impact of high oil prices on freight transportation: modal shift ...

TECHNICAL REPORT - IMPACT OF HIGH OIL PRICES ON FREIGHT TRANSPORTATION:
MODAL SHIFT POTENTIAL IN FIVE CORRIDORS
The results <strong>of</strong> Exhibits 16-20 are summarized in Exhibit 21, which presents the resulting maritime cost
projections for a 22-knots GLSLS-max RORO vessel under each <strong>of</strong> the forecast scenarios. As has been
mentioned previously, the cost-optimizing speed declines as fuel <strong>prices</strong> go up, but this is <strong>of</strong> little relevance
to a vessel service that has to compete with surface transportation modes for time-sensitive traffic. All the
costs in Exhibit 21 are based on the full speed 22-knot service that is quite a bit faster than the cost
minimizing point.
Exhibit 21: GLSLS-max RORO Costs Summary
Scenario $/Barrel
Fuel %
<strong>of</strong> 2005
base
In terms <strong>of</strong> the economics <strong>of</strong> a smaller ship, Exhibits 22-26 show the speed performance curves for the 90-
FEU “Coaster” RORO vessel that was evaluated by the earlier NC/NV study. Exhibit 27 summarizes those
results, which show that the GLSLS-max vessel <strong>of</strong>fers considerable economies <strong>of</strong> scale over the smaller ship.
Exhibit 22: “Coaster” RORO Costs, original NC/NV Study, $55 per barrel
$0.90
$0.80
$0.70
$0.60
$0.50
$0.40
$0.30
$0.20
$0.10
$0.00
TEMS, INC. OCTOBER 2008
RORO
Cost per
FEU-
Mile
Ship %
<strong>of</strong> 2005
base
2002 Historic $28.85 53% $0.15 66%
2005 Base $54.79 100% $0.23 100%
2020 Optimistic $59.61 109% $0.25 106%
2020 Central $91.03 166% $0.34 148%
2020 Pessimistic $157.18 287% $0.55 236%
0.0 5.0 10.0 15.0 20.0 25.0
Time Cost
Knots
Fuel Cost Total Cost
28