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February 2008
Boston Strategies International, Inc.
Global Infrastructure Series
I i i S l T
b t t t i
Investing in Seattle-Tacoma
Page 1© 2008 Boston Strategies International, Inc.7/7/2008
www.bostonstrategies.com(1) (781) 250‐8150
This report has been prepared by Boston Strategies International at the request of CLIENT for the purpose of establishing its operating strategies. It may not be appropriate for other purposes or audiences. This report contains forward-looking statements andprojections with respect to anticipated future performance of CLIENT, suppliers, customers, and/or general or specific economic conditions and factors that are based on Boston Strategies International’s analysis of market trends and external data. Forward-lookingstatements and projections are not guarantees of future performance and involve significant business, economic and competitive risks, contingencies and uncertainties, which are difficult to predict. Accordingly, these projections and forward-looking statements maynot be realized and actual results may vary up or down. This report may not be reproduced or distributed without express written approval from Boston Strategies International.
Global Supply Chain Economists™
IndustryResearch
Cost and Pricing Analysis
StrategyConsultingResearch Analysis Consulting
®
Page 2© 2008 Boston Strategies International, Inc.7/7/2008
Agenda
• Seattle in Perspective
• Terminals, Services, and Connections
• Congestion and Capacity Issues
• Development and Expansion Plans
• Seattle in Your Global Supply Chain• Seattle in Your Global Supply Chain
Page 3© 2008 Boston Strategies International, Inc.7/7/2008
Seattle-Tacoma in PerspectiveSeattle-Tacoma in Perspective
Page 4© 2008 Boston Strategies International, Inc.7/7/2008
Rail Transit
Page 5© 2008 Boston Strategies International, Inc.7/7/2008
Source: Port of Tacoma
Truck Transit
Page 6© 2008 Boston Strategies International, Inc.7/7/2008
Source: Port of Tacoma
Port of Tacoma Ocean Transit
Page 7© 2008 Boston Strategies International, Inc.7/7/2008
Source: Port of Tacoma
One of the Largest US Port Complexes2006 US Port Rankings
Rank Port ComplexValue of Foreign Trade
(Billion USD)Rank Port Complex (Billion USD)
1 Los Angeles - Long Beach, CA $305,126.39
2 Newark, NJ $145,620.02
3 Houston TX $102 990 143 Houston, TX $102,990.14
4 Seattle-Tacoma, WA $68,457.90
5 Charleston, SC $55,200.49Source: Boston Logistics, U.S. Dept. of Commerce, Bureau of Census Source: Port of Seattle
Rank Port Complex Million TEUs
1 Los Angeles-Long Beach $15,759,218.00
2 New York/New Jersey $5,092,806.00
3 Seattle-Tacoma $4,054,546.00
4 Oakland $2,390,262.00
Page 8© 2008 Boston Strategies International, Inc.7/7/2008
Source: Boston Logistics, AAPA5 Savannah $2,160,168.00
The Distribution Hub for the Pacific Northwest
Page 9© 2008 Boston Strategies International, Inc.7/7/2008
Source: http://www.aaccessmaps.com/show/map/washington_west
Strong West Coast Container Growth
25
US Maritime Containerized Export and Imports by Coast 1991-2005
5
Seattle-Tacoma Container Throughput
20 4
10
15
TEUS (millions)
2
3TEUs
(millions)
5
10
1
2
01991 1995 1999 2003
01991 1995 1999 2003
Page 10© 2008 Boston Strategies International, Inc.7/7/2008
West Coast East Coast Gulf Coast
Sources: Boston Logistics analysis of BTS
TEU Throughput Surge 2001-2005
• 58% Growth in five years
4
5
3
4
TEUs
2
(millions)
0
1
Page 11© 2008 Boston Strategies International, Inc.7/7/2008
2001 2002 2003 2004 2005
Sources: Boston Logistics analysis of BTS
Tacoma Will Dominate Future Growth
Planned ExpansionsRecent Planned
Port Expansion Expansion Total
Port of Seattle 405 120 525
Port of Tacoma 422 1 335 1 757
Port of Tacoma
Port of Tacoma 422 1,335 1,757
Total 827 1,455 2,282
Container Capacity (1000 TEUs)
Port 2005 2025Share of Growth
Port of Seattle 2088 4500 24%
Port of Tacoma 2066 9,806 76%
T t l 4154 14 306 100%
Source: Kemer Nelson, US Customhouse Guide
Page 12© 2008 Boston Strategies International, Inc.7/7/2008
Total 4154 14,306 100%
Sources: Port of Tacoma
P t f S ttlPort of SeattleTerminals, Services, and Connections
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Overview of Port of Seattle Facilities
Page 14© 2008 Boston Strategies International, Inc.7/7/2008
Image: Courtesy of Port of Seattle.
View of key cargo terminalsCentral Harbor North Harbor
South Harbor
Page 15© 2008 Boston Strategies International, Inc.7/7/2008
Images: Courtesy of Port of Seattle.
Key Cargo Terminals• Terminal 5
• Six container-handling cranes• On dock intermodal rail facilities
• Terminal 25• Terminal Size : 32 acres (12.9
hectares)• 80,000 SF covered transit shed with
truck access• 48,000 SF maintenance and repair
)• Within 2 miles of UPRR & BNSF
yards
• Terminal 46center
• 182 acres (74 hectares)
• Terminal 18
• Leased by Total Terminals Int’l. and Hanjin until 2015.
• Includes 16 lane truck gate• One of the largest in North America• Terminal Size 196 acres (79
hectares)• Ten container handling cranes
• Terminal 30• Provides shore power to two
vessels at the same time• Ten container handling cranes• 97,000 SF covered transit shed• Efficient road access via truck into
terminal
Page 16© 2008 Boston Strategies International, Inc.7/7/2008
Sources: www.portseattle.org, Pacific Shipper
Seattle Break Bulk Terminals
• Terminal 91• Terminal Size : 212
Terminal 91
Terminal Size : 212 acres
• Frozen food use• Terminal 115
• Receipt and shipment of import/export Terminal 115of import/export cargo (domestic and international)
Terminal 115
• 70 acres of yard space
Page 17© 2008 Boston Strategies International, Inc.7/7/2008
Photos: Courtesy of Port of Seattle.
Seattle Grain Facility
• Fully automated• 3.99-million-bushel capacity3.99 million bushel capacity• 68 silos each holding a total of 54,000 bushels
Grain Facility
Page 18© 2008 Boston Strategies International, Inc.7/7/2008
Photo : Courtesy of Port of Seattle.
Seattle Real Estate Division
• Formed in 2008 to manage commercial real estate and allow Seaport and Aviation divisions to focus on pcore businesses
• Expected to run at a $5m loss in 2008Fi e b siness gro ps• Five business groups• Real Estate Development & Planning• Harbor Services• Maintenance• Maintenance• Property Management & Leasing• Pier 69 Facilities Management
Page 19© 2008 Boston Strategies International, Inc.7/7/2008
Seattle Intermodal Facilities at South Harbor
Page 20© 2008 Boston Strategies International, Inc.7/7/2008
Photo: Courtesy of Port of Seattle.
Sea-Tac Airport
Page 21© 2008 Boston Strategies International, Inc.7/7/2008
Source: Washington State Department of Transportation
Rail access in Seattle
Page 22© 2008 Boston Strategies International, Inc.7/7/2008
Source: Seattle Dept. of Transportation
Major Truck Routes in Seattle
Page 23© 2008 Boston Strategies International, Inc.7/7/2008
Source: Seattle Dept. of Transportation
Spokane Corridor Truck Route
Page 24© 2008 Boston Strategies International, Inc.7/7/2008
Source: Seattle Dept. of Transportation
P t f TPort of TacomaTerminals, Services, and Connections
Page 25© 2008 Boston Strategies International, Inc.7/7/2008
Overview of Port of Tacoma Fascilities
Page 26© 2008 Boston Strategies International, Inc.7/7/2008
Source: Port of Tacoma website
Tacoma Key Terminal Summary• APM Terminals
• 135 acres• Five cranes
• Pierce County Terminal• 171 acres (includes PCT
intermodal yard)• Five cranes• 875 reefer plugs• Six outbound truck lanes
• Husky Terminals
intermodal yard)• Seven cranes• Six outbound truck lanes• 764 reefer Plugs• Husky Terminals
• 93 acres• Four Cranes• 460 reefer plugs
g• Opened in 2005
• TOTE Terminal• 47 acres460 reefer plugs
• Four outbound truck lanes
• Olympic Container Terminal
• One operating and one lay-up berth
• RORO operationTerminal• 54 acres • Four cranes• 300 reefer plugs
• 140 reefer plugs• Two outbound truck lanes
Page 27© 2008 Boston Strategies International, Inc.7/7/2008
300 reefer plugs• Two outbound truck lanesSource: Port of Tacoma
Terminal Summary, Cont’d• Washington United
Terminals100
• Marshall Ave Auto Facility
146 5• 100 acres• Four Cranes• 352 reefer plugs• Four out
