19
Apparel Importers Trade and Transportation Conference Container Shipping Industry Update November 9, 2016 Greg Tuthill

Container Shipping Industry Update Corporate(Presentation · Corporate(Presentation Group Financial’department 19/03/2014 Apparel Importers Trade and Transportation Conference Container

Embed Size (px)

Citation preview

Page 1: Container Shipping Industry Update Corporate(Presentation · Corporate(Presentation Group Financial’department 19/03/2014 Apparel Importers Trade and Transportation Conference Container

Corporate PresentationGroup

Financial department19/03/2014

Apparel Importers Trade and Transportation Conference Container Shipping Industry Update

November 9, 2016Greg Tuthill

Page 2: Container Shipping Industry Update Corporate(Presentation · Corporate(Presentation Group Financial’department 19/03/2014 Apparel Importers Trade and Transportation Conference Container

Areas for Discussion

1. APL CMA-­CGM update

2. The changing world of container shipping

3. Strategic industry trends

4. Alliances – what can we expect in the future?

5. How do we prepared for choppy waters?

Page 3: Container Shipping Industry Update Corporate(Presentation · Corporate(Presentation Group Financial’department 19/03/2014 Apparel Importers Trade and Transportation Conference Container

CMA CGM – APL Integration Update

Page 4: Container Shipping Industry Update Corporate(Presentation · Corporate(Presentation Group Financial’department 19/03/2014 Apparel Importers Trade and Transportation Conference Container

US$7.0bn1 5.7m TEU 0.6m TEU

Over 80 weekly services ;;

call ports in over 50 countries;;

94 vessels

Over 7,400

2014 Revenue 2014 Volumes Fleet Capacity

Employees Globally

US$16.7bn 12.2m TEU 1.8m TEU

170 shipping routes between

400 ports in 160 countries;;

469 vessels

Over 22,000

2014 Revenue 2014 Volumes

Employees GloballyFleet Capacity

1. Excludes revenue from APL Logistics.

CMA-­CGM APL Integration Update

Combined company will cement its global position as the third largest liner with strengthened competitive position

Page 5: Container Shipping Industry Update Corporate(Presentation · Corporate(Presentation Group Financial’department 19/03/2014 Apparel Importers Trade and Transportation Conference Container

CMA-­CGM APL Combination Profile-­ Largest US Carrier

4.1m TEU13% MS

The Largest US Carrier Combined

1. Third largest global carrier at 2.3 Million teu operating capacity

2. Total combined fleet of 563 vessels

3. Global market share of 11.5%

4. Combined turnover of $22B

CMA APL New CMA-­‐APLVessels 469 94 563Market Share 8.8% 2.7% 11.5%Million Teu Capacity 1.74 0.56 2.3Turnover (Billion) $16.8 B $5 B $22B

Page 6: Container Shipping Industry Update Corporate(Presentation · Corporate(Presentation Group Financial’department 19/03/2014 Apparel Importers Trade and Transportation Conference Container

Industry Trends

Page 7: Container Shipping Industry Update Corporate(Presentation · Corporate(Presentation Group Financial’department 19/03/2014 Apparel Importers Trade and Transportation Conference Container

Carrier Consolidation – it will continue to accelerate

M&A in the carrier space during the last 15 months

1. CSCL + COSCON

2. CMA CGM +APL

3. Hapag Lloyd + UASC

4. NYK + MOL + Kline

5. What next??

Page 8: Container Shipping Industry Update Corporate(Presentation · Corporate(Presentation Group Financial’department 19/03/2014 Apparel Importers Trade and Transportation Conference Container

Industry Update – The top 7 carriers will control over 65% capacity

Carrier consolidation is accelerating….

Top 5 Carriers will have over 50% of global market share by 2017

The three Japanese carriers add to the list of recent mergers

Page 9: Container Shipping Industry Update Corporate(Presentation · Corporate(Presentation Group Financial’department 19/03/2014 Apparel Importers Trade and Transportation Conference Container

Industry Update – Fewer carriers will have more scale

Carrier tie ups will be necessary to stay competitive….

