Transportation Outlook. 21 st Breakbulk Americas Transportation Conference Houston. October 14th, 2010

Transcription

1 Transportation Outlook 21 st Breakbulk Americas Transportation Conference Houston October 14th, 2010

2 Transportation Outlook Agenda 1 Introduction 2 Cargo 3 Fleet 4 Market outlook & forecasts

3 Major MPV seaborne trade routes Transportation Outlook North Europe EU27 Steel 10-12m tonnes Construction commodities 5-6m tonnes USA Forest products 28-32m tonnes France Med Russia Steel 14-16m tonnes South Korea Japan Steel 10-12m tonnes Fertilisers 3-4m tonnes Algeria Grain (mpv routes) 3-4m tonnes Construction commodities 15-18m tonnes India China Taiwan Forest products 10-12m tonnes Forest products 10-12m tonnes Brazil Fertilisers 2-3m tonnes Indonesia Argentina Grain (mpv routes) 4-5m tonnes Exporter Importer Exporter and importer

4 Transportation Outlook Estimated development of general cargo market (million tonnes) 2,500 2,000 General cargo market share Container market share MPV market share Total general cargo market 1,500 1, Source: Drewry, WTO

5 2 Cargo Transportation Outlook

6 Transportation Outlook Dry cargo market segments Dry Cargo Bulk Cargo Non - Bulk Cargo Major Bulk Cargo Minor Bulk Cargo General Cargo Major Bulk Cargo Other Minor Bulk Cargo Neo/Agri- Bulk Cargo Unitised General Cargo Non - Unitised General Cargo Major Bulk Cargo Other Minor Bulk Cargo Neo/Agri-Bulk Cargo Containerised General Cargo Other Unitised General Cargo Specialised General Cargo Non - Specialised Breakbulk General Cargo Iron ore, coal, grain Phosrock, bauxite, other Iron & steel, forest products, fertilisers, sugar, rice General cargo in containers General cargo in trailers (short sea) Est. Global Seaborne Cargo 2010 (mill.t) Primary Cargo Markets for Multi-Purpose Ships 2,022 Major Bulk 532 Other Minor Bulk 598 Neo/Agri-Bulk (Multi - Purpose ships part) 1,342 Containerised General Cargo (Multi -Purpose ships part) 340 Other Unitised General Cargo Reefer, vehicles 57 Specialised General Cargo All types of non-unitised general & project cargo 304 (Multi-Purpose ships part) (Multi-Purpose ships part) Non-Specialised Breakbulk General Cargo Competing Vessel Types Bulk carriers Handy bulkers Handy bulkers Ro-Ro ships Containerships Ro-Ro ships Con-bulkers Ro-Ro ships Ferries Reeferships Car carriers Ro-Ro ships Ro-Ro ships Heavy lift ships Source: Drewry

7 Transportation Outlook Project cargo the invisible break-bulk volume 1) Nowhere to be seen in port and trade statistics, but it has become the foundation for the most dynamic part of the break-bulk market and home to many fast growing specialist companies such as Beluga, BBC, Clipper, Rickmers, SAL, Intermarine and others. 2) Wide range of industries generate project cargo, but they can be combined into just 4 sectors:- Transportation (46%); Logistics (34%); Power & Water (16%);Oil &Gas (4%) 3) Global annual project value, give or take a few billion, is estimated at $275 bn. Assuming sea freight = 7.5% of value; average freight rate of $150/rev ton; 2.5 cbm/tonne; and 60% of cargo seaborne, this would indicate an annual project cargo flow of 33 million tonnes or 82.5 million cbm pa.

8 Million Tonnes Unitised Share Transportation Outlook Development of the world general cargo market 2,500 90% 2,000 80% 1,500 1, % 60% 50% 40% % General/Project break-bulk Freight trailers Unitised share Source: Drewry, partially derived from WTO Specialised break-bulk Containers Container share

9 MPV share of traffic Transportation Outlook Assumed/estimated development of market shares for MPV 25% 20% 15% 10% 5% 0% Minor/Neo-bulks Major bulks Containers Source: Drewry

10 Million Tonnes General/Project Cargo Share Transportation Outlook Development of the cargo pool for MPV % % 55% 50% 45% 40% 35% General/Project Break-bulk Minor & Neo-Bulk Major Bulk Containers General/Project Share 30% Source: Drewry

11 3 Fleet Transportation Outlook

12 Transportation Outlook MPV/GC Fleet Container Unfriendly Multi-Purpose types Built ,430 dwt 1 x 80t + 5 x 22t + 4 x 10t derricks 380 teu = 43.2 dwt per teu 16.5 knots

13 Transportation Outlook MPV/GC Fleet Container Optimised Multi-Purpose types Built 1999: 20,567 dwt: Speed 16 kn 2 x 60t cranes combinable to 120t 1,300 teu = 15.8 dwt per teu Built 2006: 17,300 dwt: Speed 15 kn 3 x 80t cranes combinable to 160t 958 teu = 18 dwt per teu

