Container Shipping Leaders22 June 2020 • 15:00-15:45 BST

Part ofMaritime Leaders Webinar Week22-26 June 2020

Presentation documents:Page 2: Andrew Abbott, Atlantic Container LinePage 7: Henning Schleyerbach, Digital Container Shipping AssociationPage 12: Jan-Olaf Probst, DNV GLPage 18: Alessandro Menezes, Vinmar

Right-Sizing Business:

Can You be Too Big?

MARTIME LEADERS WEBINAR WEEK

THE CURRENT REALITY

IN TIMES OF MARKET DECLINE, THERE IS NOT ENOUGH CARGO AROUND TO FILL A BIG SHIP – THERE IS ALWAYS ENOUGH CARGO TO FILL A SMALL SHIP

EVERY LARGE CARRIER HAS BLANKED SAILINGS – THE SMALL CARRIERS HAVE MAINTAINED FULL SCHEDULES

EVERY LARGE CARRIER IS LOSING MONEY –THE SMALL CARRIERS STILL MAKE MONEY

MANY LARGE CARRIERS NEED GOVERNMENT SUPPORT TO SURVIVE NOW – THE SMALL CARRIERS RELY ON THEMSELVES

HOW CAN YOU BABYSIT SO

MANY SHIPMENTS?

CARRIER SHIPSTEU

CAPACITYAVERAGE TEU SIZE

APM-MAERSK 657 3,999,000 6,086MSC 548 3,663,000 6,684COSCO 467 2,862,000 6,128CMA CGM 484 2,673,000 5,524HAPAG LLOYD 238 1,716,000 7,210ONE 212 1,569,000 7,402EVERGREEN 189 1,215,000 5,554YANG MING 92 598,000 6,498HMM 67 552,000 8,235PIL 111 350,000 3,157ZIM 58 284,000 4,904WAN HAI 91 236,000 2,598

ECONOMY OF SCALE ILLUSION

BIG SHIP BENEFIT: LOWER UNIT COST IF FULL

THE PRICE YOU PAY:

• FOCUS ON FILLING SLOTS NOT PROFITS• CUSTOMERS ARE NUMBERS, NOT PEOPLE• SERVICE DETERIORATES BECAUSE LESS

PERSONAL – SO WHOLESALERS TAKE OVER THE END CUSTOMER

• HIGH VOLUME-LOW PROFIT CUSTOMERS GET BETTER SERVICE THAN LOWER VOLUME-HIGH PROFIT CUSTOMERS SO YOU LOSE THE MOST PROFITABLE CARGO

• YOU CAN’T CALCULATE ACTUAL COSTS• YOU TAKE EVERYTHING AND PRAY THAT THE

AVERAGES WORK OUT IN THE END

WHAT DOES THE

CUSTOMER WANT?

CHEAPEST PRICE – SEAMLESS SERVICE

HOWEVER, IF THINGS GO WRONG:

• VOYAGE IS LONG – SHIP IS FAR FROM A REPAIR YARD

• MOTHER NATURE ALWAYS CAUSES PROBLEMS

• PORT CONGESTION IS UNFORESEEN

• CUSTOMS CAUSES DELAYS

A MACHINE CAN’T FIX THE PROBLEMS.

Container Shipping LeadersHenning Schleyerbach, COO of DCSA

June 22, 2020

Digital Container Shipping Association at a glance

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Members represent 70% of global container tradeFounded in 2019, HQ in Amsterdam

To enable system interoperabilitythrough open source standards

Vendor neutral

Non-profit

COVID-19 highlights shortcomings of today’s supply chains

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NEXT 4-WEEK SPENDING INTENT

21%Everyday household goods

27%Groceries

10%Medicines

-13%Restaurants/takeout food

-12%Alcohol

-12%Apparel/footwear

-4%Books

-14%Electronics

CONSEQUENCES

Storagespace shortage Lower

demand &blanksailing

Impeded workforce

Less reliablesupply chain

Goodspile up

DISRUPTION

COVID-19

Longitudinal biweekly surveys of consumers across 17 countries. 1.000 respondents per country. Data update: 30-May-2020

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Global supply chains need collaboration and standardisation to enable:

Simplicity TransparencyMultimodal Reliability

It is easy to order and change shipping services using digital documentation and connected systems

Use self-service for fast, secure and automated collaboration

Collaborative awareness and decision making to manage changes

Real-time visibility of cargo location and status

Confidence in arrival time

Pro-active communication in case of exceptions

Responsive support across all stakeholders, also during a crisis (e.g. pandemic or cyber attack)

Transparency and trust between all parties in the supply chain

Solid access management following the need-to-know principle

Everyone clearly states and commits to their operational and commercial promises

Transport parties share data about their performance

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Thank you

DNV GL ©

Confidential

22.June 2020 SAFER, SMARTER, GREENERDNV GL ©

Confidential

MARITIME

Jan-Olaf Probst, Business Development, Executive Vice President

Container Shipping Leaders webinarSuitable fuel solutions beyond 2030

1

22nd June 2020

DNV GL ©

Confidential

22.June 2020

Initial IMO Strategy on reduction of GHG emissions:Vision and ambitions

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Short-term 2018 – 2023

Tighter EEDI & SEEMP

Energy efficiency indicators

Speed reduction

National Action Plans

Mid-term 2023 - 2030

Energy efficiency measures for new and existing ships, using new indicators

Carbon pricing / MBM

Plan for low carbon fuels

Long-term 2030

Development of zero carbon fuels

New/innovative emission reduction mechanisms

DNV GL ©

Confidential

22.June 2020

Fuel availabilityCurrent production of possible ship fuels per year (relative energy content)

Some fuel alternatives can meet possible shipping demand for the next 10 years when a small growth in shipping applications is assumed

If a rapid demand in alternative ship fuel occur a strong increase in production capacity is needed for all fuels except LNG

Fuels from hydrogen and CO2(PtoF) are currently not produced in relevant quantities

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HFO,MGO assumed consumption 2020 (330 Mio t/a)

LPG production in 2015

LNGproduction capacity end 2018 (approx. 10% of natural gas production)

CH3OH (Methanol ) production capacity 2016

Bio fuel production 2016 (Bio Diesel and straight vegetable oil)

H2 production 2016

PtoF Power to Liquid and Power to Gas: CO2+H2 --> fuel

DNV GL ©

Confidential

22.June 2020

Fuel volume: How much space future fuels will need?

Todays ship fuel has the highest volumetric energy density

Hydrogen needs more than 4,5 times the volume of oil based fuel. In this regard not suitable for deep sea shipping

Other fuel alternatives are acceptable for deep see shipping with regard to required volume

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Reference energy density

DNV GL ©

Confidential

22.June 2020

Rules and RegulationsLNG as a fuel for merchant ships is regulated by IMO

International Code for Safety for Ships using Gases or other Low-Flashpoint Fuels

MSC.391(95), 2016 Edition

In force since 2017-01-01

– For LNG and CNG

Methanol and LFF oil fuels are under development

No other fuels are currently proposed

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Combustion engines for alternatives fuels

DNV GL ©

Confidential

22.June 2020

SAFER, SMARTER, GREENER

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Suitable fuel solutions beyond 2030

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Jan-Olaf ProbstE-mail: jan-olaf.probst@dnvgl.comMobile: +49 172 419 2102