ExecutiveExecutive ManagementManagement ConferenceConference forfor LatinLatin AmericaAmerica andand thethe CaribbeanCaribbean FebruaryFebruary 12,12, 20072007 Miami,Miami, FloridaFlorida "Tools"Tools toto LeadLead andand ManageManage CompetitiveCompetitive Ports"Ports" GlobalGlobal MaritimeMaritime LogisticsLogistics && PortPort OperatingOperating TrendsTrends MacroeconomicMacroeconomic SituationSituation JohnJohn VickermanVickerman

Norfolk, Virginia Norfolk, Virginia CopyrightCopyright ©© 2007 2007 "Tools"Tools toto LeadLead andand ManageManage CompetitiveCompetitive Ports"Ports"

PortPort && IntermodalIntermodal ExternalExternal IndustryIndustry PressuresPressures

CopyrightCopyright ©© 2007 2007 GlobalGlobal Trade:Trade: CurrentCurrent CourseCourse && Direction?Direction?

CargoCargoCargo Demands,Demands,Demands, Capacity,Capacity,Capacity, Funding,Funding,Funding, PortPortPort ProductivityProductivityProductivity &&& EnvironmentalEnvironmentalEnvironmental ChallengesChallengesChallenges

NorthNorth AmericanAmerican PortPort GatewaysGateways

CopyrightCopyright ©© 2007 2007 WhatWhat WeWe KnowKnow Today...Today... WillWill BeBe SurelySurely BeBe DifferentDifferent Tomorrow!Tomorrow!

CopyrightCopyright ©© 2007 2007 ToTo BeBe CompetitiveCompetitive Today...Today... Marine/IntermodalMarine/Intermodal TerminalsTerminals MustMust ReduceReduce ThroughputThroughput CostCost && IncreaseIncrease CargoCargo VelocityVelocity SecurelySecurely andand asas StewardsStewards ofof thethe EnvironmentEnvironment

CopyrightCopyright ©© 2007 2007 FunctionalFunctional ClassificationClassification ofof GlobalGlobal MaritimeMaritime CargoesCargoes

All Maritime Cargo

General Cargo Bulk Cargo

BreakBreak BulkBulk Neo-Bulk Neo-Bulk Containerized Containerized Liquid Bulk Dry Dry BulkBulk

Sacks, Cartons, Lumber, Paper,Paper, Containers,Containers, LNG, Petroleum,Petroleum, Grain, SandSand && Crates, Drums, Steel, Autos LiftLift On/LiftOn/Lift OffOff Molasses, Gravel, Scrap Pallets, Bags (Lo/Lo),(Lo/Lo), Chemicals, Metal, Coal/Coke,Coal/Coke, RollRoll On/RollOn/Roll OffOff Vegetable Oil Clinker, Fertilizer (Ro/Ro)(Ro/Ro)

CopyrightCopyright ©© 2007 2007 TheThe “Port”“Port” OneOne ofof thethe ManyMany DiverseDiverse ConstituenciesConstituencies inin thethe CargoCargo TransportationTransportation LogisticsLogistics ChainChain

Port Railroads Shipping Agents Motor Carriers/ Truckers Shippers Objective: Freight Forwarders/ A multimodal Carriers/ “Seamless” integrated BrokersBrokers world wide cargo NVOCCs conveyance system. Customs Agencies Stevedores/ Terminal Operators Warehousing/ CFS Operators Longshore Labor Pilotage/Tuggage Governmental Regulation/ Compliance

CopyrightCopyright ©© 2007 2007 TheThe GlobalGlobal ContainerContainer IndustryIndustry ContinuesContinues toto Consolidate…Consolidate… TotalTotal numbernumber ofof slotsslots SlotsSlots controlledcontrolled byby toptop 2020 carrierscarriers SlotsSlots controlledcontrolled byby 44 globalglobal alliancesalliances 9,7639,763

10,00010,000 8,1808,180 9,0009,000 6,8816,881 8,0008,000 7,000 7,000 5,0535,053 4,8504,850 6,0006,000 70.5% 4,0274,027 5,000

Operation and on Order Operation and on 5,000 Operation and on Order Operation and on 2,6742,674 Thousands of TEU Thousands Slots in Thousands of TEU Thousands Slots in 4,0004,000 2,2442,244 3,0003,000 1,4791,479 59.3% 2,0002,000 44.4% 1,0001,000 00 19951995 2000 2000 2005 2005 CopyrightCopyright ©© 2007 2007 The North American Freight Paradox: The Nation’s Ports and Their Intermodal Linkages are Experiencing the “Best of Times and the Worst of Times” in Terms of Growth and Demands on Capacity

CopyrightCopyright ©© 2007 2007 At Current Productivity and Growth Levels by 2020 North American Ports & Their Associated Intermodal Systems Will Be Severely Congested. In Today’s Supply Chain Congestion Can’t be an Excuse…

CopyrightCopyright ©© 2007 2007 We do not have an “intermodal system” as such. Rather we have an aggregation of multiple, private and public modes, each of which are “stove-piped” within their own individual areas of interest with little or no true cross communication and collaboration.

CopyrightCopyright ©© 2007 2007 PollPoll ofof thethe TopTop 10001000 “Blue“Blue Chip”Chip” MultinationalMultinational Shipper PrioritiesPriorities

43%43% ScheduleSchedule 38%38% ReliabilityReliability && CompetitiveCompetitive ConsistencyConsistency FreightFreight RateRate 12%12% TransitTransit TimeTime && SpeedSpeed

CopyrightCopyright ©© 2007 2007 Today’sToday’s LogisticsLogistics Truth:Truth: “The“The customercustomer wantswants moremoreand and isis willingwilling toto paypay lesslessfor for it.”it.”

CopyrightCopyright ©© 2007 2007 "Tools"Tools toto LeadLead andand ManageManage CompetitiveCompetitive Ports"Ports" InternationalInternational MaritimeMaritime CargoCargo DemandDemand TrendsTrends

CopyrightCopyright ©© 2007 2007 WorldWorld Bank’sBank’s 20102010 “Global“Global EconomicEconomic Prospects”Prospects” WorldWorld OutputOutput willwill IncreaseIncrease 33%33% inin 1010 yearsyears

4040

$

$

$$ 4040 TrillionTrillion s

s 3030

n

n

o

o

i

i

l

l l l $ 30 Trillion

i $ 30 Trillion

i 2020

r

r

T T 1010 0 20002000 20102010

CopyrightCopyright ©© 2007 2007 WorldWorld ContainerContainer ForecastForecast toto 20242024 inin TEUsTEUs (186%(186% IncreaseIncrease inin NextNext 2020 Years)Years)

Forecast 243 M

Growth Rate (CAGR) 1994 to 2004: 8.3 % 85 M

Growth Rate (CAGR) 2004 to 2014: 6.1 % 2014 to 2024: 5.0%

Source:Source: GlobalGlobal Insight,Insight, 20042004

CopyrightCopyright ©© 2007 2007 2003 World Container Gateways

20.420.4 “The World’s Top 10 Port Gateways” 20 18.4118.41 18 Hong Kong Alone is Equal to the Top 15 North American Container Ports 1515 13.113.1 (2004)(2004) POLA + POLB

1212 11.2811.28 10.6510.65 10.3610.36 8.848.84 99 US Ports 7.117.11 6.176.17

66 e 5.455.45 or Kong TEUs in Millions TEUs in Millions n gap 33 ng in Ho Shanghai Kaohsiung Rotterdam Hamburg S Shanzhen Pusa Antwerp 00 RankRank 12123456789103 45678910

Source:Source: PortPort EngineeringEngineering ManagementManagement,, Vol.Vol. 22-22- Issue Issue 66 -- December December 20042004 CopyrightCopyright ©© 2007 2007 GlobalGlobal MarketMarket EconomicEconomic ShiftsShifts (Country(Country GDPGDP Rank)Rank) 20002000 20102010 20202020 20302030 20402040 20502050 #1#1 USA USA USA USA USA CHINA #1#1 Japan Japan CHINA CHINA CHINA USA #2#2 Germany Germany Japan Japan INDIA INDIA #3#3 UK UK Germany INDIA Japan Japan France CHINA UK Russia Russia Brazil #5#5 Italy France INDIA UK Brazil Russia #7#7 CHINA Italy France Germany UK UK #8#8 Brazil INDIA Russia France Germany Germany #9#9 INDIA Russia Italy Brazil France France Russia Brazil Brazil Italy Italy Italy

Source:Source: GlobalGlobal Insight,Insight, 20052005 CopyrightCopyright ©© 2007 2007 "Tools"Tools toto LeadLead andand ManageManage CompetitiveCompetitive Ports"Ports" TheThe GrowingGrowing AsianAsian ImportImport TradeTrade ChallengeChallenge

CopyrightCopyright ©© 2007 2007 Global Interdependent Economics Have Resulted in a Major Product Sourcing Shift to Asia

Source:Source: ClarksonClarkson ResearchResearch StudiesStudies CopyrightCopyright ©© 2007 2007 Today,Today, moremore thanthan 60%60% ofof allall NorthNorth AmericanAmerican containercontainer tradetrade isis withwith Asia.Asia. EuropeanEuropean containercontainer flowsflows havehave heldheld steadysteady (19%(19% marketmarket share).share).

2005 North American Trade Regions 1% Total: 24.1 Million Units 3% 6% 3% China North Asia 6% North Europe 41% Caribbean/Central America 7% Southeast Asia Mediterranean Indian Subcontinent 8% East Coast South America Oceania Other 13% 12%

Source:Source: PIERS;PIERS; PortPort ReportedReported Throughput;Throughput; NorbridgeNorbridge AnalysisAnalysis CopyrightCopyright ©© 2007 2007 LastLast 55 YearsYears Asia-Asia- US US ContainerContainer TradeTrade IncreasedIncreased 12%12% CAGRCAGR andand ChinaChina AccountedAccounted forfor 95%95%of the Increase

Source:Source: PIERS,PIERS, PortPort ReportedReported Throughput, Norbridge CopyrightCopyright ©© 2007 2007 China-US:China-US: TwinTwin EnginesEngines ofof thethe WorldWorld

Population:Population: US:US: 298298 millionmillion China:China: 1,3071,307 millionmillion (1/5(1/5 World)World) TheThe numbernumber ofof ChineseChinese childrenchildren inin elementaryelementary schoolschool isis equivalentequivalent toto thethe totaltotal USUS population.population.

CopyrightCopyright ©© 2007 2007 MainlandMainland ChinaChina ContainerContainer PortPort GrowthGrowth (Compound(Compound AnnualAnnual GrowthGrowth Rates)Rates)

25.9 %

27.3 %

35.4 % 17.1 % 30.1 % 5 Yr Average = 27.2% Increased Volume

CopyrightCopyright ©© 2007 2007 China’sChina’s MinistryMinistry ofof RailwaysRailways SignedSigned aa 55 yearyear CooperationCooperation AgreementAgreement withwith thethe USUS BNSFBNSF RailroadRailroad forfor IntermodalIntermodal RailRail DevelopmentDevelopment

•• Develop Develop China’sChina’s highhigh volumevolume efficientefficient intermodalintermodal networknetwork ••$242 $242 billionbillion programprogram toto 20202020 •• On-dock On-dock && near-docknear-dock intermodalintermodal transfertransfer yardsyards atat portsports •• Ministry Ministry toto buildbuild 1818 mega-terminalsmega-terminals withwith 77 atat seaports,seaports, 4040 smallersmaller IntermodalIntermodal terminalsterminals

CopyrightCopyright ©© 2007 2007 Shanghai International Shipping Center Yangshan Deep Port & Logistics Park

NewNew PortPort CityCity

NewNew LogisticsLogistics ParkPark 20 Mile New Port Access Bridge Constructed in 3 yrs

5454 NewNew BerthsBerths

CopyrightCopyright ©© 2007 2007 ToTo 20152015 ChinaChina && IndiaIndia AreAre ProjectedProjected ToTo ContinueContinue ToTo DriveDrive NorthNorth AmericanAmerican ContainerContainer TradeTrade

9% Annual Growth 7% Annual Growth

Source:Source: GlobalGlobal Insight,Insight, NorbridgeNorbridge CopyrightCopyright ©© 2007 2007 EmergingEmerging NewNew MexicanMexican IntermodalIntermodal GatewaysGateways && CorridorsCorridors –– Nearly Nearly 44 MillionMillion TEUsTEUs

GuaymusGuaymus 1.01.0 milmil TEUTEU

PuntaPunta ColonetColonet 11 milmil TEUTEU ThroughputThroughput

LazaroLazaro CardenasCardenas PhasePhase II -- 700K 700K TEUTEU Fut.Fut. PhasePhase -- 2.0 2.0 milmil TEUTEU

CopyrightCopyright ©© 2007 2007 MarineMarine TerminalsTerminals CorporationCorporation (MTC)(MTC) withwith partnerspartners Evergreen,Evergreen, YangYang Ming,Ming, Hanjin,Hanjin, andand ChinaChina ShippingShipping AnnounceAnnounce PlanPlan forfor aa 11 MillionMillion TEUTEU,, $1Billion$1Billion GreenfieldGreenfield PortPort DevelopmentDevelopment atat PuntaPunta ColonetColonet Harbor,Harbor, BajaBaja PeninsulaPeninsula

Source:Source: MTCMTC MediaMedia AnnouncementAnnouncement AprilApril 20062006 CopyrightCopyright ©© 2007 2007 NewNew NorthNorth AmericanAmerican ContainerContainer GatewayGateway

CopyrightCopyright ©© 2007 2007 ConnectingConnecting Canada’sCanada’s PacificPacific && EasternEastern IntermodalIntermodal GatewayGateway StrategiesStrategies

PacificPacific GatewayGateway

Potential Northeast Gateway

“North“North America’sAmerica’s NorthNorth EastEast Gateway”Gateway”

CopyrightCopyright ©© 2007 2007 TheThe EmergingEmerging CNCN TranscontinentalTranscontinental LandLand BridgeBridge PacificPacific GatewayGateway NortheastNortheast GatewayGateway

Prince Rupert Transit Times

CopyrightCopyright ©© 2007 2007 SoutheastSoutheast AsianAsian ManufacturingManufacturing CentroidCentroid ShiftShift CurrentCurrent InboundInbound U.S.U.S. CargoCargo FlowFlow

U.S.U.S. IntermodalIntermodal RailRail FlowFlow

WesternWestern CentroidCentroid ShiftShift

Eastbound:Eastbound:All All WaterWater FlowFlow Eastbound:Eastbound:US US IntermodalIntermodal RailRail FlowFlow

CopyrightCopyright ©© 2007 2007 SoutheastSoutheast AsianAsian ManufacturingManufacturing CentroidCentroid ShiftShift CurrentCurrent InboundInbound U.S.U.S. CargoCargo FlowFlow WesternWesternWesternWestern CentroidCentroidCentroidCentroid ShiftShiftShiftShift

UU.S.UU.S..S..S. IntermodalIntermodalIntermodalIntermodal RRailRRailailail FlowFlowFlowFlow

WestboundWestboundWestboundWestbound AllAllAllAll Water/SuezWater/SuezWater/SuezWater/Suez FlowFlowFlowFlow WestboundWestboundWestboundWestbound IntermodalIntermodal IntermodalIntermodal U.S.U.S.U.S.U.S. FlowFlowFlowFlow

CopyrightCopyright ©© 2007 2007 "Tools"Tools toto LeadLead andand ManageManage CompetitiveCompetitive Ports"Ports" NorthNorth AmericanAmerican PortPort && IntermodalIntermodal CapacityCapacity TrendsTrends

CopyrightCopyright ©© 2007 2007 CanCan NorthNorth AmericanAmerican MarineMarine TerminalsTerminals HandleHandle thethe ForecastedForecasted FreightFreight VolumesVolumes ?...?...

CopyrightCopyright ©© 2007 2007 2010 Projected Public Port Capacity Shortfall

Capacity Shortfall

75% of the 16 Ports Studied will have Significant Capacity Problems by 2010

CopyrightCopyright ©© 2007 2007 U.S.U.S. ContainerizedContainerized TonnageTonnage ForecastForecast

CAGR TotalTotal 79.2 79.2 119.5 119.5 188.7 188.7 236.6 236.6 355.6 355.6 7.8% 7.8% NENE (Maine(Maine toto Virginia)Virginia) 6.3%6.3% CAGR SESE (NC(NC toto Tampa)Tampa) GulfGulf (Mobile(Mobile toto ElEl Paso)Paso) 100100 SWSW (San(San DiegoDiego toto OaklandOakland 6.6%6.6% NWNW (Oregon(Oregon toto Alaska)Alaska) 8080 7.6%7.6% By 2020 Most US Container Port Gateways7.2%7.2% ons ons 6060 T T

0 0 Will Double or Triple in Volume 0 0 0 0 4040 , , 0 0 0 0 0 0 , , 20

1 20 1

00 19901990 1995 1995 2000 2000 20052005 20102010 Source:Source DRI/McGraw: DRI/McGraw HillHill CopyrightCopyright ©© 2007 2007 NorthNorth AmericanAmerican MaritimeMaritime ContainerContainer CurrentCurrent andand FutureFuture TradeTrade GrowthGrowth 6,8486,848 (Top 10 Ports) 15,83515,835 1,6651,665 59,42059,420 VancouverVancouver 4,4784,478 2,5572,557 1,7761,776 SeattleSeattleBy 2020 demand will exceed current capacityNY/NJNY/NJ 4,3964,396 5,5665,566 1,7981,798 of many U.S. ports by as much as 200%.1,8091,809 TacomaTacoma VirginiaVirginia 3,3823,382 2,0432,043 6,6396,639 1,860 OaklandOakland 1,860 Charleston 13,10113,101 Charleston 9,4209,420

6,1656,165 1,6621,662 (TEUs in LA/LBLA/LB 1,4371,437 SavannahSavannah thousands) HoustonHouston 20042004 20202020 ForecastForecast figuresfigures basedbased onon 66 yearyear linearlinear regressionregression CopyrightCopyright ©© 2007 2007 FutureFuture USUS TruckTruck TrafficTraffic GrowthGrowth InIn UrbanUrban ConsumptionConsumption ZonesZones TodayToday 20202020

Source:Source: USDOTUSDOT FHWAFHWA FreiFreightght AnalysisAnalysis FrameworkFramework CopyrightCopyright ©© 2007 2007 POLA/POLBPOLA/POLB Challenge:Challenge: TruckTruck CongestionCongestion GoodsGoods movementmovement isis aa majormajor contributorcontributor toto traffictraffic congestioncongestion andand aa bottleneckbottleneck toto futurefuture growth.growth. I-710 Typical Day I-710 During 2002 Port Lockout

CopyrightCopyright ©© 2007 2007 CapacityCapacity vs.vs. DemandDemand BottomBottom Line:Line: BalancingBalancing CapacityCapacity andand DemandDemand isis BothBoth aa PublicPublic andand PrivatePrivate IssueIssue

½ ½

E F E F

CapacityCapacity DemandDemand

NorthNorth America’sAmerica’s futurefuture economiceconomic andand environmentalenvironmental healthhealth isis atat riskrisk as a result of decliningdeclining transportationtransportation efficiencyefficiency andand reliability.reliability.

CopyrightCopyright ©© 2007 2007

as a result of "Tools"Tools toto LeadLead andand ManageManage CompetitiveCompetitive Ports"Ports" LatinLatin AmericaAmerica North/SouthNorth/South FreightFreight CorridorsCorridors

CopyrightCopyright ©© 2007 2007 EmergenceEmergence ofof thethe DemandDemand forfor aa North-SouthNorth-South FreightFreight CorridorCorridor

FreeFree TradeTrade ZoneZone AmericasAmericas

Trans-AtlanticTrans-Atlantic (EU-NAFTA)(EU-NAFTA) Trans-PacificTrans-Pacific RouteRoute

FreeFree TradeTrade ZoneZone AmericasAmericas

CopyrightCopyright ©© 2007 2007 LatinLatin AmericanAmerican GrossGross DomesticDomestic ProductProduct Growth,Growth, LastLast TwoTwo DecadesDecades

77 6.0%6.0% 66 e

ag 55 entage

c 44

ercent 3.0% P Per 3.0% 33

22 1.7%1.7%

11

00 19801980 -- 1991 1991 EarlyEarly 1990’s1990’s LateLate 1990’s1990’s

CopyrightCopyright ©© 2007 2007 MajorMajor IncreaseIncrease ofof TradeTrade ExpectedExpected BetweenBetween U.S.U.S. andand LatinLatin AmericasAmericas

GlobalGlobal InvestmentInvestment ShiftsShifts Forecasted:Forecasted: toto LatinLatin AmericaAmerica 1616 MillionMillion • Chemicals TEUsTEUs @@ 6%6% • Textiles CAGRCAGR 1818 • Wood Products 1616 • Electronics 1414 • Vehicles 1212 1010 88 66 44 TEUs (in millions) (in TEUs TEUs (in millions) (in TEUs 22 ExpectedExpected 00 66 MillionMillion TEUsTEUs @@ 19901990 19921992 19941994 19961996 19981998 20002000 20102010 20162016 20252025 20352035 3.5%3.5% CAGRCAGR 1.51.5 MillionMillion TEUsTEUs

CopyrightCopyright ©© 2007 2007 CanadaCanadaCanada

UnitedUnitedUnited States StatesStates

“Free Trade Area of theBahamasBahamasBahamas Americas” (FTAA) “Free Trade Area of theCuba Americas” (FTAA) CubaCuba MexicoMexicoMexico JamaicaJamaica DominicanDominican RepublicRepublic BelizeBelize HaitiHaiti HondurasHonduras LesserLesserLesserLesser GuatemalaGuatemala AntillesAntillesAntilles NicaraguaNicaragua ElEl SalvadorSalvador CostaCosta RicaRica VenezuelaVenezuela Guyana JamaicaJamaica DominicanDominicanVenezuela RepublicRepublic Guyana Largest Free TradePanamaPanama Zone InSurinameSuriname the World BelizeBelize HaitiHaitiColombiaColombia FrenchFrench GuianaGuiana HondurasHonduras Colombia GuatemalaGuatemala NicaraguaNicaragua (Over $14ElEl SalvadorSalvador TrillionEcuadorEcuadorEcuador in 2006) Costa Rica Costa Rica GuyanaGuyana PanamaPanama SurinameSuriname FrenchFrench GuianaGuiana A Tripling of US Exports withBrazilBrazilBrazil the Majority PeruPeruPeru Bringing Manufactured Products to BoliviaBoliviaBolivia

Central & South America…ParaguayParaguayParaguay CentralCentral AmericanAmerican

CommonCommon MarketMarket

C

h

C

h C

h C

iiililleleh e AndeanAndean CommunityCommunity UruguayUruguay ArgentinaArgentinaArgentina Uruguay AndeanAndean CommunityCommunity && MercosurMercosur AssociateAssociate MercosurMercosur MercosurMercosur AssociatesAssociates

NAFTANAFTA FalklandFalklandFalkland I. I.I. (UK.) (UK.)(UK.) CaricomCaricom (15(15 countries)countries) Tierra TierraTierraTierra CopyrightCopyright ©© 2007 2007 deldeldeldel Fuego FuegoFuegoFuego NorthNorth America’sAmerica’s North-SouthNorth-South Multi-ModalMulti-Modal SuperSuper TransportTransport CorridorCorridor CoalitionCoalition (NASCO)(NASCO)

AnAn InlandInland PortPort NetworkNetwork alongalong NAFTANAFTA CorridorCorridor Routes.Routes. SpecificallySpecifically PlannedPlanned toto AlleviateAlleviate CongestionCongestion atat Ports,Ports, UrbanUrban IntermodalIntermodal CentersCenters andand atat BorderBorder Crossings.Crossings.

CopyrightCopyright ©© 2007 2007 Trans-TexasTrans-Texas Multi-ModalMulti-Modal HighHigh PriorityPriority FreightFreight CorridorCorridor TTC-35TTC-35

CopyrightCopyright ©© 2007 2007 KansasKansas City’sCity’s SmartPortSmartPort InvestorInvestor Based,Based, Non-Non- ProfitProfit EconomicEconomic DevelopmentDevelopment OrganizationOrganization SupportedSupported byby bothboth thethe PublicPublic andand PrivatePrivate Sectors.Sectors. AA RegionalRegional InternationalInternational TradeTrade ProcessingProcessing CenterCenter,, PermittingPermitting FreightFreight toto ClearClear USUS CustomsCustoms inin KansasKansas CityCity andand AvoidAvoid BorderBorder Delays.Delays.

CopyrightCopyright ©© 2007 2007 CanadianCanadian IntelligentIntelligent SuperSuper CorridorCorridor (CISCOR)(CISCOR)

CopyrightCopyright ©© 2007 2007 "Tools"Tools toto LeadLead andand ManageManage CompetitiveCompetitive Ports"Ports" MaritimeMaritime VesselVessel TechnologyTechnology TrendsTrends

CopyrightCopyright ©© 2007 2007 April 26, 1956 58 Modified 35-foot Truck Containers

In 1955 Malcolm McLean, sold McLean Trucking, and secured a bank loan of US$42 million to build the world's first container ship.

CopyrightCopyright ©© 2007 2007 WorldWorld ContainerContainer ShipShip EvolutionEvolution TEUTEU CapacityCapacity

IdealIdeal XX 1,7001,700 TEUTEU 1st Generation ( Pre-1960 (Pre-1960 - 1970 - 1970))

2,3052,305 TEUTEU 2nd Generation (1970(1970 -- 1980)1980)

PanamaxPanamax 3,2203,220 TEUTEU 3rd Generation ( 1985 (1985))

PostPost PanamaxPanamax 4,8484,848 TEUTEU

4th Generation ( 1986 (1986 - 2000 - 2000))

SuperSuper PostPost PanamaxPanamax 8,6008,600 TEUTEU

5th5th GenerationGeneration (2000(2000 -- 2005) 2005)

CopyrightCopyright ©© 2007 2007 MadisonMadison MaerskMaersk (3,928(3,928 TEUs)TEUs) inin thethe PanamaPanama CanalCanal (Current(Current MaxMax PanamaxPanamax == 50005000 TEUs)TEUs)

CopyrightCopyright ©© 2007 2007 Today’sToday’s MegaMega ShipsShips -- Measuring Measuring UpUp

Eiffel Tower – 990 feet

Regina Maersk – 1043 Ft, 140 Ft wide, 6000+ TEUs

CopyrightCopyright ©© 2007 2007 Today’sToday’s MegaMega ShipsShips -- Measuring Measuring UpUp HowHow Wide,Wide, HowHow Deep?Deep? 1970-1980 1985 1986-2000 2000-2005 2,305 TEU 3,220 TEU 4,848 TEU 8,600+ TEU 10-11 11-13 13-17 17-24 Pre-1970 Containers Wide Containers Wide Containers Wide Containers Wide 1,700 TEU <10 Containers Wide

SEA LEVEL

CopyrightCopyright ©© 2007 2007 7000+7000+ TEUTEU ContainershipsContainerships SlotSlot CapacityCapacity inin thethe FleetFleet andand onon OrderOrder

SUMMARY OF WORLD CONTAINERSHIP FLEET IN SERVICE AND ON ORDER (OCTOBER 2005)

Ship Type 5000-5999 6000-6999 7000+ Total Current Vessel Capacity = 2,304,286 Slots PresentOrder Slots Book 1,181,275Vessel Capacity728,304 = 2,367,935394,707 Slots7,850,513 APresent 103 % Ships Increase in216 Fleet Slot112 Capacity49 on Order3,506

Slots on Order 371,509 435,032 1,561,394 4,323,417

Ships on Order 68 67 183 1,113

Source:Source: ContainerisationContainerisation InterInternationalnational Yearbook 2005 CopyrightCopyright ©© 2007 2007 10,00010,000 TEUTEU ContainerContainer ShipsShips CurrentlyCurrently onon OrderOrder

