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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 BridgeTM

SeaBridge Overseas Holdings Limited

TRB Annual Meeting Workshop on Alternative Freight Capacity

Opportunities and Solutions Panel

January 11, 2004


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

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

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

secretary of transportation mineta
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


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


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



Total Freight Bill (1997) - $328 Billion



Small Package Surface/Air


Rail Carload

Source: Transportation in America 1998

Does not include Private Carriage

LTL Trucking

our vision to build toll bridges over the sea
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


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


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


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

innovation is the key to turning the sea into a bridge
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


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


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


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


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


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

conclusions continued
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

interlocking challenges that require time to overcome
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


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


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

Contact Details: