client_polymer_logistics_study_presentation template v1

Agenda

Gulf Polymer Industry Overview – Slides 3- 15

CLIENT Supply Chain Concepts and Cost Model – Slides 16- 27

Containerisation – 28-53

International Freight and shipping Economics-Slides 54-72

Middle East and Shipping Geostrategy-Slide 73-75

Regional Port and Transport Infrastructures -Slide 76 – 87

Maritim Freight Rates determinants – Slide 88 – 92

Shipping Lines RFI Analysis – Slide 93 – 125

CLIENT Logistics Review 126 - 137

Gulf Polymer Industry Overview

Gulf Pretrochemicals Milestones Development

Polymers Net Export by Region

Futur New Entrants

Global Impact

GCC Petrochemicals Capacity by Country

The Down Stream Opportunity

GCC Polymer Exports by Origin

GCC Polymer Exports by Destination

GCC Inter Regional Polymer Trade

Middle East Cost Competitive Advantage

© Innova Supply Chain

The Commodity Chain (or Value Chain)

Transport Chain

Rawmaterials

Manufacturingand assembly Distribution

Bulk shipping Unit shipping

High volumesLow frequency

Low volumesHigh frequency

LTL shipping

Average volumesHigh frequency

1- Commodities 3- Final Goods2- Intermediate Goods

Attributable to climatic (agricultural products, forestry products) or geological (ores and fossil fuels) conditions.

Transformation that confers added value. Metals, textiles, construction materials and parts used to make other goods.

Goods shipped to large consumption markets. Flow and inventory management.

Stages

Market

Flows

Market


The “Four Ts” in International Trade

Transaction costs

Transport costs

Time costs

Tariff and non-tariff costs


Value-Added Functions and Differentiation of Supply Chains

Value-Added Functions Supply Chain Differentiation

Production Costs

Location

Time

Control

Logistics Costs

Transit Time

Reliability

Risk


Total Logistics Costs TradeoffC

osts

Shipment Size or Number of Warehouses

Transport Costs

Total Logistics Costs

Warehousing Costs


SIPCHEM Supply Chain Objectives

Changes in the Relative Importance of Logistical Functions

70

10

20

40

10

50

SUPPLY DRIVEN

DEMAND DRIVEN

Inventory Transport System Information System


The Velocity of Freight

Push Logistics

Shipment Speed

Transshipment Speed

Pull Logistics

Containerization

Speed barrier

Logistical threshold

Future improvements

Corporation To Corporation Trade

Incoterms Costs Model

Invoice calculation Order XYZQuantity 1,000.00

Price 1,600.00 1,600,000.00 Sold to End Client

Ocean Freight - Insurance - War InsuranceSurveyor Cost - Thruput Cost - marketer costWithholding Tax - Customs Duty - Demurrages - Other Charges - Land transportation - Indirect Cost Total - -

Ocean Freight 50.00 50,000.00 Insurance 20.00 20,000.00 War Insurance - Surveyor Cost - Thruput Cost - Producer CostBank Charges - Customs Duty - Demurrages - Withholding Tax - Other Charges -

- Direct cost 70.00 70,000.00

Total Cost 70.00 70,000.00

Comission @ 4% 61.20 61,200.00

Invoice Amount 1,538.80 1,538,800.00 Payable by the marketer

Netback/Net Revenue 1,468.80 1,398,800.00 SIPCHEM revenue

More Risk for SIPCHEM



Ocean Freight 50.00 50,000.00 Insurance 20.00 20,000.00 War InsuranceSurveyor Cost - Thruput Cost - marketer costWithholding Tax - Customs Duty - Demurrages - Other Charges - Land transportation - Indirect Cost Total 70.00 70,000.00

Ocean Freight - Insurance - War Insurance - Surveyor Cost - Thruput Cost - Producer CostBank Charges - Customs Duty - Demurrages - Withholding Tax - Other Charges -

- Direct cost - -

Total Cost 70.00 70,000.00

Comission @ 4% 61.20 61,200.00



More Risk for the Marketer

Incoterms Costs Model



Ocean Freight - Insurance - War InsuranceSurveyor Cost - Thruput Cost - marketer costWithholding Tax - Customs Duty - Demurrages - Other Charges - Land transportation - Indirect Cost Total - -

Ocean Freight 50.00 50,000.00 Insurance 20.00 20,000.00 War Insurance - Surveyor Cost - Thruput Cost - Producer CostBank Charges - Customs Duty - Demurrages - Withholding Tax - Other Charges -

- Direct cost 70.00 70,000.00

Total Cost 70.00 70,000.00

Comission @ 4% 61.20 61,200.00



More Risk for SIPCHEM



Ocean Freight 50.00 50,000.00 Insurance 20.00 20,000.00 War InsuranceSurveyor Cost - Thruput Cost - marketer costWithholding Tax - Customs Duty - Demurrages - Other Charges - Land transportation - Indirect Cost Total 70.00 70,000.00

Ocean Freight - Insurance - War Insurance - Surveyor Cost - Thruput Cost - Producer CostBank Charges - Customs Duty - Demurrages - Withholding Tax - Other Charges -

- Direct cost - -

Total Cost 70.00 70,000.00

Comission @ 4% 61.20 61,200.00



More Risk for the Marketer

Direct cost 70.00 70,000.00

Total Cost 70.00 70,000.00

Comission @ 4% 61.20 61,200.00


Netback/Net Revenue 1,468.80 1,398,800.00 SIPCHEM revenueCIF

Direct cost - -

Total Cost 70.00 70,000.00

Comission @ 4% 61.20 61,200.00


Netback/Net Revenue 1,468.80 1,468,800.00 SIPCHEM revenueFOB

Taxonomy of Logistics Decisions

Level Description

Production structures Commercial decisions on outsourcing, offshoring and sub-contracting.Number, location and capacity of production units.

Transport structures Choice of a freight network linking a company and its suppliers and customers.Choice of modes and terminals; the transport chain.

Distribution structures Choice concerning the number, location and capacity of distribution centers.Frequency and timing of distribution (e.g. just-in-time).

Logistics structures Usage of production, transport and distribution capabilities to fulfill short, medium and long term strategies (e.g. lower costs, gain market share, improve service efficiency, reduce response time, reduce environmental footprint). Usage of third party logistics providers.


