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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:

IHS Global Insight World Trade Service (WTS): used to estimate the trade impact of the liner industry.

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.

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.

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