Project Cargo Opportunities

Transcription

1 Project Cargo Opportunities Hwy H2O 2014 Module 4 Cargo Diversification: Growth through Cargo Marc André Roy November 20, 2014 Toronto, ON

2 Project Cargo Opportunities The Alberta Oil Sands Opportunity The Mid West Import/Export Opportunity and the Cleveland Europe Express 2

3 The Alberta Oil Sands Cargo Opportunity 241: Number of planned oil sands projects 12,000: Number of expected oil sands modules Modules Per year 3,500 3,000 2,500 2,000 1,500 1, Oil Sands Module Transport Requirements In Situ Recovery Mining Upgrader Projects Source: CPCS Analysis Other project cargo loads a multiple of modules (3 50x)

4 Example Oil Sands Module Modules: Pre fabricated, ready to install Getting bigger Largely originated in Asia Source: PCL Construction

5 Other Alberta Oil Sands Project Cargo Include Heavy equipment and rigs Boilers Tanks Modular camp units oversize and overweight superloads megaloads Source: Perkins

6 How are Modules Getting to Alberta s Oil Sands? Port of Houston: Preferred Gateway 75%: Percentage of international oversize/overweight and superload oil sands project cargo that moves to Western Canada via the Port of Houston. Source:

7 Why the Port of Houston? Houston is just so set up cranes storage nobody s going to bust it. Superload carrier serving the Oil Sands Other factors: Shippers/forwarders/EPC companies comfortable with this routing (it s about reliability, not cost). Existing relationships with players in and around Houston. Greater certainty with truck permitting, fewer physical challenges along corridor.

8 Houston to Fort MacKay, AB: A Long, Heavy Haul Source: Perkins Motor Transport, Inc.

9 So what s the play for the Seaway? An alternative gateway to the Oil Sands? Great Lakes routings are more likely used for project cargo originating in Europe, though we have seen packing lists for project cargo originated in China and destined to Alberta routing via Duluth! Example Transportation Requirements for Movement of Modules 105 modules to Edson, AB, via Duluth, MN: ranging in length from 40 feet to 80 feet in length, by feet in width and weighting between 130,000 lbs and 250,000 lbs each.

10 Issues to Overcome Common Seaway Challenges Seasonality of the Seaway Limited backhaul opportunities for marine carriers (which reduces carrier interest) Host of charges incurred by the marine mode, notably pilotage Land Transportation Constraints Rail clearance limitations (e.g. 15 for Thunder Bay to Alberta) TransCanada Highway to the Manitoba border only two lanes Truck permitting in Manitoba reportedly difficult Busting Houston Need to Market Seaway Routing Long standing relationships that exist in Houston

11 Project Cargo Opportunities The Alberta Oil Sands Opportunity The Mid West Import/Export Opportunity and the Cleveland Europe Express 11

12 Good News Shipping project cargo via Great Lakes to/from Mid West cheaper than routing cargo via Houston. Example: Three trucks from Monroe, MI to Port of Cleveland $4000 cheaper than rail to Houston, and close to $10,000 cheaper than trucking to Houston.

13 Comparative Land Transport Atlantic Gateway Costs Break Bulk Study Title Example Paragraph text paragraph text. Paragraph text paragraph text. Paragraph text paragraph text. Paragraph text paragraph text. Paragraph text paragraph text. List item #1 List item #2 List item #3 13

14 Savings When Truck Transport to Great Lakes Port Relative to Rail to Houston Land Transport Savings Truck (3) to Great Lakes Port Relative to Rail to Port of Houston Origin (left ) and Destination Port (Right) Pairs Cleveland Detroit Toledo Milwaukee Monroe Milwaukee Cleveland Toledo Cleveland Milwaukee Cleveland Milwaukee Milwaukee $1,000 $ $1,000 $2,000 $3,000 $4,000 $5,000 Land Transport Savings ($) to Move 3x 48,000 lbs Trucks Relative to Rail to Port of Houston 14

15 Oversize/Overweight Truck Permitting is Complicated

16 Project Cargo Opportunities The Alberta Oil Sands Opportunity The Mid West Import/Export Opportunity and the Cleveland Europe Express 16

17 An Exciting Development Source of Photos: Port of Cleveland

18 Update on Cleveland Europe Express First sailing in April 2014 Initially envisaged 75% containers, 25% breakbulk In actuality, 25% containers, 75% breakbulk Market reportedly growing, but ship not full Second monthly sailing to start in Spring 2015 Can this service be a catalyst for other liner services into the Lakes?

19 Other Market Opportunities? Petroleum markets? More containers? Time will tell In the meantime, continue to take costs out of the system, increase ease of doing business, visibility, and sell value proposition. 19

20 Questions and Discussions Marc André Roy, IMBA, CMILT Vice President (North America) T: x 306 C: F: