2011 Introduction to Deep-Draft Navigation Economics of Deep Draft Navigation Analysis.

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2011 Introduction to Deep-Draft Navigation Economics of Deep Draft Navigation Analysis

Transcript of 2011 Introduction to Deep-Draft Navigation Economics of Deep Draft Navigation Analysis.

Page 1: 2011 Introduction to Deep-Draft Navigation Economics of Deep Draft Navigation Analysis.

2011 Introduction to

Deep-Draft Navigation

Economics of Deep Draft Navigation Analysis

Page 2: 2011 Introduction to Deep-Draft Navigation Economics of Deep Draft Navigation Analysis.

• Purpose– To provide an overview of the maritime

system as well as the requirements and procedures for conducting deep-draft navigation economic analyses in accordance with standards and guidance as applied by the U.S. Army Corps of Engineers (USACE).

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• Student Learning Objectives:– Become familiar with the Maritime

Transportation System and Terminology– Identify the General Concepts and Procedural

Steps for Economic Analysis Applied to the Study of Deep-Draft Waterway Improvements Under National Economic Development (NED) Criteria.

– Identify primary sources of guidance and data and exposure to some of the general terminology applied for studies.

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• “The role of the U. S. Army Corps of Engineers with respect to navigation is to provide safe, reliable, and efficient waterborne transportation systems (channels, harbors, and waterways) for movement of commerce, national security needs, and recreation. The Corps accomplishes this mission through a combination of capital improvements and the operation and maintenance of existing projects.”

-ER 1105-2-100

Page 5: 2011 Introduction to Deep-Draft Navigation Economics of Deep Draft Navigation Analysis.

Federal Involvement – Why?

• The Federal Interest is established by the Constitution –Commerce Clause

• Provides means of commercial transportation

• Is part of national defense

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Corps Involvement – So How Did the Corps Get Involved?

Gallatin’s 1808 report to Congress on waterways, canals and roads

Congressionally directed in 1824 to remove snags from Ohio & Mississippi Rivers

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U.S. Ports: Vital to Trade…and to Our National Economy

MillionTons

Over 100

50 - 100

25 - 50

10 - 25

Houston

Corpus ChristiS. Louisiana

New Orleans

Baton Rouge

Texas City

Lake Charles

PlaqueminesTampa

New York/NJ

Valdez

Long Beach

Beaumont

Lower DelawareRiver (9 harbors)

Duluth/Superior

Los Angeles

Port Arthur

St. Louis

Portland

Seattle

Freeport

Huntington

Richmond

Oakland

Tacoma

Boston

Hampton Roads

Port Everglades

Jacksonville

Memphis

Detroit

Cleveland

SavannahCharleston

Indiana Hbr

Cincinnati

Portland

Two Harbors

Anacortes

Honolulu

Chicago Pittsburgh

Baltimore

Pascagoula

53 harbors – coastal, inland, Great Lakes - handled over 10 million tons each in 2008…

Toledo

Mobile

Matagorda

Kalama

Barbers Pt

Nearly 12,000 Miles 9 ft & Over

192 Lock Sites / 238 Chambers

Moving Nearly 600 Million Tons

About 2/3rds Cost of Rail and1/10 Cost of Truck

Inland Waterway System:

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Principal US Harbor ImprovementsFunded in 2009*

* Includes 2-year ARRA funding.

SELECTED PROJECTS STATE FY 2009FEDERAL

COSTSNON-FEDERAL

COSTTOTAL COST

PERCENT COMPLETE

DEPTH FEET

DEPTH METERS

MOBILE HARBOR AL 29,770 244,126 284,874 529,000 15% 55 16.8

LOS ANGELES HARBOR CA 885 58,100 135,900 194,000 80% 53 16.2

OAKLAND HARBOR CA 32,892 224,798 183,288 408,086 100% 50 15.2

JACKSONVILLE HARBOR FL 18,149 21,200 36,100 57,300 100% 40 12.2

PORT EVERGLADES HARBOR FL 1,435 76,298 41,083 117,381 92% 36 11.0

INDIANA HARBOR CDF IN 8,390 63,000 60,000 123,000 21% 27 8.2

GULFPORT HARBOR MS 21,000 28,715 17,981 46,696 100% 38 11.6

NEW YORK & NEW JERSEY HARBOR NY 90,000 1,165,437 1,314,698 2,480,135 70% 50 15.2

WILMINGTON HARBOR NC 2,075 276,300 190,700 467,000 76% 42 12.8

COLUMBIA RIVER CHNL IMPROV OR 34,451 110,024 60,784 170,808 100% 43 13.1

HOUSTON-GALVESTON CHANNELS TX 108,178 541,369 240,991 782,360 85% 45 13.7

TEXAS CITY CHANNEL TX 46,000 82,153 135,926 218,079 100% 52 15.8

OTHERS 74,723 N/A N/A N/A Varies Varies Varies

TOTAL 467,948 2,891,520 2,702,325 5,593,845

($USD in Thousands)

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• Deep-Draft Navigation System: System of independent channels that serve individual ports. For Corps purposes, these channels are in excess of 14-feet deep, and are found in coastal waters, bays, major rivers and the Great Lakes.

• Deep-Draft Commercial Vessels: Ships and ocean-going tows.

• Harbors: “Water Area” partially enclosed to provide safe and suitable accommodation for vessels.

• Port: A sheltered harbor where marine terminal facilities are provided.

• Terminal Facilities: Part of a port or harbor which provides docking, cargo-handling, and storage facilities

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Page 11: 2011 Introduction to Deep-Draft Navigation Economics of Deep Draft Navigation Analysis.

Top 10 Coastal U.S. Ports, 2008(Millions of Short Tons)

Rank Port Tonnage

1 Port of South Louisiana 223.9

2 Houston, TX 212.2

3 New York, NY & NJ 153.4

4 Long Beach, CA 80.2

5 Corpus Christi, TX 76.7

6 New Orleans, LA 73.0

7 Beaumont, TX 69.4

8 Mobile, AL 67.6

9 Port of Plaquemines, LA 63.7

10 Los Angeles, CA 59.7

Source: USACE Navigation Data Center

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Top 10 U.S. Ports HandlingForeign Waterborne Commerce, 2008

(Millions of Short Tons)

Rank Port Tonnage

1 Houston, TX 146.3

2 Port of South Louisiana 111.4

3 New York, NY & NJ 91.1

4 Long Beach, CA 67.2

5 Corpus Christi, TX 55.3

6 Los Angeles, CA 52.9

7 Beaumont, TX 46.7

8 Texas City, TX 38.7

9 Norfolk, VA 36.8

10 New Orleans, LA 36.4

Source: USACE Navigation Data Center

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U.S. Waterborne Traffic by State, 2008(Millions of Short Tons)

Rank State Tonnage

1 Louisiana 484.9

2 Texas 442.3

3 California 190.1

4 Florida 122.5

5 Illinois 120.3

6 Ohio 119.4

7 Pennsylvania 115.3

8 New Jersey 110.1

9 Washington 100.9

10 Kentucky 100.1

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0

10

20

30

40

50

60

70

2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028

Imports Exports Total

U.S. Imports and Exports

Source: IHSGI World Trade Service

Millions of TEUs

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Cargo Handling, Circa 1950

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Cargo Handling, Circa 2004

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The Need for Deeper Channels

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Cargo

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Functional Classifications of Maritime Cargoes

All Maritime Cargo

General Cargo Bulk Cargo

Break Bulk Neo-Bulk Containerized Liquid Bulk Dry Bulk

Sacks Cartons Crates Drums

Pallets Bags

Lumber Paper Steel Autos

Containers

Lift On/Lift Off (Lo/Lo)

Roll On/Roll Off (Ro/Ro)

LNG / LPG Petroleum Molasses Chemicals Vegetable

Oil

Grain Sand & Gravel Scrap Metal

Coal/Coke Clinker

Fertilizer

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Shipboard Measurements

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Foreign Flag General Cargo Characteristics

DWT 11,000 14,000 16,000 20,000 24,000 30,000

Length 442 478 498 535 568 610

Beam 65 69 72 77 81 86

Draft 26 29 30 33 35 38

Hourly Cost at

Sea

453 516 564 664 760 900

Hourly Cost in

Port

367 413 448 523 595 701

Note: All measurements in feet; Cost in US $Source: USACE Economic Guidance Memo 00-06, 01 June 2004

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General Cargo

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Pure Car Truck Carrier (PCTC)

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Roll On/Roll Off (Ro/Ro)

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Lighter Aboard Ship (LASH)

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Lift On/Lift Off (LO/LO)

Heavy Lifters Sea BargeIntegrated Tow

Float On /Float Off

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Page 28: 2011 Introduction to Deep-Draft Navigation Economics of Deep Draft Navigation Analysis.

