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APL UPDATE
Long Beach, March 2019
LONG BEACHMARCH 2019
APL UPDATE
APL UPDATE
Long Beach, March 2019
Forecasted
Demand +3.3%
Supply +3.2%
3.0%
4.1%
2.7%3.1%
-3.4%
8.7%
5.5%
2.1%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
14%
16%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2018 2019
% Y
oY
gro
wth
Supply Demand
Trans-Pacific market expected to remain robust in 2019
Source: PIERS, CTS for historical volumes
Alphaliner, Drewry Container Forecaster Q4 and APL
analysis for forecasted growth
2
FY YoY%
Demand +6.0%
Supply +7.0%
Trans-Pacific Supply & Demand YoY% Growth 2018-2019
Market showing restraint in capacity growth;
Option to further rationalize if demand weakens
Against an
exceptionally
high 2018 Q4
demand
“Beat the
Tariffs” rush
APL UPDATE
Long Beach, March 2019
Despite tariff war, China will remain a major US exporter
3
Source: PIERS/IHS Markit
100 5 15 20
China
India
Vietnam
Thailand
Indonesia
Exports from key Asia emerging countries
are nowhere near China’s scale today
47%
5%
3%
2%
2%
2018 share of
US imports
2016
2017
2018
YoY % growth
2016
2017
2018
2016
2017
2018
2016
2017
2018
2016
2017
2018
APL UPDATE
Long Beach, March 2019
Port volume surge:+17% YoY
in Dec 2018
Source : IHS Markit, 30 Jan 2019
LA-LB port congestion – an industry-wide issue
4
LA-LB is the most complex
port environment in the US:
• 12 container terminals
• Handles >16M TEUs p.a.
• 30,000 gate moves daily
‘Beat the tariffs’ rush: BCOs scramble to bring
inventory into US
34 extra loaders:Adding 250,000+ TEUs
Shippers
experienced:
• Full warehouses
• Local dwells up 3x
• Slower cargo availability
• Truck turns >90 mins
• Truck power shortage
• Chassis dislocation
• Rail connectivity issue
What happened in Q4 2018?
APL UPDATE
Long Beach, March 2019
Port volume surge:+17% YoY
in Dec 2019
Source : IHS Markit, 30 Jan 2019
5
LA-LB is the most complex
port environment in the US:
• 12 container terminals
• Handles >16M TEUs p.a.
• 30,000 gate moves daily
‘Beat the tariffs’ rush: BCOs scramble to bring
inventory into US
34 extra loaders:Adding 250,000+ TEUs
Shippers
experienced:
• Local dwells up 3x
• Chassis dislocated
• Lack of truck power
• Rail delays
What happened in Q4 2019?
FMS’ commitment
APL UPDATE
Long Beach, March 2019
EXX remains
>90% on-time
No appointment,
no queue;
25-min truck turn-time
via Bobtail gate
New off-dock express rail
service offers daily departures
and shaves ≥4 days’ transits
into key inland destinations
Guaranteed chassis
for local EXX
delivery, from APL-
dedicated pool
sidesteps the LA-LB congestion
6
99% local EXX cargo
on wheels and available
for pick-up within 12 hours
of vessel operation
APL UPDATE
Long Beach, March 20197
Choose EXX for its proven performance in speed, timeliness and service
99% 25minutes
WHEELED CARGOWithin 12 hours
of vessel dischargeCARGO PICKUPby trucks averaging*
from entry to exit at FMS terminal
*Average truck turn time via EXX-dedicated Bobtail gates
WHITE GLOVE SERVICEfrom dedicated APL team
throughout the journey
100% >90%
SPACE & EQUIPMENTavailability upon
booking confirmation
– no rolls
ON TIME11 days from Shanghai
12 days from Ningbo
Source: On-time performance based ion Seaintel’s Ocean Liner
Performance for Q4 2018; Others based on APL’s internal
analysis in Jan 2019 data.
