2020 cargo forecast & strategic business initiatives · • gdp growth on the decline, yet...
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2020 Cargo Forecast & Strategic Business Initiatives
Tong ZhuChief Commercial & Strategy Officer
Item No.: 4ADate of Meeting: October 29, 2019
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Trade & Economic Trends
Global Economy• Trade policy and tariffs driving global uncertainty and risk• Global GDP growth slowing, merchandise trade is contracting• International business sentiment and corporate spending are weak• Global political environment adding to economic instability
US Economy• GDP growth on the decline, yet stable job market and low inflation rate• Consumer demand showing recent signs of weakness• US manufacturing and corporate investment are subdued• US dollar is strong, challenging export competitiveness in world markets
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Trade & Economic TrendsIMPLICATIONS FOR THE NWSA GATEWAY
Short Term Impacts• Slower growth in international container volumes • Less seasonality, more volatility in imports• Increased competition for WA/US exporters in global markets• Fierce competition between North American ports for declining
import/export volumes
Medium- to Long-Term Impacts• Moderate growth in import/export volumes over time• Continued shift in manufacturing and sourcing from China• Increased exports to China, SE Asia and other emerging markets
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Gateway Comparison – TEU & Market SharePORTS OF INTEREST, August YTD(Source: Port Statistics)
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FULL IMPORTS (YOY Change)
+9,358 TEU (+1.0%)
China Other Mkts‐38,040 TEU
(‐6.8%)+47,390 TEU(+12.9%)
Commodity China Other Mkts
Machinery ‐9.2% +13.9%
Furniture ‐13.9% +19.6%
Metal Articles ‐8.6% +25.6%
Plastic/RubberArticles ‐15.0% +15.3%
Auto Parts Flat +13.9%
NWSA Top Commodity Trends - ImportsJan – Aug; 2018 vs. 2019
Source: PIERS, Foreign Full TEUs
Metal Articles
Plastics/Rubber Articles
Auto Parts
Furniture
Machinery
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NWSA Trading Partner Trends - ImportsJan – Aug; 2018 vs. 2019
Source: PIERS, Foreign Full TEUs
Vietnam
So. Korea
China
Taiwan
Japan
20192018
VietnamSo. Korea
China
Taiwan
Japan
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NWSA Top Commodity Trends - ExportsJan – Aug; 2018 vs. 2019
Source: PIERS, Foreign Full TEUs
Hay
Processed Potatoes
Wood Pulp
Lumber/LogsVegetables
FULL EXPORTS (YOY Change)
+7,992 TEU (+1.4%)
China Other Mkts‐38,040 TEU
(‐6.8%)+47,390 TEU(+12.9%)
Commodity China Other Mkts
Hay ‐29.4% +19.8%
Processed Potatoes ‐52.7% +13.8%
Wood Pulp ‐42.4% +11.2%
Lumber/Logs ‐29.4% +9.0%
Vegetables +1.5% +30.6%
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NWSA Top Trading Partners - ExportsJan – Aug; 2018 vs. 2019
Source: PIERS, Foreign Full TEUs
South Korea
China
Taiwan
India
Japan
20192018
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Asian Tigers on the Move
Source: PIERS, Foreign Full TEUs 9
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About the Industry
Weaker demand growth
Substantial ship size increase
Bigger shipping alliances
INDUSTRYDYNAMICS
IMPACTS
Seeking value, greater control
Green initiatives (IMO)
Intensified competition
Terminal constraints, rising OPEX & CAPEX
Smaller margins, tougher
negotiations
Vertical integration & diversification PROPERTY
ACQUISITION
INLAND PORT
TERMINAL DENSIFICATION
EXPAND NWSA’S REACH
STRATEGIC OPPORTUNITIES
Rising OPEX & CAPEX
Cargo Throughput
Financial Return
Number of Jobs
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About the Industry
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Strategic Initiatives – Investing in Key Infrastructure
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Strategic Initiatives – Business Innovations
• Incentivizing BCO and carrier customers for incremental cargo growth
• Targeting new business opportunities in SE Asia and other emerging markets
• Diversifying the NWSA business portfolio
• Exploring opportunities for intermodal and export growth
• Targeting specific cargo types
• Continued advancements in our operation service delivery commitment
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Business Outreach Efforts
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Cargo Forecast – International Container(2019 – 2024)
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Cargo Forecast – Domestic Container(2019 – 2024)
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Cargo Forecast – Int’l + Domestic Container(2019 – 2024)
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Cargo Forecast – Breakbulk(2019 – 2024)
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Cargo Forecast – Autos(2019 – 2024)
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