NWSA Strategic Business

Plan

10/12/2016

Date of Meeting: 10/18/16

Item No.:4A_Supp

1

10/12/2016 2

53.7

21.4

18.1

MARKET OUTLOOK - CONTAINER

• Overcapacity and non-compensatory freight rates will continue to create market

uncertainty and turmoil for container shipping lines

• Flat to modest global economic and international container volume growth

• Heightened competitive landscape for all North American gateways

• Restructured Alliances = Opportunities & Challenges

International

Domestic

• Alaska - Negative impact on container volume from soft commodity prices and

suspension of oil and gas projects

• Hawaii – Construction and tourism-related spending will support modest

volume growth

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53.7

21.4

18.1

MARKET OUTLOOK – NON-CONTAINER

• The auto manufacturing industry is globalizing, opening factories closer to

the target market

• Increasingly, roll-on/roll-off ships are carrying both autos and breakbulk on

the same vessel

Autos

Logs

• Logs continue to find a market in China, but volumes impacted by both

stronger U.S. timber prices and a slowdown in China construction projects

Breakbulk

• The downturn in the global economy, including energy, mining and

construction, has dampened breakbulk and project volumes

• Container lines are actively pursuing traditional roll-on/roll-off cargo

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International & Domestic

CONTAINER TRAFFIC

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International Full

CONTAINER TRAFFIC

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CONTAINER KEY INITIATIVES

2) Modernization of T-5 dock, berth and power infrastructure to meet future container industry requirements, increase throughput, and position the NWSA gateway strategically

GOAL 1: ENHANCE THE COMPETITIVE POSITION OF THE NORTHWEST SEAPORT ALLIANCE

A. Improve licensed Alliance terminal and waterway assets to meet market demand

1) Redevelop the General Central Peninsula and Pier 4 to increase container throughput and respond to container industry changes

• Retain existing carrier business

• Attract long-term lease tenant for vacant terminal footprint

• Advance T-4 construction project

• Attract long-term T-5 lease tenant

• Advance T-5 modernization

• Advance North Harbor water deepening project

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CONTAINER KEY INITIATIVESGOAL 1: ENHANCE THE COMPETITIVE POSITION OF THE NORTHWEST SEAPORT ALLIANCE

C. Advance the Alliance’s market position in the international shipping industry

2) Develop and implement a comprehensive business development strategy targeting international container carriers, BCOs, NVOs, and other supply chain partners

Retain and grow business by:

• Building on relationships with key shipper and carrier accounts through targeted call scheduling

• Launching signature NWSA business development programs targeting importers and exporters

• Launching customized joint marketing programs with supply chain partners

• Formulating and implementing incentive programs to attract carriers and customers for increased business

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NON-CONTAINERIZED VOLUMES

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GOAL 3: IMPROVE THE SEAPORT ALLIANCE FINANCIAL POSITION

A. Increase revenue through growth and diversification

1) Facilitate new project cargo, breakbulk, auto and bulk business opportunities

NON-CONTAINER KEY INITIATIVES

Retain and grow business by:

• Continuing to leverage the expertise of our Operations team and labor force to provide our customers with “Best in Class” service

• Increasing business with existing customers by enhancing facility capabilities and securing long term commitments

• Focusing on new business development by implementing a target account program for new customers and non-container market segments

Striving for Operational Excellence

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Key

Performance

Indicators

Operations

Service Center

Executive

Advisory Council

OPERATIONS – KEY INITIATIVESGOAL 1: ENHANCE THE COMPETITIVE POSITION OF THE NORTHWEST SEAPORT ALLIANCE

B. Improve efficiency and cost competitiveness of the supply chain

2) Establish an Executive Advisory Council (EAC) made up of leaders in the shipping industry. The EAC’s mission will be to execute key initiatives that ensure the gateway is the easiest and most realizable for doing business

3) Establish an Operations Service Center (OSC) with the mission of providing ‘best in class’ service delivery and customer care to our customers and stakeholders

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2016 ACCOMPLISHMENTS

Planning• Completed 10-Year Infrastructure Planning/Grant Funding Prioritization• Initiated Truck Trip/Data Collection and Analysis

• Assisted Terminal Gate and Breakbulk Strategic Terminal Planning

Water Quality• Established a Northwest Seaport Alliance stormwater working group

• Conducted stormwater treatment pilot study and completed a web-based

inspection/source control documentation tool

Air Quality and Sustainable Practices • Initiated the 2016 air emissions inventory• Scrapped 146 older trucks and applied for additional grant funding• Joined Green Marine• Implemented pilot program for truck wait-time reduction technologies• Completed DERA grant-funded switching locomotive engine replacement

with Tacoma Rail

13

• Update Land Use and Transportation Plan

• Update Infrastructure Investment Plan

• Continue integrated planning efforts with local, regional and statewide agencies

• Promote infrastructure grant funding opportunities

PLANNING/TRANSPORTATION INFRASTRUCTURE– KEY INITIATIVES

GOAL 2: PROVIDE RELIABLE AND EFFICIENT REGIONAL AND LOCAL INFRASTRUCTURE CONNECTIONS

A. Enhance transportation infrastructure

1) Participate in partner agency planning efforts to ensure that the Alliance's needs are considered and that plans support future business growth

2) In partnership with local, state and federal stakeholders, facilitate improvement projects to vital infrastructure that service Alliance customers

• Complete consolidation of NWSA Clean Truck Program

• Complete the 2016 air emissions inventory

• Complete Green Marine self-assessment and publish results

• Evaluate/update the Green Gateway Carbon Footprint study

WATER & AIR QUALITY – KEY INITIATIVES

B. Continuously improve operational efficiency and emission reductions

1) Continue to implement the Northwest Ports Clean Air Strategy

GOAL 4: ADVANCE ENVIRONMENTAL STEWARDSHIP

A. Partner to find innovative solutions to our customer’s environmental challenges

1) Identify and develop maritime industrial stormwater treatment best management practices

• Update the stormwater management guidance manual

• Conduct quarterly working group meetings

• Evaluate a Port Metro Vancouver, BC/NWSA Northwest Ports Clean Water Strategy