Economical Impact on Container Transport Market Erik Ringmaa, Chief Commercial Officer Port of Tallinn 2008 1
Background Since the beginning of 2000's container logistic companies have enjoyed rapid growth of the market Recession driven by financial crisis results in decreasing consumption and a pressure has been put on Huge investments have been income from transport services. made in shipbuilding, many vessels are still under construction. (In 2008 total container fleet will grow 15%) It puts traders into a challenging position how to beat the competition by decreasing transport costs and at the same time keep the current service quality and speed? 2
World s container flows in 2007 14.8M TEU (6.5%) 5.0M TEU (9.7%) UNITED STATES ~ 143M TEU ( 10.9% ) ASIA 14.4M TEU (15.2%) EUROPE 3
Current market situation (1) Congested West-European ports (2006 Rotterdam, Hamburg, Antwerp 95-96% capacity utilization) Capacity growth of European container ports fall behind the growth of container volumes (respective annual figures until 2011 3,7-4,2% and 7,8%) The disbalance between Asian export capacity and European import capacity is 2,25 times and is still growing. The emphasis of container goods consumption is moving eastbound. 4
Current market situation (2) Average annual growth of container troughput in Russian ports in recent 5 years is 25 %. Russian CAGR 2009 2015 16,4% The drivers of container market growth in Russia fast developing economy supported by export of raw materials; low level of containerisation (20% of EU average), booming retail business. 5
Growth potential in container trade 2004-2010 2010-2020 2020-2030 8,0 7,0 NB! Growth rate of container trade is 2-4 times bigger than the growth of GDP GNP growth rate, % in year 6,0 5,0 4,0 3,0 2,0 1,0 0,0 OLD EU-COUNTRIES NEW EU-CONTRIES FINLAND RUSSIA CHINA 6
Container traffic potential in Baltic Sea region 10000 th TEU 8000 6000 4000 2000 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 7
Growth in container market in 2007 Volume of trade worldwide Global container market volume + 4.3 % + 10.9 % Total capacity of container fleet Baltic Sea fleet capacity + 16.2 % + 28.8 % Total amount of container ships Total amount of container ships in the Baltic Sea + 11.7 % + 13.4 % Average container ship capacity in the Baltic Sea + 13.6 % 8
Immutable development of container traffic - old mode FINLAND 3 8 port calls in China and South-East Asia; 1 port call in Arabian Peninsula; 3 4 port calls in North Sea; STOCKHOLM HELSINKI TALLINN ESTONIA TO ST. PETERBURG MOSCOW 20 days sailing from Asia to Europe; RIGA Discharge in North Sea hub, loading on feeder SWEDEN LATVIA vessel in 2 14 days; LITHUANIA MINSK DENMARK BELARUS 2 4 days sailing from North Sea to Baltic Sea. Feeder transport cost ca 25% of total sea transport cost 9
Immutable development of container traffic - new mode FINLAND 3 8 port calls in China and South-East Asia; 1 port call in Arabian Peninsula; 1 3 port calls in North Sea; STOCKHOLM HELSINKI TALLINN ESTONIA TO ST. PETERBURG MOSCOW 20 days sailing from Asia to Europe; RIGA No discharge in North Sea, skipping one SWEDEN LATVIA port call; LITHUANIA MINSK DENMARK BELARUS 2 4 days sailing from North Sea to Baltic Sea. Cost-save ca 15% of total sea transport costs Time-save approx 10 hours 10
Estonia is well positioned as a gateway! All regional centers are at 24h reach Estonia is well connected with all of these centers via sea, rail and road network HELSINKI 80KM ST. PETERBURG 355KM STOCKHOLM 375 KM ESTONIA 24h 48h RIGA 300KM MOSCOW 1044KM 72h MINSK 620KM KIEV 1269KM 11
Market sizes and delivery times Russia 143.8 mln inhabitants - to St.Petersburg 24 hours (by train) - to Moscow 24 hours (by train)/48 hours (by truck) Finland 5.2 mln inhabitants - to Helsinki 3 hours (by ship/truck) Latvia & Lithuania 6 mln inhabitants - to Riga 4 hours (by truck) - to Vilnius 8 hours (by truck) Belorus 10 mln inhabitants - to Minsk 24 hours (by train) 48 hours (by truck) Ukraine 46 mln inhabitants - to Black Sea 2 days (by truck) 5 days (by train) 12
Excellent gateway! Port of Tallinn Well-developed hinterland connections, roads links and railways directly to Russia, Baltic States, Scandinavia, Belarus and Ukraine Customs Free Zone Water depth No tides Year-round navigation Land availability 13
1228m / -16m Development plans 2008+ 47 ha 420m -16m 17 ha GEN. PORT AREA 46 ha TOTAL NEW QUAYLINE TOTAL NEW TERRITORY 2030 m 137 ha 27 ha 378m / -14.5m 14
Thank You! Please visit our website www.portoftallinn.com Port of Tallinn Sadama 25, Tallinn 15051 Estonia Ph: + 372 631 8555 Fax: +372 631 8166 portoftallinn@portoftallinn.com 15