UK – Tilbury Container Services (TCS)

Andrew Morgan Supply Chain Europe Limited in collaboration with the International Agri-Technology Centre Ltd

Supply Chain Europe Limited , 1 Hayden Lane, Staverton, Cheltenham, Gloucestershire, GL51 0SR April 2009

Introduction

• Andrew Morgan MPhil, CMILT (Dip) – Began logistics operations career in 1978 – Consulting projects since 1990 (Brazil since 1998) – Author “ Making the Brazil Connection – managing risk in the international food supply chain ”

• Supply Chain Europe Limited – Founded in 2003 – Focus on supply chain improvement – International agri-food chain expertise

• International Agri-Technology Centre Ltd – Established in 2003 – UKTI (government) sector team – Responsible for promoting and developing international trade in the agri-food technology sector

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1 Agenda

• International food supply chain • UK ports – Tilbury Container Services (TCS)

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International food supply chain – issues

End-to-end design and execution

Network infrastructure – Organisation – Process – Information

© 2007, 2008 Supply Chain Europe Limited

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2 International food supply chain – Brazil infrastructure

© 2008 Supply Chain Europe Limited. All rights reserved.

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Agenda

• International food supply chain • UK ports – Tilbury Container Services (TCS)

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3 TCS – aerial view of terminal

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TCS – aerial view of of Tilbury

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4 TCS – aerial view of Tilbury and the Thames

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TCS – senior management team

Managing Director

Campbell Mason

Director/General Manager Finance Director

Mike Gibson Neale Banfield

Head of Head of Compliance Business Human Operations Engineering Manager/Port Development Resources Facility Security Manager Manager Graham Chandler Barry Dyer* Officer James Leeson Lindy Blackman Dick Lovett

*Seconded from Southampton Container Terminal

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5 TCS – history

1968 First purpose-built container terminal in UK

1976 TCS formed • OCL (forerunner of P&O Containers) • Associated Container Transportation ( “ “ ) 1992 • Associated British Ports • P&O Containers 1998 to present date • DP World (34%) formerly P&O Ports • – Forth Ports (33.33%) • Associated British Ports (32.66%)

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TCS – marine access

Princes Channel, new deeper southern approach

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6 TCS – location

• Shortest, most direct route to the UK’s largest market area • Adjacent to London’s M25 Orbital Motorway • Less than 50kms from Central London • Over 1/3 UK’s population within 3 hours

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TCS – inland distribution savings

Indicative Haulage Distances

Actual Road Distances in miles (kms)

Port London Birmingham Manchester

Tilbury 29 (46) 150 (240) 225 (360)

Southampton 80 (128) 145 (232) 221 (353)

Felixstowe 93 (149) 170 (272) 245 (392)

Tilbury

Indicative Haulage Savings

Indexed Haulage Cost Savings

Port London Birmingham Manchester

Tilbury 100 100 100

Southampton 126 114 113

Thamesport 120 112 107

Felixstowe 154 114 108

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7 TCS – features and benefits

• Less than 50kms from Central London. Shortest most direct route into London (UK’s largest market area)

• No peak season in Autumn

• Insignificant time lost due to weather

• UK’s premier port for foodstuffs and temperature controlled cargoes • Major Distribution Centres in the hinterland (fruit, meat, plywood) • Port cold storage facilities

• Superior relationship with HM Customs and Port Health Authorities • Rapid handling of reefer imports & customer satisfaction

• Excellent support and world wide reputation provided by DP World

• No industrial problems for 19 years

• Excellent co-operation and infuence upon the Authority • Assists with pilotage issues and contacts within London community

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TCS – shipping line trends

The TOP 25 carriers as at 14th October 2008 (AXS Alphaliner)

Rank Operator Current Fleet Share Orderbook % Order Current Fleet Orderbook

1 MAERSK 2,012,677 16.4% 440,646 21.9% 55,527 0

2 MSC 1,422,631 11.6% 692,780 48.7% 57,440 8,924

3 CMA CGM 972,595 7.9% 645,008 66.3% 93,893 0

4 EVERGREEN 629,802 5.1% 4,298 0.7% 100,965 49,190

5 HAPAG LLOYD 503,695 4.1% 122,500 24.3% 137,291 52,402

6 COSCO 497,344 4.1% 485,848 97.7% 143,670 165,816

7 APL 472,723 3.9% 179,680 38.0% 185,786 81,135

8 CSCL 426,621 3.5% 252,984 59.3% 252,724 132,810

9 NYK 419,332 3.4% 188,760 45.0% 282,388 194,362

10 MOL 383,147 3.1% 213,717 55.8% 287,191 299,244 Top 25 in Jan 2000 = 75% Market Share 11 HANJIN/SENATOR 372,990 3.0% 301,786 80.9% 303,973 162,998

