Inland connections to global networks

1. Inland connections to global networks Alex von Stempel Director Freshwater Logistics Ltd

2. Global logistics expenditure in 2002: 5.4 trill Euro (more or less 1:1 in 2002) Europe: 794 bill USD USA: 688 bill USD Asia: 648 bill USD Source: Datamonitor 2005 Global Trade flows

3. Oceanfreight 2006/2005 • Transatlantic 6.1 M TEU up 4.1% • Asia / Europe 17.8 M TEU up 13% • Transpacific 21.3 M TEU up 10.5% • Intra-Asia 44.3 M TEU up 9.7%

4. Outsourcing • Manufacturing • Logistics functionalities: • Transportation + Warehousing • Customs brokerage • Shipment Consolidation • Cross-docking • Freight billing/payment • Order entry, processing + fulfillment • IT + Customer service

5. Bigger vessels Source TGM

6. Global Container production • World Box fleet : 24 mill TEU of which new builds in 2007 • dry boxes, incl. specials 3.7 mill TEU • reefer boxes 205,000 TEU • tank containers 15,000 TEU • Source: World Cargo News

7. TEU growth Total production: • 2004 2.96 mill TEU • 2005 2.6 mill TEU • 2006 3.1 mill TEU • 2007 3.92 mill TEU • Source World Cargo News

8. Global Port Operators: Increase in market concentration Ranking Operator Equity TEU % Share of world throughput throughput throughput 1 PSA* 41.2 9.3 2 APM Terminals 32.4 7.4 3 HPH* 30.8 7.0 4 DP World** 26.2 5.9 • Evergreen 8.1 1.8 • Cosco Group 7.9 1.8 • Eurogate 6.6 1.5 • HHLA 6.0 1.4 • OOIL *** 4.8 1.1 • APL 4.6 1.0 Top 10 168.6 38.2 Other global operators 33.0 7.5 Local operators 239.7 54.3 World total 441.3 100 SOURCE: Drewry Shipping Consultants

9. Supply-Demand Terminal Capacity in EuropeSOURCE: CERERS PARAGON

10. EU25, 1995-2004 (tonnes/km) Modal Split EU 25 - 2000- 2004 t/km

11. Hinterland strategy 1. Road • Strengths: speed, flexibility, fixed pricing per unit • Weaknesses: most expensive modality, limited capacity: 2 TEU per unit, road congestion, Road pricing • Main utilization: short distance around sea ports, Northern Germany and Lower Rhine, short sea business

12. 2. Hinterland transport strategy 2. Rail • Strengths: mass transportation capacity, fixed schedules, fixed pricing • Weaknesses: pricing differentiation to weight, only point-point transportation, infrastructure highly utilised, high costs for infrastructure and equipment • Main utilization: Northern sea ports to Germany and CEE, Western sea ports only small market share

13. 3. Hinterland transport strategy 3. Barge • Strengths: environmental friendly, mass transportation capacity, fixed but flexible schedules, fixed pricing per unit, infrastructure reserves, inter-terminal positioning • Weaknesses: geographical limitation, dependency on water levels, surcharges, low speed, particularly in canals • Main utilization: main concentration on Rhine axis, feeders between sea ports and intra Benelux traffics

14. Rail intermodal forecast for 2015 • Forecasts indicate that maritime intermodal services involving the North Range ports will grow particularly strong at 11 % p.a. • Volumes in maritime intermodal transport will triple • Growth is mainly anticipated on the main routes 2003 2015 1) Source: DB AG

15. Betuweline, dedicated rail freight : meeting expectations? 3 Own exit for port of Amsterdam supported by measures to extend capacity for rail freight on existing trunk line 1 Direct access to the Maasvlakte and Maasvlakte II 5 Exit for destinations via Hanover 6 Sufficient capacity at the Emmerich – Oberhausen section: As of Q4 07 due to the use of ‘cross border locomotives’ no stops at Emmerich As of 2008 – upgrading signal system (shorter blocks) As of 2012 – third track between Emmerich and Oberhausen 2 4 Betuweline: rail freight only. No interference with passenger traffic. 160 km double track, max. 125 km/h and 25 kV. Betuweline: highest safety standards. No road crossings and ETCS level 2

