APM Terminals APM Terminals

Ports in the FutureSoren Sjostrand JakobsenHead of Project ImplementationAPM TerminalsThe Hague, Netherlands

Presentation overview Presentation overview

• APM Terminals Introduction

• Why are we in Gothenburg?Why are we in Gothenburg?

• Setting the stage (the shipping industry today and what are our customers looking for)

• How can we enhance the services we offer – and do we need to?

• Productivity – the future battleground

Company overview –and why is APM Terminals in Sweden and Gothenburgand why is APM Terminals in Sweden and Gothenburg

3

APM Terminals is part of A P Moller–Maersk Group APM Terminals is part of A.P. Moller–Maersk Group

A.P. Moller-Maersk Group Copenhagen, Denmark

• 2011 Revenue: USD 60.2 bill(Shipping, Energy, Retail)

• 108,000 employees, 130 countries.

APM Terminals The Hague, Netherlands

• 2011 Revenue: USD 4.7 bill. Segment result USD 649 millresult USD 649 mill

• 2011 container volume: 33.5m TEUs (Container Volumes weighted by equity share)

• 24,000 employees, 64 countries

• 56 operating terminals, 15 projects, 155 inland facilities

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History: 54 years of innovation, growth and progress

First dedicated A.P. Moller terminal facility opens, in the Port of New York.1958Containerization begins to change patterns of global trade and growth; the company opens its first dedicated container terminal at Berth 51, Port Newark, NJ USA.1970s p , ,

Ongoing evolution of containerization and economic efficiencies of international trading patterns lead to the rapid establishment of global port load centers and transhipment networks, requiring highly coordinated and specialized container terminal operations and equipment as vessels grow in size and capacity.

1980s

Maersk Line acquisition of US-based Sea-Land Services enlarges scope of terminal operations globally.1999

APM Terminals is established as a separate container terminal operating company within Maersk Line.

2001

APM Terminals becomes an independent corporate entity, with HQ in The Hague, Netherlands.2004

Revenue of $2.5 billion, $111 million profit; APM Terminals reports earnings separately.2007

Named “Port Operator of the Year” by Containerisation International Magazine.2006

2007Only true Global Terminal Network in port industry; Focus on emerging market investment.2008Named "Port Operator of the Year" by Lloyd's List.; Revenue of $3 billion 2009

I l d i i f d h APM T i l bi d f $4 2 billi2010

APM Terminals named winner of Lloyd’s List Global Safety Award

Inland services unit transferred to the APM Terminals; combined revenue of $4.2 billion2010

2011

Established as separate, independent business unit in 2004 unit in 2004

Segment Cash Flow

Revenue

4 251

4,682

Segment Result

Segment Cash Flow

from Operations

3,126

4,0244,251

2,068

2,520

,

793679 760

845 912

1,3131,504

2004 2005 2006 2007 2008 2009 2010 2011

53 92 142 160302

431649

103 230 299 275

679

6

APM Terminals’ Financial Results 2004-2011 (Million USD)

Our port facilities: A balanced global network serving all major marketsserving all major markets

Port facilities: Europe regionPort facilities: Europe region

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Projects under implementation Projects under implementation

MV2

V d

CTWGothenburg

SCCT Ph 2 Aqaba Ph 2

Vado

Moin

Poti

Pipavav

Lazaro Cardenas

Luanda

Monrovia

Santos

Callao

Moin

Apapa Ph2

Projects under implementation

Santos

Initiation phase

Planning phase

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Execution phase

Why is APM Terminals in Gothenburg?Why is APM Terminals in Gothenburg?

Gothenburg – Strong Market Position • Largest gateway in Sweden – and handles only

Real GDP GrowthSource: IHS Global Insight

g g y ygateway cargo, not competing for transhipment

• The only real deep sea container terminal in Sweden & Norway

Gothenburg Container Volume2.0

4.0

6.0

Sweden

Eurozone

• 45% of Gothenburg cargo goes on rail using unmatched rail connectivity

600

800

1000

1200

1400

(0

00

)

6 0

-4.0

-2.0

0.0

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

2020

0

200

400

600

TEU

-6.0

Why is APM Terminals in Gothenburg?Why is APM Terminals in Gothenburg?

37.4 40 0

Crane moves / hourUASC, 3.0%

Other, 7.4%

Share of Swedish Market 2010

29.3  28.0  27.5 21.9 

10.0 

20.0 

30.0 

40.0 Maersk Line, 22.8%

OOCL, 4.2%

Evergreen, 3.7%

COSCO, 3.3%

Hamburg Sud, 3.2%

APL, 3.0%

‐

ZEE BRV AAR ROT SCT

MSC, 13.9%

Hapag Lloyd, 11.2%CMA CGM,

10 6%

Yang Ming, 5.0%

CSCL, 4.8%

Hanjin Shipping, 4.3%

10.6%

Our vision for GothenburgOur vision for Gothenburg

The shipping industry today – setting the stageThe shipping industry today – setting the stage

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Seaborne trade has grown faster than global GDPSeaborne trade has grown faster than global GDP

Indices for world GDP, the OECD Industrial Production Index, world merchandise trade and world seaborne trade 1975-2011 (1990=100)

300

250

200

150

100 World merchandise trade

World seaborne trade

W ld GDP50

0

1975 1980 1985 1990 1995 2000 2005

World GDP

OECD Industrial

Production Index

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1975 1980 1985 1990 1995 2000 2005 2011

Increased use of containers; higher productivityIncreased use of containers; higher productivity

Indices for global container, tanker and major dry bulk volumes 1990-2011 (1990=100)

700

600 Container

Major dry bulks

500

400

Major dry bulks

Tanker

300

200

100

0

1990 1995 2000 2005 2011

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1990 1995 2000 2005 2011

Source: UNCTAD secretariat, based on Review of Marine Transport, various issues; and on Clarkson Research Services, Shipping Review and Outlook, Spring 2011

Global container throughput growth 1970-2010Global container throughput growth 1970-2010

Million TEUs

600

500

600

300

400

100

200

19801970 1990 2000

02010

16

(Source: Containerisation International Data 2011)

Long-term attractiveness of the port industry is driven by ongoing globalization containerization and privatizationongoing globalization, containerization and privatization

World container port handling demand (TEU million)

• 10% CAGR from 1990 - 2008Fundamental drivers

• (9.1% ) global volume loss for 2009 • Recovery in 2010 with 14.8% growth• 50% projected rise 2009-2015

Fundamental drivers of port demand

• Global economic growth.• Increased regional trade (e.g.

Intra-Asia).• Increased containerization of

commodities (e.g. grain, reefer).

• Necessity to upgrade existing capacity (e.g. larger vessels, deep draft and larger crane requirements)..

• Growing consumer demand in developing countries.

F t d fi b d

17 (Source: Drewry Shipping Consultants, October 2011)

Forecasted figures based on 5% average annual growth

Container shipping factsContainer shipping facts

Largest vessel Container shipping Number of super post Largest vessel

1980: 2,800 teu1990: 4,800 teu2006: 7 100 teu

pp gfinancial results:

2009: (USD 16 Bil)

2010: USD 20 Bil

Number of super post panamax cranes:

2000: 172006: 7,100 teu2011: 15,500 teu2013: 18,000 teu

2010: USD 20 Bil

2011: (USD 8 Bil)2010: 3,200

Maersk Line Market Share

1992: 4%

MSC Market Share

1992: 4%

CMA-CGM Market Share

1992: 3%

2011: 16% 2011: 13% 2011: 8%

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(Sources: Drewry Shipping Consultants, Alphaliner)

Let’s just take the financials againLet s just take the financials again

Estimated financial result for the liner industryEstimated financial result for the liner industryshipping financial results:

• 2009 (USD 16 bill)

• 2010 USD 20 bill

• 2011 (USD 8 bill)2011 (USD 8 bill)

• 2012 (USD XX bill)

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New larger vessels are being deployed –80% of all new buildings are VLCS/ULCSg /

World Container Fleet Development to 2014

Source: Alphaliner Oct 201120

The next generation is hereThe next generation is here

Shipping lines continue to seek greater economies gof scale.

In 2013, the Maersk Line EEE series will be the largest vessels afloat

•Capacity: 18,000 TEUs•Length: 400 metersg•Beam: 60 meters•23 containers across

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So what are our customers looking for?So what are our customers looking for?

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It is all rather simple when you sum it upIt is all rather simple when you sum it up

• Growing industry: 6-8% y-o-y growth, doubles in 10-12 years

• Truly global industry most top 20 carriers are global players• Truly global industry, most top 20 carriers are global players

BUTBUT

• Dysfunctional industry with poor financial returns (our t t bl di th i ti bl d)customers are not bleeding, they are squirting blood)

• Cutthroat competition for market share

• Huge investments in new big ships containers IT etc• Huge investments in new big ships, containers, IT etc.

• Industry consolidation limited

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So what are they looking for?So what are they looking for?