Financial Benefits of Demand-Driven Supply Systems

Inventory turnover Working capital

Cause Consequence

Customer service Net income

Labor productivity Operating expenses

Capacity utilization Return on assets

Logistics costs Operating expenses


SIPCHEM Containerized Supply Chain Cost Model Factors

NOT EXHAUSTIVE

• Price paid by customers for the product (1600-1800 $/ton)• Incoterms (variable)• Price paid by the marketer to SIPCHEM (GACI and HANWAR)• Deductible logistics costs – Port of Discharge to End User destination• Sales Order Minimum Size (EOQ)/ Order Taking Costs• Number of BoL / Container versus Nb of containers per BoL.• Road Transportation Costs both legs• Sea Transportation Costs• Warehousing and Yard Cost and Port costs on both legs• Logistics Administration Costs• 3PLs Costs

The Benefits of Containerization

• Lower freight rates• Lower insurance

rates• Minimal load unit

Transport Transport Costs

• Lower storage costs• Lower packing and

packaging costs• Faster inventory

turnover

Inventory Inventory Costs

• Time reliability• Higher frequency

Service Service Level

Advantages of Containerization

Factor AdvantageStandard transport product

Can be manipulated anywhere in the world (ISO standard).Specialized ships, trucks and wagons.

Flexibility of usage Commodities (coal, wheat), manufactured goods, cars, frozen products.Adapted containers for dry cargo, liquids (oil and chemical products) and refrigerated cargo.Reuse of discarded containers.

Management Unique identification number and a size type code.Transport management not in terms of loads, but in terms of units.

Costs Low transport costs; 20 times less than bulk transport.Economies of scale.

Speed Transshipment operations are minimal and rapid.Port turnaround times reduced from 3 weeks to about 24 hours. Containerships are faster than regular freighter ships.

Warehousing Its own warehouse; Simpler and less expensive packaging.Stacking capacity on ships, trains (double/ triple stacking) and on the ground.

Security Contents of the container is unknown to carriers.Can only be opened at the origin, at customs and at the destination.Reduced spoilage and losses (theft).

Main Physical Characteristics of Containers

Type Cubic Capacity Tare Weight Payload Weight Gross Weight Length / Width / Height

20 Footer 33.2 cubic meters(1,170 cubic feet)

2,150 kg - 2,220 kg(4,740 lb - 4,894 lb)

21,850 kg - 28,160 kg(48,171 lb - 62,082 lb)

24,000 kg - 30,480 kg(52,911 lb - 67,197 lb)

6.058 m / 2.438 m / 2.591 m(20‘0" / 8'0“ / 8'6“)

40 Footer 67.7 cubic meters(2,391 cubic feet)

3,720 kg - 3,740 kg(8,201 lb - 8,245 lb)

26,760 kg - 28,760 kg(58,996 lb - 63,405 lb)

30,480 kg - 32,500 kg(67,197 lb - 71,650 lb)

12.192 m / 2.438 m / 2.591 m(40'0“ / 8'0“ / 8'6")

40 FooterHigh Cube

76.4 cubic meters(2,700 cubic feet)

3,730 kg - 3,950 kg(8,223 lb - 8,708 lb)

26,750 kg - 28,550 kg(58,974 lb - 62,942 lb)

30,480 kg - 32,500 kg(67,197 lb - 71,650 lb)

12.192 m / 2.438 m / 2.896 m(40'0“ / 8'0“ / 9'6")

40 FooterHigh Cube Reefer


4,810 kg(10,604 lb)

29,190 kg(64,353 lb)

34,000 kg(74,957 lb)

12.192 m / 2.438 m / 2.896 m(40'0“ / 8'0“ / 9'6“)

45 Footer High Cube


4,740 kg(10,450 lb)

28,280 kg(62,350 lb)

33,020 kg(72,800 lb)

13.716 m / / 2.438 m / 2.896 m(45'0“ / 8'0“ / 9'6“)

48 Footer High Cube


5,140 kg(10,865 lb)

25,340 kg(56,350 lb)

30,480 kg(67,197 lb)

14.630 m / 2.591 m / 2.908 m(48'0“ / 8'6“ / 9'6 1/2")


Container Identification System

Owner Code (3 letters): TGHProduct Group Code (1 letter): URegistration Number (6 digits): 759933Check Digit (1 digit): 0Size & Type Code (4 digits/letters): 45G1

Operational CharacteristicsMaximum weight: 30,480 kgContainer weight: 3,870 kgPayload weight: 26,610 kgCubic capacity: 2,700 cubic feet

Container as a Transport, Production and Distribution Unit

TransportModes,

terminals, intermodal and

transmodaloperations

ProductionSynchronization

of inputs and outputs

(batches)

DistributionFlow

management (time-based), warehousing

unit

Containerization Growth Factors

Derived

Economic and income growthGlobalization (outsourcing)

Fragmentation of production

and consumption

Substitution

Functional and geographical

diffusionNew niches

(commodities and cold

chain)Capture of bulk and

break-bulk markets

Incidental

Trade imbalances

Repositioning of empty

containers

Induced

Transshipment (hub, relay and

interlining)

Container Usage during its Life-Span

16%

16%

6%

6%

56%

Ocean Transit

Terminal

Inland Use

Repair

Idle or EmptyRepositioning

Challenges of Containerization

Factor Challenge

Site constraints Large consumption of terminal space (mostly for storage); move to urban periphery.Draft issues with larger containerships (more than 13 meters).

Infrastructure costs Container handling infrastructures and equipment (giant cranes, warehousing facilities, inland road, rail access), are important investments.

Stacking Complexity of arrangement of containers, both on the ground and on modes (containerships and double-stack trains). Restacking difficult to avoid.

Theft and losses High value goods and a load unit that can opened or carried (on truck).Vulnerability between terminal and final destination.10,000 containers are lost at sea each year (fall overboard).

Empty movements Many containers are moved empty (20% of all flows).Either full or empty, a container takes the same amount of space.Divergence between production and consumption; repositioning.

Illicit trade Common instrument used in the illicit trade of drug and weapons, as well as for illegal immigration.Worries about the usage of containers for terrorism.

Container Shipping Costs and Cargo Value

Products Items / 40 Foot Container Retail Value (USD) Freight / Value (%)

Low High Low High Low High

Clothing (low value) 90,000 130,000 225,000 520,000 0.56 1.91

Clothing (mid range) 25,000 60,000 500,000 3,600,000 0.08 0.86

Sports shoes 18,000 28,000 350,000 2,520,000 0.12 0.23

Bicycles 1,200 1,600 240,000 480,000 0.60 1.79

Toys (low quality) 20,000 60,000 60,000 720,000 0.40 7.17

Consumer electronics (small) 2,800 3,600 170,000 430,000 0.67 2.53

Consumer electronics (large) 240 480 70,000 140,000 2.07 6.14

Appliances (small) 600 1,200 45,000 100,000 2.90 9.56

Appliances (large) 100 130 30,000 65,000 4.16 14.33

Furniture (assembled) 250 600 20,000 150,000 1.93 21.50

Furniture (flat packed) 1,000 3,000 70,000 360,000 0.80 6.14

Automobile parts 600 15,000 50,000 375,000 0.77 8.60

Changes in the World Container Fleet, 1990-2014

-5,000,000

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

40,000,00019

90

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

End-year fleet size Fleet addition Fleet replaced

Containerized Cargo Flows along Major Trade Routes, 1995-2011 (in millions of TEUs)

