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The Gulf Coast Advantage: A Regional Approach to
Marketing & Preparing for the Panama Canal Expansion
Largest, most diversified port in Florida
$8B in economic impact/supports nearly 100,000 jobs
Largest economic engine in West Florida
Solid financial performance, even during economic downturn
Encompasses 5,000 acres
Approx. 40M tons cargo/year—nearly 40% of FL waterborne trade
Energy products gateway of West/Central Florida-critical to economy
Premier U.S. fertilizer port
Large/diverse bulk and break bulk business
Shipyard/ship repair center
Top ten cruise homeport—Carnival, RCI, HAL, NCL
Expanding container/distribution center gateway
Petroleum Cruise Phosphate Building Materials Containers
Port of Tampa
Containers Concentrate In Population Centers
Estimated Market Shares
Far East to USEC/Gulf
2010 1990 1983 1976
Mini-Landbridge 65% 80% 30% 15%
All-Water 35% 20% 70% 85%
Lock Chamber
Length: 427 m
Width: 55 m
Depth: 18.3 m
Vessel size
LOA: 366 m
Beam: 49 m
Draft: 15.2 m
Panama Canal Expansion
Logistics & Supply Chain Implications
Distribution Strategies
Cost & Transit Time Considerations
Commodity Sensitivities
While ocean carriers seek to reduce their
costs, including through larger ships/economies
of scale, ultimately, exporters and importers
determine cargo routing by optimizing their
supply chains
Distance Comparison
SHANGHAI
PANAMA CANAL
NEW YORK LOS ANGELES 5699 miles
8566 miles
Ocean Carriers’ Economics & Perspective
Larger ships + economies of scale
Profitability vs market share strategy
Inability to raise rates to a compensatory levels
Focus on lowering operating costs
Larger ships
Slow steaming
Minimize inland rail/trucking costs
Global Container Shipping Industry Profit/Loss
2009 – 2012 (US$ Billions)
Source: AXS Alphaliner
Cargo Owners’ Economics & Perspective
* Diversify route options and minimize exposure
* Geography does not change, despite Canal expansion *All water delivery China to US Midwest via east coast vs west
coast/intermodal = extra 7+ days transit time
*Lower value/seasonal vs higher value/time sensitive
* Transloading
* Ultimately cargo owners (importers and exporters) drive cargo flows and determine routings – not ocean carriers
46%* 63%*
4000 TEU ship 8000 TEU ship
* Share of the US population
Assumptions
• $400/MT bunker
• Canal tolls based on 2011
proposal
• Current ship charter rates
• Inland move by rail
• Left of the black line = West Coast has the cost advantage
• Right of the black line = East Coast has the cost advantage
For a typical Asia-USEC voyage,
shifting to an 8000 TEU vessel
expands the market reach of the
USEC ports
Waterside & Landside Access
*How deep is deep enough?
*East Coast & Gulf Coast
*Transshipment will play a role
*Deep water is important but efficient road and rail
access to customers is key
Tampa•
Kingston•
Colon/MIT•
•
Caucedo
•Cartagena
•Freeport
Mexico
South America
United States
Caribbean Transshipment Triangle
Increase from 235K TEUs in 1996 to 6.5M TEUs in 2011
Panama Container Terminals
Puerto Barrios
326K
1
Santo Tomás
392K
1
Puerto Cortes
583K
2
Puerto Quetzal
583K
0
Freeport 1,125K
16
Caucedo 1,004K
5
Haina
288K
3
Kingston
1,891K
19
Acajutla
145K
0
Limon /Moin
858K
1
MIT/CCT/Cristobal
2,810K
34
Balboa/PSA
2,758K
25
Cartagena
1,581K
12
La Guaira
333K
5
Puerto Cabello
800K
0
Caldera
155K
0
Port name
Movement in TEUs
Quay cranes
Profile of main ports in the region (movements in ‘000 of TEUs for 2010 and number of quay cranes)
La Habana 228K
0
Barranquilla
103K
0
Buenaventura
662K
4
Port Spain
389K
5
Point Lisas
184K
2
Jarry
150K
4
Tampa among the deepest draft ports