12 OOCL 362,579 3.0% 129,632 35.8% 304,349 185,237 Top 25 in Jan 2005 = 81% Market Share

13 YANG MING 307,821 2.5% 183,390 59.6% 307,821 183,390 Top 25 in Jan 2007 = 84% Market Share 14 K LINE 304,349 2.5% 185,237 60.9% 362,579 129,632 Top 25 in Jan 2008 = 90% Market Share 15 HAMBURG SUD 303,973 2.5% 162,998 53.6% 372,990 301,786

16 ZIM 287,191 2.3% 299,244 104.2% 383,147 213,717

17 CSAV 282,388 2.3% 194,362 68.8% 419,332 188,760

18 HYUNDAI 252,724 2.1% 132,810 52.6% 426,621 252,984

19 PIL 185,786 1.5% 81,135 43.7% 472,723 179,680

20 UASC 143,670 1.2% 165,816 115.4% 497,344 485,848 21 WAN HAI 137,291 1.1% 52,402 38.2% 503,695 122,500 TCS 22 IRISL 100,965 0.8% 49,190 48.7% 629,802 4,298 customers 23 MISC 93,893 0.8% 0 0.0% 972,595 645,008

24 GRIMALDI 57,440 0.5% 8,924 15.5% 1,422,631 692,780

25 SEA CONSORTIUM 55,527 0.5% 0 0.0% 2,012,677 440,646 Top 25 10,989,154 89.8% 5,173,147 47.1%

Others 1,250,786 10.2% 212,527 3.9% TOTAL 12,239,940 100.00% 5,385,674 51.0%

• Maersk, MSC and CMA CGM control 36% of the market • Further consolidation is considered inevitable

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8 TCS – market supply /Market demand Supply-Demand probable Probable capacity Capacity case Case

16,000 Demand 14,000

12,000

10,000

8,000 Supply 000TEUs 6,000

4,000

2,000

0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

FXT South, London Gateway, Southampton expansion )

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TCS – capacity vs. demand

Volumes (TEUs) Capacity 900

800

700

600

500

400

300 000s TEUs per annum 000s

200

100

0 2007 2008 2009 2010 2011 2012

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9 TCS – investment for growth

Over £100 million (USD185m) investment since 2001 • New Riverside Berth and Railhead development • 2 new post Panamax & 2 new super post-Panamax quay cranes • BIP (Border Inspection Post) • Increased reefer capacity - >1,300 units – and Remote Reefer Monitoring (REFCON) • New straddle carriers, reach stackers and empty handlers • Extensive paving programme (latest phase completed June 08) • ISPS • New gate process and VBS system • 7,000 TEU empty park • Annual capacity increased to 700,000 TEU

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TCS – ongoing developments

• Six new straddle carriers, one empty handler and one reach stacker late Q4 2008

• Two further super post-Panamax quay cranes in Q1 2010

• Ruggedised PCs and new system to load empties dynamically

• Refurbishment and relocation to inside berth of two existing Panamax quay cranes

• Possible relocation of Admin building and Engineers workshop

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10 TCS – vehicle booking system (VBS)

Why was VBS necessary? Unpredictable arrival pattern of vehicles and queues What it has achieved? More consistent service Improved communication with hauliers More containers per vehicle Some VBS stats: (Hourly rate) Vehicles Containers March 06 25 36 March 07(*) 29 47 March 08 31 52

(*) first month with VBS

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TCS – current trades

Latin America • ECSA Plate Express (HSDG/CSAV) • ANDES (WCSA - CSAV) • SAM W.COAST (WCSA – HSDG/HL) • ECS (CMA-CGM, Maruba, CCL) • MSC East Coast S.America & Others • N.Brazil/French Guyana (CMA/Marfret) • CRX (Maersk) • Andean (Maersk) • Safran (CMA-CGM, Maruba, Hanjin)

Australasia • NEMO (CMA CGM/Delmas/DAL/ANL) • North Atlantic South Pacific/Panama (CMA/Hapag/Marfret) • TRIDENT (Hamburg Sud)

Mediterranean South Africa • Borchard Eastern Med • SAECS Main String (Maersk, Safmarine, MOL & DAL ) India/Middle East • EPIC (Hapag/Hamburg Sud)

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11 TCS – quality & environment management systems

• Registered to BSEN ISO 9001 (Quality) since 1991

• Registered BSEN ISO 14001 (Environment) since 1998

• Certified ISO 28000 (Security for the Supply Chain), C-TPAT member and AEO status (European equivalent of C-TPAT)

• Registered BSEN ISO 18001 (Safety) since Nov 2008

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TCS – UK’s hub for Brazil reefer cargoes

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12 Contact details

• Andrew Morgan MPhil, CMILT (Dip) – M +44 (0)7768 473120 – E [email protected]

• Supply Chain Europe Limited – T +44 (0)1242 681229 – www.supplychaineurope.com

• International Agri-Technology Centre Ltd – T +44 (0)2476 323961 – www.theiatc.org

• Tilbury Container Services – T +44 (0)1375 363720 – www.tcsonline.co.uk

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Conclusion

Thank you!

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