ZimZim ordersorders fourfour 10,00010,000 TEUTEU containercontainer shipsshipsfrom from HyundaiHyundai ShipyardsShipyards inin Korea;Korea; willwill doubledouble itsits carriagecarriage capacitycapacity ZimZim willwill taketake deliverydelivery ofof thethe ships,ships, secondsecond halfhalf ofof 20092009

CoscoCosco ordersorders fourfour 10,00010,000 TEUTEU containershipscontainershipsfrom from HyundaiHyundai HeavyHeavy IndustriesIndustries toto bebe delivereddelivered inin 20082008 $505$505 MM DealDeal

Source: North Sea Terminal Bremerhaven GmbH & Co

CopyrightCopyright ©© 2007 2007 A.P.A.P. Moller-MaerskMoller-Maersk September September 20062006 ServiceService AnnouncementAnnouncement forfor 14,00014,000 TEUTEU VesselVessel

SS ClassClass 68006800 TEUTEU

LL ClassClass 14,00014,000 TEUTEU

TheThe new-buildnew-build knownknown asas ““M/SM/S EmmaEmma MaerskMaersk”,”, waswas christenedchristened atat thethe Odense-LindoOdense-Lindo Shipyard Shipyard inin DenmarkDenmark inin AugustAugust 2006.2006. TheThe nominalnominal capacitycapacity ofof thethe neneww vesselvessel couldcould bebe asas highhigh asas 14,00014,000 TEUsTEUsbased based onon itsits reportedreported LOALOA ofof 397397 m,m, BeamBeam ofof 5656 m,m, DraftDraft ofof 15.515.5 m,m, GrossGross TonnageTonnage 170,974170,974 gt,gt, SpeedSpeed 25.525.5 knotsknots

Source:Source: JournalJournal ofof CommerceCommerce AugustAugust 2006,2006, MarineMarine LogLog DecemberDecember 20062006 CopyrightCopyright ©© 2007 2007 A.P.A.P. Moller-MaerskMoller-Maersk L L ClassClass M/SM/S EmmaEmma MaerskMaersk (14,000(14,000 TEUTEU VesselVessel -- 22 22 ContainersContainers Wide)Wide)

Length:Length: 1,3021,302 ft,ft, Width:Width: 207207 ft,ft, NetNet Cargo:Cargo: 123,200123,200 tonstons KeyKey Cranes:Cranes: 10,10, Engine:Engine: 1414 in-linein-line cycylinderslinders dieseldiesel engineengine (110,000(110,000 BHP)BHP) CruiseCruise Speed:Speed: 3131 mi/h,mi/h, FullFull CrewCrew:: 13,13, ConstructionConstruction costcost -- US US $145$145 M+M+

Source:Source: MaritimeMaritime WorldWorld LogisticsLogistics Inc.Inc. JanuaryJanuary 20072007 CopyrightCopyright ©© 2007 2007 A.P.A.P. Moller-MaerskMoller-Maersk L L ClassClass M/SM/S EmmaEmma MaerskMaersk (14,000(14,000 TEUTEU VesselVessel -- 22 22 ContainersContainers Wide)Wide)

Length:Length: 1,3021,302 ft,ft, Width:Width: 207207 ft,ft, NetNet Cargo:Cargo: 123,200123,200 tonstons KeyKey Cranes:Cranes: 10,10, Engine:Engine: 1414 in-linein-line cycylinderslinders dieseldiesel engineengine (110,000(110,000 BHP)BHP) CruiseCruise Speed:Speed: 3131 mi/h,mi/h, FullFull CrewCrew:: 13,13, ConstructionConstruction costcost -- US US $145$145 M+M+

Source:Source: MaritimeMaritime WorldWorld LogisticsLogistics Inc.Inc. JanuaryJanuary 20072007 CopyrightCopyright ©© 2007 2007 A.P.A.P. Moller-MaerskMoller-Maersk L L ClassClass M/SM/S EmmaEmma MaerskMaersk (14,000(14,000 TEUTEU VesselVessel -- 22 22 ContainersContainers Wide)Wide)

Length:Length: 1,3021,302 ft,ft, Width:Width: 207207 ft,ft, NetNet Cargo:Cargo: 123,200123,200 tonstons KeyKey Cranes:Cranes: 10,10, Engine:Engine: 1414 in-linein-line cycylinderslinders dieseldiesel engineengine (110,000(110,000 BHP)BHP) CruiseCruise Speed:Speed: 3131 mi/h,mi/h, FullFull CrewCrew:: 13,13, ConstructionConstruction costcost -- US US $145$145 M+M+

Source:Source: MaritimeMaritime WorldWorld LogisticsLogistics Inc.Inc. JanuaryJanuary 20072007 CopyrightCopyright ©© 2007 2007 A.P.A.P. Moller-MaerskMoller-Maersk L L ClassClass M/SM/S EmmaEmma MaerskMaersk (14,000(14,000 TEUTEU VesselVessel -- 22 22 ContainersContainers Wide)Wide)

Length:Length: 1,3021,302 ft,ft, Width:Width: 207207 ft,ft, NetNet Cargo:Cargo: 123,200123,200 tonstons KeyKey Cranes:Cranes: 10,10, Engine:Engine: 1414 in-linein-line cycylinderslinders dieseldiesel engineengine (110,000(110,000 BHP)BHP) CruiseCruise Speed:Speed: 3131 mi/h,mi/h, FullFull CrewCrew:: 13,13, ConstructionConstruction costcost -- US US $145$145 M+M+

Source:Source: MaritimeMaritime WorldWorld LogisticsLogistics Inc.Inc. JanuaryJanuary 20072007 CopyrightCopyright ©© 2007 2007 TheThe 15,00015,000 TEUTEU ContainershipContainership “…the“…the shipship isis aa flightflight ofof fancy…fancy… but but suchsuch aa shipship isis withinwithin thethe currentcurrent statestate ofof thethe shipbuilder’sshipbuilder’s art…”art…”

R.R. G.G. McLellan,McLellan, P&OP&O ContainersContainers

CopyrightCopyright ©© 2007 2007 TheThe 15,00015,000 TEUTEU ContainershipContainership

LOA.LOA. == 400400 mm (1,312(1,312 ft.)ft.) DraftDraft == 1414 mm (46(46 ft.)ft.) BEAMBEAM == 6969 mm (226(226 ft.)ft.)

6-76-7 aboveabove deckdeck 10-1110-11 belowbelow deckdeck

28 Wide 28 Wide 1313 WideWide

2828 AcrossAcross PanamaxPanamax DimensionsDimensions

CopyrightCopyright ©© 2007 2007 ContainerContainer Ship-in-a-SlipShip-in-a-Slip ConceptConcept

CopyrightCopyright ©© 2007 2007 TheThe 18,00018,000 TEUTEU MalaccamaxMalaccamax ReportedReported Predictions/BenefitsPredictions/Benefits

•• ByBy 20102010 onon Asia-EuropeAsia-Europe TradeTrade RouteRoute •• 30%30% CheaperCheaperthan than 48004800 TEUTEU PanamaxPanamax Vessel,Vessel, primarilyprimarily duedue toto “Economies“Economies ofof Scale”Scale” •• US$40/TEUUS$40/TEU SavingsSavings

Source:Source: DynamarDynamar Consultancy,Consultancy, RotterdamRotterdam CopyrightCopyright ©© 2007 2007 EmergenceEmergence ofof NorthNorth AmericanAmerican FastFast FeederFeeder Short-SeaShort-Sea CoastalCoastal VesselsVessels

r: a ntie Se Fro rt ew Sho e N and Th ent ipm nssh Tra

2,000 - 3,000 TEU Feeder Ship

10,000 to 15,000 TEU Mega Ship CopyrightCopyright ©© 2007 2007 Short Sea Shipping Coastwise Maritime Trade

Roads ed est Cong f of t of igh Fre ng Taki

CopyrightCopyright ©© 2007 2007 EmergingEmerging ViableViable ContainerContainer OnOn BargeBarge CoastalCoastal ShippingShipping ConceptsConcepts && InlandInland IntermodalIntermodal PortPort PotentialPotential

CopyrightCopyright ©© 2007 2007 High-Speed, Low Wake, Intermodal Float Technology

CopyrightCopyright ©© 2007 2007 PortPort && IntermodalIntermodal TerminalTerminal CompetitiveCompetitive MandatesMandates PortsPorts && intermodalintermodal linkageslinkages mustmust changechange thethe currentcurrent costcostversus versusvalue valuerelationship relationship inin thethe logisticslogistics chain.chain. BecomeBecome ValueValue AddedAdded Multipliers...Multipliers... SuccessfulSuccessful portsports && intermodalintermodal terminalsterminals inin thethe nextnext decadedecade mustmust investinvest inin andand leverageleverage technologytechnologyto to improveimprove terminalterminal productivity,productivity, cost,cost, effectivenesseffectiveness andand reliabilityreliability forfor allall modesmodes ofof transportation…transportation…securelysecurely asas environmentalenvironmental stewards.stewards. CopyrightCopyright ©© 2007 2007 ExecutiveExecutive ManagementManagement ConferenceConference forfor LatinLatin AmericaAmerica andand thethe CaribbeanCaribbean FebruaryFebruary 12,12, 20072007 Miami,Miami, FloridaFlorida "Tools"Tools toto LeadLead andand ManageManage CompetitiveCompetitive Ports"Ports" GlobalGlobal MaritimeMaritime LogisticsLogistics && PortPort OperatingOperating TrendsTrends MacroeconomicMacroeconomic SituationSituation ThankThank YouYou

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