Tasmanian Shippers Forum – Beyond Bass StraitLauncestonJuly 2018

www.ANL.com.au

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› ANL is a regional specialist and an established global operator

› Originally “Australian National Line”

› CMA CGM bought ANL from the Australian Govt. in 1998

› ANL managed as a stand alone entity

› Major expansion since 1998

› Award winning customer service

› Continued development and diversification plans

ANL Company Profile

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ANL Route Summary (1998)

Aust - Asia x 3

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ANL Route Summary (Today)

Aust - Asia x 9

Aust - PNG

Aust – NZ

Aust/NZ - EC USA

Melb. - Tasmania

Aust/NZ - Europe

Aust. Coastal x 3

WC USA – ANZ x 2

Pacific Is. x 10

NZ – Asia x2

MEG – Asia

Asia – PNGAsia – Timor

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ANL Group: The Volumes (TEU)

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

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Key Figures – ANL Group

Turnover 2017 US$1,210m

TEU Moved 2017 1,225,599

Direct Worldwide Staff +1,000

Vessel Fleet 27

Ports Serviced >400

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ANL IN TASMANIA

➢ The largest dedicated Sales & Customer Service office

in Tasmania

➢ Almost 60 years of experience servicing Tasmania

➢ The best range and biggest stock of container

equipment in the state

➢ 12 arrivals/departures per week to/from MEL

13 direct international services/week ex/to Australia

➢ 4 Container Parks throughout the state (Burnie,

Launceston, Bell Bay & Hobart)

➢ 4 Bond Stores around the state (Burnie x 2, Launceston

& Hobart)

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TASMANIA

TASMANIA AAX A3 DARWIN

ANL Services: Australian Coastal

› Toll ANL Bass Strait Service (TABSS)

› 6 sailings per week

› 2 dedicated RO/RO vessels

› Seamless connection via Melbourne to other Australian ports and ANL’s worldwide network

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AUSTRALIAN CABOTAGE

TASMANIA AAX A3 DARWIN

› Weekly loadings ex all main ports with

dedicated coastal space

› Weekly westbound sailings from Sydney

and Melbourne to Adelaide and Perth

› Ex-Brisbane coastal cargo via Sydney

transhipment

› Weekly northbound coastal sailings from

Melbourne to Brisbane via ANL’s A3

service

ANL Services: Australian Coastal

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DARWIN COASTAL

TASMANIA AAX A3 DARWIN

› Utilises ANL’s PAX service into Darwin

› Weekly loadings ex all main ports with dedicated

coastal space into Darwin

› Weekly sailings from Brisbane using ANL’s KIX

service

› Weekly sailings from Sydney, Melbourne,

Adelaide and Fremantle using ANL’s AAX service

› Through bill of lading from all Australian origin

ports

› All coastal cargo cleared in Darwin

From/ To ( D ays)

B risbane

Sydney

M elbourne

A delaide

Fremant le

Terminal

DPW

DPW

D A R W IN

24

19

DPW

DPW

Flinders

28

25

23

ANL Services: Australian Coastal

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ANL’s Parent – CMA CGM

CMA CGM Tower - Marseille

Over 200 Shipping lines

30,000+Employees Worldwide

2.53Million TEU’s of fleet

capacity

Over 420Ports of Call

18.95Million TEU’s

transported in 2017

34Terminals in operation

Over 755 Offices worldwide

504Vessels

21.1Billion USD of revenue in

2017

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ANL’s Parent – CMA CGM

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ANL’s Parent – CMA CGM Acquisitions – 1996 - 2018

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Container Fleet

ANL operates as part of the CMA CGM global container pool.

