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24 September 2014 The on-line newspaper devoted to the world of transports 02:26 GMT+2





Valuation of the
Liner Shipping Industry


Economic Contribution and Liner Industry Operations





December 2009



Table of Contents

Executive Summary

     

What is the Liner Shipping Industry?


Key Findings

Introduction


Purpose of Report


Methodology and Data Dources

Economic Valuation of the Liner Industry

Liner Industry Operations and Expenditures


Methodology and Data Sources


The Liner Fleet

           

Fleet Size and Capacity



Shipbuilding



Vessel Purchase Prices


Liner Fleet Operations



Port Calls and Nautical-Miles Travelled


Port Expenditures and Operations



Throughput at Liner Ports



Expenditures by Terminal Operators



Container Fleet



Other Liner Industry Equipment

Summary

Appendix A: World Industry Service Methodology


Data Sources


Water Transport and Shipbuilding Sectors


Liner Industry Share


Definition of WIS Metrics

Appendix B: Data Sources


Figures

Figure 1:

Average Weekly Port Calls Made by Container and Vehicle Vessels, First 35 Weeks of 2009

Figure 2:

Average Weekly Nautical-Miles Travelled by Container and Vehicle Vessels, First 35 Weeks of 2009



Tables

Table 1:

Direct Economic Contribution of Shipbuilding and Liner Industry Operations, 2007

Table 2:

Direct Economic Contribution of Liner Industry Operations, 2007

Table 3:

Direct Economic Contribution of Shipbuilding, 2007

Table 4:

Global Liner Fleet, July 2009

Table 5:

Global Liner Fleet on Order

Table 6:

Current and On-Order Liner Fleet by Region, July 2009

Table 7:

European Union Liner Fleet, July 2009

Table 8:

Top Twenty Countries by Existing Fleet and Vessels On-Order, July 2009

Table 9:

Deliveries of Container and Ro-Ro Vessels by Builder Country, 2006-2008

Table 10:

Cumulative Spending on Liner Vessels by Operating Region through 2009

Table 11:

Cumulative Receipts from Sales of Liner Vessels by Region of Build as of July, 2009

Table 12:

Number of Service and Annual Capacity Deployed by Route, as of July 1, 2007

Table 13:

Average Weekly Number of Port Calls Made by Operator Region in 2009

Table 14:

Average Weekly Number of Nautical-Miles Travelled by Operator Region in 2009

Table 15:

Top 20 World Ports by 2008 Throughput

Table 16:

Throughput at Select Container Ports in the European Union, 2007- 2008

Table 17:

Throughput at Select Container Ports in North America, 2007

Table 18:

Investment by Terminal Operators, 2007-2008

Table 19:

Container Fleet by Region, Mid-2008

Table 20:

Container Handling and Trans-shipment, Million TEUs, 2007

Table 21:

Chassis Fleet and Operating Costs in the United States, 2008




Executive Summary

Liner shipping is the service of transporting goods by means of high capacity, oceangoing ships that transit regular routes on fixed schedules. The liner shipping industry is the primary conduit of world trade and an increasingly important part of the maritime industry. Liner shipping carries the majority of the world's ocean-borne trade in value terms and facilitates a significant portion of the merchandise trade of the world. The industry has contributed to advances in the standard of living of most of the world's population in the last 35 years, as the gains from trade through advancing global commerce were enabled by the reliable, efficient and relatively low-cost transportation provided by the industry.

Quantifying the significance of the liner shipping industry can be done using many metrics. Valuable perspectives on the liner industry include how much of world trade is handled by the liner industry; the employment, investment, and value added the industry contributes to the world economy, and the operational characteristics of the industry in providing services globally.

WHAT IS THE LINER SHIPPING INDUSTRY?

The liner shipping industry is the portion of the maritime industry that includes all operations and related infrastructure involved in scheduled ocean-borne shipping. It consists of liner vessels and the people working on-board these vessels, ports, shipbuilding operations, longshore dock workers, shipbuilders, and all other on-shore support staff. Liner shippers transport most of the high unit-value consumer and intermediate goods, including ocean containerized cargo, vehicles, and other mobile machinery. The industry operates on all oceans and many of the navigable inland waterways world-wide, benefitting consumers and exporters globally.

KEY FINDINGS

This report provides measures that describe the important role of the liner shipping industry in the world and for key world regions. Among the findings are:
  • The value of the liner industry operations and shipbuilding in 2007 is estimated to be $436.3 billion, generating 13.5 million direct and related jobs.
  • The liner industry transported about 60% of the total value of global seaborne trade of US$7.7 trillion in 2007.
  • The industry has invested in more than 7,000 vessels to provide these services, with approximately another 1,400 on order.
  • Over $235 billion have been spent on new vessels by the industry.
  • Throughput at the top 20 global ports reached almost 250 million TEU in 2008.
  • In 2008, the global container fleet consisted of 17.8 million containers, which cost the industry over $80 billion.
  • In 2009, on average, liner ships made 10,000 port calls around the world each week.
  • In mid-2007, the liner industry operated more than 400 scheduled services serving intercontinentalroute.


Introduction

The liner industry is a crucial segment of the global economy and contributes significantly to world economic output. The industry is broadly defined as the operations and underlying infrastructure involved in scheduled ocean-borne shipping. As such, it consists of a variety of components with significant economic impact, including:
  • Liner operating companies
  • Liner vessels
  • Ports of Call
  • Shipbuilding operations
  • Liner industry operations

1

IHS Lloyd's Register-Fairplay fleet database and IHS Global Insight World Trade Service.

Liner operating companies generally transport high-value consumer and intermediate goods, including all seaborne containerized cargo, automobiles, and other machinery. As a result, the industry has a profound effect on consumers and exporters. In 2007, the industry carried almost 60% of the total value of the world's seaborne commodities on more than 7,000 registered vessels.1

The industry is especially significant to the economies of the European Union and South Korea in terms of shipbuilding and to the European Union, China, United States, and the Americas in its economic contribution from transport operations. Globally, the industry was directly or indirectly responsible for over $436.3 billion in output and 13.5 millions jobs in 2007.


PURPOSE OF REPORT

This report was commissioned by the World Shipping Council in order to better understand the value and size of the liner shipping industry and its contribution to global trade and national economies. The estimates presented in this report are an initial effort using readily available data from various IHS companies for valuing and sizing the industry. The majority of the data presented here is from 2007, the most recent year for which economic and trade data is complete. This year also presents the size and impact of the industry prior to the current global recession and is thus indicative of future operations.


METHODOLOGY AND DATA SOURCES

The primary information presented in this report is derived from three IHS data sources, described in greater detail in the body of this report:

  1. IHS Global Insight World Trade Service (WTS): used to estimate the trade impact of the liner industry.
  1. IHS Global Insight World Industry Service (WIS): used to estimate the economic and employment impact of the liner industry. A detailed explanation of the WIS methodology is available in Appendix B.
  1. IHS Lloyd's Register - Fairplay Research (LRF): used for determining the size of the global liner fleet, its capacity and operating statistics. LRF maintains a comprehensive ongoing registry of all seagoing vessels of 100 gross tons or larger and tracks their operations on an ongoing basis.
Where enough geographic detail was available, economic, trade and operating metrics were aggregated by region. The WTS regional trade aggregations are presented in Appendix A.

These three databases were supplemented with data obtained from research of websites and annual reports of liner industry participants including liner vessel operators and service providers, ports and port authorities, terminal operators, and equipment manufacturers. Consulting and other research reports were also reviewed. For a full list of reviewed sources please see Appendix C.



Economic Valuation of the Liner Industry

The most common measures of the value of an industry in the economy are the value of output produced by the sector and the associated employment provided by this activity. These are commonly measured through the value of the output of the companies in the industry and the number of workers they employ. This section reviews available economic metrics for the liner industry and provides estimates of the economic value of the liner industry and its contribution to the global economy and regional economies.

