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Trends in ports and shipping market –

prospects for the coming years

Drewry Maritime Advisors

03 September 2015

PRIVATE & CONFIDENTIAL

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4 www.drewry.co.uk Trends in ports and shipping market – prospects for the coming years

Global seaborne trade – growth

Source: Drewry Maritime Research

The past 34 years (1980 – 2014)

Global seaborne trade growth

World GDP grow

World population growth

Urbanization factor

Shipping capacity expansion

3.1%

2.0%

1.5%

2.4%

2.7%

-5%

0%

5%

10%

15%

Seaborne trade growth Global GDP growth

-

2 000

4 000

6 000

8 000

10 000

12 000

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

Mil

lio

n T

on

ne

s


Global seaborne trade – Key market segments

Source: Drewry Maritime Research

2014

2000

CAGR 1980-2014

► Dry Bulk: 3.7%

► Liquid Bulk: 1.9%

► Containers: 8.3%

► Non Containers: 2.9%

Dry Bulk: 47%

Liquid Bulk: 31%

Containers: 12%

Non Containers: 10%

Dry Bulk: 34%

Liquid Bulk: 36%

Containers: 16%

Non Containers: 14%

CAGR 2009-2014

Dry Bulk: 7.1%

Liquid Bulk: 2.4%

Containers: 7.6%

Non Containers: 6.0%

-

2 000

4 000

6 000

8 000

10 000

12 000

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014

Mill

ion

to

nn

es

Dry Bulk Liquid Bulk General Cargo - Containers General Cargo - Non Containers

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Container Market

www.drewry.co.uk 7 Overview of global container port and shipping trends | © Drewry 2015

Global container port traffic 2000-2014

Market is growing but at a much slower pace

249 279

315

363

399

443

497 525

478

548

596 625

645 678

713 749

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 (f) 2016 (f)

Source Drewry Maritime Research

Million teu

CAGR 11.3% CAGR 5.3%


Regional throughput growth (teu) Wide variation in expected demand growth by region, with increased volatility

5,4% 5,1% 4,9% 4,3%

3,8% 3,7% 3,4%

5,7% 5,2% 5,1%

3,3% 3,0% 3,2%

4,6%

0%

2%

4%

6%

8%

10%

Asia World Oceania North America Latin America Europe Africa


2014-2015

9,1% 8,9% 8,1%

7,6% 6,9%

5,7%

2,8%

0%

2%

4%

6%

8%

10%

Latin America Africa World Europe Oceania Middle East / South AsiaNorth America

2011


Global containership size development Rapid move towards bigger ships; 2015 - scheduled delivery of 1.9 million teu and 60 ULCVs

-5%

0%

5%

10%

15%

20%

25%

30%

35%

<4000 4,000-4,999 5,000-5,999 6,000-6,999 7,000-7,999 8,000-9,999 10,000 +

1Q 2014 1Q 2015 Change

• Ships of 10,000 teu or above comprise 18% of the global fleet by capacity (14% a year ago)

• Ships of 8,000 teu or above comprise 37% of the global fleet by capacity (33% a year ago)

• Ships of less than 5,000 comprise 46% of the global fleet by capacity (43% a year ago)


Increase in average container ship size, 1Q2013 - 1Q2015 Increase in ship size on all trade lanes…significant upsizing on certain trades

80%

37%

34%

32%

21%

19%

15%

15%

14%

10%

9%

9%

8%

8%

6%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Europe-S Africa

Asia-ECSA

Asia-W Africa

Europe- W Africa

Europe-ECSA

Asia-N Europe

Asia-USEC (Suez)

Asia-USWC

N Europe-Gulf/Mex

Asia-S Africa

SE Asia-Aus

N Europe- N Atlantic

Asia-WCSA

Asia-Med

N Asia-Aus



Average ship size

More than 6,000 teu on most trade lanes

8 625

7 444

7 390

7 386

7 375

7 188

6 861

6 569

4 702

4 606

4 467

4 393

4 066

3 828

3 613

3 556

2 470

0 1 000 2 000 3 000 4 000 5 000 6 000 7 000 8 000 9 000 10 000

Asia-Med

Europe-ECSA

Asia-USWC

Asia-ECSA

Asia-USEC (Suez)

Europe-S Africa

Asia-WCSA

Asia-S Africa

N Europe- N Atlantic

Asia-USEC (Panama)

N Asia-Aus

N Europe-Gulf/Mex

Asia-W Africa

SE Asia-Aus

Europe-WCSA

N Europe-Montreal

Europe- W Africa



Changing nature of cargo flows Terminal performance is critical to achieving benefits of largest ships; who pays?

Lines Expect:

• Reliability

‒ Departure on schedule

‒ Connectivity with feeders/relay services at

hubs

‒ All containers loaded (including empties)

‒ No constraints/congestion on landside

service

• Productivity

‒ Speed of vessel turnaround is important.

