Percy Pyne IV, AFL

1. The Realization of America’s Marine Highway
Transportation Research Board
Tuesday, July 12, 2011 - Boston

2. Disclaimer
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3. AFL will become America’s Marine Highway
Our Mission
“We will completely transform North America’s
Coastal Shipping Network”
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4. We will completely transform the pattern of America’s supply chain network!
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5. Table of Contents
What I See
State of the U.S. transportation system and coastal shipping
American Feeder Lines (AFL)
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6. A Perfect Storm
Containers move the worlds goods. Backbone of on-time logistics chains.
More and more goods are being containerized including food
The world depends on the free flow of containers
Container volumes are back at 2008 levels
Existing U.S. transportation system under growing stress and decay
No government infrastructure money to repair and maintain the existing system let alone any
future expansion
National driver shortage estimated at 75,000
Lack of equipment
Dramatic fuel price escalation
Deployment of the Mega Liner Ships
Panama Canal Expansion
EPA mandated compliance with the 1990 Clean Air Act
Projected highway toll increases
Growing U.S. emphasis on export trade
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7. What I See
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8. Road and rail capacities are not keeping pace with
transport demands
Vehicle Miles Traveled vs. Lane Miles, 1980-2008 (1980 = 100) U.S. Rail Network Extension Plans
220%
200% Vehicle Miles Traveled
180%
160%
140%
120%
Lane Miles
100%
80%
84
94
00
80
82
86
88
90
92
96
98
02
04
06
08
19
19
19
19
19
19
19
19
19
19
20
20
20
20
20
Source: Global Insight for AASHTO Freight Bottom Line Report
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9. Market Opportunity
Current state of US container shipping
Background for US coastal shipping:
The U.S. was the “inventor” of container shipping
U.S. remains the largest developed economy in the world
Less than 1% of American manufacturing export
Frictional transportation bottle necks costs the economy 1 trillion per year according to the DOT
The US effectively has no coastal shipping capability
Substantially all U.S. container vessels service 3 routes: West coast-Alaska; West coast-Hawaii-Guam; and
Florida-Puerto Rico
U.S. container fleet (26 vessels), 55,000 TEU capacity
Global container fleet (~4,500 vessels), 15,000,000 TEU capacity
0.58%
99.42%
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10. U.S. has no coastal or international container fleet
Top 20 World Liner Companies and Ports
Liner Companies Ports
Source: US Dept of Transportation, Research and Innovative Technology Administration and Alpha Liner -Top 100 April 2011
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11. 1/3 of all bridges in the U.S. are older than 50 years
State of the Nation’s Bridge Infrastructure and Repair Funding
599,996 bridges in the United States
69,223 (11.5%) are rated as “structurally deficient” according to
government standards 70,9
2009
5,2
23% of all bridges are located in urban areas
High commuter and truck traffic
61,4
Urban bridges carry approx. ¾ of the nations bridge traffic 2008
5,2
1/3 of all bridges in the U.S. are older than 50 years (this number
Year
will double by 2030)
51,6
Bridge Repair Funding 2007
5,1
The current backlog on maintenance and repair of the
nation’s bridges amounts to approximately $70.9 bn
48,0
2006
The current Federal Highway Bridge program has 4,6
approximately $5.2 bn in funding
U.S. bridge infrastructure is lacking $65.7 bn in maintenance 0,0 10,0 20,0 30,0 40,0 50,0 60,0 70,0 80,0
Billion US$
and repair funds
Actual Highway Bridge Program Appropriations Federal Estimates to Eliminate Backlog
Source: The State of Our Nation‘s Bridges; Transportation for America; 2011
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12. Maritime falls behind in funding projects
Note the obvious disparity between spending and usage!
Less than .003% of the nation’s transportation budget is spent on the U.S. Marine Highway
Estimated ton-miles of domestic surface freight shipped
by mode in 2007
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13. AFL will become America’s Marine Highway
Our Mission
Cost to create one mile of Urban Highway = $20.0 – 50.0m
Cost to create one mile of the Marine Highway = $0.0
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14. The current transportation system is extremely costly
Costs to the U.S. Economy
Economic Costs Environmental Costs Political Costs
%
+ 21
CO2 Emissions Transportation
Sector
1998 Source: Energy Information Administration 2008
• U.S. congestion
• Significant environmental • Currently 68% dependency
responsible for $200 billion costs on foreign oil
Source: U.S. Energy Information Administration
in costs each year • Transportation is the leading
• Lost revenue carbon emissions contributor
• Wasted time
• Wasted fuel
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15. Market Opportunity
Jones Act fleet and estimated fuel savings
The value of the fuel savings alone makes chartering an AFL vessel attractive for existing Jones Act carriers.
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16. AFL will become America’s Marine Highway
“The idea that the U.S. cannot
build ships is an excuse, not a
reason”
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17. The U.S. CAN build ships
U.S built a ship in 4 days, 15 hours, 29 minutes!
Liberty Ship SS Robert E. Peary was built in 4 days, 14 SS Robert E. Peary
hours, 29 minutes
After the first Liberty Ship, Patrick Henry, was built in
1941, over a hundred more followed before the end of
the year
Henry Kaiser built these ships of prefabricated modules
that were then assembled in series construction
Welding was used extensively for the first time
instead of riveting
In the first year and half of the year, construction time SS Patrick Henry
for Liberty ships was reduced from 105 to 14 days
By the end of WWII, Kaiser had built one-third of the
Maritime Commission’s vessels and had set the
standard for all other yards
Kaiser’s system has been adopted by all the world’s
“commercial” yards
Source: The Abandoned Ocean by Andrew Gibson and Arthur Donovan
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18. Trading Partners with Cabotage Laws
Nations that support shipbuilding in their countries
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19. The Game Changer
China
Source: Chinese Artic and Antartic Administration
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20. The Game Changer
Container Fleet Capacity and Vessel Size Composition
Source: Clarkson’s Research Studies 2011
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21. The Game Changer
Evolution of the world’s largest containerships 1985-2011
Source: Expansion of the Panama Canal: Potential Impact, Rodolfo Sabonge, March 2011
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22. Panama- Logistics center of the Americas
Reaching full potential of its geographical position
Source: Expansion of the Panama Canal: Potential Impact, Rodolfo Sabonge, March 2011
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23. Easy Access and benefits of expansion
Latin America, the Carribbean, North America, Asia and Europe
Before After
Source: Expansion of the Panama Canal: Potential Impact, Rodolfo Sabonge, March 2011
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24. American Feeder Lines (AFL)
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25. In Asia and Europe, the intermodal link between
container-vessels and Truck/Rail is the Feeder-Ship
Container Transport Patterns in Asia and in Europe (Exemplified)
Asia Europe
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26. For example: The port of Hamburg has 159 Feedership
departures per week. Zero in the U.S.!
Feeder Connections from the Port of Hamburg* (2nd largest Port in Europe)
• Port of Hamburg had a container turnover of approx. 7 mil TEU in 2009 (10 mil TEU in 2007 and 2008)
• Intercoastal transport (Feedering/Short sea) accounts for 1.5 mil TEU (21.4%) of the total volume
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27. AFL: The intermodal link
Current Route
Current Service Routes
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28. Feedering helps to increase road and rail transport
efficiency in the U.S.
Feedering/Short Sea as Transport System Efficiency Driver
 
Feedering/short sea Container flows to main
makes the entire hubs on U.S. East and
system more efficient Gulf Coast
We are applying a world-wide proven transportation system to the U.S.
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29. First fully U.S. Jones Act compliant feeder service
Who We Are and Our Approach
American Feeder Lines (AFL) is the United States’ first short sea/feeder shipping company
Officially designated by the U.S. Department of Transportation as “American Marine
Highway Project” under Title XI—Energy Transportation and Infrastructure of the Energy
Independence and Security Act 2007
AFL business model is based on successful international short sea/feeder operations that
exist today in Europe and Asia
AFL will target domestic cargo moves, thereby reducing the existing and growing road
system congestion as well as carbon emissions
AFL will build, own, and operate 100% U.S. built, flagged, and manned
Jones Act container vessels
AFL will introduce and establish the hub and spoke container network in the U.S.
AFL will facilitate the deployment of the container cargos of “super ships” on the USEC
AFL will create many new jobs at sea, in ports, in shipyards and create an entirely new
maritime sector along the U.S. East and Gulf Coast
AFL International will commence operations in Q2 2011 with our New England Shuttle
connecting Maine and Massachusetts via water to 17 international trunk liner companies
calling Halifax weekly
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30. 92% of all U.S. domestic truck/rail moves are in
regions to which AFL plans to offer services
Domestic (Door-to-Door) Potential on the USEC and USGC
Origin
South
(in millions) New England NY/NY/PA Mid Atlantic Florida Gulf Totals
Atlantic
North-bound Traffic Flow
New England - 895 1,627 1,087 2,766 6,375
Destination
NY/NY/PA - 1,200 6,019 3,470 10,110 20,799
Mid Atlantic 527 457 1,265 2,716 5,920 10,885
South Atlantic 474 3,075 636 1,598 4,821 10,604
Florida 417 2,688 2,134 522 5,689 11,450
Gulf 737 2,995 2,123 3,701 2,667 12,223
Totals 2,155 9,215 6,988 13,134 11,538 29,306 72,336
Source: Four Corridor Case Studies of Short Sea Shipping Service. Submitted to the DOT by Global Insight
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31. Feedering is more economically efficient and
