Panama Canal & the Barge Industry

American Institute of Marine Underwriters May 8, 2013 AVP, Strategic Planning

Jerry Knapper

Introduction to Ingram Marine Group

ESTABLISHED

Family-owned and Family-operated

Martha Ingram
Chairman Emerita

Pres. & CEO, Ingram Industries

Chairman, Ingram Barge Co.

Orrin Ingram

Chairman of the Board

John Ingram

Paducah, KY

Baton Rouge, LA

St. Louis, MO

Grand Rivers, KY

Columbus, KY

LaPlace, LA

Ingram Marine Group

We operate 152 towboats

26 Lower Miss Boats 91 Locking River Boats 35 ISS/Fleet Boats

Ingram operates on all major rivers

Ingram Infrastructure System (ISS)

Linehaul Motor Vessel Deployment To/From Hubs Hubs

Hub and Spoke Operations

Ingram Linehaul Boats by River

Largest dry cargo carrier; th 4 largest liquid carrier

Strategic Situation: Competitors

The industry is relatively consolidated & half of the top 10 carriers are shipper owned *

Commodities We Carry
Dry Cargo Tons

% Energy-Related 62
TONS

Coal, Coke, Other

% Agriculture-Related 12
TONS

Grain, Fertilizer

% Metals-Related 14
TONS

Alloys, Iron, Steel, Ores, Scrap

% Construction-Related 10
TONS

Cement Products, Stone

Chemicals (No hazardous chemicals or black oil)

Caustic soda, Methanol, Acetone, Styrene, VAM

Inland Waterway Capacity Matches New Panama Canal Lock Capacity

Todays Inland Waterway System

Nearly 12,000 Miles 9ft & Over 198 lock sites / 241 chambers Operated by Army Corps of Engineers
Lock & Dam Sites Areas of Congestion

System is mature; but available capacity to support traffic growth

The Lower Mississippi is an open river with no lock structures, allowing larger tows moving more than 80,000 tons

Inland Waterway Volumes

Large Post-Panamax cargoes will strengthen the Center Gulf gateway Grain: larger geographic reach for exports Oil Products & Chemicals: Asian destinations

21

Soybeans: Draw Area Expansion Potential

22

Soybeans: Draw Area Expansion Potential

23

Container Distribution Network

Port Expansions
Currently Norfolk and Baltimore are the only East Coast (or Gulf) ports deep enough for Post-Panamax vessels New Orleans draft depth: 45 feet Necessary draft depth: 50 feet No plan in New Orleans yet
Panama Port Readiness
Norfolk Already 50 ft. depth NY/NJ 50 ft. depth estimated completed by 12/31/2014 Miami Seeking approval Charleston Planning, but no funding Savannah Hold up for spoil disposal & environmental study Houston Secured funding for 45 ft. depth, building new container terminal NOLA Operating with no announced plans

Panama Port Readiness

Panama Canal Expansion (2014)

TEUs per Barge

Twenty-foot Equivalent Units (TEUs) Container dimensions: 8 x 8 x 20 Dry cargo barge box internal dimensions: 27 x 15 x 189 ~40,000 barges shipped Northbound EMPTY in 2012 (total industry)

Barge w/containers: Birds-Eye View 27 Barge w/containers: Side View 17 15 189

TEUs per barge= 3 x 9 x 4 = 108 TEUs Tons per TEU = 13.5 tons (avg) Tons per barge w/containers = 1458

Maximum Tow Sizes

Below Cairo, IL To New Orleans
35

280

TEUs per Flotilla: 108 x 40 = 4320 Flotillas per Post-Panamax Ship: 10,000 / 4320 = ~2.5

Post-Panamax Barge Potential

Barge Constraints Lack of Post-Panamax-ready port (50 channel depth) Velocity North/South network orientation

Post-Panamax Barge Potential

Barge Advantages Industry is in a position to grow for either Bulk Commodity or Container moves, both North and South North bound barge movements Availability of empties (40,000 barges = 4.3 million TEUs.) Favorable Rates

Final Slide
Ingram Barge logo