As vessel size increases, port time is

maintained, in spite of increased container

exchange

• Efficiency

‒ Largest vessels for the trade/route to be

handled without physical constraints

‒ Unit handling costs are maintained –

requires a competitive environment


Global TEU volumes are forecast to grow steadily to 2019

65%

66%

67%

68%

69%

70%

71%

72%

73%

-

200

400

600

800

1 000

1 200

1 400

2014 2015 2016 2017 2018 2019

Mil

lio

n T

EU

Throughput (Left axis) Capacity (Left axis) Utilisation (Right axis)


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Dry Bulk Market


-

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015(f) 2016 (f) 2017(f) 2018(f) 2019(f) 2020(f)

Millio

n t

on

nes

Minor Bulk

Demand : uncertain market, modest outlook

CAGR 7.9% CAGR 2.9%

CAGR 3.5% CAGR 3.3%

-

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015(f) 2016 (f) 2017(f) 2018(f) 2019(f) 2020(f)

Millio

n t

on

nes

Major Bulk


Supply: Demolition, delayed deliveries, cancellations

0

4 000

8 000

12 000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015*

Millio

n d

wt

Handysize (up to 39,999 dwt)

Deliveries Demolitions

0

10 000

20 000

30 000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015*

Millio

n d

wt

Handymax (up to 64,999 dwt)


0

10 000

20 000

30 000

40 000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015*

Millio

n d

wt

Panamax & Post-Panamax (up to 119,999 dwt)


0

10 000

20 000

30 000

40 000

50 000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015*

Millio

n d

wt

Capesize & VLOC (120,000 dwt+)



0

20

40

60

80

100

120

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015(forecast)

New

bu

ild

pri

ce,

US

D m

illio

ns

Capesize Panamax Handymax Handysize

Whilst newbuild prices have seen a steadier decline

Prices peak in 2007-2008 due to

high capacity utilisation.

Prices decline due to

excess supply and global

recession

CAGR (2009-2014)

• Capesize: -6%

• Panamax -5%

• Handymax: -4%

• Handysize: -5%


Forecast

0%

20%

40%

60%

80%

100%

0

200

400

600

800

1 000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Uti

lis

ati

on

Millio

n d

wt

Dry Bulk fleet (left axis) Utilisation of capacity (right axis)

Improving utilisation

Fleet growth CAGR

• 2009-2014: +10%

• 2014-2020: +4%


Forecast

0

20 000

40 000

60 000

80 000

100 000

120 000

140 000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

1-y

ear

peri

od

rate

s,

US

D p

er

day

Capesize Panamax Handymax Handysize

Period rates have seen a dramatic decline since 2008

CAGR (2014-2020)

• Capesize: +4%

• Panamax: +10%

• Handymax: +10%

• Handysize: +12%

CAGR (2009-2014)

• Capesize: - 10%

• Panamax: - 12%

• Handymax: - 6%

• Handysize: - 2%


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Tanker Market


Change in oil demand and production

• IEA now estimates global oil demand to have grown by 1.7 mb/d in 1H 2015

vs 1H 2014

• IEA forecast Global oil demand to average 94.2 mb/d in 2015, and to 95.6

mb/d in 2016.

• Estimates were upgraded as economic growth solidifies and US consumers, in

particular, respond to sharply lower oil price

-3

-2

-1

0

1

2

3

4

2003 2005 2007 2009 2011 2013 2015

Ch

an

ge

(m

bd

)

OPEC NON-OPEC Demand


Crude oil seaborne trade – Asia the only bright spot

-

200

400

600

800

1 000

1 200

2000 2002 2004 2006 2008 2010 2012 2014

Imp

ort

s (

mil

lio

n t

on

nes)

Europe USA Asia Pacific

CAGR (2009-2014)

USA - 4.0%

Europe - 1.0%

Asia + 3.3%


US shale oil output - key variable for seaborne oil trade

5

6

7

8

9

10

11

2009 2011 2013 2015 2017 2019

Pro

du

cti

on

(m

bp

d)

US Crude Oil Production US Crude Oil Production (high price)

US Crude Oil Production (low price)


Crude tanker tonne-mile demand

8000

8500

9000

9500

10000

10500

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

De

ma

nd

(b

illi

on

to

nn

e-m

ile

s)

Oil trade (billion tonne-miles) Oil trade (billion tonne-miles)High Price

Oil trade (billion tonne-miles)-Low Price

CAGR (2014-2020)

1.7%

CAGR (2014-2020)

2.7%


Crude tanker fleet growth

0

50

100

150

200

250

300

350

400

450

-15

-10

-5

0

5

10

15

20

25

30

35

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Fle

et

siz

e (

Mil

lio

n D

WT

)

Deli

very

an

d d

em

oli

tio

n (

M. D

WT

)

Delivery Demolition Fleet size - right


Crude tanker supply-demand balance

6 000

7 000

8 000

9 000

10 000

11 000

12 000

13 000

14 000

2011

2012

2013

2014

2015

2016

2017

2018

20

19

2020

bill

ion

to

nn

e-m

iles

Supply Demand


Crude tanker: Summary and earnings outlook

0

10

20

30

40

50

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Thousand U

SD

per

day

Vlcc (280K dwt) Suezmax (150K dwt) Aframax (95K dwt)


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Thank You

www.drewry.co.uk

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London

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India

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