4.0

4.0

4.6

5.4

6.1

7.3

7.4

8.4

9.0

10.6

11.9

13.2

13.5

13.4

10.6

12.8

12.7

3.5

3.6

3.5

2.9

2.9

3.5

3.4

3.4

3.6

4.1

4.5

4.7

5.3

6.9

6.1

6.0

6.0

2.4

2.6

3.0

3.6

3.9

4.7

4.7

5.1

6.9

8.2

9.3

11.2

13.0

13.5

11.5

13.5

14.1

2.0

2.2

2.3

2.1

2.3

2.5

2.5

2.6

3.8

4.3

4.4

4.5

5.0

5.2

5.5

5.6

6.2

1.7

1.6

1.7

1.7

1.5

1.7

1.6

1.4

1.6

1.9

2.0

2.1

2.4

3.3

2.8

3.1

3.4

1.7

1.7

2.1

2.3

2.4

2.7

2.6

2.6

3.0

3.3

3.7

3.7

3.5

3.3

2.5

2.8

2.8

0 5 10 15 20 25 30 35 40 45 50

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Asia-North America North America-Asia Asia-Europe

Europe-Asia North America-Europe Europe-North America


Containerized Cargo Flows along Major Trade Routes, 2007

USA7.6

Asia33.1

14.5

19.9

20.4

14.9

Europe

15.4 (+175%)

4.9 (+48%)

Million TEUs Growth (2000-2007)

Imports (M TEUs)

Exports (M TEUs)2.7 (+23%)

4.5 (+55%)

10.0 (+178%)

17.7 (+293%)

Time & Cost of Transport Activities Involving Moving a 40 FT between the American East Coast and Western Europe

0 200 400 600 800 1000 1200 1400 1600 1800 2000

0 20 40 60 80 100 120 140 160

Moving container from loading ramp to storageContainer waiting for pickup after stuffing

Loading container on road trailerRoad transport to port terminal

Waiting for admission to port terminalTransfer from road trailer to stack

Waiting in stackUnstacking and transfer to terminal trailer

Transfer/loading onto shipContainership travel time (NY-Rotterdam)

Tranfer/unloading off shipTransfer to stackWaiting in stack

Tranfer from stack to road trailerClearance and inspection

Road transport, port terminal to inland depotUnloading container at inland depot

Storage at inland depotMoving container to consignee

US DOLLARS

HOURSTime (hours) Cost ($US)

Cumulative Cost and Time of Moving a 40 FT between the American East Coast and Western Europe

0

500

1,000

1,500

2,000

2,500

3,000

3,500

0 100 200 300 400 500

Cum

ulat

ive

cost

(US$

)

Cumulative time (hours)

Container Transport Costs, 2000s

23%

18%

21%

25%

13%

Ships

Containers

Terminals

Monthly Intermodal Equipment Depreciation Factors

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

1 5 9 13 17 21 25 29 33 37 41 45 49 53 57 61 65 69 73 77 81 85 89Container Chassis

Global Container Fleet, 2003-2009

14.5

9

15.9

5

17.8

3

18.9

4

21.3

0

24.0

0

23.5

20

5

10

15

20

25

30

2003 2004 2005 2006 2007 2008 2009

Mill

ions

TankReeferDry Freight SpecialDry Freight Standard

Composition of the Global Fleet of Containers, 2008

27%24%

33%6%

4%

6%

26.2 million TEU

20 Foot

40 Foot

40 Foot HighCube

World Container Production, 2007

89%

2%5% 1%3%

Dry Freight Standard

Dry Freight Special

Reefer

TankRegional

Price of New Containers, 2001-2008

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

2001 2002 2003 2004 2005 2006 2007 2008

20 footer 40 footer 40 footer high cube

Container Lease Rates, 2003-2008

0.3

0.4

0.5

0.6

0.7

0.8

0.9

8

9

10

11

12

13

14

15

16

17

2003 2004 2005 2006 2007 2008

Leas

e Rat

e (US

D)

Retu

rn (%

)

Annual Return for Lessor (%)


Net Containerized Traffic Change, 2003-05 / 2008-10 (in TEU)

Technical Changes in Container Port Terminals

Standard Container Port Emerging Paradigm

Stacking density 1,000 to 1,200 TEUs per hectare 2,000 to 4,000 TEUs per hectare

Ship-to-shore gantry crane productivity

About 20-30 movements per hour

About 40-50 movements per hour

Daily throughput per ship 3,000 to 4,000 TEUs 5,000 to 6,000 TEUs

Dwell time at container yard

About 6 days About 3 days

Truck turnaround time About 60 minutes About 30 minutes

Rail access In port area / Near dock On dock

Berthing depth 12 to 15 meters (40 to 50 feet) More than 15 meters (50 feet)

Logistical Activities Related to Containerization

Container Management Broking/Leasing.Inventory management.Transport chain routing.

Container Transportation Maritime shipping (Routing, Scheduling).Terminal operations (Transshipment, Storage/Stacking, Gate access).Inland transportation (Rail operations, Drayage, Repositioning).

Container Handling Loading (Packing, Palletizing and Bundling).Transloading (Re-bundling).Unloading (Unbundling, de-palletizing and Unpacking).

Container Storage and Maintenance

Empty stacking.Inspection.Cleaning & Repair.

Elements of “Last Mile” Logistics

TerminalCapacity;

turnover; gate gate access

Drayage / Deliveries

Congestion; chassis

management

WarehousingInventory level; lead

time; transloading


The “Last Mile” in Inland Freight Distribution

Gateway Inland Terminal

DistributionCenter

Volume

Frequency

CorridorCustomer

“Last Mile”

Drayage

GLOBAL HINTERLAND REGIONAL LOCAL

Shipping Network

Massification Atomization

Volume

Frequency

Drayage

LTL

Transloading

“Last Mile”

LTL Customer

LOCALGLOBALMaritimeRail / BargeDrayage (Truck)Less than truckload (LTL)

Flow Chain

Transport Chain

Gateway Logistics


Economies and Diseconomies of Scale in Container Shipping

Cost

s per

TEU

Capacity in TEU

Maritime Shipping

Transshipment

Inland Transportation

Transshipment Requirements for Liner Shipping Connections between Country Pairs, 2009

17.2%62.0%

18.6%

2.2% Direct

OneTransshipmentTwoTransshipments


Country Liner Shipping Connectivity Index (LSCI)

Global Logistics Costs Breakdown


Intermodal Transportation Cost FunctionCo

sts

Origin Destination

Composition

Connection

Connection

Interchange

DecompositionC(T)

Transshipment

C(cp)

C(cn)

C(I)

C(cn)

C(dc)Local / Regional Distribution Costs

National / International Distribution Costs


Intermodal Terminal Equipment

Circulate over container piles. Can go over stacks up to 3 in height. Density of 500 to 700 TEU per hectare.