Width 8’

Height 8’ 6”

Length 20’

TEU

Twenty-Foot Equivalent Unit (TEU)

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Foreign Flag Containership Characteristics

TEU 600 1,600 2,500 3,000 4,800 6,000

DWT 9,000 23,000 35,000 42,000 66,000 82,000

Length 427 611 716 768 984 1,044

Beam 68 89 100 105 122 140

Draft 24 32 37 39 43 46

Immersion Rate (tpi)

53 101 136 154 229 279

Hourly Cost at

Sea

485 842 1137 1327 1840 2298

Hourly Cost in

Port

383 552 697 799 928 1215

Note: All measurements in feet; tpi – tons per inch; cost in US $ Source: USACE Economic Guidance Memo 04-01 June 2004

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Containership

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Containership

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Loading Containers

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Top 20 Container Ports by TEUs

Rank in

2000

Rank in

2007

Rank in

2008 Port name Country

2000 Million

TEU

2007 Million

TEU

2008 Million

TEU

Percent change 2000–08

Percent change 2007–08

Av annual rate (%) 2000–08

2 1 1 Singapore Singapore 17.0 27.9 29.9 76 7.1 7.36 2 2 Shanghai China 5.6 26.2 28.0 398 7.0 22.21 3 3 Hong Kong China 18.1 23.9 24.2 34 1.5 3.7

11 4 4 Shenzhen China 4.0 21.1 21.4 436 1.5 23.43 5 5 Busan South Korea 7.5 13.3 13.4 78 1.2 7.5

13 7 6 Dubai UAE 3.1 10.7 11.8 287 11.0 18.465 11 7 Ningbo China 0.9 9.4 11.2 1,145 19.9 37.038 12 8 Guangzhou China 1.4 9.2 11.0 669 19.6 29.15 6 9 Rotterdam Netherlands 6.3 10.8 10.8 72 0.1 7.0

24 10 10 Qingdao China 2.1 9.5 10.3 387 9.1 21.99 9 11 Hamburg Germany 4.2 9.9 9.7 128 -2.0 10.94 8 12 Kaohsiung Taiwan 7.4 10.3 9.7 30 -5.7 3.4

10 14 13 Antwerp Belgium 4.1 8.2 8.7 112 6.0 9.932 17 14 Tianjin China 1.7 7.1 8.5 398 19.7 22.212 16 15 Port Klang Malaysia 3.2 7.1 8.0 149 11.9 12.17 13 16 Los Angeles United States 4.9 8.4 7.8 61 -6.0 6.18 15 17 Long Beach United States 4.6 7.3 6.5 41 -11.3 4.4

113 18 18 Tanjung Pelepas Malaysia 0.4 5.5 5.6 1,239 1.8 38.317 20 19 Bremen/Bremerhaven Germany 2.7 4.9 5.5 103 12.4 9.214 19 20 New York/New Jersey United States 3.1 5.4 5.3 73 -2.5 7.1

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Top 10 U.S. Container Ports, 2008Twenty-Foot Equivalent Units (TEUs)

Rank Port TEUs (X 1,000)

1 Los Angeles, CA 5,521

2 Long Beach, CA 4,843

3 New York, NY & NJ 4,103

4 Savannah, GA 2,086

5 Norfolk, VA 1,645

6 Oakland, CA 1,548

7 Tacoma, WA 1,458

8 Houston, TX 1,371

9 Charleston, SC 1,307

10 Seattle, WA 1,224Source: USACE Navigation Data Center

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Bulk Carrier

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Great Lakes - Coasters

Page 37: 2011 Introduction to Deep-Draft Navigation Economics of Deep Draft Navigation Analysis.

• Oil Tankers carry about 40% of the world’s seaborne trade.

• About 60% of the world’s crude oil is transported by seagoing tankers.

• Crude is generally transported in larger vessels.• Tanker Size Groupings:

– Ultra Large Crude Carriers (ULCCs) > 320,000 DWT

– Very Large Crude Carriers (VLCCs) 200 – 320,000 DWT

– Suezmax (long to medium haul) 120 – 200,000 DWT

– Aframax (medium to short haul) 80 – 120,000 DWT

– Panamax (short haul) 55 - 70,000 DWT– Handysize (smallest in world fleet) to as little as...

10,000 DWT

Oil and Tanker Business

Page 38: 2011 Introduction to Deep-Draft Navigation Economics of Deep Draft Navigation Analysis.