APL UPDATE
Long Beach, March 2019
City
*Includes Ocean transit + 3 days dwell
Cuts ≥4 days of inland transits with
daily-departing express rail
8
Available for shipments sailing from Shanghai on 14 March onwards
APL UPDATE
Long Beach, March 20199
Expanded to
all origins in Asia
Guaranteed
chassis from
APL’s dedicated
pool
Dedicated
bobtail gates for
swift pick-up
Instant
appointment
confirmation
LOS ANGELES - FMS
Specially reserved for dry 40’
containers on APL’s services:
• Eagle Express (EX1)
• South China 1 (SC1)
• Pendulum Loop 1 (PE1)
Cargo available on wheels
within 2 hours of discharge at L.A.
*Terms & Conditions apply
*
EXPRESS
ACCESS
SVC Vessel Voyage POL ETA POD ETA
EX1 President FD Roosevelt 0DB3NE1PL Qingdao, 7 Mar ’19 L.A., 24 Mar ’19
PE1 APL Detroit 0TU4ZE1PL Port Klang, 6 Mar ’19 L.A., 3 Apr ’19
SC1 CMA CGM Alaska 0TX2HE1PL Fuqing, 3 Mar ‘19 L.A., 23 Mar ‘19
Effective voyages:
NEW!
NEW!
APL UPDATE
Long Beach, March 2019
End-to-end visibility to
optimize your supply chain
Monitor transit time, shipment movement &
status.
Operate exception management with little to
no disruption.
Optimize your supply chain. Identify and
implement concrete operational enhancements
Set KPIs to drive
efficiencies and costs reduction.
Advanced Data (AD)
Supply Chain Diagnostic (SCD)
Geolocation
Temperature
Humidity
Acceleration
Exception Alert (temperature/humidity,
acceleration out of range;
longer than expected idle time)
Notifications(container has entered/ exited
designated zone, door opening)
Data & Services Two Product Offerings
US$90*/
container
US$120/
container
Your Benefits
10
*volume discounts available. Talk to your APL sales rep
Bookings available for dry boxes!
APL UPDATE
Long Beach, March 2019
Project LIFT: Now in steady state
• Underlying platform proven robust for years
• Website interface upgraded to APL eBusiness, fully replacing the familiar HomePort
• New APL mobile app to be launched in 2 months
Oct – Dec 2018 Jan 2019
Parallel-run of legacy
and new systems
Running 100% on new &
improved
• Improved user familiarity
• Bugs, processes fixed
• Systems enhanced
EDI issues (customer cases): 3 open
Booking confirmation in 2 hours: 94.9%
Draft BL in 8 hours: 84.8%
BL accuracy: 98.4%
Issue resolution in 12 hours: 84.0%
Invoice dispute resolved in 7 days: 80.6%
Thanks to your support, and together
with the commitment of APL employees,
the most difficult period is now over
TODAY
11
Note: Figures are as of Week 7, 2019
APL UPDATE
Long Beach, March 2019
Sulfur Cap 2020: APL’s new BAF offers visibility
of fuel cost impact
12
=
FUEL PRICE
(Per Ton)
TRADE
COEFFICIENT
X
Revised formula makes the extent of fuel price changes on your total freight
rate in different trades more transparent and predictable
Fuel oil consumed (in ton)
per round voyage
per trade Total
number of
full TEUs carried
=3 months’ market average
historical fuel price* prior to
quarterly BAF quantum
announcement.
BAF
*Referencing IFO 380’s at:
40% Rotterdam
+ 50% Singapore
+ 10% HoustonTrade-specific quantum
revised and published quarterly.
Trade-relevant Low Sulphur Fuel surcharge
for ECAs will be applied on top of BAF.
Also known as Bunker
Surcharge (BSC) and Fuel
Adjustment Factor (FAF)
in some Trades.
Applicable for all contracts
with > 3-month duration
When APL starts switching over from regular to
low sulphur fuel in 2019, fuel reference and index
will be updated and announced accordingly.
APL UPDATE
Long Beach, March 2019
THANK YOU