Use container top anchor points. Handle most containers. Can reach stacks up to 3 in height.

Flexible side loaders. Can reach stacks up to 3 full or 5 empty containers in height. 500 TEU per hectare.

High storage densities (1,000 TEU per hectare). Difficult to move from one stack to the other. High acquisition but low operating costs.

Highest storage density (widespan; +1,000 TEU per hectare); mostly used at port terminals. Lowest operating costs. Fixed to rail tracks.

Load and unload containerships.Various sizes (Panamax and Super-Panamax).

Straddle Carrier Rubber-tired Gantry

Front-end Loader Rail-mounted Gantry

Reach Stacker Portainer

Value Per Ton of U.S. Freight Shipments by Transportation Mode, 2002

$667

$4,892

$611

$88,618

$37,538

$1,480

$775

$401

$241

$198

1 10 100 1,000 10,000 100,000

All Modes

Multiple modes

Single modes

Air (incl. truck and air)

Parcel, U.S.P.S, or courier

Truck and rail

Truck

Water

Pipeline

Rail Value per ton (dollars)

Functional Integration of Supply Chains

Shipping Line

ShippingAgent

Stevedore

CustomAgent

FreightForwarder

Rail / Trucking

Depot

Trucking

Megacarrier

Econ

omies

of sc

ale

Land DistributionMaritimeDistribution

Level of functional integration


Domains of Maritime Circulation


Main Maritime Shipping Routes

Liner Shipping Trends

Wd’s Largest Maritime Container Shipping Operators, 2010

Total Owned CharteredOperator TEU Ships TEU Ships TEU Ships % Chart

APM-Maersk 2,038,760 543 1,118,663 207 920,097 336 45.1%

MSC 1,621,453 410 858,591 202 762,862 208 47.0%

CMA CGM Group 1,072,891 372 343,351 85 729,540 287 68.0%

APL 584,923 145 170,373 45 414,550 100 70.9%

Evergreen Line 554,292 151 319,263 87 235,029 64 42.4%

Hapag-Lloyd 533,371 122 292,613 60 240,758 62 45.1%

COSCO Container L. 486,277 131 271,305 87 214,972 44 44.2%

Hanjin Shipping 447,206 98 104,068 19 343,138 79 76.7%

CSCL 437,564 121 250,099 71 187,465 50 42.8%

CSAV Group 431,435 118 41,410 8 390,025 110 90.4%

MOL 358,616 93 159,706 29 198,910 64 55.5%

OOCL 354,648 77 254,768 42 99,880 35 28.2%

NYK 354,007 92 280,379 54 73,628 38 20.8%

Hamburg Süd Group 331,994 107 137,726 37 194,268 70 58.5%

K Line 330,775 85 199,537 36 131,238 49 39.7%


AMAX Round-the-World Route, 2005-2007


Evolution of Containerships

A

B

C

D

E

Early Containerships (1956-)

Panamax (1980-)

Post Panamax (1988-)

New Panamax (2014-)

Fully Cellular (1970-)

Panamax Max (1985-)

Post Panamax Plus (2000-)

Post New Panamax (2006-)

Triple E (2013-)

500 – 800 TEU

1,000 – 2,500 TEU

3,000 – 3,400 TEU

3,400 – 4,500 TEU

4,000 – 5,000 TEU

6,000 – 8,000 TEU

12,500 TEU

15,000 TEU

18,000 TEU

200x20x9

137x17x9

215x20x10

250x32x12.5

290x32x12.5

285x40x13

300x43x14.5

366x49x15.2

400x59x15.5

397x56x15.5 ; 22–10–8 (not shown)

(LOA – Beam – Draft)

10

8

23

2010

6

6

917

5

915

6

813

5

613

10

45

84

64

A

B

C

D

E

6 containers across4 containers high on deck

4 containers high below deck

Specifications for Very Large Post-PanamaxContainerships

“Triple E Class” (Projected 2013)

“E Class” (Emma Maersk)

“S Class” (Sovereign Maersk)

Capacity (TEU) 18,000 14,500 8,400

Length (meters) 400 397 348

Width (meters) 59 56 44

Draft (meters) 16.5 16 15

Deadweight (tons) 165,000 156,900 105,000

Speed (knots) 23 (19 optimal) 25.5 25

The Largest Available Containership, 1970-2013 (in TEUs)

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000Sh

ip S

ize

in T

EU

L “Lica” Class(3,400 TEU)

R “Regina” Class

(6,000 TEU)

S “Sovereign” Class

(8,000 TEU)

E “Emma” Class

(12,500 TEU)

“Triple E” Class

(18,000 TEU)

Potential Impacts of Larger Containerships on Maritime Transport Systems

Shipping Network• Cascading of ship assets; Less port of call options; Changes

in the frequency of services; Increase in transshipment.

Port Operations• Dredging; Improved equipment; More yard storage.

Hinterland• Increased congestion; Pressure to invest in infrastructures;

Modal shift; Setting of inland ports.

Potential Impacts of Larger Containerships – Global capacity

Middle East Shipping and Geostrategy

Middle East Shipping and Asssociated Geostrategic Risks

IRAN Straight of Hormuz

related Ports

Suez Canal Egypt politicalRisks related

Ports

PiracyRisks

Middle East Shipping and Geostrategy

Djeddah To the World – Lead-Time Span – (WAR RISK)


Port Infrastructure Determinants

NOT EXHAUSTIVE

• Service Cost- Equal• Efficiency-Not Equal• Lead-Time - Not Equal• Equipment Availability – Not Equal• Others…..

DAMMAM – PSA Container Terminal Developments

DAMMAM – JUBAIL – Export Equipment Unbalanced Figures

Unbalanced

Balanced

DAMMAM – JUBAIL – Import Equipment Unbalanced Figures

Unbalanced

Unbalanced

Empty Equipment Demand and Supply Gap

JUBAIl Port has Import and Export balanced in TEUsBut Suffers of a Lack of Equipments (Empties)

DAMMAM Port has Imports far bigger that

Exports in TEUsBut suffers periodic

congestions and customs glimps.

