turning the sea into a bridge tm seabridge overseas holdings limited trb annual meeting workshop on...

Turning the Sea into a BridgeTM

SeaBridge Overseas Holdings LimitedTRB Annual Meeting Workshop on Alternative Freight

CapacityOpportunities and Solutions Panel

January 11, 2004


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Why the next major expansion in U.S. freight capacity has to use the sea

Stephen FlottChairman & Managing DirectorSeaBridge Overseas Holdings


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The federal government has identified development of coastal shipping as a national priority

new technologies enable the use of the sea in ways not possible before

the current US transportation infrastructure cannot keep up with demand


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Between 1980 and 2000 vehicle miles increased 80% while road lane miles increased only 2%

4.5 billion hours of traffic delays in 1999 were caused by highway congestion

Trucks transported over 10 billion tons of domestic freight in 1998 and are forecast to move over 18 billion tons by 2020; by 2020 international freight will add 1 billion tons to that amount

It costs millions to add rural and urban interstate lanes to existing highways or build new ones, if they can be built at all


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Secretary of Transportation Mineta“Our landside transportation system is already stressed to the limit and currently planned infrastructure improvements and expansion cannot possibly meet this escalating demand.”

“One intermodal alternative is the development of a robust short sea shipping system that would aid in the reduction of growing freight congestion on our nation’s rail and highway systems.”

“Short sea [and coastwise] shipping provides a practical, safe, and efficient means of transporting freight.”

Speech at US Chamber of Commerce Conference 6/12/03


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No existing SSS services in the US address intercity freight moving by roadmaritime focus has been on transshipment of

containers and bulk cargoes

US maritime industry views SSS in terms of its historic competitive advantage: ships can move the most cargo for the least $/ton

SeaBridge sees a new paradigm: creating high-speed/high-value SSS intermodal services aimed at serving the motor carriers who carry 90% of US domestic freight


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Dom.Trucking

Dom. Rail Dom. Water Dom. Air Int. Total

Tons (Billions) Value (Trillions)

Source: Federal Highway AdministrationOffice of Freight Management and Operations

Domestic trucking is THE target of opportunity because it dominates US freight movements

1998 Freight Total (15 Billion Tons, $9 Trillion)


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3%7%

12%

11%

61%

3%3%

Source: Transportation in America 1998Source: Transportation in America 1998

Does not include Private CarriageDoes not include Private Carriage

PipelinePipeline

TruckloadTruckload

Rail CarloadRail Carload

Small Package Small Package Surface/AirSurface/Air

DomesticDomestic WaterWater

Total Freight Bill (1997) - $328 Billion

LTL TruckingLTL TruckingIntermodal


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Our Vision?

To build toll bridges over the

seaSeaBridge Overseas Holdings Limited intends to become a global leader in delivering branded, high-speed, short sea and coastal transport services to motor carriers and motorists, first in the US, then in markets worldwide


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reducing overall transit times

reducing their line haul costs

increasing productivity by multiplying the number of trips; using rest time to travel

expanding or improving the services they can offer to their customers

To attract truckers and other users, a sea link has to save them time, money or both by:


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Assessing potential short sea routes requires

identification of origins and destinations of potential traffic

evaluation of options, constraints, and needs of users (e.g., HOS regulations)

creation of trip frequencies that reduce the overall transit times of potential users


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To be a real “bridge”, a sea link must:

be predictable and reliable

depart at the same time(s) every day

arrive and depart on time, without fail

fit the truckers’ pick up and delivery times


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Innovation is THE key to turning the sea into a bridge

5+ years of research identified size (>125 trucks), speed (>32 knots), roll-on roll-off applications; rapid loading/unloading and simple port facilities as keys to success

extensive technical and design work narrowed the choice to monohull vessels

other hull forms (conventional monohulls, catamarans, trimarans, hydrofoils, etc.) limited by speed, size, and seakeeping


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SeaBridge controls two designs that can transport at least 135 full-size US tractor trailer combinations and 1800 people


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>32 knot (service speed) monohull design priced at Samsung; being priced for US use at Bender Shipyard in Mobile, AL


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42 knot (maximum speed) pentamaran design by BMT Nigel Gee & Associates will be model tested in 1Q2004 in Norway


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Port Requirementsroll-on roll-off capability requires minimal shore side infrastructurenot necessary to be located at major portport locations driven by user needs in relation to road network and proximity to key customer distribution centersSeaBridge has conducted preliminary port and route assessments on East, Gulf and Pacific Coasts in US; and between Mexico and Canada and US ports


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Conclusionsoffering attractive options to motor carriers is the THE highest value market opportunity for coastal shipping

passenger movement represents an unknown, but potentially very large market opportunity

scheduled, dependable departures and arrivals; ports and connections must be linked to existing highway network

speed at sea and in port are essential

right applications and technologies turn the sea into the lowest cost way to build freight capacity


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Conclusions (continued)

“demonstration projects” will not attract motor carriers

four ships needed to initiate service on an East coast route and achieve economic scale in construction to keep price reasonable, six to eight ships preferred

joint venture arrangement is the optimum solution to create SeaBridge USA

government financial support is critical component to attract private investment to finance ship construction


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Interlocking challenges that require time to overcome:

prospective US JV partners are nervous about building ships in US and uncertain of the extent of government support

US yards need to know financing for at least four ships is in place before committing substantial resources to the project

government support depends on evidence that venture is economically sound and will attract motor carriers and others


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demonstrating to government the economic viability of its SSS services

finding creative ways to improve viability of using US yards, including foreign shipyard participation and assistance

selecting a strong US joint venture partner when the first two challenges have been overcome

SeaBridge will overcome each of these challenges by


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Thank you for your timeStephen Flott, Chairman

SeaBridge Overseas Holdings LimitedPO Box 17655, Arlington, VA 222165-7655

703-525-5110 Fax [email protected]

Contact Details:

turning the sea into a bridge tm seabridge overseas holdings limited trb annual meeting workshop on...

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