2017 State of Trade A Port Perspective - Expeditors | Home EMS Everport POLB PCT LBCT 2M G6 CKYHE...
Transcript of 2017 State of Trade A Port Perspective - Expeditors | Home EMS Everport POLB PCT LBCT 2M G6 CKYHE...
Global Review: Port-related Investments
State of Container Trade
Implications of Alliances and Big Ships
The Challenges Ports Face
Port of Los Angeles Approach
Agenda
Draft - For Discussion Purposes Only 2
Through 2026 there are 522 “planned and under construction” projectsglobally
Existing infrastructure in many emerging countries is inadequate andrequires investment to overcome capacity constraints
Consumer demand in developing countries is driving infrastructureinvestment for growing containerized trade
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Global Port Investment
Source: BMI Research
Port investment in the US and many other countries correlates with policies to boost economic growth
Very Large Container Ships (VLCS) drive particularly costly/lengthy infrastructure investment
US ports and private sector partners’ forecasted spend on port infrastructure improvements between 2012 and 2016 was $46 billion
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Heavy Investment in the Americas
Forecasted spend between 2016 and 2020 is $154.8 billion ($22.6B ports/$132.2B private sector)
Best current outlook for US federal freight infrastructure investment is about $25 billion (US DOT FAST Act, TIGER Grants, and US Army Corps of Engineers)
AAPA Planned Infrastructure Investment Survey (3/26/16)
Optimism Supports Ship
OrdersSupply
exceeds demand/
trade growth slows
Ship over capacity
Freight rates drop
Demand for ships / ship orders drop
Fleet growth slows. Trade
recovers
Supply -demand realign
Freight rates recover
Demand for new ships
Shipping Market Cycle
State of Container Trade
Source: Drewry Oct 2016
Shipping Line Alliance Structure
POLAEMS
Everport
POLBPCT
LBCT
2M
G6
CKYHE
Ocean 3
Alliance Formations before April 2017
2M-H
THE Alliance
Ocean Alliance
POLATRAPAC
YTIWBCT
POLBITS
POLAAPMTCUT
POLBTTI
Alliance Structure as of April 2017
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Larger Shipping Line AlliancesWhat does it mean for Beneficial Cargo Owners?
Sailing Frequencies and Weekly Capacity for Asia to/from San Pedro Bay Ports
Second Half 2016 Second Half 2017Weekly Capacity (TEU): 205,300 214,900
Number of Eastbound Sailings: 27 27- by Global Carriers 26 23- by Independent Carriers 1 4
Source: Mercator Intl.
Marine Terminal SelectionShifting of services between terminals causes some terminal volumes to dramatically increase while others are under-utilized
• Service providers are required to obtain new cargo volume forecasts by terminal (rail, chassis)
• Increased chassis repositioning requirements• Potential impact to truck turn-times
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There are 258 vessels of various size presently on order (2.5M TEUs)*
This equates to 12.7% of existing global capacity (approx. 5,000 vessels and 19.9M TEUs)*
On routes served by VLCS’s, infrastructure and innovation are critical to carrier success
*Alphaliner (all info provided as guidance)
Over-Capacity A Continuing Trend
Shipping lines’ scale may limit choices
Higher operating costs and capital expense due to larger vessels
Shipping lines are pressuring ports for lower rates
Implications For Port Operators
Source: Drewry Oct 20169
Drive for higher performance• More operational cooperation with shipping lines• Technical innovation to manage complexity
Increasing Capital Expenditures and Operating Expenses• Higher costs for terminal handling• Closer cooperation with shipping lines to manage peak
Investments• Cautious investment by existing terminal operators• Terminals live with higher risk and lower return • A few port and terminal investors exit the industry
Source: Drewry Oct 2016 10
Implications For Port Operators
10-Year Capital Improvement Projects: $2.6B
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Terminal Projects1. TRAPAC container terminal: Most advanced container
terminal with advanced technology for new backland and rail yard
2. Yang Ming container terminal : Reconstruction of existing container berth and expansion of existing rail yard
3. Everport container terminal: Upgraded wharf and backland 4. Cruise Terminal: AMP system expansion 5. YTI container terminal: Upgraded wharf and expansion of
TICTF 6. APMT: Expanded rail support and loading tracks, Crane-raising
initiative 7. Container Terminal Support Facility (proposed)
Transportation Projects8. I-110 Connector Improvement Projects (completed in 2016)
Marine Oil Terminal Engineering & Maintenance Standards Implementation (MOTEMS)
Liquid bulk wharves upgraded/replaced (various locations )
2015-2024
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Process Management• Supply Chain Optimization efforts -- 100+ stakeholders
• Continuing strong engagement with State & Federal Policymakers, including FMC and Departments of Commerce, Labor & Transportation
Technology• Increase development and application of Blue & Green technology
Strategic Land Use• Ongoing terminal modernization projects
• Re-purposing surplus land to support short- and mid-term cargo needs
• Terminal Alliances
Critical Focus Points
Process Management: Future-Facing Teamwork
Deeper Joint-Port Collaboration
Dialogue with Supply Chain Stakeholders
Develop efficiency programs that improve:
• Cargo Flow
• Secondary Conveyance (Truck and Rail)
• Chassis availability
Develop Performance Metrics that can are embraced by Supply Chain Stakeholders
Technology: Data Solutions Portal Concept
Partnership with GE Transportation
One terminal, two steamship lines, and one string of ships
Channeled, secure access to data that supply chain stakeholders need
Benefits supply chain efficiency, predictability, and reliability
Keeps the supply chain flowing
Chassis Pool
Cell Phone Holding Yard / Bobtails
Wheeled Storage
Potential Solar Operation
Gate Entry
80 Acres(32.37 Hectares)
Strategic Land Use
Container Terminal Support Facility Concept
Robust infrastructure investment will help bring many ports into the 21st Century. Keys to success include:• Technology• Public-Private Partnerships • Long-term national infrastructure funding plan that includes port
and multi-modal freight transportation improvements
Container lines need to find their way to profitability in the coming years• Carriers must “right-size” their fleets and leverage alliance
partnerships to reduce excess capacity
Communication and collaboration between carriers, ports and supply chain operators is more critical than ever
Moving Forward
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