An ideal measure of this value would include the value of liner vessels, their operations, and the value of on-shore assets that support the industry. In practice, however, because some on-shore assets and personnel are shared in their use with non-liner transportation services, such measures are very difficult to produce and would require a significant effort in summing up values using a "bottom-up" approach. This process faces limitations in the inconsistencies between national financial accounting standards and gaps in the data collected and published by different government agencies and facilities such as liner ports around the world.

The analysis of the industry included here have been produced using "top-down" economic measures of the liner industry derived from IHS Global Insight's World Industry Service databases. The detailed methodology and data sources used to derive the liner share portion of these measures are presented in Appendix A. The key indicators presented here are Capital Expenditures, Gross Output, Labor Compensation, and Number of Employees for both the liner industry and the portion of the shipbuilding industry devoted to building and maintaining liner vessels.

The liner industry produced over $183 billion of direct output globally in 2007 from both operations and shipbuilding. Of this, more than a third was produced by companies in the European Union. The liner industry also accounts for more than 4 million direct jobs world-wide and investment in fixed assets of more than $29 billion. This estimate of the value of the industry does not include related activities such as cargo handling and storage activities at ports, nor does it include the inland transportation of liner cargoes, unless moved inland by water.

In addition to the direct impacts of the liner industry measured in value and jobs, the spending by the industry creates additional indirect economic impact on other sectors of the economy. Furthermore, this spending induces additional economic activity and employment in the economy. Using estimates of the multipliers for indirect and induced effects that apply to the maritime sector for value and related employment, the full impact of the value of the liner sector operations and shipbuilding in 2007 is estimated to be $436.3 billion in gross output, generating 13.5 million jobs.
Table 1: Direct Economic Contribution of Shipbuilding and Liner Industry Operations, 2007
(Million US Dollars)

Region

Gross
Output

Labor
Compensation

Employees
(Thousand)

Capital
Expenditure

Total

183,305.0

27,177.9

4,146.8

29,406.0

Sources: IHS Global Insight World Industry Service and World Trade Service.

The direct global economic contribution generated from the operations of the liner industry produced over $141 billion, or about 77 percent, of liner industry related direct output in 2007. With almost 4 million people directly employed world-wide and with investment in fixed assets of almost $28 billion, liner industry operations also account for most of the jobs and capital investment related to the industry.

Table 2: Direct Economic Contribution of Liner Industry Operations, 2007
(Million US Dollars)

Region

Gross
Output

Labor
Compensation

Employees
(Thousand)

Capital
Expenditure

Total

141,528.3

20,792.2

3,869.9

27,527.8

Sources: IHS Global Insight World Industry Service and World Trade Service.

In addition to the extensive global operations of the liner industry, the value and employment of the manufacturing required to supply the equipment for liner industry operations is also significant, especially for countries with advanced and sizable shipbuilding operations. The direct economic contribution of liner vessel manufacturing for countries that delivered at least one liner vessel in 2007 is shown in Table 3.
The construction of liner vessels provided almost 277,000 jobs in shipbuilding countries and generated almost $42 billion of gross output, more than $6 billion of which was labor compensation. The liner shipbuilding industry also invested almost $1.9 billion in fixed assets during the year 2007. The leader in liner vessel construction is South Korea, with almost $16 billion worth of output, followed by Germany.
Likewise, Japan has a large shipbuilding industry, although much of its output is of non-liner shipping vessels such as bulk carriers.

Table 3: Direct Economic Contribution of Shipbuilding for the Liner Industry, 2007
(Million US Dollars)

Country

Gross
Output

Labor
Compensation

Employees
(Thousand)

Capital
Expenditures

China

4,726.2

97.5

88.4

279.3

Germany

8,694.8

1,531.4

24.5

166.8

Japan

4,089.4

573.1

13.7

95.6

South Korea

15,857.3

2,400.7

77.9

958.1

United States

52.4

17.9

0.3

2.2

Rest of World

8,356.7

1,765.1

72.0

376.2

European Union Total

13,804.7

2,665.5

48.4

419.2

World Total

41,776.7

6,385.8

276.9

1,878.2

Sources: IHS Global Insight World Industry Service and Lloyd's Register-Fairplay Research.



Liner Industry Operations and Expenditures

This section of the report examines the seaborne operations of the liner industry as well as its on-shore component, including port expenditures, where possible. The size and impact of the liner industry can be quantified by examining its expenditure on capital such as vessels, containers and equipment as well as the cost of its operations. In addition, non-monetary measures of the industry’s operations also provide useful information on the industries magnitude and scope. Where data was available, this report quantifies the dollars spent on capital and operations by the industry as well as the following operational statistics: port calls, port throughput, number of services provided, available liner capacity, and nautical-miles traveled. The size and geographic scope of the liner fleet is examined in greater detail. Lastly, the number of containers and other equipment utilized by the liner industry is quantified where possible.

In mid-2007, the global liner fleet consisted of 7,210 vessels with approximately 185 million deadweight tons (dwt) of capacity, including 12.5 million TEU of container capacity and 3.2 million CEU of automotive capacity. As of July 2009, approximately $236 billion has been spent cumulatively on purchasing new liner vessels since the inception of the liner trade. This amount does not include the additional and potentially substantial amounts spent subsequently in the second-hand market, or for upgrades and maintenance. The liner fleet made more than 10,000 average weekly port calls in the first half of 2009 and the average liner ship travelled more than 1,100 nautical-miles in an average week.

2

U.S. DOT Maritime Administration, U.S. Public Port Development Expenditure Report (FYs 2006 & 2007-2011), February 2009. Major ports such as Los Angeles/Long Beach and New York/New Jersey were not respondents to this survey. The true investment by U.S. ports in liner facilities is thus very likely to be significantly larger than $360 million.

Throughput at the top twenty busiest global ports reached almost 250 million TEU in 2008. The global container fleet reached 17.8 million units and cost $80.1 billion. Investment in liner ports by port authorities and terminal operators are also substantial. Ports in the United States alone invested at least $360 million2 in their liner facilities in just 2006.




METHODOLOGY AND DATA SOURCES

Fleet statistics are derived from databases compiled and maintained by Lloyd's Register - Fairplay Research (LRF). LRF maintains registry information for all ships with International Maritime Organization (IMO) numbers, which includes all seagoing trading ships of 100 gross tonnes and above as well as vessels that are on order. The nationalities of the operator as well as the owner are recorded for most - though not all - vessels in this database. The fleet and order book databases are primary data sources and do not pose any major limitations.

The expenditures and operations of the liner industry are not possible to fully quantify on a global scale for a variety of reasons. Many liner companies, equipment manufacturers, and terminal operators are privately held companies which disclose only minimal details pertaining to their finances and operations. Accounting requirements differ across countries for publicly held companies. There are thus no global or regional organizations that have aggregated any comprehensive financial or operating data on the liner industry. Instead, only piecemeal information can be gleamed from company reports and government agencies.

Subject to such limitations, this report presents the best available data and examples as could be gathered from a review of company information as available from their websites, annual reports, government organizations and research and consulting companies. The sources and methodologies for the operating and financial measures and data that were quantified here are described in greater detail in each of the following sections.


THE LINER FLEET

For the purposes of this report, the liner fleet is defined as consisting of container, vehicle, and Ro-Ro vessels. Some of the Ro-Ro vessels identified in the database are used in short-sea, as opposed to liner, shipping. While it is difficult to identify and exclude Ro-Ro vessels utilized in short-sea shipping, their share of the overall Ro-Ro vessel count is small. In addition, certain vessels such as combination vessels that operate on a scheduled service but are not container, vehicle or Ro-Ro vessels are excluded from the vessel counts and capacity data.

It is important to note that the exact number of ships in the liner fleet changes frequently as ships are decommissioned or new ships enter service. Likewise, the order book is frequently updated with new orders and changes to current orders.


Fleet Size and Capacity

As of July 2009, the global liner fleet consisted of 7,210 vessels with almost 185 million dead-weight tons of capacity. The container fleet of 4,684 vessels has capacity of just over 12.5 million TEU, and the vehicle fleet of 773 vessels has the capacity of approximately 3.2 million car equivalent units (CEU). The Ro-Ro fleet provides an additional 1.2 million CEU of capacity.