16. Hinterland transport cost • 20’ BOX SHANGHAI TO ANTWERP COSTS 650 EUROS (INCLUSIVE OF ALL SURCHARGES) • 20’ BOX ANTWERP TO MUNICH COSTS 1450 EUROS (2006) (Carrier source) • 40’ BOX SHANGHAI TO MUNICH VIA HAMBURG 1700-2400 Euro + 800 Euro FOR HINTERLAND TRANSPORT COSTS (2007) (Freight forwarder source)

17. Causes of congestion • The delays of vessels and trains • Inefficient document handling in terminals • Opening times of sea terminals, intermodal terminals and warehouses? • Lack of value-added services in terminals such as container repair facilities • Terminal security access cards - a plethora of different systems • Lack of parking space for trucks at the gate and inside terminals • Trains could be longer but there are platform length limitations

18. Bottleneck - not in my back yard ! • 7- 10 days ‘free’ time • Empties and import containers • Demurrage • As goods inside the containers have often not been sold yet, importers and or their agents will try to use the free storage in ports and string this out as long as possible • Demurrage costs to the shippers are often less painful than having to strip the container and store its contents in a warehouse

19. Rotterdam hits back • From September 1, ECT has introduced much stricter delivery and pick-up regulations • Containers cannot be delivered earlier than nine days before departure of the vessel and they must be collected within 14 days • From January 1 dwell time will be further reduced to seven days

20. 12 daily railroad shuttles to the sea ports More than 300 scheduled direct combined transportation train links per week to the European hinterland 25 national/ international railroad companies offering transportation services; Duisburg intermodal inland hub

21. Hub potential available in Duisburg thanks to high market growth Turntable Potential 2009 via Rail per week Against the background of quickly growing cargo volumes and the threat of bottlenecks in the seaports DB Intermodal is focusing on hinterland hubs which will be utilized forEuropean cargo distribution. Container moves in the West ports will grow at double-digit rates over the next few years. DB Intermodal and duisport plan to raise the share of trains in transportation to and from the West European sea ports. Extensions at the DB terminal (DUSS) in Duisburg have already been finished. In a second step (2009), a new gateway terminal is planned.

22. Risk: Bottleneck transfer • Inland rail and barge terminals • The next frontier: Congestion in inland terminals where land containers are beginning to have to compete for space with seafreight boxes. • 45ft box stacks interfering with swap bodies.

23. Possible lessons • Empty container management a problem that unites Europe /US/Africa/Eastern Europe • Need to build up value-added manufacturing capabilities in the Third World to offset balance of full and empty boxes • Privatisation • Global port operators to secure supply chains by investing in ICD in land-locked countries • Creating secure investment climate

24. Role of internationalinstitutions • Financing renovation of essential infrastructure • Encouraging customs and administrative procedures simplification • Ensuring fair competition

25. ICD essential link for multimodal transport • Congestion relief tool • Transshipment hub port- rail-road • Bonded area • Buffer zone • Special reefer depots

26. Recommendations • Ocean a n d Inland Terminals to charge more for storage • Ocean carriers to facilitate earlier release of boxes from terminals – negotiating better deals with end customers, up front payment etc, congestion charge as well as charging shippers higher detention rates for empties • Shippers and agents to accept that 'free' storage is not really free • Inland terminal operators to segregate sea-freight stacks from land containers + trailers and swap-bodies. • Development of a truly modular/standardised container that everyone will have to accept!

27. Thank you! • Dedicated to running events for the transport and logistics industry • Consultancy services Alex von Stempel 39a The Avenue St Margarets-Twickenham Middlesex TW1 1QU UK Tel. + 44 208 744 0244 Email: a.vonstempel@ukonline.co.uk