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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 www.bostonstrategies.com (1) (781) 2508150 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 and projections 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-looking statements 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 may not 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.
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Page 1: Global Infrastructure Seriesbostonstrategies.com/images/Investing_in_Seattle_080703a.pdfOne of the Largest US Port Complexes 2006 US Port Rankings Rank Port Complex Value of Foreign

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.

Page 2: Global Infrastructure Seriesbostonstrategies.com/images/Investing_in_Seattle_080703a.pdfOne of the Largest US Port Complexes 2006 US Port Rankings Rank Port Complex Value of Foreign

Global Supply Chain Economists™

IndustryResearch

Cost and Pricing Analysis

StrategyConsultingResearch Analysis Consulting

®

Page 2© 2008 Boston Strategies International, Inc.7/7/2008

Page 3: Global Infrastructure Seriesbostonstrategies.com/images/Investing_in_Seattle_080703a.pdfOne of the Largest US Port Complexes 2006 US Port Rankings Rank Port Complex Value of Foreign

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

Page 4: Global Infrastructure Seriesbostonstrategies.com/images/Investing_in_Seattle_080703a.pdfOne of the Largest US Port Complexes 2006 US Port Rankings Rank Port Complex Value of Foreign

Seattle-Tacoma in PerspectiveSeattle-Tacoma in Perspective

Page 4© 2008 Boston Strategies International, Inc.7/7/2008

Page 5: Global Infrastructure Seriesbostonstrategies.com/images/Investing_in_Seattle_080703a.pdfOne of the Largest US Port Complexes 2006 US Port Rankings Rank Port Complex Value of Foreign

Rail Transit

Page 5© 2008 Boston Strategies International, Inc.7/7/2008

Source: Port of Tacoma

Page 6: Global Infrastructure Seriesbostonstrategies.com/images/Investing_in_Seattle_080703a.pdfOne of the Largest US Port Complexes 2006 US Port Rankings Rank Port Complex Value of Foreign

Truck Transit

Page 6© 2008 Boston Strategies International, Inc.7/7/2008

Source: Port of Tacoma

Page 7: Global Infrastructure Seriesbostonstrategies.com/images/Investing_in_Seattle_080703a.pdfOne of the Largest US Port Complexes 2006 US Port Rankings Rank Port Complex Value of Foreign

Port of Tacoma Ocean Transit

Page 7© 2008 Boston Strategies International, Inc.7/7/2008

Source: Port of Tacoma

Page 8: Global Infrastructure Seriesbostonstrategies.com/images/Investing_in_Seattle_080703a.pdfOne of the Largest US Port Complexes 2006 US Port Rankings Rank Port Complex Value of Foreign

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

Page 9: Global Infrastructure Seriesbostonstrategies.com/images/Investing_in_Seattle_080703a.pdfOne of the Largest US Port Complexes 2006 US Port Rankings Rank Port Complex Value of Foreign

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

Page 10: Global Infrastructure Seriesbostonstrategies.com/images/Investing_in_Seattle_080703a.pdfOne of the Largest US Port Complexes 2006 US Port Rankings Rank Port Complex Value of Foreign

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

Page 11: Global Infrastructure Seriesbostonstrategies.com/images/Investing_in_Seattle_080703a.pdfOne of the Largest US Port Complexes 2006 US Port Rankings Rank Port Complex Value of Foreign

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

Page 12: Global Infrastructure Seriesbostonstrategies.com/images/Investing_in_Seattle_080703a.pdfOne of the Largest US Port Complexes 2006 US Port Rankings Rank Port Complex Value of Foreign

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

Page 13: Global Infrastructure Seriesbostonstrategies.com/images/Investing_in_Seattle_080703a.pdfOne of the Largest US Port Complexes 2006 US Port Rankings Rank Port Complex Value of Foreign

P t f S ttlPort of SeattleTerminals, Services, and Connections

Page 13© 2008 Boston Strategies International, Inc.7/7/2008

Page 14: Global Infrastructure Seriesbostonstrategies.com/images/Investing_in_Seattle_080703a.pdfOne of the Largest US Port Complexes 2006 US Port Rankings Rank Port Complex Value of Foreign

Overview of Port of Seattle Facilities

Page 14© 2008 Boston Strategies International, Inc.7/7/2008

Image: Courtesy of Port of Seattle.

Page 15: Global Infrastructure Seriesbostonstrategies.com/images/Investing_in_Seattle_080703a.pdfOne of the Largest US Port Complexes 2006 US Port Rankings Rank Port Complex Value of Foreign

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.

Page 16: Global Infrastructure Seriesbostonstrategies.com/images/Investing_in_Seattle_080703a.pdfOne of the Largest US Port Complexes 2006 US Port Rankings Rank Port Complex Value of Foreign

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

Page 17: Global Infrastructure Seriesbostonstrategies.com/images/Investing_in_Seattle_080703a.pdfOne of the Largest US Port Complexes 2006 US Port Rankings Rank Port Complex Value of Foreign

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.

Page 18: Global Infrastructure Seriesbostonstrategies.com/images/Investing_in_Seattle_080703a.pdfOne of the Largest US Port Complexes 2006 US Port Rankings Rank Port Complex Value of Foreign

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.