Table 4: Global Liner Fleet, July 2009

Vessel Type

Number
of Vessels

Dwt

Container

4,684

165,774,103

Vehicle

773

11,375,69

Ro-Ro

1,753

7,423,240

Total

7,210

184,573,034

Source: Lloyd's Register - Fairplay Research

The total order book for liner vessels in July 2009 contained another 1,381 vessel to be added to the fleet. These vessels will account for another 68.1 million dwt in liner tonnage. Container ships on-order will add 5.5 million TEU of capacity or roughly 40% additional capacity. The order book thus reflects the growing size of container vessels. The average container ship in the current fleet has the capacity of about 2,670 TEU where as the average container ship on-order will have the capacity of more than 5,000 TEU. A similar trend can be observed in vehicle vessels. The vehicle carrier vessels on-order will provide another 1.14 million CEU of capacity, or an average capacity of 5,300 CEU per vessel compared to an average capacity of 4,100 CEU per vessel in the current fleet.


Table 5: Global Liner Fleet on Order

Vessel Type

Number
of Vessels

Dwt

Container

1,082

63,755,615

Vehicle

214

3,539,701

Ro-Ro

85

814,676

Total

1,381

68,109,992

Source: Lloyd's Register - Fairplay Research

Over the last five years, container shipping has been one of the fastest growing segments of seaborne shipping. The fleet has grown by an average annual of 13% over the last five years. This growth is driven primarily by vessels with a capacity of over 5,000 TEU, which added 3.1 million TEU of capacity between 2004 and 2008. In the next five years, the container fleet is expected to expand an average of 9.3% per year, with growth in vessels of more than 8,000 TEU topping 25% through 2013.

The growth in the vehicle carrier fleet has also been significant, averaging 9.3% per year between 2004 and 2008. This growth will slow to about five percent per year over the next five years.

Table 6 below presents the regional break-down of the current liner fleet as well as the liner fleet that is currently on-order. Regional fleet data are aggregated based on the nationality of the operator of each vessel and not the registry of the vessel as the operator is more in control of the operational deployment of vessels and therefore has a more important impact on the countries the vessels are used to serve than the owner of the vessel in cases where the owner and operator are different.

3

Greater China is a regional definition used in this report to represent all of China, including Taiwan, China and Hong Kong S.A.R.

The regional break-down of the liner fleet demonstrates that with a total fleet of 2,112 vessels, or 29 percent of the global fleet, and an additional 654 vessels on order, the European Union dominates liner trade by this measure, especially for container vessels. Asia, particularly Greater China3 and Japan, also has a significant and expanding presence in container shipping. Japan, however, is the leading country in seaborne vehicle shipping, with almost 48 percent of the total global vehicle carrier fleet.


Table 6: Current and On-Order Liner Fleet by Region, July 2009

Vessel Type

Operator Region

Existing Fleet

On-Order



Vessels

Dwt

TEU/CEU

Vessels

Dwt

TEU/CEU

Container

European Union

1,641

58,749,877

4,414,581

546

27,074,606

2,277,276

Other Europe

508

21,191,551

1,568,753

68

7,335,173

648,447

Greater China

857

32,271,290

2,498,311

131

9,843,666

866,764

Japan

326

14,451,324

1,110,661

84

4,981,250

451,196

South Korea

245

9,881,359

762,819

39

3,483,674

316,568

Other Asia

529

13,084,849

961,141

45

2,060,360

184,538

United States

89

1,977,114

145,363

1

63,300

4,860

Canada

2

16,657

1,342

0

0

0

Latin America & Caribbean

146

5,151,926

388,334

20

1,462,096

132,724

Middle East & Africa

229

7,851,031

576,010

63

5,216,203

449,032

Unknown

112

1,147,125

83,505

85

2,235,287

174,715

Total Container

4,684

165,774,103

12,510,820

1,082

63,755,615

5,506,120

Vehicle

European Union

119

2,461,381

571,640

78

1,404,885

420,201

Other Europe

164

2,653,173

764,238

29

399,520

153,827

Greater China

49

484,134

143,341

33

537,726

162,924

Japan

368

5,063,649

1,497,799

34

481,450

165,678

South Korea

16

168,908

31,567

5

61,420

31,670

Other Asia

10

52,466

10,531

1

17,250

5,309

United States

10

183,887

49,788

2

42,400

12,000

Canada

0

0

0

0

0

0

Latin America & Caribbean

3

43,475

14,006

0

0

0

Middle East & Africa

12

100,242

29,298

0

0

0

Unknown

22

164,376

56,348

32

595,050

183,738

Total Vehicle

773

11,375,691

3,168,556

214

3,539,701

1,135,347

Ro-Ro

European Union

352

3,429,781

595,003

30

450,528

98,274

Other Europe

107

640,984

126,979

12

89,444

22,090

Greater China

25

165,381

25,214

6

68,144

22,626

Japan

94

610,843

90,298

0

0

0

South Korea

11

74,909

10,227

0

0

0

Other Asia

230

288,091

36,300

10

29,797

8,066

United States

80

846,057

152,911

0

0

0

Canada

8

62,693

9,226

0

0

0

Latin America & Caribbean

33

104,264

20,106

5

26,325

10,780

Middle East & Africa

169

499,640

75,966

3

13,270

2,159

Unknown

644

700,597

93,452

19

137,168

13,004

Total Ro-Ro

1,753

7,423,240

1,235,682

85

814,676

176,999

Total Liner

European Union

2,112

64,641,039


654

28,930,019


Other Europe

779

24,485,708


109

7,824,137


Greater China

931

32,920,805


170

10,449,536


Japan

788

20,125,816


118

5,462,700


South Korea

272

10,125,176


44

3,545,094


Other Asia

769

13,425,406


56

2,107,407


United States

179

3,007,058


3

105,700


Canada

10

79,350


0

0


Latin America & Caribbean

182

5,299,665


25

1,488,421


Middle East & Africa

410

8,450,913


66

5,229,473


Unknown

778

2,012,098


136

2,967,505


Total Liner

7,210

184,573,034


1,381

68,109,992


Note: Unknown refers to liner vessels the nationality of whose operator is not recorded in the registry.
Source: Lloyd's Register - Fairplay Research


Table 7 provides an overview of the current fleet size for countries in the European Union - the largest regional participant in the liner industry. With almost 600 liner vessels each, Denmark and Germany are the leading participants in the European Union liner industry and account for 55 percent of the Union's liner fleet. France operates more than 300 liner vessels; where as all other member states operate less than 100 vessels. Sweden is the major operator of vehicle vessels, accounting for more than 55 percent of the total European Union vehicle fleet. However, the European Union operates much fewer vehicle vessels than Japan does alone. Ro-Ro operations are spread fairly evenly through out the European Union.


