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Turning the Sea into a Bridge TM

Turning the Sea into a Bridge TM SeaBridge Overseas Holdings Limited TRB Annual Meeting Workshop on Alternative Freight Capacity Opportunities and Solutions Panel January 11, 2004

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Turning the Sea into a Bridge TM

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  1. Turning the Sea into a BridgeTM SeaBridge Overseas Holdings Limited TRB Annual Meeting Workshop on Alternative Freight Capacity Opportunities and Solutions Panel January 11, 2004

  2. Why the next major expansion in U.S. freight capacity has to use the seaStephen FlottChairman & Managing DirectorSeaBridge Overseas Holdings

  3. The federal government has identified development of coastal shipping as a national priority new technologies enable the use of the sea in ways not possible before the current US transportation infrastructure cannot keep up with demand

  4. Between 1980 and 2000 vehicle miles increased 80% while road lane miles increased only 2% 4.5 billion hours of traffic delays in 1999 were caused by highway congestion Trucks transported over 10 billion tons of domesticfreight in 1998 and are forecast to move over 18 billion tons by 2020; by 2020 internationalfreight will add 1 billion tons to that amount It costs millions to add rural and urban interstate lanes to existing highways or build new ones, if they can be built at all

  5. Secretary of Transportation Mineta “Our landside transportation system is already stressed to the limit and currently planned infrastructure improvements and expansion cannot possibly meet this escalating demand.” “One intermodal alternative is the development of a robust short sea shipping system that would aid in the reduction of growing freight congestion on our nation’s rail and highway systems.” “Short sea [and coastwise] shipping provides a practical, safe, and efficient means of transporting freight.” Speech at US Chamber of Commerce Conference 6/12/03

  6. No existing SSS services in the US address intercity freight moving by road maritime focus has been on transshipment of containers and bulk cargoes US maritime industry views SSS in terms of its historic competitive advantage: ships can move the most cargo for the least $/ton SeaBridge sees a new paradigm: creating high-speed/high-value SSS intermodal services aimed at serving the motor carriers who carry 90% of US domestic freight

  7. Domestic trucking is THE target of opportunity because it dominates US freight movements 1998 Freight Total (15 Billion Tons, $9 Trillion) Source: Federal Highway Administration Office of Freight Management and Operations

  8. Intermodal Total Freight Bill (1997) - $328 Billion DomesticWater Pipeline Small Package Surface/Air Truckload Rail Carload Source: Transportation in America 1998 Does not include Private Carriage LTL Trucking

  9. Our Vision?To build toll bridges over the sea SeaBridge Overseas Holdings Limited intends to become a global leader in delivering branded, high-speed, short sea and coastal transport services to motor carriers and motorists, first in the US, then in markets worldwide

  10. To attract truckers and other users, a sea link has to save them time, money or both by: reducing overall transit times reducing their line haul costs increasing productivity by multiplying the number of trips; using rest time to travel expanding or improving the services they can offer to their customers

  11. Assessing potential short sea routes requires identification of origins and destinations of potential traffic evaluation of options, constraints, and needs of users (e.g., HOS regulations) creation of trip frequencies that reduce the overall transit times of potential users

  12. To be a real “bridge”, a sea link must: be predictable and reliable depart at the same time(s) every day arrive and depart on time, without fail fit the truckers’ pick up and delivery times

  13. Innovation is THE key to turning the sea into a bridge 5+ years of research identified size (>125 trucks), speed (>32 knots), roll-on roll-off applications; rapid loading/unloading and simple port facilities as keys to success extensive technical and design work narrowed the choice to monohull vessels other hull forms (conventional monohulls, catamarans, trimarans, hydrofoils, etc.) limited by speed, size, and seakeeping

  14. SeaBridge controls two designs that can transport at least 135 full-size US tractor trailer combinations and 1800 people

  15. >32 knot (service speed) monohull design priced at Samsung; being priced for US use at Bender Shipyard in Mobile, AL

  16. 42 knot (maximum speed) pentamaran design by BMT Nigel Gee & Associates will be model tested in 1Q2004 in Norway

  17. Port Requirements roll-on roll-off capability requires minimal shore side infrastructure not necessary to be located at major port port locations driven by user needs in relation to road network and proximity to key customer distribution centers SeaBridge has conducted preliminary port and route assessments on East, Gulf and Pacific Coasts in US; and between Mexico and Canada and US ports

  18. Conclusions offering attractive options to motor carriers is the THE highest value market opportunity for coastal shipping passenger movement represents an unknown, but potentially very large market opportunity scheduled, dependable departures and arrivals; ports and connections must be linked to existing highway network speed at sea and in port are essential right applications and technologies turn the sea into the lowest cost way to build freight capacity

  19. Conclusions (continued) “demonstration projects” will not attract motor carriers four ships needed to initiate service on an East coast route and achieve economic scale in construction to keep price reasonable, six to eight ships preferred joint venture arrangement is the optimum solution to create SeaBridge USA government financial support is critical component to attract private investment to finance ship construction

  20. Interlocking challenges that require time to overcome: prospective US JV partners are nervous about building ships in US and uncertain of the extent of government support US yards need to know financing for at least four ships is in place before committing substantial resources to the project government support depends on evidence that venture is economically sound and will attract motor carriers and others

  21. SeaBridge will overcome each of these challenges by demonstrating to government the economic viability of its SSS services finding creative ways to improve viability of using US yards, including foreign shipyard participation and assistance selecting a strong US joint venture partner when the first two challenges have been overcome

  22. Thank you for your time Stephen Flott, Chairman SeaBridge Overseas Holdings Limited PO Box 17655, Arlington, VA 222165-7655 703-525-5110 Fax 703-525-5122 sflott@seabridgeferries.com Contact Details:

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