container shipping industry update corporate(presentation · corporate(presentation group...
TRANSCRIPT
Corporate PresentationGroup
Financial department19/03/2014
Apparel Importers Trade and Transportation Conference Container Shipping Industry Update
November 9, 2016Greg Tuthill
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?
CMA CGM – APL Integration Update
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
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
Industry Trends
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??
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
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)
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
Why are carriers focusing on scale?
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
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)
Alliance Trends?
Carrier Alliances –
Alliances and partners continue to change to remain competitive
KL YMThe Alliance
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
How do you prepare for the unexpected?
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
Questions??