Table 7: European Union Liner Fleet, July 2009

Operator Country

Container

Vehicle

Ro-Ro

Total


Vessels

Dwt

TEU

Vessels

Dwt

CEU

Vessels

Dwt

CEU

Vessels

Dwt

Austria

1

12,167

754







1

12,167

Belgium

44

431,422

34,921




28

245,588

56,775

72

677,010

Bulgaria

3

42,713

2,280




2

20,871

2,178

5

63,584

Cyprus

37

738,066

53,088




2

17,684

2,975

39

755,750

Denmark

529

25,873,255

1,902,981

1

15,880

6,545

39

375,452

86,856

569

26,264,587

Estonia

3

14,954

1,262




3

6,565

925

6

21,519

Finland

11

112,803

8,748




30

231,100

47,487

41

343,903

France

296

12,011,547

938,591




17

213,155

33,732

313

12,224,702

Germany

553

17,177,137

1,302,190




30

251,013

23,383

583

17,428,150

Greece

30

605,565

42,526

15

123,524

38,818

38

203,600

38,212

83

932,689

Irish Republic

9

52,801

4,491

1

1,275

568

2

13,511

2,925

12

67,587

Italy

18

359,898

23,385

28

587,341

109,594

41

749,663

90,630

87

1,696,902

Latvia







2

6,332

1,449

2

6,332

Lithuania

1

13,729

1,080







1

13,729

Netherlands

43

628,658

48,784

2

36,074

10,378

37

418,600

77,118

82

1,083,332

Poland

1

9,238

750




6

44,766

8,127

7

54,004

Portugal

3

31,246

2,123




1

3,570

870

4

34,816

Romania

4

21,740

1,133




2

8,065

1,776

6

29,805

Spain

17

236,242

15,076

6

21,773

7,005

14

80,121

19,750

37

338,136

Sweden

2

19,071

1,618

66

1,675,514

398,732

28

345,762

59,052

96

2,040,347

United Kingdom

36

357,625

28,800




30

194,363

40,783

66

551,988

Total

1,641

58,749,877

4,414,581

119

2,461,381

571,640

352

3,429,781

595,003

2,112

64,641,039

Source: Lloyd's Register - Fairplay Research


Table 8 ranks the top twenty countries by the size of their current liner fleet and by the number of vessels they have on order. China is currently the leading operator of liner vessels with 11 percent of the global liner fleet and 15 percent of its capacity. It is followed closely by Japan, with 788 liner vessels. Denmark, which ranks fifth by the fleet count, operates the second largest fleet by capacity. Germany is the largest European Union operator of liner vessels and the country with the most vessels on-order world-wide. By the current order-book, Germany will operate only two fewer vessels than China by the time the orders are completed.


Table 8: Top Twenty Countries by Existing Fleet and Vessels On-Order, July 2009


Existing Fleet

On-Order

Rank

Operator Country

Vessels

Dwt

Operator Country

Vessels

Dwt

1

China

804

27,906,667

Germany

355

14,103,350

2

Japan

788

20,125,816

Unknown*

136

2,967,505

3

Unknown*

778

2,012,098

China

126

8,626,542

4

Germany

583

17,428,150

Japan

118

5,462,700

5

Denmark

569

26,264,587

Denmark

63

4,609,064

6

Switzerland

387

19,617,726

France

59

5,338,548

7

France

313

12,224,702

Greece

56

2,252,062

8

Singapore

291

9,409,744

Switzerland

46

6,780,960

9

South Korea

272

10,125,176

Hong Kong S.A.R., China

44

1,822,994

10

Indonesia

196

999,769

South Korea

44

3,545,094

11

Norway

186

2,783,435

Netherlands

37

564,490

12

United States

179

3,007,058

Norway

37

442,420

13

Hong Kong S.A.R., China

127

5,014,138

Singapore

37

1,887,087

14

Chile

119

4,515,680

Israel

30

2,873,349

15

United Arab Emirates

106

1,001,431

Cyprus

27

720,900

16

Israel

104

3,739,350

Turkey

22

452,144

17

Sweden

96

2,040,347

Belgium

18

550,771

18

Turkey

94

1,088,073

Italy

18

334,497

19

Malaysia

89

1,088,152

Kuwait

17

1,781,100

20

Italy

87

1,696,902

Sweden

12

289,120


Other

1,042

12,484,033

Other

79

2,705,295


Total

7,210

184,573,034


1,381

68,109,992

Source: Lloyd's Register - Fairplay Research
* Note: The identity of an operator is unknown because the vessel is on the order book without an assigned operator or the vessel is not currently in service. In addition, operator data is incomplete on operators with small fleets of one or two ships and on some operators from select developing countries.


Shipbuilding

Many maritime nations participate in liner vessel operations, with larger nations tending to operate larger fleets. Shipbuilding, however, is more concentrated among a few countries - particularly South Korea and Japan - with highly developed shipyards. Shipbuilding is an important component of the liner industry, and it generates many skilled jobs and revenues.

A total of 532 container and Ro-Ro vessels were delivered in 2007. In Table 9 below are the details. South Korea delivered approximately 48 percent of new liner capacity in 2007 and Japan delivered another 18 percent. The table also demonstrates that South Korea's dominance in shipbuilding has slowly eroded over the last three years, as its market share declined from 54 percent to 43 percent between 2006 and 2008. The main beneficiary has been China, whose market share increased from less than 10 to more than 20 percent in the same time period. Indonesia and Malaysia deliver dozens of smaller vessels, with less than one thousand gross-tons of capacity.


Table 9: Deliveries of Container and Ro-Ro Vessels by Builder Country, 2006-2008


2006

2007

2008

Builder Country

No.

1,000gt

%

No.

1,000gt

%

No.

1,000gt

%

South Korea

149

9,378

54.3%

151

8,314

47.5%

148

8,794

43.4%

Japan

63

2,776

16.1%

72

3,179

18.2%

86

4,137

20.4%

China

95

1,690

9.8%

124

2,262

12.9%

164

3,676

18.1%

Germany

47

991

5.7%

53

1,085

6.2%

52

1,015

5.0%

Denmark

4

537

3.1%

5

854

4.9%

6

572

2.8%

Taiwan, China

13

467

2.7%

14

462

2.6%

14

614

3.0%

Poland

24

784

4.5%

13

460

2.6%

13

516

2.5%

Croatia

5

138

0.8%

6

273

1.6%

5

211

1.0%

Romania

7

181

1.0%

7

203

1.2%

7

307

1.5%

Philippines

1

1

0.0%

3

155

0.9%

6

146

0.7%

Turkey

4

41

0.2%

7

70

0.4%

9

120

0.6%

Singapore

4

112

0.6%

3

48

0.3%

5

92

0.5%

Spain




3

36

0.2%

4

54

0.3%

Netherlands

6

47

0.3%

3

32

0.2%



0.0%

Indonesia

36

18

0.1%

33

18

0.1%

21

11

0.1%

Malaysia

10

7

0.0%

11

10

0.1%

7

7

0.0%

Iran

7

4

0.0%

13

7

0.0%

3

1

0.0%

Egypt




1

7

0.0%




Ukraine

3

27

0.2%

1

6

0.0%




Thailand





1

3

0.0%



United Arab Emirates





3

2

0.0%



North Korea

2

1

0.0%

2

1

0.0%




India




1

1

0.0%

1

1

0.0%

United States

4

31

0.2%

2

1

0.0%

1

0


Finland

1

23

0.1%







Italy

1

28

0.2%







Norway







1

3

0.0%

United Kingdom

1

2

0.0%







Total

487

17,284

100%

532

17,489

100%

553

20,277

100%

Source: Lloyd's Register - Fairplay Research


Vessel Purchase Prices

While it is not possible to determine the current book value of the liner fleet from available sources, one can measure the amount of capital originally invested in liner vessels. Cumulatively, more than $236 billion has been spent on the purchase of new liner vessels though July of 2009. This number does not include the amount spent on second-hand sales and or on vessel upgrades or necessary maintenance and repair.

Cumulatively, European operators have spent the most on liner vessels, more than $105 billion or 45 percent of total purchases of liner vessels, as shown in Table 10. This reflects the historical dominance and a continued strong presence of Europe in liner shipping. Greater China however is the second largest cumulative spender on liner vessels, with 15 percent of total spending, although most of its purchases have been more recent than Europe's.


Table 10: Cumulative Spending on Liner Vessels by Operating Region through 2009
(Million US Dollars)

Operating Region

Container

Vehicle

Other
Ro-Ro

Total

South Korea

11,309

299

224

11,832

Japan

15,300

16,760

2,206

34,266

Greater China

33,981

2,351

334

36,665

Other Asia

648

0

164

812

Middle East

8,913

179

1,009

10,101

South East Asia

14,969

164

918

16,050

Europe

82,365

13,882

9,433

105,681

Russia

980

15

365

1,360

Turkey

1,165

14

1,295

2,474

North America

3,298

497

1,938

5,733

South America

5,591

203

59

5,854

Rest of World

68

8

309

386

Unknown

2,083

498

2,268

4,849

Total

180,671

34,869

20,523

236,062

Source: Lloyd's Register - Fairplay Research


Table 11 combines the cumulative recipients of spending on liner vessels. As expected, South Korea, the leading shipbuilding country, has received more than $76 billion or 32 percent of the total. Europe is ranked next at 27 percent, reflecting its historic presence in shipbuilding, although many of its yards have been losing competitiveness and market share. Japan does not lag far behind Europe, with a cumulative market share of 25 percent. The United States no longer has a major international commercial liner vessel building industry.