EmptyContainer

gap

Potential Solution

• Trucking of Empties betweenDammam and Jubail

• Trucking of Empties betweenJeddah and Jubail

• Balance Exports on the Two Ports

• Polymer ShipperTo Non Polymer Shippers VCY Solutions (shareddatabase)

UAE – Leading the pack

KSA – Projected Integrated Road – Rail Network

GCC – Projected Integrated Rail Network

Gulf Comparative Ports Charges (Tariffs)-1

Gulf Comparative Ports Charges (Tariffs)-2

Working Hypothesis (JUBAIL MPFL) – SWOT Analysis

Strengths Weaknesses

• Distance/ Location (from JIC)• Efficiency in Export• Polymer Export Specialization• Efficient Custom Clearance Process

• No rail connection for régional Trade lanes

• Lack of Empty Equipment• Road Transportation extra cost

required• Availability of alternative Shipping

lines

Opportunities Threats

• SIPCHEM Yard availability• Potential Infrastructure

development• Rail connectivity to Yambu

• Rail project could bring container import unbalances in the long run

• Under capacity due to an increasein Petrochemical projects

Maritime Freight Rates Determinants

cost of operating the vessel (for example, crew wages, fuel, maintenance and insurance); the capital costs of buying the vessel, such as deposit, interest and depreciation; and the cost of the shore-side operation, which covers office personnel, rent and marketing.

• Main Determinants

Freight rates are not all-inclusive but a subject to numerous additions like:the bunker adjustment factor, the currency adjustment factor, terminal handling charges, war risk premiums, piracy surcharges, container seal fees, electronic release of cargo fees, late fees, Equipment shortage fees

• Additional Determinants for ALL INCLUSIVE RATE NEGOCIATIONS

Growth in Demand/ Supply container vessels 2000-2011

Forscasted BAF – 2013/2014

Maerks Bunker Fuel Factor (BAF)

Maerks NEW BAF Calculation Formula – 2013/2014

Strategy - Formulation versus Execution

Shipping MarketStudy

Polymer Logistics Study ProjectShipping Line RFI Analysis

[Final Presentation[Jubail Industrial City], [5/7/2013]

v.1


Logistics and Shipping Optimum Solution

Value-Added Functions Supply Chain Differentiation

Production Costs

Location

Time

Control

Logistics Costs

Transit Time

Reliability

Risk


Logistics and Shipping Optimum Solution

PORT OF DISCHARGE PREFERRED AND FLEXIBLE SHIPPING LINESDAMMAM JUBAIL

XIAMEN, CHINA

APL, CMA CGM, HMM, CHINA SHIPPING CMA CGM, CHINA SHIPPING, UASC, HMM

HUANGPU, CHINAQINGDAO, CHINADAILIAN, CHINA

JAKARTA, INDONESIA

CMA CGM, HMM, CHINA SHIPPING CMA CGM, CHINA SHIPPING, UASC, HMMSURABAYA, INDONESIAPORT KLANG, MALAYSIA

HOCHIMINH, VIETNAM

CMA CGM, HMM, CHINA SHIPPING CMA CGM, CHINA SHIPPING, UASC, HMM

HANOI, VIETNAMYANGON, MYANMARBANGKOK, THAILAND

PARANAGUA, BRAZIL MAERSK, UASC, CMA CGM, MSC MAERSK, UASC, CMA CGM, MSC

NEWARK, US

MAERSK, UASC, CMA CGM, MSC, NYK, MOL, APL MAERSK, UASC, CMA CGM, MSCCHARLESTON, USHOUSTON, US

ANTWERP MAERSK, UASC, CMA CGM, MSC, NYK, APL, MAERSK, UASC, CMA CGM, MSC

NHAVA SHEVAPERMA, TRANSASIA, BALAJI SHIPPING, MSC, MAERSK, UASC

TS LINE, BALAJI SHIPPING, MSC, MAERSK, UASC, PERMACHENNAI

PERMA, TRANSASIA, BALAJI SHIPPING, MSC, MAERSK, UASC

KOLKATA TRANSASIA, MSC, MAERSK, UASC

ALEXANDRIA MSC, MAERSK, SAFMARINE, UASC MSC, MAERSK, SAFMARINE, UASC

Strategy Formulation: Core Shipping Line Data Analysis

1) Time-to-market – Shipping speed is critical to modern manufacturing and supply systems – LEAD TIME LEADERSHIP2) Reliability – Infrastructure and transport congestion can be catastrophic to the shipper/customer relationship and their supply chains – HOW TO MEASURE IT?3) Cost – minimizing overall cost is a central issue for shippers – COST LEADERSHIP4) Environment – new regulatory standards create higher costs; carbon footprint awareness is leading shippers to demand environment-friendly logistics solutions. OPTIMUM LOCATION

Global Data ExtractShipping lines

SEG Port of Loading Port of Discharge Type of Service (feeder/ Main

Vessel Schedule and Frequency

Port To Port Transit Time

BFR20 BFR40 BAF20

BAF40 CAF20 CAF40

IMO ISPS SEC GRI THC20 TH40 HWSPCS PSS WS Total Cost 1 (USD)

Total Cost 1 (USD)

UASC IND Dammam NHAVA SHEVA F/M Once a Week 14 621 179 79 879



UASC IND Dammam Nhava Sheva F/M Once a Week 14 591 962 179 358 79 120 849 1440




UASC IND Jubail NHAVA SHEVA F/M Once a Week 14 621 179 79 879



UASC IND Jubail Nhava Sheva F/M Once a Week 14 621 962 179 358 79 120 879 1440




MAERKS IND Jubail NHAVA SHEVA M2WESTBOUND Once a Week 14 450 1050



MAERKS IND Jubail Nhava Sheva M2WESTBOUND Once a Week 14 450 1050




CMA-CGM ASIA Dammam Surabaya, Indonesia F Once a Week 15 200 350 $11 181 291

MAERKS IND Dammam NHAVA SHEVA M2WESTBOUND Once a Week 15 450 1050



MAERKS IND Dammam Nhava Sheva M2WESTBOUND Once a Week 15 450 1050




CMA-CGM ASIA Jubail Xiamen, China F Once a Week 15 200 350 $11 181 291

MAERKS ASIA Jubail Port Klang, Malaysia M2WESTBOUND Once a Week 16 965 1465

UASC ASIA Dammam Port Klang, Malaysia F/M Once a Week 17 308 486 122 244 107 159 537 889

MAERKS ASIA Dammam Port Klang, Malaysia M2WESTBOUND Once a Week 17 960 1445

UASC ASIA Jubail Port Klang, Malaysia F/M Once a Week 17 308 486 122 244 107 159 537 889

