Wood Pellet Presentation

Ben Vandenberghe

CTL Westrans Shipbrokers

June 15 2012

CTL Westrans Shipbrokers Established in 1966 – proven record of success in ship broking

Experienced with many types of cargo: forest products including wood pellets & chips, grains, iron ore, machinery, pulp, sulphur, coal…

In-house ship agency: Compass Marine Services

Head office in Vancouver, BC

www.ctlwestrans.com

Freight Markets into Asia

Large Shipments : 20,000mt to 50,000mt Economies of scale with full bulk vessels

Medium Shipments : 5,000mt to 15,000mt Semi-liner services & cargo parcelling

Small Shipments : < 5,000mt Full liner services (containers)

Bulk Vessels – Full Cargo Large bulk shipments of 20,000mt to 50,000mt

Economies of scale = lowest cost per M/T

Limited by restrictions at both load port and discharge port: Draft restrictions Terminal equipment Storage capacity

Full Vessel - CalculationShipment Size : 25,000mt 50,000mtVessel Daily Rate : $ 7,600/day $ 7,000/dayVoyage Time : ~47.0 days ~58.2 days

Vessel Cost : $ 357,200 $ 407,700Bunkers (Fuel) : $ 571,500 $ 749,200Port Costs : $ 82,000 $ 110,000Misc, Days, TT: $ 35,300 $ 44,300Lump sum: $ 1,046,000 $1,311,200

$ 41.84 /mt $26.23 /mt

+ Loading costs ~ $15 - $25 / mt

Semi-Liners & Cargo Parcelling Shipments of 5,000mt to 15,000mt

Carriers regularly calling Vancouver for dedicated base cargo

Monthly or bi-weekly service

Base cargoes of pulp, lumber, concentrates

Parcelling of spot fixture cargo

3 of 5 holds with grain space for 2 holds of pellets

Combination shipment (same product)

2-3 shippers sharing space on the same vessel

Part Cargo - Calculation What is the “Contribution to the Voyage” of the additional cargo?

Consider additional costs -vs.- revenue on 1 hold of cargo

The key is to minimize deviations like extra ports and extra time

Owners consider what other contract cargoes could pay:

10k Copper concentrate parcels to Korea paying ~$45/mt

10k Canola parcels to Japan paying ~$53/mt

Current rule of thumb is ~$50/mt on 10,000 parcels to Japan

Full Liner (Container)Small Shipments < 5,000mt

22 - 24mt pellets / 20’ container26 - 28mt pellets / 40’ container

Vancouver to Busan:$1,150 - $1,250 per 20’ container = $50-$55/mt

$1,500 per 40’ container = $57/mtTransloading, Stuffing, Drayage = $20-$25/mt

Freight Market – Critical Factors Supply and demand of vessels – currently an oversupply of tonnage

High bunker prices account for 55-65% of current voyage costs

Competition from other cargoes – what do they pay?

Very good market for Vancouver to Asia – many ships and options

Considerations & Strategies Parcelling or combining several shippers on a single vessel

Single hold on semi-liner vessels with regular service

Getting product from origin to Vancouver & other ports?

Terminal transloading abilities?

Storage -vs.- direct load from railcar to vessel

Bagged product – handling, storage, tiers in vessel or containerization

Stowage Factor = 53 Cubic Feet Per Metric Tonne 40’ vs 20’

Ben Vandenberghe

CTL Westrans Shipbrokers

www.ctlwestrans.com