Foreign Flag Tanker Characteristics

DWT 20,000 60,000 80,000 120,000 200,000 325,000

Length 498 685 745 838 973 1,121

Beam 79 113 124 141 167 195

Draft 30 42 46 52 60 70

Immersion Rate (tpi)

79 159 191 247 343 468

Hourly Cost at

Sea

647 840 930 1,080 1,389 1,782

Hourly Cost in

Port

512 653 721 822 1,039 1,292

Note: All measurements in feet; tpi – tons per inch; cost in US $Source: USACE Economic Guidance Memo 06-01 June 2006

Page 39: 2011 Introduction to Deep-Draft Navigation Economics of Deep Draft Navigation Analysis.

Oil Tanker

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ULCC - Jahre Viking - 565,000 DWT) Length 1,504 ft; Beam 226

ft; Draft 81 ft

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Cruise Ships

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Duluth - Superior

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Mobile Harbor

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Louisiana Offshore Oil Port (LOOP)

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Freeport Harbor

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Long Beach

Page 47: 2011 Introduction to Deep-Draft Navigation Economics of Deep Draft Navigation Analysis.

Port of Los Angeles

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Port of Oakland

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More Information on Dredging

• http://education.usace.army.mil/navigation/dredging.html

USACE “Education Center” website (for students, teachers, librarians and other educators).

Page 50: 2011 Introduction to Deep-Draft Navigation Economics of Deep Draft Navigation Analysis.

Some Trivia

• State of _______ has deep draft port facilities on 4 Great Lakes.

• __________ &_________ have ports along the Great Lakes and the Atlantic Coast.

• The deep-water port farthest from the sea is ______________ (at miles 168 to 255 up the Mississippi River)

• On the West Coast, ________&__________ operate the largest # of container cranes (80)

• On the East Coast, ________&__________ operate the largest # of container cranes (50)

Page 51: 2011 Introduction to Deep-Draft Navigation Economics of Deep Draft Navigation Analysis.

• State of Michigan has deep draft port facilities on 4 Great Lakes.

• Pennsylvania & New York have ports along the Great Lakes and the Atlantic Coast.

• The deep-water port farthest from the sea is Baton Rouge (at miles 168 to 255 up the Mississippi River)

• On the West Coast, Long Beach & Los Angeles operate the largest # of container cranes (80)

• On the East Coast, New York & New Jersey operate the largest # of container cranes (50)

Page 52: 2011 Introduction to Deep-Draft Navigation Economics of Deep Draft Navigation Analysis.

Issues in Economics of Container Ship Driven Channel Deepening

Page 53: 2011 Introduction to Deep-Draft Navigation Economics of Deep Draft Navigation Analysis.

Background

• The Corps experience in many Districtshas mostly been for bulk cargo.– Bulk cargo ships generally have a simple

itinerary, back and forth between only 2 ports• All economic analyses by the Corps of

ports for containers have been done with homegrown spreadsheets, unique for each application, some of them developed by consultants.

Page 54: 2011 Introduction to Deep-Draft Navigation Economics of Deep Draft Navigation Analysis.

What is Different about Container Traffic?

• They have a scheduled itinerary calling at multiple ports

• Port rotations dynamic• Vessels on rotation dynamic• Services at any port are complex with

multiple rotations

Page 55: 2011 Introduction to Deep-Draft Navigation Economics of Deep Draft Navigation Analysis.
Page 56: 2011 Introduction to Deep-Draft Navigation Economics of Deep Draft Navigation Analysis.
Page 57: 2011 Introduction to Deep-Draft Navigation Economics of Deep Draft Navigation Analysis.

Container Ship Operations & Loadings

• Container ship cargo is diverse so that the draft a vessel needs to call at a port is variable from trip to trip

• What a ship can carry depends on the number of container slots, design draft, the weight of the cargo, and other factors– Some containers are empty meeting need to

be repositioned to the exporting ports (see return route of previous slide)

Page 58: 2011 Introduction to Deep-Draft Navigation Economics of Deep Draft Navigation Analysis.

Container Posers

• Sailing drafts almost always significantly less than design drafts even in the deepest ports around the world

• Carry TEU’s for multiple US ports except at the last US port of call

• Carriers seem to add capacity rather than drafting deeper– “Undulation” in sailing drafts

• At deeper ports, larger vessels seem to have a larger share of total calls—statistical analysis suggestive but not definitive

• At deeper ports, sailing draft distribution is deeper but not as much as expected.