UASC IND Dammam ICD LONI F/M Once a Week 18 1998 179 2177

Global Data Analysis - Shipping Line Maps

Global Data Analysis – SL Transit Time Tables

Strategy Formulation: Best Port Of Loading

• JUBAIL advantage in terms of the Port To Port Transit Time

• DAMMAM advantage in terms of the Number of Port Pairs covered

05

1015202530354045

Dammam Jubail

Number of Port of Discharge per Port of

Loading

0

200

400

600

800

1000

1200

1400

Dammam Jubail

Sum of Port To Port Transit Time per Port

of Loading

Transit Time Analysis – Port Pairs coverage per SL

05

10152025303540

CMA-CGM MAERKS UASC

Number of SegmentsSL/Port Pair par Shipping line

• UASC has the best coverage

Transit Time Analysis – Port Pairs coverage per SL/POL

024

68

10

1214

1618

Dammam Jubail Dammam Jubail Dammam Jubail

CMA-CGM MAERKS UASC

Number of SegmentsSL/Port Pair per Shipping lines

• UASC has best coverage by Port Of Loading

Transit Time Analysis – Extract of Best TT per Segment SL SEG POL POD BEST LT SEG RANKINGUASC IND Dammam NHAVA SHEVA 14 01UASC IND Jubail NHAVA SHEVA 14 02CMA-CGM ASIA Dammam Surabaya, Indonesia 15 04CMA-CGM ASIA Jubail Xiamen, China 15 06MAERKS ASIA Jubail Port Klang, Malaysia 16 07MAERKS IND Jubail CHENNAI 18 13UASC IND Dammam ICD LONI 18 11UASC IND Jubail ICD LONI 18 12UASC IND Dammam ICD DELHI 19 14UASC IND Jubail ICD DELHI 19 16MAERKS ME Jubail Alexandria 20 17UASC ASIA Dammam Jakarta, Indonesia 21 18UASC ASIA Dammam Hochiminh, Vietnam 24 25UASC ASIA Dammam Bangkok, Thailand 25 27CMA-CGM US Dammam Charleston, US 25 32CMA-CGM ASIA Dammam Dailian, China 25 29CMA-CGM US Dammam Houston, US 25 33CMA-CGM US Dammam Newark, US 25 34CMA-CGM AMERICA Dammam Paranagua, Brazil 25 31CMA-CGM ASIA Dammam Qingdao, China 25 28MAERKS ASIA Jubail Qingdao, China 26 37CMA-CGM ASIA Jubail Huangpu, China 27 42UASC EU Jubail Antwerp 29 43CMA-CGM ASIA Dammam Hanoi, Vietnam 55 73

Transit Time Analysis- Best TT versus Average TT

0 10 20 30 40 50 60

Nhava Sheva

Xiamen

Chennai

Dehli

Jakarta

Bangkok

Dalian

Newark

Qingdao

Antwerp

Best TT versus Average TTBest TT Average TT

Port Of Discharge Average TT Best TT

Nhava Sheva 14 14

Surabaya 18 15

Xiamen 19 15

Port Klang 19 16

Chennai 19 18

Loni 19 18

Dehli 21 19

Alexandria 22 20

Jakarta 24 21

Hochimin 25 24

Bangkok 26 25

Charleston 29 25

Dalian 34 25

Houston 35 25

Newark 37 25

Paranagua 37 25

Qingdao 41 25

Huangpu 41 27

Antwerp 41 29

Hanoi 55 55

Transit Time Analysis- Sum of Best TT per Zone and SLSomme de BEST LTÉtiquettes de lignes CMA-CGM MAERKS UASC Total généralEU 29 29IND 18 102 120ASIA 162 42 70 274ME 20 20US 75 75AMERICA 25 25Total général 262 80 201 543

0

20

40

60

80

100

120

140

160

180

EU IND ASIA ME US AMERICA

CMA-CGM

MAERKS

UASC

Cost Analysis – Cost Leadership per Segment for 20FTMin de BFR20Étiquettes de lignes UASC MAERKS CMA-CGM Total généralEU 0 1150 850 850IND 591 450 450ME 591 1115 591ASIA 266 775 200 200US 0 4905 300 300AMERICA 1504 1790 250 250Total général 266 450 200 200

0

591

591

266

0

1504

1150

450

1115

775

4905

1790

850

200

300

250

0 1000 2000 3000 4000 5000 6000

EU

IND

ME

ASIA

US

AMERICA

CMA-CGM

MAERKS

UASC

Cost Analysis – Cost Leadership per Segment for 40FTMin de BFR40Étiquettes de lignes CMA-CGM MAERKS UASC Total généralEU 1960 2160 1481 1481IND 1050 962 962ME 1790 962 962ASIA 350 1235 443 350US 500 7910 1975 500AMERICA 450 3540 2206 450Total général 350 1050 443 350

1960

350

500

450

2160

1050

1790

1235

7910

3540

1481

962

962

443

1975

2206

0 1000 2000 3000 4000 5000 6000 7000 8000 9000

EU

IND

ME

ASIA

US

AMERICA

UASC

MAERKS

CMA-CGM

Cost Analysis – Average Cost per Destination per Equipment

Étiquettes de lignes Moyenne de BFR20 Moyenne de BFR40

Alexandria 940 1423

Antwerp 1000 1867

Bangkok, Thailand 478 776

Charleston, US 5690 5265

CHENNAI 705 1410

Dailian, China 846 1297

Hanoi, Vietnam 2300 3550

Hochiminh, Vietnam 468 1098

Houston, US 5860 7265

Huangpu, China 548 849

ICD DELHI 1940 2822

ICD LONI 1998

Jakarta, Indonesia 466 655

Newark, US 3611 3895

Nhava Sheva 528 1006

Paranagua, Brazil 1438 2488

Port Klang, Malaysia 598 915

Qingdao, China 510 781

Surabaya, Indonesia 357 505

Xiamen, China 585 853

Étiquettes de lignes Moyenne de BFR20 Moyenne de BFR40EU 1000 1867.0IND 1140 1561.0ME 940 1422.5ASIA 605 939.0US 4910 5106.4AMERICA 1438 2488.4

Cost Analysis – Average Cost per Destination per Equipment

0

1000

2000

3000

4000

5000

6000

7000

8000

Average Cost Destination per Equipment

Moyenne de BFR20 Moyenne de BFR40

Cost Analysis – Average Cost per Segment per Equipment

0

1000

2000

3000

4000

5000

6000

EU IND ME ASIA US AMERICA

Average Cost Segment per Equipment

Moyenne de BFR20 Moyenne de BFR40

Solution - OPTIMUM BFR20

Min de BFR20DESTINATIONS CMA-CGM MAERKS UASC Total général Tons %20FT TEUs Amount Share

Alexandria 1115 591 591 625 1 56.8 33580 UASCAntwerp 850 1150 850 42500 0 0.0 0 CMA

Bangkok, Thailand 478 478 1200 0.8 87.3 51578 UASCCharleston, US 300 8105 300 800 0 0.0 0 CMA

CHENNAI 705 705 2000 1 181.8 107455 MAERKSDailian, China 550 266 266 5000 0.8 363.6 214909 CMA

Hanoi, Vietnam 2300 2300 2400 0.8 174.5 103156 CMAHochiminh, Vietnam 468 468 4800 0.8 349.1 206313 UASC

Houston, US 550 8185 550 1200 0 0.0 0 CMAHuangpu, China 350 775 468 350 20000 0.8 1454.5 859636 CMA

