Specialty Crop Trade Council - PowerPoint PPT Presentation

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  1. Specialty Crop Trade Council Monterey, CA April 3, 2013 Edward Zaninelli

  2. Landscape • Protracted period of low global economic growth • North America export volumes today are the strongest in years • Equipment is tight in almost all locations • Demand on export space is very high • Mega Ships are starting to come to the W/C ports and they are more fuel efficient, and more environmentally friendly vessels • Mega Alliances – changing landscape • Most carriers still losing money

  3. Market conditions • 2013 Transpacific (TPT) outbound growth forecast is 4-5% • 2013 Transatlantic (TAT) outbound growth forecast is 2-3% • Transpacific remains an eastbound/import driven trade • Equipment still an imbalance challenge • California has less problems than most zones with equipment

  4. Costs Push Carriers to Save • Slow steaming and loop deployment changes – have become business as usual • Structural overcapacity W/B leads a very mixed message as carriers chase TEU volumes rather than revenue • Fuel costs continue to be high and represent the ocean carriers single highest non asset cost item • 1% low sulfur fuel 200 mile requirement for US /Canada ports now in place; 0.1% by January 2014 for California; 0.1% by January 2015 for US/Canada ports

  5. Hard Assets in a Costly Game • Port marine terminal and on dock expansion face environmental and community hurdles • Middle Harbor Redevelopment Project as an example has a $4.6 B investment by OOCL over 40 years • Very few carriers purchased equipment in 2013 • The lack of heavy weight corridors in California do cost shippers money and efficiency • Port imbalances can impact service levels

  6. Regulation and Admin • Carrier lead time to coordinate vessel load planning is important • Carrier and customer interaction options are growing – EDI; on line bookings, internet b/l • Forecasting by shippers and ocean carriers is a critical success factor for equipment and space management • Exception notification by carriers is important • Cancellation notification by shippers can be a huge help in cost controls

  7. Complicated TPT W/B Market • Scope of North American inland structure is different from most the world • Even California which is all truck is challenging • The Weight of commodity products impact operations and can add costs • TEU/Market Share focus of carriers drive rates rather than cost recovery • Equipment locations are a key factor • And Service Levels are more important to SCTC shippers due to the value of your products

  8. Size/Scale Comparison Petronas Towers, Malaysia 13,208 TEU Vessel John Hancock Center, US 8,888 TEU Vessel USS Nimitz Height 333 m 335 m 344 m 366 m 379 m

  9. MHRP – OOCL’S Long Term Commitment

  10. MHRP 2019 - Long Beach Container Terminal