• Productivity – minimum growing with the vessel size

• Lower cost per unit including unit price reduction• Lower cost per unit – including unit price reduction

• Remove infrastructure bottlenecks – as long as they don’t have to pay

• Hinterland connectivity (truck, rail, barge, feeders)

• Logistics systems that work (customs, forwarders, depots)

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Can we enhance the services we offer?And do we need to?And do we need to?

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Inland Services elevated Inland Services elevated

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Cologne, Germany Pipavav, India

Port industry needs to respondLogistics services Inland infrastructure and connectivity

Port industry needs to respond

b l f dSustainability- Safety and Environment

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Productivity – the new battleground. And we need itAnd we need it…

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1950’s1950 s

29

20112011

30

Land reclamation: The NetherlandsLand reclamation: The Netherlands

M l kt II R tt d

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Source: Port of Rotterdam

Maasvlakte II, Rotterdam 

Land reclamation: Costa RicaLand reclamation: Costa Rica

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Moin, Costa Rica

The evolution of crane sizes... and why nothing has happened in the past 30 years has happened in the past 30 years

Terminal productivity has stagnatedTerminal productivity has stagnated

The situation at APM Terminals is similar across the industry. The charts below show average productivity across 20 APM Terminals facilities regularly handling exchanges of more than 2 500 movesof more than 2,500 moves.

4 0

5.0 

6.0 

ity

Crane Intensity

40

50 

60 

ur

Gross Crane Productivity

‐

1.0 

2.0 

3.0 

4.0 

crane intens

Max

Average

Min

‐

10 

20 

30 

40 

moves / ho

u

Max

Average

Min

250 

Berth Productivity

50 

100 

150 

200 

moves / ho

ur

Max

Average

Min

34

‐

Larger ships will result in longer port stays,unless we take actionunless we take action…

Maersk Line’s Triple E ships have 16% more capacity than the PS class –but they are the same length. This means that crane intensity, and h f b h d i i ill i h h ltherefore berth productivity will remain the same on these larger

vessels unless we change the game

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We have many many optionsWe have many many options

From bigger cranes … … to smarter cranesFrom bigger cranes … … to smarter cranes

Innovation: FastNet cranes will double productivityInnovation: FastNet cranes will double productivity

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Remote STS / RTG opsRemote STS / RTG ops

From this…

To this…

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Innovation: A path to improved productivity Innovation: A path to improved productivity

Lift Automated-Guided Vehicles at the new Maasvlakte II at the new Maasvlakte II terminal in Rotterdam will increase productivity by an estimated 25-50% over conventional terminal design.

For the first phase of the Maasvlakte II terminal, the fleet ,will consist of diesel/electric-powered 36 Lift AGVs in combination with 128 storage racks

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racks.

Split head-blocksSplit head-blocks

40

Dual hoist craneDual hoist crane

Dual hoist offers two completely independent hoisting t hi h t ith i t d

41

systems, which can operate either in tandem, or separately.

Double trolley craneDouble trolley crane

Double trolley cranes decouple the ship side crane cycle, from the yard operation.

An added benefit is that twistlock handlers work An added benefit is that twistlock handlers work on an elevated platform above the hazardous wharf area.

It is possible to combine dual hoist and double

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trolley functionality. QQCT has 6 dual hoist, double trolley cranes.

Stack profilingStack profiling

Stack profiling uses 3D laser scanners to build up a map of where the containers are on a ship, or in a stack. Because the crane “knows” where the containers are damage due to accidental knows where the containers are, damage due to accidental impacts, or heavy landings can be virtually eliminated.

Knowing the shape of the container stack enables the “flight

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path” of the container to be automated and optimized – reducing cycle time.

Personnel detectionPersonnel detection

44

Even with equal hardware - results are differentEven with equal hardware - results are different

A significant productivity gap exists between our best terminals, and the rest. Yokohama is the only terminal close to reaching the physical limit of STS crane productivity It is clear that consistent productivity of 35+ moves / hour is achievableproductivity. It is clear that consistent productivity of 35+ moves / hour is achievable.

60 

Avg Gross Crane Productivity 9 months to Q1 2011 ( > 2,500 moves)

30 

40 

50 

oves / ho

ur

10 

20 gross m

o

‐

45

Benefits of higher productivityBenefits of higher productivity

Shipping lines

• Fewer vessels required for a string• Fewer vessels required for a string

• Lower fuel cost

• Dependable service

• Schedule flexibility

Port operators

• Capacity optimized, expanded

• Lower operating cost through scale

Lower (or avoidable) investments • Lower (or avoidable) investments

• Safety improvements

• Happy customersppy

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So are we ready to take on the challenge?So are we ready to take on the challenge?