ICD DELHI 1940 1940 20000 0.5 909.1 537273 UASCICD LONI 1998 1998 6000 1 545.5 322364 UASC

Jakarta, Indonesia 525 436 436 8400 0.8 610.9 361047 UASCNewark, US 350 4905 350 3600 0 0.0 0 CMA

NHAVA SHEVA 450 591 450 26105 1 2373.2 1402550 MAERKSParanagua, Brazil 250 1790 1504 250 2400 0.8 174.5 103156 CMA

Port Klang, Malaysia 450 960 308 308 1200 0.8 87.3 51578 UASCQingdao, China 300 795 328 300 6400 0.8 465.5 275084 CMA

Surabaya, Indonesia 200 436 200 4800 0.8 349.1 206313 CMAXiamen, China 200 1040 320 200 38000 0.8 2763.6 1633309 CMA

Solution - OPTIMUM BFR40

Min de BFR40DESTINATIONS CMA-CGM MAERKS UASC (vide) Total général Tons %40FT TEUs Amount Share

Alexandria 1790 962 962 625 0 0.0 0Antwerp 1960 2160 1481 1481 42500 1 1770.8 1703542 UASC

Bangkok, Thailand 776 776 1200 0.2 10.0 9620 UASCCharleston, US 500 10010 2852 500 800 1 33.3 32067 CMA

CHENNAI 1410 1410 2000 0 0.0 0Dailian, China 750 443 443 5000 0.2 41.7 40083 UASC

Hanoi, Vietnam 3550 3550 2400 0.2 20.0 19240 CMAHochiminh, Vietnam 1098 1098 4800 0.2 40.0 38480 UASC

Houston, US 750 10110 750 1200 1 50.0 48100 CMAHuangpu, China 600 1235 656 600 20000 0.2 166.7 160333 CMA

ICD DELHI 2822 2822 20000 0.5 416.7 400833 UASCICD LONI 6000 0 0.0 0

Jakarta, Indonesia 800 582 582 8400 0.2 70.0 67340 UASCNewark, US 600 7910 1975 600 3600 1 150.0 144300 CMA

NHAVA SHEVA 1050 962 962 26105 0 0.0 0Paranagua, Brazil 450 3540 2206 450 2400 0.2 20.0 19240 CMA

Port Klang, Malaysia 695 1445 486 486 1200 0.2 10.0 9620 UASCQingdao, China 500 1250 446 446 6400 0.2 53.3 51307 UASC

Surabaya, Indonesia 350 582 350 4800 0.2 40.0 38480 CMAXiamen, China 350 1430 520 350 38000 0.2 316.7 304633 CMA

Solution - MINIMUM SHARE BFR20/BFR40

DESTINATIONS %20FT TEUs Amount Share1 %40FT TEUs Amount Share2

Alexandria 1 56.8 33580 UASC 0 0 0

Antwerp 0 0.0 0 CMA 1 1770.8 1703542 UASC

Bangkok, Thailand 0.8 87.3 51578 UASC 0.2 10.0 9620 UASC

Charleston, US 0 0.0 0 CMA 1 33.3 32067 CMA

CHENNAI 1 181.8 107455 MAERKS 0 0.0 0

Dailian, China 0.8 363.6 214909 CMA 0.2 41.7 40083 UASC

Hanoi, Vietnam 0.8 174.5 103156 CMA 0.2 20.0 19240 CMA

Hochiminh, Vietnam 0.8 349.1 206313 UASC 0.2 40.0 38480 UASC

Houston, US 0 0.0 0 CMA 1 50.0 48100 CMA

Huangpu, China 0.8 1454.5 859636 CMA 0.2 166.7 160333 CMA

ICD DELHI 0.5 909.1 537273 UASC 0.5 416.7 400833 UASC

ICD LONI 1 545.5 322364 UASC 0 0.0 0

Jakarta, Indonesia 0.8 610.9 361047 UASC 0.2 70.0 67340 UASC

Newark, US 0 0.0 0 CMA 1 150.0 144300 CMA

NHAVA SHEVA 1 2373.2 1402550 MAERKS 0 0.0 0

Paranagua, Brazil 0.8 174.5 103156 CMA 0.2 20.0 19240 CMA

Port Klang, Malaysia 0.8 87.3 51578 UASC 0.2 10.0 9620 UASC

Qingdao, China 0.8 465.5 275084 CMA 0.2 53.3 51307 UASC

Surabaya, Indonesia 0.8 349.1 206313 CMA 0.2 40.0 38480 CMA

Xiamen, China 0.8 2763.6 1633309 CMA 0.2 316.7 304633 CMA

Solution - MINIMUM SHARE VALUE BFR20/BFR40

$3,884,557.27 , 41%

$1,510,005.00 , 16%

$4,161,956.97 , 43%

SL shares in $

UASC

MAERKS

CMA CGM

TOTAL$9,556,518

Solution - MINIMUM SHARE VOLUME BFR20/BFR40

5058.4, 36%

2555.0, 18%

6542.1, 46%

SL shares in TEUs

UASC

MAERKS

CMA CGM

SHARED LANES

40083

214909

51307

275084

0

50000

100000

150000

200000

250000

300000

UASC CMA

SHARED LANES CHINA IN VALUE

Dailian, China Qingdao, China

41.7

363.6

53.3

465.5

0.0

50.0

100.0

150.0

200.0

250.0

300.0

350.0

400.0

450.0

500.0

UASC CMA

SHARED LANES CHINA IN VOLUME

Dailian, China Qingdao, China

Solution - MAXIMUM SHARE BFR20/BFR40

DESTINATIONS %20FT TEUs Amount Share1 %40FT TEUs Amount Share2Alexandria 1 56.8 63352MAERKS 0 0 0Antwerp 0 0.0 0MAERKS 1 1770.8 3169792MAERKSBangkok, Thailand 0.8 87.3 97309UASC 0.2 10.0 17900UASCCharleston, US 0 0.0 0MAERKS 1 33.3 59667MAERKSCHENNAI 1 181.8 202727MAERKS 0 0.0 0MAERKSDailian, China 0.8 363.6 405455MAERKS 0.2 41.7 74583CMAHanoi, Vietnam 0.8 174.5 194618CMA 0.2 20.0 35800CMAHochiminh, Vietnam 0.8 349.1 389236UASC 0.2 40.0 71600UASCHouston, US 0 0.0 0MAERKS 1 50.0 89500MAERKSHuangpu, China 0.8 1454.5 1621818MAERKS 0.2 166.7 298333MAERKSICD DELHI 0.5 909.1 1013636UASC 0.5 416.7 745833UASCICD LONI 1 545.5 608182UASC 0 0.0 0Jakarta, Indonesia 0.8 610.9 681164CMA 0.2 70.0 125300CMANewark, US 0 0.0 0MAERKS 1 150.0 268500MAERKSNHAVA SHEVA 1 2373.2 2646098UASC 0 0.0 0MAERKSParanagua, Brazil 0.8 174.5 194618MAERKS 0.2 20.0 35800MAERKSPort Klang, Malaysia 0.8 87.3 97309MAERKS 0.2 10.0 17900MAERKSQingdao, China 0.8 465.5 518982MAERKS 0.2 53.3 95467MAERKSSurabaya, Indonesia 0.8 349.1 389236UASC 0.2 40.0 71600UASCXiamen, China 0.8 2763.6 3081455MAERKS 0.2 316.7 566833MAERKS