Table 11: Cumulative Receipts from Sales of Liner Vessels by Region of Build as of July, 2009
(Million US Dollars)

Building Region

Container

Vehicle

Other
Ro-Ro

Total

South Korea

69,781

6,087

377

76,244

Japan

34,033

21,061

4,326

59,421

Greater China

26,513

996

974

28,483

Other Asia

10

0

80

90

Middle East

0

0

278

278

South East Asia

1,567

426

1,857

3,850

Europe

45,771

6,221

11,151

63,144

Russia

26

0

298

323

Turkey

1,124

0

79

1,203

North America

1,597

78

773

2,447

South America

202

0

223

425

Rest of World

46

0

107

153

Total

180,671

34,869

20,523

236,062

Source: Lloyd's Register - Fairplay Research


LINER FLEET OPERATIONS

This section of the report provides information on the operations of the liner industry. These statistics are useful for understanding the scope of liner operations. For example, container and vehicle vessels made an average of more than 10,100 port calls in a typical week in 2009, or about 2.1 port calls per vessel per week. The average vessel also travelled more than 1,100 nautical-miles in a typical week. Seventy four services with almost 15 million TEU of capacity were provided by the industry on the West Coast of North America and Asia route alone in the middle of 2007.

The liner industry offers transport between all major container ports world-wide. Inland countries in turn utilize the container ports of their maritime neighbors in order to participate in international trade.

Table 12 demonstrates the number of services, or unique ship schedules and routes, provided by the liner industry as of July 1, 2007. There were 409 services provided by the industry in mid-2007. It is important to note that the industry frequently modifies its services in order to respond to changing market forces and the needs of its customers. The route with the most services is between Asia and the west coast of North America, particularly reflecting the large volume of trade between the United States, China and other Asian countries. Together, the North Europe and the Mediterranean routes with Asia have 88 unique services.


Table 12: Number of Services and Annual Capacity Deployed by Route, as of July 1, 2007

Route

Services

West Coast of North America - Asia

74

East Coast of North America - Asia

24

North America - Northern Europe

36

North America - Mediterranean

23

Asia - North Europe

35

Asia - Mediterranean

43

North America - East Coast of South America

11

North America - West Coast of South America

16

North America - North Coast of South America

22

Europe - East Coast of South America

14

Europe - West Coast of South America

6

Europe - North Coast of South America

13

Asia - East Coast of South America

6

Asia - West Coast of South America

7

South Africa - Europe

6

South Africa - North America

3

South Africa - Asia

21

West Africa - Europe

33

West Africa - North America

3

West Africa - Asia

13

Total

409

Notes: Services may be counted on more than one route.
"Asia" includes Australia and New Zealand.
Sources: ComPair Data, World Line Supply Report Summary, July 2007;
Drewry, Annual Container Market Review and Forecast - 2007/08.


Port Calls and Nautical-Miles Travelled

As an indication of the extensiveness of the physical activity of the liner industry, this section presents measures of port calls and distances travelled by container and vehicle ships during the first 35 weeks of 2009. These measures are derived from Lloyds Register-Fairplay (LRF) Automatic Identification System (AIS), which tracks the real-time movement of vessels. During this period, LRF's AIS system tracked a weekly average of 4,800 container and vehicle vessels, corresponding to about 88 percent of the total container and vehicle fleet. The AIS satellite system was not in operation prior to 2009, thus it is not possible to derive these measures for an earlier time period. However, one would expect a larger number of port calls and nautical-miles prior to the global recession.

Overall, these vessels made more than 10,100 port calls and travelled more than 5.4 million nauticalmiles in an average week. An average container or vehicle vessel made 2.1 port calls per week and travelled more than 1,100 nautical-miles.

While measures of capacity and vessel counts demonstrate the overall size of the industry, such operating measures indicate the swings in its actual utilization and scope of operations as well as the seasonality inherent in the liner business.

Figure 1 shows the number of port calls made by container and vehicle vessels in the first 35 weeks of 2009. On average, container ships made more than 9,100 port calls and vehicle vessels just over 1,000 port calls per week. In other words, workers at ports world-wide loaded and unloaded more than 10,000 vessel-stops per week. The average vessel thus made 2.1 port calls per week.


Figure 1: Average Weekly Port Calls Made by Container and Vehicle Vessels, First 35 Weeks of 2009


Note: The first week of 2009 was a short week and is excluded.
Source: Lloyd's Register- Fairplay Research, AISLive.


Operators from the European Union made more than a third of these port calls and operators from Greater China and Other Asia made about 17 percent each.


Table 13: Average Weekly Number of Port Calls Made by Operator Region in 2009

Region

Container
Vessels

Vehicle
Vessels

Total

Americas

388

15

403

Greater China

1,733

37

1,770

European Union

3,505

212

3,716

Japan

573

504

1,078

Other Asia

1,723

36

1,760

Other Europe

1,029

224

1,253

Rest of World

10

0

10

Unknown

156

15

171

Global Average

9,116

1,044

10,160

Note: Average is for the first 35 weeks of 2009, excluding the first short week.
Source: Lloyd's Register- Fairplay Research, AISLive.


On average, container ships travelled more than 4.7 million nautical miles and vehicle vessels travelled 0.7 million nautical miles per week in the first 35 weeks of 2009. Figure 2 demonstrates the weekly number of nautical-miles travelled by container and vehicle vessels during this period. The average vessel thus travelled 1,132 nautical-miles per week.


Figure 2: Average Weekly Nautical-Miles Travelled by Container and Vehicle Vessels, First 35 Weeks of 2009


Note: The first week of 2009 was a short week and is excluded.
Source: Lloyd's Register- Fairplay Research, AISLive.


Operators from the European Union travelled the most nautical-miles, or about 36 percent of the total, reflecting the higher number of port calls made by these vessels.


Table 14: Average Weekly Number of Nautical-Miles Travelled by Operator Region in 2009
(Thousands)

Region

Container
Vessels

Vehicle
Vessels

Total

Americas

280

14

294

Greater China

821

23

845

European Union

1,829

129

1,958

Japan

379

335

714

Other Asia

863

21

884

Other Europe

518

160

678

Rest of World

2

0

2

Unknown

49

10

59

Global Average

4,741

692

5,433

Note: Average is for the first 35 weeks of 2009, excluding the first short week.
Source: Lloyd's Register- Fairplay Research, AISLive.


PORT EXPENDITURES AND OPERATIONS

The on-shore portion of the liner industry includes container and Ro-Ro terminals, container handling equipment such as cranes and chassis, as well as all the workers needed to load and unload containers and vehicles and to deliver goods to their final destinations. All this equipment, as well as containers themselves, require constant expenditure to manufacture, maintain and operate. The liner industry thus generates economic activity and employment not just from vessel construction and operations but also from the thousands of companies that participate in equipping and operating ports and the inland portion of the distribution of liner goods.

This section of the report thus quantifies the available data on expenditures at ports and on liner industry equipment. Only limited data was available on an aggregated global or regional basis. Company and port annual reports were also reviewed in order to highlight activity for select ports, equipment types and companies.

Throughput at the top twenty global liner ports reached nearly 236 million TEU in 2007. Globally, there were more than 17.8 million containers in the world fleet in mid-2008, costing about $80.1 billion.


Throughput at Liner Ports

Throughput at liner ports is another important indicator of liner industry activity. Though it was not practical for this study to estimate the throughput at every liner port, throughput at the top 20 global ports is presented in Table 15 below. By definition however, global port volumes must exceed the sum of import and export TEU, since both the exporting and importing port will count the containers.

