Page 34: of Maritime Logistics Professional Magazine (Q3 2014)

Power & Fuel Management

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LNG & RISK??We did not ? and I?ve said this every time I?ve been asked ? make this decision from an economic perspective. We made this decision purely from an environmental impact perspective. When we  rst started the Orca conversion project, I said, ?We don?t know what the cost of LNG is going to be when the ships come out. We hope it?s low, but we don?t know.? So our decision was solely based upon the environmental impact of LNG. ? TOTE President and CEO Anthony Chiarello options longer if there hadn?t been such a signi cant uptick in construction of Jones Act vessels, because the yard was get- ting full. So we just weren?t ready to pull the trigger on op- tions yet.? That said; the market should not assume that TOTE isn?t bullish on what?s to come next. Shedding full light on their plans ? with or without the op-tion vessels ? Chiarello says, ?Our position is that we?re run- ning two vessels today of around 1,200 TEUs. These new ves- sels will be 3,100 TEUs, so the capacity that we?re bringing, or the capability of capacity that we can handle, is signi cantly greater than what we?re doing today.? Signi cantly, about half of that capacity will be capable of handling 53-foot containers.The 53 foot model works in the Caribbean trade, and as Chi- arello already knows, it works in Alaska. That?s because, if you don?t have to unpack a 53-footer that comes down the highway, you just roll it onto the boat, faster, with less labor involved and more economically. Chiarello adds, ?That?s what we do in Alaska. They?re roll-on/roll-off ships exclusively. In the current trade today, we have, in Puerto Rico, a portion of the ship is roll-on/roll-off; a portion of the ship is lift-on/lift- off. So we wanted to go to lift-on/lift-off because we think in that particular trade it?s more ef cient from a vessel perspec- tive, but we needed 53-foot capacity. So we ended up going with half the ship being 53-foot.? According to Chiarello, the on board combination will make TOTE?s competitive position extremely strong for that trade, insisting, ?It?s going to be a major paradigm shift. Crowley was a year or so behind us on their announcement, and you see what they?re doing ? they?re having some 53-foot capacity, as well. We believe it?s the right equipment for that trade.? Looking AheadWith the intent of improving its position in the trades that they currently service and growing the logistics platform (through acquisition of Carlile), the corporate vision of be-coming a broader supplier of transportation and logistics ser- vices is coming to fruition. Chiarello charts the future by say-ing, ?I think we?ll continue down that same path. Looking at trades ? Jones Act trades ? that we?re not in today, there?s one, obviously, very glaring place that comes to mind. So, we have thought about how we possibly service that market because there?s a lot of customers that ask us about it.? Chiarello continues, ?Hawaii is the one place that we don?t have ships and I?m not sure that we will have ships there any ?These ships will increase shipping capacity, reduce air emissions, and ensure a cleaner environment for our workers and port communities.? ? Anthony Chiarello 34 Maritime Professional I 3Q 201434-49 Q3 MP2014.indd 3434-49 Q3 MP2014.indd 348/13/2014 3:07:09 PM8/13/2014 3:07:09 PM

Maritime Logistics Professional

Maritime Logistics Professional magazine is published six times annually.