in Florida and along the Gulf Coast
STATE
PORT
REPORTED
CHANNEL DEPTH
Florida Tampa 43
Jacksonville 40
Miami 42
Port Manatee 40
Port Everglades 42
Alabama Mobile 45
Louisiana New Orleans 40
Texas Houston 40
Container Terminal Expansion
Currently 40 acres; expansion to 160 acres planned
4 container cranes; 2 more under consideration
43 foot deepwater channel/berths
Plans to quadruple capacity; enough to handle all Cent. FL demand
Tampa Gateway Rail Project
• Joint TPA-CSX multi-modal initiative
• Florida’s only on-dock unit train terminal
• Ethanol, containers, other cargo
• Scheduled for completion in 2012
I-4 Connector Project Elevated express highway access between Port and Interstate
System, scheduled for completion summer 2013
Dedicated Truck Lane
20
21
*
* Three strong, distinct, complementary markets
* Proximity to expanded Panama Canal
* Balanced trade characterized by robust exports to multiple lanes
* Expanding logistics gateways, distribution centers and industrial parks driving cargo density
* Extensive terminal facilities on deep water, with plans for additional expansion
* D E M O G R A P H I
C S
22
• Combined population of 97.2 Million. 32% of the U.S. population
• Fastest population growth in the U.S.
• Combined GDP of US$4.1 Trillion. 29% of U.S. Gross Domestic Product
• Access to major hubs like Dallas/Ft. Worth, New Orleans, Memphis, Atlanta and Orlando in 8 hours or less
* C O S T S A V I N G S
& R E V E N U E
E A R N I N G O P P O
R T U N I T Y
23
• Shipping via the Panama Canal is less costly than USWC rail or via the Suez Canal
• Shorter nautical miles from Asia as compared to USEC ports, a 15% savings from Panama Canal
• Eliminates mini-land bridge cost
• Balanced import / export trade allows for even matchback to multiple trades
• Higher terminal efficiency levels with favorable labor environment
• No local port or terminal fees related to clean air, congestion or capital improvement
• Traditionally, a higher revenue market
Panama - US Gulf R/T mileage
Colon Houston 1,539
Houston Mobile 539
Mobile Tampa 386
Tampa Colon 1,216
total distance 3,680
Versus
Panama - USEC R/T mileage
Colon Savannah 1,563
Savannah Norfolk 503
Norfolk NY 294
NY Colon 1,974
total distance 4,334
Source: Panama Canal Authority
The Gulf Coast Advantage:
654 mile reduction or -15%
24
O U R B U S I N E S S
HOUSTON MOBILE TAMPA
Top Importers Top Import
Commodities Top Importers
Top Import
Commodities Top Importers
Top Import
Commodities
Wal-Mart GDSM Honda, Hyundai, Kia,
Mercedes , Nissan,
Toyota
Auto Parts Rooms to Go Furniture
The Home Depot Home Improvement Big Lots,
Dollar General GDSM Beall's
General
Merchandise
Fox Conn / Hon Hai Electronics Standard Furniture Furniture Publix Grocery Products
Ashley Furniture Furniture Evonik Chemicals Lowe's Building Materials
Crown Mark Furniture CAFFCO Art Flowers Pepsico/Tropicana Juice Concentrate
Top Exporters Top Export
Commodities Top Exporters
Top Export
Commodities Top Exporters
Top Export
Commodities
Shintech Resin Sabic Resins Amalie Engine Lubricants
ExxonMobil Chemicals GP Cellulose, IP Forest Products Sysco Food Products
JBS / Swift Frozen Meat Ascend Performance
Materials Chemicals
Coca Cola/
Minute Maid Frozen Citrus Pulp
Noble Cotton Cotton Tyson, Pilgrims,
Sanderson Frozen Poultry Mosaic Feed Supplements
Halliburton OWS Staplcotn Cotton Citrus World Frozen Citrus Pulp
25
*9 Million + TEUs potential
*Attractive alternative to the USWC / USEC
*Large and under-served market
*Lower cost
*Terminal expansion projects in progress
*A new frontier
The Gulf Coast Advantage: A NEW BUSINESS
OPPORTUNITY
Thank You!