Solution - MAXIMUM SHARE VOLUME BFR20/BFR40

$10,787,507.58 , 60%

$1,036,881.82 , 6%

$6,125,214.39 , 34%

SL shares in $

MAERKS

CMA

UASC

TOTAL$17,949,602

Solution - MAXIMUM SHARE VOLUME BFR20/BFR40

8118.6, 57%

875.5, 6%

5161.5, 37%

SL shares in TEUs

MAERKS

CMA

UASC

Solution - MEDIUM SHARE BFR20/BFR40

DESTINATIONS %20FT TEUs Amount Share1 %40FT TEUs Amount Share2Alexandria 1 56.8 56681MEDIUM 0 0 0MEDIUMAntwerp 0 0.0 0MEDIUM 1 1770.8 2573906MEDIUMBangkok, Thailand 0.8 87.3 87062MEDIUM 0.2 10.0 14535MEDIUMCharleston, US 0 0.0 0MEDIUM 1 33.3 48450MEDIUMCHENNAI 1 181.8 181379MEDIUM 0 0.0 0MEDIUMDailian, China 0.8 363.6 362758MEDIUM 0.2 41.7 60563MEDIUMHanoi, Vietnam 0.8 174.5 174124MEDIUM 0.2 20.0 29070MEDIUMHochiminh, Vietnam 0.8 349.1 348247MEDIUM 0.2 40.0 58140MEDIUMHouston, US 0 0.0 0MEDIUM 1 50.0 72675MEDIUMHuangpu, China 0.8 1454.5 1451030MEDIUM 0.2 166.7 242250MEDIUMICD DELHI 0.5 909.1 906894MEDIUM 0.5 416.7 605625MEDIUMICD LONI 1 545.5 544136MEDIUM 0 0.0 0MEDIUMJakarta, Indonesia 0.8 610.9 609433MEDIUM 0.2 70.0 101745MEDIUMNewark, US 0 0.0 0MEDIUM 1 150.0 218025MEDIUMNHAVA SHEVA 1 2373.2 2367447MEDIUM 0 0.0 0MEDIUMParanagua, Brazil 0.8 174.5 174124MEDIUM 0.2 20.0 29070MEDIUMPort Klang, Malaysia 0.8 87.3 87062MEDIUM 0.2 10.0 14535MEDIUMQingdao, China 0.8 465.5 464330MEDIUM 0.2 53.3 77520MEDIUMSurabaya, Indonesia 0.8 349.1 348247MEDIUM 0.2 40.0 58140MEDIUMXiamen, China 0.8 2763.6 2756958MEDIUM 0.2 316.7 460275MEDIUM

Solution - MEDIUM SHARE VALUE BFR20/BFR40

$10,919,909.92 , 70%

$4,664,523.75 , 30%

SL shares in $

20FT

40FT

TOTAL$15,584,432

Solution - MEDIUM SHARE VOLUME BFR20/BFR40

10946.4, 77%

3209.2, 23%

SL shares in TEUs

20FT

40FT

UNCOVERED DESTINATIONS (SPOTS)

ICD KAMPUR

KOUKATA

MYANMAR

Strategy - Execution

Logistics Review

Strategy Execution -Outsourcing Decision Framework

Business Strategy alignment Assessment

Assessment – Current Issues NA

Capacity Management

Transaction Cost Factors

Trends and other outsourcing considerations

Capacity Management

SIPCHEM

Capacity Management / Assets Utilisation

Fashion – BasedProducts and services

Agile Planning and control

Commodity productsand services

Lean Planning and control

‘Super value’ productsand services

Project Type PlanningAnd control

‘Consumer Durable’Product and Services

Combinaison of lean and agilePlanning and control

Potential for TaskStandardization

Need to cope withTask

Variability

Nature of processtasks

Need for capacityFlexibility

Potential capacityStability

Nature of capacity

High

Low

Demanduncertainty

LowHigh Product/serviceComplexity

Capacity Management / Asset Utilisation

Capacity Management / Asset Utilisation

High utilization but Long throughput time

Low utilization but Short throughput time

Capacity utilization

20% 40% 60% 80%

Reduce processVariability

LEANBase Capacity

Transaction Costs Factors

Assessment 1: The different activities of the logistics chain require investments that may show a high degree ofspecificity. In the light of TCE predictions, we should note a tendency to outsource activities requiring assets(physical, site and human resources) with a low specificity. Conversely, a tendency to keep inside the elements ofthe logistic chain requiring highly specific assets should be observed. (Hence Warehousing)

Assessment 2: In the field of logistics, uncertainty is closely linked to the difficulty for the principals to define theneeds that will satisfy an extremely fluctuating demand and the unstable and complex conditions of the externalenvironment with certainty. In case of high uncertainty, we should witness a tendency to internalisation, while atendency to outsource all or part of or the components of the logistics chain should take place in case of lowuncertainty (Hence Container operations and yard/ trucking management outsourced)

Assessment 3: In the field of logistics, costs related to outsourcing are justified only in case of a high degree offrequency. According to theoretical predictions, we should note a tendency to outsource recurring activities.Conversely, non-recurring activities should tend to be internalised. [Obvious in this case]. Containerized supplychain, increase transaction frequency as compared to bulk , therefore cannot be handled internally.

Assessment 4: The relationships between the features of transaction (assets specificity, frequency and uncertainty)and the decision of outsourcing all or part of the logistic chain will be influenced by certain contextual factors suchas the size of the company, its level of competence and the degree of the structure of the logistic function in thecompany. These relationships will be negative for small companies with a high level of competence and a well-structured logistic function. Conversely, they will be positive for large companies with a low degree ofcompetence and a loosely structured logistic function.

Common Outsourcing Decision Matrix

SIPCHME 3PLs New Logistics capability Integration

Scope where IPC has less than 100% Lead-Time control

Scope where IPC has 100% of Lead-time

control

Lead-Time -Controlon

e Export and LogisticsLead-Time14 Days

Two Port To

Port Transit Time

Thre

e Last Mile Logisticsand delivery???

14 Days

29 Days

55 Days

Lead-Time to Port of Loading – 14 Days Cut off

Key factors For Freight Forwarders Selection

client_polymer_logistics_study_presentation template v1

Documents