• Over 3,500,000 TEU worldwide

• 36% less than 5 years old

• 325,000 TEU of Reefer Containers

• 55% of reefers have Eco-friendly low

energy machinery

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Top 13 Carriers & Market Share (@ 1 June 2018)

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Top 13 Carriers – Change in Capacity Operated(Jan-May 2018 vs Jan-May 2017)

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Cellular Fleet Growth vs Global Throughput

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Cellular Fleet Growth vs Global Throughput

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Main Carriers’ Operating Margins by Quarter: 2008-2018

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World Fleet / Average Vessel Size

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Global Fleet Capacity Breakdown by TEU Size Range

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Global Fleet Orderbook Breakdown by TEU Size Range

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Global Fleet Orderbook Breakdown by TEU Size Range

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Rising Costs – Charter Rates

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Rising Costs – Charter Rates

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Rising Costs – Bunker Costs

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Rising Costs – Low Sulphur Fuel (2020)

❖ Options:

i. Low sulphur (>0.5%) fuel;ii. Diesel oil; oriii. Scrubbers.

❖ Estimated Additional Cost to Container Shipping industry: US$10 billion.

❖ Estimated additional Cost to ANL: US$105 million.

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Recent developments:

❖ COSCO and China Shipping merge

❖ CMA CGM acquires NOL (APL)

SUMMARY OF GLOBAL DEVELOPMENTS (@ Feb17)

❖ MOL, NYK and K-Line announce merger of their liner businesses

❖ Maersk acquires Hamburg Sud

❖ UASC ‘merges’ with Hapag Lloyd

❖ Hanjin bankruptcy, Hyundai MM financial re-structure

❖ Taiwan government announce financial aid package for YML and Evergreen

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Developments:❖ Container operators margins turn ‘red’, reflective of dramatic cost

increases. 2018 forecast for cumulative losses in USD billions.

❖ COSCO acquires OOCL – subject to regulatory approval (Jul18).

SUMMARY OF GLOBAL DEVELOPMENTS (@ Jun18)

❖ MSC announces new ‘super-slow’ steaming initiatives, in conjunction with 2M partner, Maersk. Unprofitable services to be cut.

❖ ‘ONE’ Launches New Network (Apr 18).

❖ CMA CGM acquires Mercosul and Containerships, and 25% CEVA Logistics.

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❖ 2018 Estimated global container fleet growth: +5.8%

❖ 2018 Estimated global container demand/throughput: +4.5%

❖ Average Vessel Size: 2000 – 1,749 TEUs / 2020 – 4,289 TEUs

❖ 68% of vessels on order = 12,500 TEUs+

IN SUMMARY – BEYOND BASS STRAIT

❖ Percentage of vessels on order suitable for servicing Tasmania (direct calls): 10%

❖ Dramatically increasing costs for container shipping operators – vessels and fuel

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Recent developments in the Australia liner trades:

❖ Withdrawal of Maersk from dedicated trans-Tasman service - Tasmania

IN SUMMARY – BEYOND BASS STRAIT (AUSTRALIA)

❖ A3 partners announce deployment of 8,500 TEU vessels (north Asia/Australia)

❖ Triple A partners return to 2 loops on SEA/Australia trade

❖ ANL enhance stand-alone service to/from New Zealand

❖ ANL acquires Sofrana Unilines (‘Sofrana ANL’)

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❖ Further rationalisation?

The Way Forward – Supply

➢ Acquisitions & mergers – regulatory hurdles viz market share

➢ Vessel Sharing Agreements

o Ocean Alliance – CMA CGM, COSCO, OOCLo 2M – Maersk Line, MSC, Hyundaio The Alliance – Hapag Lloyd, ONE, Yang Ming

❖ Enhanced ‘super-slow’ steaming initiatives.

THE FUTURE

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Impact on Australia (& Tasmania)

❖ The Australian container trades are directly influenced by international container trades developments.

❖ Cascading global tonnage can mean reduced costs through ‘economies of

scale’, BUT

❖ Infrastructure development required in Australia ; ports, terminals,

intermodal interface.

❖ The alternative = smaller, higher-cost services.

THE FUTURE

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The Challenge for Container Carriers

❖ Differentiation from commoditised service offerings.

❖ Commercial excellence including:

o Closer customer relationshipso Product differentiationo Broader product offering, including intermodal serviceso Improved e-Business and Digital solutions, including trackingo Environmentally-sensitive solutions, including LNG, low-sulphur fuels

THE FUTURE

❖ Cost reductions

SHIPPING THE FUTURE

www.ANL.com.au