Mr. Lee: CP Ships is a top 10 carrier within the container shipping industry. We are a regional specialist, providing door-to-door transportation services, with 22 trade lanes and 35 services. We own or operate 80 ships and provide intermodal surface transportation services in close cooperation with third-party suppliers and, to a lesser degree, through our own trucking operations in Canada and Europe. Our main markets are Transatlantic representing 53% of our volume and revenue; Latin America 11%; Australasia, 14%; and Asia, 21%. Sales revenue was 3.1 billion in 2003 and volume 2.2 million teu (a 20ft equivalent unit being the industry’s unit of measurement and also our stock ticker). We are registered in New Brunswick, Canada with our corporate headquarters in London. We consider ourselves a North American transportation company with listings on the Toronto and New York Stock Exchanges. We are the only North American-listed pure-play container shipping company. Eighty percent of our business moves through North American ports. Indeed, if we were not a foreign issuer in the US and not already part the TSX/ S&P 60 Index, we would consider our natural home to be within the S&P 500 Transportation Index. Our current market capitalization is about US 1.5 billion, about twice what it was when we listed on October 3rd, 2001. Our daily trading is roughly 400,000 shares a day;
TWST: Do most carriers offer this door-to-door service or are you unique in that regard?
Mr. Lee: Many carriers do this. Door-to door service is just one of many things we do, that when combined, differentiate us from the rest of the industry. So, for example, first we focus on regional markets rather than the Asia-Europe and TransPacific trades where the large global carriers operate. We aim to be a market leader in our core trade lanes where we offer superior services by covering a wider range of ports, provide extensive customer service and sales coverage, and create economies of scale through pushing high volume through narrow trade corridors. Our services in the Transatlantic are a good example of this where we offer 12 services of which 10 weekly, have the number one market share and move over 1 million teu a year mainly through Montreal and the Gulf of Mexico. Second, we operate a multi –branding strategy, which is unique in our industry. We offer two or more of our seven brands, which are the result of our acquisition strategy, in nearly all our trade lanes. This way we maximize customer choice and market potential. And while we have separate sales and customer service for each brand, we operate common backroom services with profit managed by trade lane and one pricing group. Third, we have grown profitably through acquisitions, executing 10 transactions since 1993. While we will always be looking at a number of small or medium sized targets, our approach is cautious, where we set high hurdle rates of return to ensure transactions are accretive.
For more information call (212) 952 7433. The Wall Street Transcript does not endorse any of the comments made by interviewees, and does not make stock recommendations.