Table 15 has the top 20 world container ports ranked by 2008 TEU. Throughput at the top 20 ports reached almost 250 million TEU in 2008. These rankings demonstrate the dominance of Asian ports in container trade. In particular, the throughput at the ports of Ningbo and Guangzhou in China has been growing rapidly. These ports now rank seventh and eighth and have overtaken Rotterdam. Kaohsiung and the ports of Los Angeles and Long Beach in the United States were particularly affected by the global downturn that started in 2008.


Table 15: Top 20 World Ports by 2008 Throughput

Rank

Port Name

Country

2007 TEU

2008 TEU

1

Singapore

Singapore

27,932,000

29,918,200

2

Shanghai

China

26,168,000

27,980,000

3

Hong Kong

China

23,881,000

24,248,000

4

Shenzhen

China

21,099,000

21,413,888

5

Busan

South Korea

13,270,000

13,425,000

6

Dubai

United Arab Emirates

10,653,026

11,827,299

7

Ningbo

China

9,349,000

11,226,000

8

Guangzhou

China

9,200,000

11,001,300

9

Rotterdam

Netherlands

10,790,604

10,783,825

10

Qingdao

China

9,462,000

10,320,000

11

Hamburg

Germany

9,889,792

9,737,110

12

Kaohsiung

Taiwan, China

10,256,829

9,676,554

13

Antwerp

Belgium

8,175,951

8,662,890

14

Tianjin

China

7,103,000

8,500,000

15

Port Kelang

Malaysia

7,120,000

7,970,000

16

Los Angeles

United States

8,355,039

7,849,985

17

Long Beach

United States

7,312,465

6,487,816

18

Tanjung Pelepas

Malaysia

5,500,000

5,600,000

19

Bremerhaven

Germany

4,912,177

5,529,159

20

New York & New Jersey

United States

5,299,105

5,265,053

Source: Lloyd Register-Fairplay Research


Table 16 presents data for container ports in the European Union that publicly report data. The port of Rotterdam is the largest container port in Europe, with more than 10 million TEU handled in 2008. It is closely followed by the ports of Hamburg and Antwerp.


Table 16: Throughput at Select Container Ports in the European Union, 2007- 2008

Country

Port Name

2007 TEU

2008 TEU

Belgium

Antwerp

8,175,951

8,662,890

Belgium

Zeebrugge

2,020,723

2,209,665

Denmark

Aarhus

504,000

458,000

Denmark

Copenhagen

192,000

n/a

Estonia

Tallinn

180,911

180,927

Finland

Helsinki

435,000

428,000

Finland

Kotka

570,881

627,765

Finland

Hamina

195,292

178,804

Finland

Rauma

174,531

172,155

Finland

Pori

34,415

n/a

Finland

Turku

21,983

22,736

France

Le Havre

2,638,000

2,500,000

France

Marseilles

1,001,957

847,651

France

Dunkirk

197,000

215,000

Germany

Hamburg

9,889,792

9,737,110

Germany

Bremerhaven

4,912,177

5,529,159

Germany

Lubeck

205,338

n/a

Germany

Cuxhaven

63,808

63,271

Germany

Kiel

20,064

12,860

Germany

Emden

51

n/a

Greece

Piraeus

1,373,138

431,000

Italy

Gioia Tauro

3,445,337

3,467,772

Italy

Genoa

1,855,026

1,766,605

Italy

La Spezia

1,187,040

1,246,139

Italy

Livorno

745,557

n/a

Italy

Naples

460,812

481,521

Italy

Taranto

756,000

786,655

Italy

Venice

328,000

379,072

Italy

Trieste

267,854

335,943

Latvia

Riga

211,840

207,122

Latvia

Ventspils

16,846

14,148

Latvia

Liepaja

7,665

4,227

Lithuania

Klaipeda

321,432

373,263

Malta

Marsaxlokk

1,887,405

2,300,000

Netherlands

Rotterdam

10,790,604

10,783,825

Netherlands

Amsterdam

370,000

435,129

Poland

Gdynia

614,373

610,767

Poland

Szczecin

47,976

62,913

Poland

Gdansk

96,873

163,704

Portugal

Lisbon

554,774

556,062

Romania

Constantza

1,411,370

1,380,935

Slovenia

Koper

305,648

350,000

Spain

Algeciras

3,414,345

3,324,310

Spain

Valencia

2,771,851

3,593,000

Spain

Barcelona

2,610,099

2,569,547

Sweden

Helsingborg

300,000

240,000

Sweden

Stockholm

44,563

41,000

United Kingdom

Felixstowe

3,300,000

3,200,000

United Kingdom

Southampton

1,900,000

1,710,000

United Kingdom

Tilbury

843,808

n/a

United Kingdom

Liverpool (United Kingdom)

727,363

n/a

United Kingdom

Thamesport

800,000

n/a

Source: Lloyd's Register- Fairplay Research


Table 17 presents throughput levels for container ports in the United States that publicly report data. The ports of Los Angeles and Long Beach are the largest ports in the United States as measured by throughput, followed by the port of New York and New Jersey.


Table 17: Throughput at Select Container Ports in North America, 2007

Port Name

2007 TEU

Los Angeles

8,355,039

Long Beach

7,312,465

New York & New Jersey

5,299,105

Savannah

2,604,401

Oakland

2,388,182

Vancouver, B.C.

2,307,289

Hampton Roads

2,128,366

Seattle

1,973,504

Tacoma

1,924,934

Houston

1,768,627

Charleston

1,754,377

Baltimore

624,462

New Orleans

315,375

Source: Lloyd's Register- Fairplay Research


Expenditures by Terminal Operators

Although it is not possible to determine the precise amount of the total investment in liner ports worldwide, we know that the investment levels are on the order of several billion dollars per year.
Example investment levels of the top private terminal operating companies have been over $2.6 billion to almost $4 billon per year for the last two years. In 2007, these terminal operators held a market share of about 37 percent so their investment of approximately $2.6 billion in property, plant, equipment and other capital, if extended to the rest of the liner market would have been over $7 billion in 2007 and over $10.5 in 2008 alone. Although a portion of these investments are in non-liner terminal facilities, it is a conservative assumption that most of the billions of dollars are invested annually in liner port facilities worldwide.


Table 18: Investment by Terminal Operators, 2007-2008
(Million US Dollars)

Operator

Cash Flow Use

2007 Market Share

2007

2008

APM Terminals

Capital Expenditures

12.1%

853

723

PSA

Property, Plant, Equipment

11.0%

1,086

1,313

DP World

Expansions, Maintenance, New Projects

8.7%

N.A.

1,397

COSCO Pacific

Property, Plant, Equipment

5.5%

683

522

Total


37.3%

2,622

3,955

Sources: Company Annual Reports; Drewry Shipping Consultant Limited, 2008.


Container Fleet

Globally, in mid-2008 there were 17.8 million containers in the world fleet providing 27.3 million TEU of capacity, and which cost the industry almost $81 billion. This was an increase from about 24.8 million TEU of capacity the previous year. Europe accounts for the largest container fleet at 6.9 million units or nearly 39 percent of the total fleet. North East Asian and North American owners account for nearly the rest of the global fleet, reflecting the location of company headquarters that own the containers, not the deployment of the containers which move throughout the world.


Table 19: Container Fleet by Region, Mid-2008

Region

TEU

TEU Share

Units

Unit Share

Cost (US$ million)

Cost Share

Europe

10,427,987

38.1%

6,917,319

38.7%

36,365

44.9%

North East Asia

7,674,963

28.1%

4,990,588

28.0%

19,588

24.2%

North America

7,648,952

28.0%

4,823,997

27.0%

20,698

25.6%

Middle-East & Indian Sub-Continent

926,730

3.4%

609,693

3.4%

2,285

2.8%

South East Asia

477,371

1.7%

362,561

2.0%

1,267

1.6%

Australia & New Zealand

86,210

0.3%

73,751

0.4%

383

0.5%

Central & South America & Caribbean

64,670

0.2%

41,987

0.2%

232

0.3%

Africa

36,834

0.1%

32,656

0.2%

98

0.1%

Total

27,343,717

100.0%

17,852,552

100.0%

80,916

100.0%

Note: Includes containers specific to regional standards.
Source: Containerisation International Market Analysis: World Container Census 2009, Table 8.