Page 59: 2011 Introduction to Deep-Draft Navigation Economics of Deep Draft Navigation Analysis.

Example Cost Efficiencies

0.0

10.0

20.0

30.0

40.0

50.0

60.0

25.0 30.0 35.0 40.0 45.0 50.0

Sailing Draft in Fee

Co

st

per

10

00 m

ile

s p

er

TE

U

38.5

39.5

41

46

47.5

MaxDraft

Panamax

Post Panamax Gen 1 & 2

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0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

20 25 30 35 40 45 50

2002

2003

2004

2005

2006

2007

Panamax

2002 = 11812003 = 17542004 = 15572005 = 14202006 = 18472007 = 1768

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0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

20 25 30 35 40 45 50

2002

2003

2004

2005

2006

2007

Post Panamax Gen 1

2002 = 11342003 = 11422004 = 12372005 = 11302006 = 15592007 = 1774

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0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

35

.72

37

.65

39

.34

39

.76

41

.11

42

.24

43

.79

44

.8

45

.92

47

.57

49

.22

50

.78

52

.55

59

.39

Terminal Class by Depth

Share of Vessel Class by Depth

Vessel Class O

Vessel Class N

Vessel Class M

Vessel Class L

Vessel Class K

Vessel Class J

Vessel Class I

Vessel Class H

Vessel Class G

Vessel Class F

Vessel Class E

Vessel Class D

Vessel Class C

Vessel Class B

Vessel Class A

Page 63: 2011 Introduction to Deep-Draft Navigation Economics of Deep Draft Navigation Analysis.

Cumulative Sailing Draft by Terminal DepthGen 2 Vessels

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

90.00%

100.00%

34 36 38 40 42 44 46 48

Sailing Draft

Pe

rce

nt

42 44 45 46 47 48

Page 64: 2011 Introduction to Deep-Draft Navigation Economics of Deep Draft Navigation Analysis.

Potential Impact ofPanama Canal Expansion

• The expansion in the Panama Canal, scheduled to be completed in 2015

– Predicted to drastically change the size vessels on routes that use the canal

– These Post-Panamax ships are in service on other routes but cannot pass through the canal

– A relatively quick migration to these larger vessels is predicted once the canal opens

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Draft12.04 m (39.5’)

Draft15.2 m (50’)

Actual Locks – Vessel Max: 4,800 TEUs

New Locks – Vessel Max : 12,600 TEUs

32.3m (106’)

33.5m (110’)

49m (160’)12.8m (42’)

294.1m (965’)

304.8m (1000’)

366m (1200’)

427m (1400’)55m (180’)

18.3m (60’)

New Locks Dimensions

Page 66: 2011 Introduction to Deep-Draft Navigation Economics of Deep Draft Navigation Analysis.

Evolution of the Full Container Ship Fleet

Number of

VesselsTEU Capacity

Number of

VesselsTEU Capacity

Number of

Vessels

TEU

Capacity

Feeders 100-499 438 136,079 11 2,607 449 138,686

Feedermax 500-999 785 574,847 155 130,864 940 705,711

Handy 1,000-1,999 1144 1,613,546 321 459,448 1465 2,072,994

Sub-Panamax 2,000-2,999 673 1,697,300 167 426,865 840 2,124,165

Panamax 3,000-4,000+ 727 2,905,510 328 1,376,161 1055 4,281,671

Post-Panamax 3,700 - 13,300 557 3,734,910 474 4,215,918 1031 7,950,828

4,324 10,662,192 1,456 6,611,863 5,780 17,274,055

12.9% 35.0% 32.6% 63.8% 17.8% 46.0%

18.3% 24.8%

Source: ACP, Shipping Intelligence Network, Clarkson Research, December 2007.

% Post-Panamax

% Panamax

Total

Average Vessel Size

Vessel SizeFull Container Ship Fleet -

December 10, 2007Orderbook 2007-2012 Projected Fleet 2012

Page 67: 2011 Introduction to Deep-Draft Navigation Economics of Deep Draft Navigation Analysis.

Economic Evaluation

• The Corps has no standardized economic model to evaluate the benefits of navigation improvements to container ships.

• Data issues daunting• Modeling subject to large uncertainties

Page 68: 2011 Introduction to Deep-Draft Navigation Economics of Deep Draft Navigation Analysis.

• Short Break

• 10 Minutes