC Asia to U.S. has been via Suez Canal because of ability to handle larger ships but trend is now shifting back to Panama.
Courtesy IMS Worldwide
East Coast Ports Benefit From Diversion Virginia Por Authority volume record in May. All major EC Ports saw cargo increase in the nine months from July 2014 through March 2015 partly due to WC labor issues. S.C. and Georgia Port Authorities have agreed to jointly contribute to funding for Jasper Terminal. Maersk returns to Baltimore after 20 year absence because larger ships make it more economical to travel up Chesapeake Bay. CN will develop Mobile Intermodal Facility patterned after Prince Rupert Success. 13
West Coast Transload
Intermodal has dramatically increased its share of US railroad units (carloads, trailers & containers) Introduction to Intermodal Source: AAR, Stifel Nicolaus estimates Note: Volumes in all categories are measured in carloads, except IML which is measured in units IML share is estimated because the AAR includes intermodal volume in various other freight categories
Total Intermodal Loadings 2001-2013 65.0% 60.0% 55.0% 50.0% 45.0% 40.0% 35.0% 2001 2002 2003 2004 2005Source: 2006 IANA/FTR 2007 2008 2009 2010 2011 2012 2013 Domestic International
Total Intermodal Loadings 18.0 17.3 Millions 17.0 16.0 15.0 14.0 14.1 14.8 14.6 14.1 14.1 14.9 15.5 16.1 13.0 12.0 12.0 11.0 10.0 05 06 07 08 09 10 11 12 13 14
Intermodal Outlook International growth will be dependent on the strength of our economy. Domestic traffic will continue to grow as more carriers recognize the synergies of rail intermodal and continue to adopt regional business models focused on dedicated relationships vs. scattering of trucks. The long term caveat determining the growth of domestic traffic will be the IPI rates of the Western railroads.
Why is Domestic Growing Number of Boxes increasing Fuel Costs increases lead to more intermodal Huge investments in infrastructure by railroads Truck driver shortages Conversion of barge and box car to intermodal Transloading of intl containers increasing Improved Technology/Visibility LTL/Parcel jumping on Board
Unit Count Intermodal 53 Container Fleets - United States (dry, for railroad) 73,300 JBHU - JB Hunt (+7300 from last year; doesn't include 200 reefer cntrs) 28,400 HGIU, HGWU, UPHU, NHUU, NHWU, HUNU - Hub Group (+3400 from last year) 17,500 PACU - Pacer (-500 from last year) 17,200 SNLU - Schneider (+3,200 from last year) 9150 SWRU - Swift (+450 from last year) 5000 UPSU - UPS (unchanged) 1850 FDXU, FEDU - FedEx Freight, FedEx Ground (1750 FDXU, 100 FEDU) 1000 APDU - APL Logistics (unchanged) 1000 RBTU - CH Robinson (unchanged) 800 UTLU - Universal Logistics (unchanged, some leased to FedEx) 600 MEQU - Milestone (unchanged)(pool equipment, currently all under lease) 475 CFQU - COFC Logistics (-25 from last year, adding 300 this year, from Marten fleet) 400 MTLU - Marten (ending, 300 will be going to COFC) 300 MLHU - Matson Logistics (+100 from last year) 125 DRTU - Dart (-225 from last year) 100 WARU - White Arrow (+35 from last year) 20 AMHU - American Highway (unchanged) 16 WERU - Werner (pilot program started 2014) total managed by United States, Motor Carrier & 3PL 157,236 (141,550 in 2014) +15,686 since last year
Intermodal 53 Container Fleets - United States (dry, for railroad) 38,800 EMHU - UP/NS/CP (+6800 from last year) 35,000 UMAX - UP/CSX (+4000 from last year) 4000 CSXU - CSX (unchanged) 900 TMXU - NS Thoroughbred Direct (unchanged) Unit Count 800 XFEU - Florida East Coast (+400 from last year) total managed by United States, Railroad (68,300 in 2014) 79,500 +11,200 since last year 157,236 total managed by United States, Motor Carrier & 3PL grand total managed by United States, Railroad+Motor Carrier & 3PL (209,850) +26,886 since last year +12.8% increase in total fleet size 236,736 Unit Count 8250 Intermodal 53 Container Fleets Canada (dry, for railroad) CNRU - Canadian National (unchanged, includes Dry and Heated, doesn't include reefer boxes) CPPU - Canadian Pacific (+350 includes Dry and Heated, doesn't include reefer boxes) 5450 13,700 total managed by Canada, Railroad around 3000 x 53 containers made for ocean vessels (Trailer Bridge, Crowley, Sea Star, Alaskan Marine, Totem) data as of Feb 1, 2015 - researched by Jason Hilsenbeck, owner of
Most Common Job by State Source: NPR s Planet Money ACT Research Co., LLC, Copyright 2015 22
Driver Shortage? 160 Percent Turnover ATA: For-Hire TL Carrier Driver Turnover 2005-2014 Q3 Large TL Turnover Small TL Turnover LTL 160 Percent Turnover NPTC Benchmark Survey: Private Fleet Driver Turnover 2005-2014 140 140 120 100 120 100 Note that the axis is the same on both graphs 80 80 60 60 40 20 40 20 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014. 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 American Trucking Associations, ACT Research Co., LLC: Copyright 2015 National Private Truck Council, ACT Research Co., LLC: Copyright 2014 Not surprisingly, private fleet drivers make $20k-plus more per year on average than for-hire drivers and they also get home more regularly! From NTI (Klemp): For-hire median (2013) @ ~$46k, Private fleet median @ ~$68k ACT Research Co., LLC, Copyright 2014 23
2600 2400 DRIVER SUPPLY: U.S. MALES Potential Hirees & Impending Retirees Warm Bodies (000s) 21 Year-olds 65 Year-olds 2000-2030 SUPPLY OF INCOMING CDL-AGE U.S. MALES NARROW S 2200 2000 1800 1600 HARD TO FIND DRIVERS NOT SO HARD TO FIND DRIVERS U.S. MALES AT RETIREMENT AGE RISES SHARPLY 1400 1200 1000 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 Source: U.S. Census Bureau, ACT Research Co., LLC: Copyright 2015
WHAT TO TAKE HOME FROM CCIB Domestic container loadings still carry the day. RR service and infrastructure improvements. Truck capacity & drivers remain tight. Nearly 250,000 DomCons now in fleet. Market share conversion continues 25
Thank You For Your Time 26