4

The three metrics each have their purpose for measurement of container handling activity. Most fundamentally is the port-to-port movement of loaded containers carrying goods that shippers are paying to have moved. This is from the perspective of a shipper or customs authorities who are concerned with the ultimate origin and destination for the delivery of the goods. Operational efficiency of the liner system is improved through the use of transhipment where containers are transferred during their journey between vessels at an intermediate port. The transshipment activity is valuable to the operators and ports that provide this service and counting this activity is another measure of container handling provided by the liner industry. At container port terminals there are often operational needs to move containers on and off ships and within terminals not just one time at the original port of loading or discharge for each leg of a container's journey. This can include when containers need to be unloaded temporarily from a ship in order for other containers to be accessible or for reloading of containers onboard vessels for stability or access at a subsequent port call. This can be thought of as additional port handling of containers.

The volume of container handling world-wide is measured from several perspectives. When all measures of container handling are combined, the total world container handling activity in 2007 was almost half a billion twenty-foot equivalent units (497 million TEU). This included movements of over 224 million loaded and empty TEU between the ports of the world, and 137 million TEU of transhipment activity.4
This type of container handling at ports can be considered essential to the efficient operations of the industry and it takes resources at the terminals to provide, so ports appropriately count this activity as well.



Table 20: Container Handling and Transhipment, Million TEU, 2007


PORT TO PORT

TRANSHIPMENT

PORT HANDLING

TOTAL

Loaded

120.3

108.4

86.0

314.7

Empty

104.2

28.6

49.9

182.7

Total

224.5

137.0

135.9

497.4

Source: IHS Global Insight Analysis and the IHS Global Insight World Trade Service.


Other Liner Industry Equipment

Aside from containers, the industry relies on numerous types of on-board and port terminal equipment to handle liner cargo. One of the most complex and expensive types of equipment are the ship-to-shore gantry cranes. Comprehensive public data on the world inventory of port cranes and their associated costs is unavailable, but ports do invest millions of dollars in cranes in most years. The largest container port alone, the Port of Singapore, has 190 cranes. The port of Shanghai and the port of Rotterdam each have just over 100 cranes. The ports of Los Angeles and Long Beach each have about 70 cranes. A typical new state-of-the-art crane cost about $10 million in 2007 to provide some perspective on the value of these equipment investments. As the containerization of cargo continues to spread world-wide, investment in such equipment is sure to accelerate.

Once a container is unloaded at the port, it is often loaded onto a specially designed truck-trailer or chassis for transport by motor carrier to its final destination.

Table 21 below demonstrates the chassis count in the United States along with the estimated annual cost of operating that fleet. The chassis fleet in the United States alone costs about $869 million a year to operate.


Table 21: Chassis Fleet and Operating Costs in the United States, 2008

Owner Type

Count
(Thousand)

Average Annual
Operating Cost
(Million)

Ocean Carriers

392.1

401

Railroads

96.2

98

Common Pool Operators

320.0

327

Motor Carriers

41.8

43

Total

850.0

869

Source: Requirements for Intermodal Equipment Providers and for Motor Carriers and Drivers
Operating Intermodal Equipment; Final Rule 49 CFR Parts 385, 386, 390, et al.
December 17, 2008.



Summary

The liner industry has been essential to the facilitation and expansion of world trade, contributing to global economic growth and improvements in the standard of living in both developed and developing countries. This report provides an overview of various economic, trade, and operating metrics that demonstrate the value of the liner industry to specific regional and individual country economies as well as the world as a whole.

This report confirms the industry's profound global economic impact, particularly in Europe, the United States, Asia, and the rest of the Americas. Globally, the full value of the liner industry operations and shipbuilding in 2007 is estimated to be $436.3 billion, and generated 13.5 million direct and related jobs.

The liner industry is the largest sector of the maritime industry when measuring the value of world trade transported, moving about 60% of global seaborne trade. This was over US$4.3 trillion of goods in 2007 alone. The liner industry draws significant investment in capacity, using over 7,000 vessels that cost the industry initially over US$235 billion to acquire plus another US$80 billion to equip the vessels with containers in which to move cargo. Landside terminals represent additional billions of capital investment from the industry. The liner industry incurs operating costs that produce output valued at $142 billion annually which make the extensive capital investments available and useful to shippers worldwide for the transportation services they need.

Using the existing metrics available to economists, the estimates of the value of the industry to the world economy understate the importance of the liner industry to the daily lives of most of the world's population. Without the efficient facilitation of trade provided by the liner industry, the standard of living of most families and the financial health of most retail, wholesale, manufacturing and services businesses would be reduced.



Appendix A: World Industry Service Methodology

IHS Global Insight's World Industry Service (WIS) includes both historic and forecast economic data covering 95 industries in 75 countries.


DATA SOURCES

The basic data in World Industry Service is taken from public sources; but is then processed extensively and filled out using established techniques.

The initial set of industry-based data is drawn from complementary primary public sources:

  • Industrial Structure Statistics, from the OECD-STAN database;
  • International Yearbook of Industrial Statistics, from the United Nations Industrial Development Organization (UNIDO) ;
  • National Accounts Statistics: Main Aggregates and Detailed Tables, from the United Nations System of National Accounts (UNSNA) ;
  • Yearbook of Labour Statistics, from the International Labour Organization (ILO) ;
  • Structural Business Statistics, from Eurostat database.
The number of countries whose industry data is included in the OECD database is restricted to members of the OECD organization. Fortunately, these countries are also the largest countries economically in the world and include the United States, Japan, Germany, France, and others. For those countries whose data is not included in the OECD database, and also for those industries whose coverage in STAN is not detailed enough, WIS uses a combination of UNSNA and UNIDO databases. The data from these organizations have the desirable attributes of fine detail, consistency, and comparability. ILO and Eurostat are also used as specific complementary sources of data. Finally, both the UN- and OECD-supplied data are supplemented by individual country sources.

Thus, the historical dataset in World Industry Service is built like a pyramid with three layers:

  • The bottom layer is the UNSNA and UNIDO data, which provides the baseline for data for all countries and all sectors;
  • The next layer up is the OECD data, which replaces UN data in those countries/industries where there is overlap ;
  • Finally, the top layer represents data that comes from individual country sources, or from global trade associations and other specific data sources. These “specific-sourced” data are used to bring the OECD and UN data forward in time to provide a timely “now-cast” snapshot of the latest available measures of industry-level business activity.
Note that employment and labor compensation data is taken directly from UNIDO statistics, and is not processed or modified in any way.


WATER TRANSPORT AND SHIPBUILDING SECTORS

In order to determine appropriate economic values for the liner industry, this report concentrated on two industries within WIS: water transport and shipbuilding.

  • Water Transport: defined as International Standard of Industrial Classification (ISIC) code 61 (Water Transport). This category includes sea, coastal and inland water transport. Included is transport of passengers or freight over water, whether in scheduled service or not. Also included are the operation of towing or pushing boats, excursion, cruise or sightseeing boats, ferries, and water taxis. The category requires transport service be provided to be included by definition. Therefore excluded are restaurant and bar activities on board ships, except when delivered as an integral part of transportation. Also excluded are landside cargo handling, storage of freight, plus harbor operation and other auxiliary maritime activities such docking, lightage and vessel salvage that are not directly transportation services.
  • Shipbuilding: defined as ISIC code 351 (Building and Repairing of Ships and Boats). This category includes the manufacturing, repairing, overhaul and the manufacturing of sections for the following type of commercial vessels and floating structures: vessels used in commerce, in pursuits related to commerce or in the carriage of passengers including multi-purpose vessels; vessels designed for ocean, coastal or inland waters; passenger vessels, fishing boats and fish processing factory vessels; tugs and pusher craft; non-motorized vessels such as barges, stationary vessels such as light-ships; non-navigational vessels such as dredgers, floating docks, and floating or submersible drilling platforms; hovercraft; boats with hulls resembling pleasure boats but specially equipped for commercial service or services related to commerce; warships and auxiliary naval vessels; vessels for scientific investigation; floating structures such as pontoons, non-recreational inflatable rafts; coffer-dams, landing stages, buoys, floating tanks and others.