• 146.5 acres• Auto Storage Capacity:
19,000 units, with overflow up to 24,000 units• Four out
• Terminal 7-A/B• 25 acres • 2 700 feet of berth space
up to 24,000 units • One mile from I-5
• Cargill Grain Terminal• 11 Acres (4 5 hectares)• 2,700 feet of berth space
• Four cranes at OCT• 100,000 square foot CFS• Two rail spurs along shed
11 Acres (4.5 hectares) • 3 million bushel elevator
capacity• Three shipping belts, two Two rail spurs along shed
and two along berth• Three miles from I-5, 30
miles from I-90
legs• Dolphin pier • 73 feet of depth
Page 28© 2008 Boston Strategies International, Inc.7/7/2008
• bound truck lanesSource: Port of Tacoma
Tacoma Intermodal Facilities
• Four yards• North• South• Hyundai• Pierce Countyy
• Combined space of 83 acres• Approximately 72,000 feet of track
72 i• 72 carriers• Four lift trucks• 5 top-pick machines5 top pick machines
Page 29© 2008 Boston Strategies International, Inc.7/7/2008
Source: Port of Tacoma
Congestion and Capacity IssuesCongestion and Capacity Issues
Page 30© 2008 Boston Strategies International, Inc.7/7/2008
Volumes Threatened by Canal Expansions
• Expansion will double the TEU capacity of
• A deeper channel will eventually allow eventhe TEU capacity of
Panamax vesselseventually allow even large tankers through
Page 31© 2008 Boston Strategies International, Inc.7/7/2008
Source: Suez Canal AuthoritySource: Panama Canal Authority
Seattle’s Green Initiatives
• Currently optional to particulate and sulfur oxide emissions restrictions require carriers to use different qauxiliary fuels while in port• Implementing early before it becomes mandatory
• Cost of replacing or converting existing equipmentCost of replacing or converting existing equipment may increase service costs and operating costs for shipping lines
Page 32© 2008 Boston Strategies International, Inc.7/7/2008
Congestion is Beginning to Cause Problems
• One runway closed at Sea-Tac 44% of the time due to poor weather conditionsp
• I-5 to I-95 Interchange is the 18th worst bottleneck in the USFreight Mobilit challenges incl de• Freight Mobility challenges include:• Old street infrastructure• Limited street space• Growing traffic demand• Growing traffic demand• Increased truck and rail volumes and conflicts• Larger trucks• Construction detoursConstruction detours
Page 33© 2008 Boston Strategies International, Inc.7/7/2008
Sources: Sea-Tac, NHTSA, PSRC
Seattle Mobility Projects
• Mercer Street Widening• Lander Street improvementsLander Street improvements• Spokane Street Viaduct• $323m
Page 34© 2008 Boston Strategies International, Inc.7/7/2008
Global Supply Chain Economists™Boston Strategies International helps supply chain executives make critical supply chain decisions that involve investment and risk by forecasting the evolution of supply markets and technologies. Our mission is to help our clients develop globally competitive supply networks that maximize Supply Chain Value.™ Our products and services include:
Industry Research that helps investors and policy makers identify emerging issues that affect their supply chains and• Industry Research that helps investors and policy makers identify emerging issues that affect their supply chains, and quantify the impact that they will have
• Cost and Pricing Analysis that helps financial and operational managers plan and budget by providing benchmark, best practice, and forecast data tailored to their companies' supply chains
• Strategy Consulting that helps supply chain leaders make high-stakes decisions related to mergers & acquisitions, market entr capital in estments o tso rcing off shoring and make or bentry, capital investments, outsourcing, off-shoring, and make-or-buy
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Page 35© 2008 Boston Strategies International, Inc.7/7/2008
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