environmentally friendly
CO2 emission to Transport 992 20’ Containers
1 American Feeder Ship
983 TEUs (14t/TEU homog.
loaded, IMO, at 14 knots) CO2/
ton
0.024 kg CO2/ton mile mile
246 Railcars
983 TEUs (TEU DBL stacked)
0.033 kg CO2/ton mile
655 Trucks
983 TEUs on 655 Trucks (at 1,5 TEUs / Truck)
0.105 kg CO2/ton mile.
Source: Adapted from U.S. Department of Transportation
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32. AFL: The intermodal link
AFL’s Targeted Routes
AFL’s first service: New England
Prospective Routes
Halifax Shuttle
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33. AFL can become your intermodal partner!
What can AFL do for Boston?
• Improvement of service pattern and intermodal transportation chain
• Connect Boston via water to the world via Halifax and Portland
• Intermodal partnership
• Less stress for truck driver community – shorter rotations, more short trips
• Weekly or better U.S.-Interregional Transportation service
• Reduction of costs
• Reduction of cargo-related inland costs
• Opportunity to streamline the equipment size
• Full load containers
• Green shipping
• Logistic chains with low carbon footprints
• Intermodal link relieves road congestion and offers reliable services
• Efficient management of inland weight limitations
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34. Collapse of U.S. Infrastructure resulted in America’s
Marine Highway Program
Why is this the Right Time?
• Collapse of U.S. infrastructure:
• Nation's existing road and rail infrastructure cannot adequately meet future
transportation needs
• U.S. government will cut investments in U.S. landside infrastructure projects
• We are focused on green projects that take into account community and
environmental costs
• Global economic crisis leads to pressure on U.S. shipyards with new buildings now
available at reasonable prices
• U.S. DOT made this a national priority by instituting America’s Marine Highway Program
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35. Immediate Action!
Conclusions
There is an existing, un-utilized U.S. coastal marine highway that people have forgotten
We must re-introduce water to the public and reinvigorate our existing hub and spoke port network
The nation needs transportation modal shift for containers
The Marine Highway needs to be a national priority
Water is the safety valve of the future which will streamline the intermodal supply chain of the future and facilitate transportation of
the future
Water transportation has significant economic and social impacts on the U.S.
Hub and Spoke network will facilitate use of mega ships improving transportation costs – will raise the level of importance of “Spoke
Ports”
Renewed coastal trading will lower transportation costs for interstate commerce and relieve stress on our existing landside networks
Our program is Black Line Law
Our federal and state governments do not need money to create the marine highway or the hub and spoke port network. It already
exist.
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36. We Need Your Cargo!
The transportation revolution starts in New England!
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37. Please feel free to contact us at any time
Your Contacts
PERCY R. PYNE IV TOBIAS KÖNIG
CHAIRMAN · FOUNDING PARTNER CEO · FOUNDING PARTNER
American Feeder Lines Holding LP American Feeder Lines Holding LP
40 Wall Street · 62nd Floor · New York, NY 10005 · USA 40 Wall Street · 62nd Floor · New York, NY 10005 · USA
Telephone + 1.212.269 4888 · Fax + 1.212.269 8108 Telephone US + 1.212.269 4888 · Fax + 1.212.269 8108
Mobile + 1.646 824 2005 · ppyne@american-feeder-lines.com Telephone GER + 49.40.36 97 57-100 · Fax GER + 49.40.36 97 57-199
Mobile + 49.172.40 31 327 · tkoenig@american-feeder-lines.com
ANDREW HAINES
RUDY MACK
VICE PRESIDENT OF LINER MANAGEMENT
COO
American Feeder Lines Holding LP American Feeder Lines Holding LP
40 Wall Street · 62nd Floor · New York, NY 10005 · USA 40 Wall Street · 62nd Floor · New York, NY 10005 · USA
Telephone 212.269 4888 · Fax 212.269 8108 Telephone + 1.212.269 8211 · Fax + 1.212.269 8108
Mobile 978 394 8856 · ahaines@american-feeder-lines.com Mobile + +1.732.763 2611 · rmack@american-feeder-lines.com
Please visit us on our website at www.american-feeder-lines.com
For additional information or to request copies of our presentation, please email info@american-feeder-lines.com
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38. Questions?
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