    Also included are the manufacturing, maintenance and repair of the following types of noncommercial vessels: yachts, rowing boats, canoes, dories, skiffs, oared life-boats, cutters, kayaks, racing shells, pedalos, rafts, inflatable boats and other pleasure and sporting vessels; pleasure boats designed to accept inboard or outboard motors or to be propelled by wind, paddles or oars; larger boats such as cabin cruisers and sport fisherman.

    Excluded are: manufacture of parts of vessels such iron or steel anchors and sails and other parts that are not major hull assemblies; navigational and other instruments used aboard ships; and amphibian motor vehicles.

LINER INDUSTRY SHARE

The following methodologies were used to extract the liner portion of these industries:

  • Water Transport: A trade ratio was applied to each country with data in the WIS. The ratio for a given country is the value of liner trade relative to its total seaborne trade. This ratio does not account for passenger and inland water transport that is included in the WIS data, and thus somewhat overstating the liner portion of the water transport industry. At the same time, the water transport industry within WIS excludes important liner industry elements such as cargo handling, storage of freight, docking and other harbor and terminal operations. This means the estimate understates the liner industry because of the other operations it excludes. At this level of detail it is not possible to tell which effect is larger, the inclusion of inland and passenger transport, or the exclusion of port and related land-side operations, though they clearly largely offset each other.
  • Shipbuilding: Countries that have a shipyard that delivered a liner vessel (container, Ro-Ro or vehicle) in 2007 were identified first. Next, for each country we determined the ratio of the grosston capacity of the liner vessels relative to the gross-ton capacity of all shipping vessels delivered by the country in the same year. This ratio was then applied to estimate the liner portion of shipbuilding from the WIS data.

DEFINITION OF WIS METRICS

WIS was used to derive the amount of Capital Expenditures, Gross Output, Labor Compensation and the number of Employees attributable to the liner industry's shipping services as well as the liner portion of shipbuilding. The following are the definitions of these four metrics:

  • Capital Expenditures: refers to investments made by establishments operating in the industry during the reference year (2007), net of fixed assets sales. The investments covered are those (whether new or used) with a productive life of one year or more. These assets are intended for the use of the establishments’ own labor forces. Major additions, alterations, and improvements to existing assets that extend their normal economic life or raise their productivity are also included.
    Capital Expenditures in the liner industry would thus include investment in any type of equipment and vessels used by liner operators. The category would also include machinery and equipment purchased by shipbuilders in order to construct liner vessels. Sales of any equipment are subtracted from the totals.
  • Gross Output: also called total sales or total production. This measures the total revenue that is earned by a sector’s operating activities. It includes the domestic production that is exported abroad, but excludes imports that are produced abroad. Gross output thus includes all operating expenditures, wages and benefits and company profits.
  • Labor Compensation: includes both wages and fringe benefits.
  • Number of Employees: the number of people directly employed by the sector. For this report, this includes employees in liner services and in the construction of liner vessels.


Appendix B: Data Sources

AXS-Alphaliner, Cellular Fleet Forecast, September 2009.

AXS-Alphaliner, Top 100 - Existing Fleet on September 2009.

American Association of Port Authorities, www.aapa.org.

Clarksons Research Services, Shipping Intelligence Network data, 2009.

Containerization International, Containerization International Yearbook 2004.

Containerization International Informa Cargo Information, Fleet as of September 3, 2009.

Containerization International Informa Cargo Information, Market Analysis: World Container Census 2009.

Drewry Shipping Consultant Ltd, Annual Container Market Review and Forecast - 200708 September 2007.

Drewry Shipping Consultant Ltd, Annual Container Market Review and Forecast - 2008/09. September 2008.

Drewry Shipping Consultant Ltd, Container Forecast Annual Supplement, 4Q08.

Eurostat, Maritime Transport of Goods and Passengers 1997-2007.

IHS Global Insight, World Industry Service, 2009.

IHS Global Insight, World Trade Service, 2009.

Institute of International Container Lessors, 2009 IICL Annual Leased Container Fleet Survey, June 8, 2009.

International Association of Ports and Harbors, http://www.iaphworldports.org/.

Lloyd's Registry-Fairplay Research, Vessel Registry, Vessel Characteristics and Movements data, 2009.

Martin Associates, JWD, and WEFA, U.S. Economic Growth and the Marine Transportation System, December, 2000.

Oosterhaven, J, and Stelder, T.M., On the Use of Gross versus Net Multipliers, August, 2000.

Requirements for Intermodal Equipment Providers and for Motor Carriers and Drivers Operating Intermodal Equipment; Final Rule 49 CFR Parts 385, 386, 390, et al. December 17, 2008.

Stopford, Martin, Maritime Economics, 3rd edition, Routledge, 2009.

U.S. Maritime Administration, MARAD Port Economic Impact Kit (MARAD Port Kit) Ver 1.1, December 2000.

U.S. Maritime Administration, Public Port Finance Survey for FY 2006, December 2008.

U.S. Maritime Administration, U.S. Public Port Development Expenditure Report (FYs 2006 & 2007-2011), February 2009.

World Shipping Council, The Liner Shipping Industry and Carbon Emissions Policy, September 2009.

World Shipping Council, The Liner Shipping Industry's Impact on the US Economy. 2000


Port Crane Manufacturers and 2007 Annual Reports of Public Companies

    



Hyundai


IMPSA


Kalmar Industries


Konecranes


Liebherr Container Cranes


Mitsubishi Heavy Industries,


Mitsui


Paceco


Samsung


TCM Corporation


Zhenhua Port Machinery Company (ZPMC)



Liner Operator Websites




APL (NOL)


A.P. MÖller-Maersk


Atlantic Container Line


COSCO (Cosco Container Lines)


China Shipping Group


CMA-CGM Group


Compania Chilena Navegacion Interoceanica


Compania Sud-Americana de Vapores


Crowley Maritime Corporation


Dole Ocean Cargo Express


Evergreen Maritime Corporation


Hamburg Süd


Hanjin Shipping Company


Hapag-Lloyd Container Line


Hoegh Autoliners, Inc.


Hyundai Merchant Marine Company


Independent Container Line


Kawasaki Kisen Kaisha Ltd. (K Line)


Malaysia International Shipping Corporation (MISC)


Mediterranean Shipping Company (MSC)


Mitsui O.S.K. Lines


NYK Line


Orient Overseas Container Line, Ltd. (OOCL)


Pacific International Lines, Ltd.


United Arab Shipping Company


Wan Hai Lines, Ltd.


Wallenius Wilhemsen Logistics,


Yang Ming Marine Transport Corporation


Zim Integrated Shipping Services, Ltd.



Terminal Operator Websites and 2007 Annual Reports (if Public)




APM Terminals


COSCO Pacific, Limited


DP World


Eurogate


Hutchinson Whampoa, Limited


International Container Terminal Services, Inc.


Port America


PSA International


SSA Marine



Top 20 Port Websites




Port of Singapore, Singapore


Port of Shanghai, China


Port of Hong Kong, China


Port of Shenzhen, China


Port of Yingkou, China


Port of Busan, South Korea


Port of Rotterdam, Netherlands


Port of Dubai, United Arab Emirates


Port of Kaohsiung, Taiwan, China


Port of Hamburg, Germany


Port of Qingdao, China


Port of Ningbo, China


Port of Guangzhou, China


Port of Los Angeles, United States


Port of Antwerp, Belgium


Port of Long Beach, United States


Port of Kelang, Malaysia


Port of Tianjin, China


Port of Tanjung Pelepas, Malaysia


Port of New York/New Jersey, United States



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