14 Transportation Outlook MPV/GC Fleet Project Cargo Optimised Multi-Purpose types Built 2004: 12,744 dwt: Speed 15 kn 2 x 120t cranes combinable to 240t 673 teu = 18.9 dwt per teu Built 2010: 14,100 dwt: Speed 17.5 kn 2 x 400t, 1 x 80t cranes 985 teu = 14.3 dwt per teu

15 Transportation Outlook MPV fleet age profile as at end 2Q10 ( 000 dwt) 2,500,000 2,000,000 20,000+ dwt 15-20,000 dwt 10-15,000 dwt 4-10,000 dwt <4,000 dwt 1,500,000 1,000, , Source: Drewry

16 Transportation Outlook Project friendly multi-purpose vessels >20,001 dwt 15,001-20,000 dwt 10,001-15,000 dwt 4,001-10,000 dwt <4000 dwt Number of vessels Bulk/Tramp Container Orientated Standard Project Carrier Premium Project Carrier

17 Transportation Outlook MPV fleet and orderbook as at 2Q10 (million dwt) Orderbook Fleet <4, , , ,000 20,000+ Dwt Source: Drewry

18 '000 dwt '000 dwt Suggested development of the multi-purpose fleet Transportation Outlook 4,000 3,000 2,000 1, ,000 40,000 38,000 36,000 34,000 32,000 30,000 28,000 26,000-2,000-3,000 Deliveries Demolition Fleet (right axis) ,000 22,000 20,000 Source: Drewry

19 Transportation Outlook 4 Market outlook and forecasts

20 Transportation Outlook World economic growth (% change) 15% 10% 5% 0% -5% -10% -15% f Real GDP Trade in goods Source: Drewry

21 million dwt Transportation Outlook The competitive threat * Excluding specialist ships MPV Handy Bulkers* Containerships Current Fleet 25+ years Orders Source: Drewry

22 Transportation Outlook Estimated development of general cargo market (million tonnes) 2,500 2,000 General cargo market share Container market share MPV market share Total general cargo market 1,500 1, Source: Drewry derived in part from WTO

23 Million Tonnes Market Share Transportation Outlook Forecast development of the general cargo market 2,500 2,000 1,500 1, % 90% 85% 80% 75% 70% 65% 60% % General/Project Break-bulk Freight Trailers Unitised Share Specialised Break-bulk Containers Container Share Source: Drewry

24 million tonnes General/Project cargo share Transportation Outlook Forecast development of the cargo pool for MPV General/Project Break-bulk Minor & Neo-Bulk Major Bulk Containers General/Project Share Source: Drewry 60.0% 55.0% 50.0% 45.0% 40.0% 35.0% 30.0%

25 Transportation Outlook Growth in effective fleet versus growth in effective demand (%) 12% 10% 8% 6% 4% 2% 0% -2% -4% -6% -8% Fleet growth Demand growth -10%

26 US$ million Transportation Outlook Newbuilding price trends Q10 15,000 dwt MPV 25-30,000 dwt bulkcarrier 500 teu 8,000 dwt container * Mid-year Source: Drewry

27 US$pd Transportation Outlook Forecast MPV time charter rate development 25,000 History Forecast 20,000 15,000 10,000 5, ,000-4,999dwt 10,000-14,999 dwt 15,000-19,999 dwt 20,000+ dwt bulkcarrier Source: Drewry

28 Break-bulk shipping in the future Transportation Outlook 1) Whilst the long lead times on projects provided some cushioning against the demand collapse, there is now some lag in regenerating new demand 2) Global GDP growth is expected to return to an average rate of 4.3% from 2010 onwards 3) Heavy orientation of the project market to the developing world, where economic growth will be stronger. 4) Cargo demand in this sector is forecast to increase at an average annual rate of 7% to 2012,with fleet growth nearer 3% pa. 5) However whilst government involvement in many major infrastructure projects helped sustain demand over the worst of the recession, it may be that this has run its course.

29 Summing up Transportation Outlook 1) The fleet was in seemingly terminal decline, but the trade/economic super-cycle reversed this and the sector is now seeing managed expansion. Memo - New vessels are considerably more productive/efficient than the ships they replace and have the potential to create over-capacity but they also draw on a different cargo pool and add value. 2) Many traditional break-bulk lines missed or misread the opportunity and have effectively abandoned the market to a new breed of logistics based project carriers. Memo Possible trend towards more vessel pooling, joint services - & even consolidation? amongst the leading project carriers. 3) Through investment in new ships & methods, project carriers have created a partially insulated niche within the break-bulk market, resulting in higher rates, higher profits and differentiated products/services. Memo Can this insulation survive the global down-turn and extra modal competition? 4) Demand for project cargoes lags the general cargo market but over time is less volatile. Memo a sustained period of firm rates may be necessary before we see any return to the peak rates, as happened in

30 Drewry - the trusted independent maritime adviser Susan Oatway Senior Consultant oatway@drewry.co.uk