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

2015 TEU Capacity (TEU M)

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

2017 TEU Capacity (TEU M)

Page 10: Container Shipping Industry Update Corporate(Presentation · Corporate(Presentation Group Financial’department 19/03/2014 Apparel Importers Trade and Transportation Conference Container

Drivers of cost competitiveness

Vessel scale

Capacity share and density

Efficiency

Scale, larger vessels and alliances will be the key to staying competitive

Volume market position and market density will allow for cost structure and efficiency

Vessel scale, larger and more cost efficiency vessels will allow for a lower cost of operation from a fixed cost perspective

Alliance structure, procurement advantage, and lower slot and fuel costs will allow larger operators to operate with more efficiency

Page 11: Container Shipping Industry Update Corporate(Presentation · Corporate(Presentation Group Financial’department 19/03/2014 Apparel Importers Trade and Transportation Conference Container

Why are carriers focusing on scale?

Page 12: Container Shipping Industry Update Corporate(Presentation · Corporate(Presentation Group Financial’department 19/03/2014 Apparel Importers Trade and Transportation Conference Container

Scale is a key factor for main line-­haul carriers in achieving profitability

Comparison of Scale and Profitability(TEU 000’s, %)

-­4%

-­2%

0%

2%

4%

6%

8%

10%

12%

0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000

Cumulative EBIT margin, 2014–2015 (%)

Maersk

OOCL

Capacity (TEU)

CMA CGM

CSCL

Hapag

HMM

China COSCO

Hanjin

NYKKline

MOL

Wan Hai

Yang MingEvergreen

APL

Note:Capacity as of May 2016CSCL = China Shipping Container Lines capacity based on 2015 Sources: Alphaliner;; company fillings;; LPS analysis

Page 13: Container Shipping Industry Update Corporate(Presentation · Corporate(Presentation Group Financial’department 19/03/2014 Apparel Importers Trade and Transportation Conference Container

Larger vessels offer operating advantages

$20

$40

$60

$80

$100

$120

$140

16 18 20 22 24

TEU Savings p

er Slot

19,000 TEU Vessel Speed in Knots

Savings TEU (Slot) -­‐ 8500 TEU vs. 19,000 TEU Vessel

Savings TEU (Slot)

Page 14: Container Shipping Industry Update Corporate(Presentation · Corporate(Presentation Group Financial’department 19/03/2014 Apparel Importers Trade and Transportation Conference Container

Alliance Trends?

Page 15: Container Shipping Industry Update Corporate(Presentation · Corporate(Presentation Group Financial’department 19/03/2014 Apparel Importers Trade and Transportation Conference Container

Carrier Alliances –

Alliances and partners continue to change to remain competitive

KL YMThe Alliance

Page 16: Container Shipping Industry Update Corporate(Presentation · Corporate(Presentation Group Financial’department 19/03/2014 Apparel Importers Trade and Transportation Conference Container

Alliance Trends

1. Fewer carriers, larger operators

2. Fleet matching

3. Financial stability will be a factor in the future

4. Efficiency and assets will be looked at closely

5. Trade compliments and compatibility

Page 17: Container Shipping Industry Update Corporate(Presentation · Corporate(Presentation Group Financial’department 19/03/2014 Apparel Importers Trade and Transportation Conference Container

How do you prepare for the unexpected?

Page 18: Container Shipping Industry Update Corporate(Presentation · Corporate(Presentation Group Financial’department 19/03/2014 Apparel Importers Trade and Transportation Conference Container

Preparing for the unexpected

1. Financial review of carriers and partners

2. Contingency planning

3. Alliance diversification for shippers

4. What if scenario strategy reviews

5. Research historical and future financial performance

Page 19: Container Shipping Industry Update Corporate(Presentation · Corporate(Presentation Group Financial’department 19/03/2014 Apparel Importers Trade and Transportation Conference Container

Questions??