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NCBFAA Government Affairs Conference September 24, 2007

NCBFAA Government Affairs Conference September 24, 2007. Vessel Operators and Non-Vessel Operators: Partners or Adversaries in Contract Negotiation? Tim Perry APL, Ltd. AGENDA. Trade Outlook We’re in This Together Successes & Challenges Summary. Trade Outlook.

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NCBFAA Government Affairs Conference September 24, 2007

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  1. NCBFAA Government Affairs Conference September 24, 2007 Vessel Operators and Non-Vessel Operators: Partners or Adversaries in Contract Negotiation? Tim Perry APL, Ltd.

  2. AGENDA • Trade Outlook • We’re in This Together • Successes & Challenges • Summary

  3. Trade Outlook

  4. Trade Outlook Rising US Exports and Imports US exports and imports expected to grow

  5. Trade Outlook World Containerized Trade Growing Containerized volumes expected to double from 2000 to 2020 Source: Global Insight

  6. Trade Outlook Capacity and Fleet Growth to Slow Gap between Supply & Demand growth narrowing by 2008 Source: GRD, MDS, Drewry

  7. Container imports are expected to double by 2020 • Rail freight tonnage is expected to increase by 50% by 2020 • Air cargo volume is expected to increase by 5% every year through 2016 • From 1970 to 2003, vehicle travel on highways rose by 161% but road mileage only increased by 6% • Half of the nation’s 257 locks on inland waterways are functionally obsolete • Of the 590,750 bridges, 27% are structurally deficient or obsolete • Most ports have not been dredged to handle the 10,000-TEU jumbo containerships being built Legend: 2004 Volumes (‘000 TEUs) 2020 Volumes (‘000 TEUs) Trade Outlook Infrastructure Issues: Current & Future 2,557 1,776  44.0% U.S. MARITIME CONTAINER TRADE GROWTH  253.6% SEATTLE 15,835 4,478  144.5% 4,396 1,798 NY/NJ 59,420 TACOMA 5,566 3,382 2,043 1,809  207.7%  65.5%  353.6% VIRGINIA OAKLAND 13,101 6,165  466.8% 6,639 9,420 LA/LB 1,437 1,860  256.9% 1,662 HOUSTON CHARLESTON SAVANNAH 2,152 1,010 MIAMI  113.1% Source: American Society of Civil Engineers (ASCE) – 2005 Report Card for America’s Infrastructure, U.S. DoT

  8. Trade Outlook Rail Growth in North America Intermodal traffic in US has almost doubled in the past 15 years – trend likely to continue

  9. Trade Outlook Rail Constraints in North America US Rail infrastructure continues to be stressed in spite of significant investment by the railroads

  10. Trade Outlook Global Insights forecast highly congested conditions on transcontinental railroads main lines by 2035 Rail Volume: 2005 vs 2035 Source: Global Insight

  11. Trade Outlook Marine Terminals are stressed

  12. Trade Outlook Port of Long Beach 2004

  13. Trade Outlook Infrastructure Issues: Viewpoint • The challenges which negatively impact ‘Flow’ today will become greater over time • Pressure on ports will continue • As rail volumes rise, and investment fails to keep pace with growth, rail velocity will continue to slip • Highway congestion will hamper rail and truck distribution to major metropolitan areas throughout the US

  14. We’re All In This Together

  15. Origin Storage Capacity Origin Local Train/ Drayage Origin Terminal Capacity/ Productivity Origin Feeder/ Barge Capacity Main Line-Haul Capacity Origin Terminal Capacity/ Productivity Destination Intermodal/ Local Drayage Capacity Destination Warehouse/ Store Capacity Transshipment Hub Capacity We’re all in this together It’s More than Port-to-Port

  16. We’re all in this together • Parties have everything to gain by partnering. • “Closeness” – from booking through delivery. • - Vessel Schedules • - Port Rotation • - Cargo Details • - Info that Shipper is NVO • VOC must know in order to manifest properly. • Demurrage is a symptom of low cargo velocity.

  17. Successes and Challenges

  18. Successes and Challenges • “24 Hour Rule” • - Special BL • - Master BL and House BL relationship • Exams • - Random VACIS, “Pop & Tap” • - FDA • - “1M”

  19. Successes and Challenges • “Zero Tolerance” – Gateouts • - MTO Bond • - Old World Penalties • $2,500 • - New World Penalties • 1st - $10,000 to $25,000 2nd - $25,000 to $50,000 3rd - $50,000 to $75,000 • - Incidents reduced from 27 to 7 per month

  20. Successes and Challenges • AMS Changes: i.e. Suppress “transportation messages” until conveyance is arrived. • “2Z” – Master / House BL mismatch advisory. • ACE PGA access to “holds” • “10 + 2”

  21. Summary

  22. Know your partners • Communicate • CESAC • NCBFAA Customs Committee • NCBFAA Legislative Advocacy - Ocean Carrier Best Practice Committee - COAC - Trade Support Network - TOPAS

  23. NCBFAA Government Affairs Conference September 24, 2007 Thank you.Tim PerryAPL, Ltd.1667 K Street NW, Suite 400Washington, DC 20006tim_perry@apl.com 202.496.2482

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