Page 19: Global Infrastructure Seriesbostonstrategies.com/images/Investing_in_Seattle_080703a.pdfOne of the Largest US Port Complexes 2006 US Port Rankings Rank Port Complex Value of Foreign

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

Page 20: Global Infrastructure Seriesbostonstrategies.com/images/Investing_in_Seattle_080703a.pdfOne of the Largest US Port Complexes 2006 US Port Rankings Rank Port Complex Value of Foreign

Seattle Intermodal Facilities at South Harbor

Page 20© 2008 Boston Strategies International, Inc.7/7/2008

Photo: Courtesy of Port of Seattle.

Page 21: Global Infrastructure Seriesbostonstrategies.com/images/Investing_in_Seattle_080703a.pdfOne of the Largest US Port Complexes 2006 US Port Rankings Rank Port Complex Value of Foreign

Sea-Tac Airport

Page 21© 2008 Boston Strategies International, Inc.7/7/2008

Source: Washington State Department of Transportation

Page 22: Global Infrastructure Seriesbostonstrategies.com/images/Investing_in_Seattle_080703a.pdfOne of the Largest US Port Complexes 2006 US Port Rankings Rank Port Complex Value of Foreign

Rail access in Seattle

Page 22© 2008 Boston Strategies International, Inc.7/7/2008

Source: Seattle Dept. of Transportation

Page 23: Global Infrastructure Seriesbostonstrategies.com/images/Investing_in_Seattle_080703a.pdfOne of the Largest US Port Complexes 2006 US Port Rankings Rank Port Complex Value of Foreign

Major Truck Routes in Seattle

Page 23© 2008 Boston Strategies International, Inc.7/7/2008

Source: Seattle Dept. of Transportation

Page 24: Global Infrastructure Seriesbostonstrategies.com/images/Investing_in_Seattle_080703a.pdfOne of the Largest US Port Complexes 2006 US Port Rankings Rank Port Complex Value of Foreign

Spokane Corridor Truck Route

Page 24© 2008 Boston Strategies International, Inc.7/7/2008

Source: Seattle Dept. of Transportation

Page 25: Global Infrastructure Seriesbostonstrategies.com/images/Investing_in_Seattle_080703a.pdfOne of the Largest US Port Complexes 2006 US Port Rankings Rank Port Complex Value of Foreign

P t f TPort of TacomaTerminals, Services, and Connections

Page 25© 2008 Boston Strategies International, Inc.7/7/2008

Page 26: Global Infrastructure Seriesbostonstrategies.com/images/Investing_in_Seattle_080703a.pdfOne of the Largest US Port Complexes 2006 US Port Rankings Rank Port Complex Value of Foreign

Overview of Port of Tacoma Fascilities

Page 26© 2008 Boston Strategies International, Inc.7/7/2008

Source: Port of Tacoma website

Page 27: Global Infrastructure Seriesbostonstrategies.com/images/Investing_in_Seattle_080703a.pdfOne of the Largest US Port Complexes 2006 US Port Rankings Rank Port Complex Value of Foreign

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

Page 28: Global Infrastructure Seriesbostonstrategies.com/images/Investing_in_Seattle_080703a.pdfOne of the Largest US Port Complexes 2006 US Port Rankings Rank Port Complex Value of Foreign

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

Page 29: Global Infrastructure Seriesbostonstrategies.com/images/Investing_in_Seattle_080703a.pdfOne of the Largest US Port Complexes 2006 US Port Rankings Rank Port Complex Value of Foreign

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

Page 30: Global Infrastructure Seriesbostonstrategies.com/images/Investing_in_Seattle_080703a.pdfOne of the Largest US Port Complexes 2006 US Port Rankings Rank Port Complex Value of Foreign

Congestion and Capacity IssuesCongestion and Capacity Issues

Page 30© 2008 Boston Strategies International, Inc.7/7/2008

Page 31: Global Infrastructure Seriesbostonstrategies.com/images/Investing_in_Seattle_080703a.pdfOne of the Largest US Port Complexes 2006 US Port Rankings Rank Port Complex Value of Foreign

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

Page 32: Global Infrastructure Seriesbostonstrategies.com/images/Investing_in_Seattle_080703a.pdfOne of the Largest US Port Complexes 2006 US Port Rankings Rank Port Complex Value of Foreign

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

Page 33: Global Infrastructure Seriesbostonstrategies.com/images/Investing_in_Seattle_080703a.pdfOne of the Largest US Port Complexes 2006 US Port Rankings Rank Port Complex Value of Foreign

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

Page 34: Global Infrastructure Seriesbostonstrategies.com/images/Investing_in_Seattle_080703a.pdfOne of the Largest US Port Complexes 2006 US Port Rankings Rank Port Complex Value of Foreign

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

Page 35: Global Infrastructure Seriesbostonstrategies.com/images/Investing_in_Seattle_080703a.pdfOne of the Largest US Port Complexes 2006 US Port Rankings Rank Port Complex Value of Foreign

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

David Jacoby: djacoby@bostonstrategies com

Boston, MA, USA445 Washington St

Wellesley, MA 02482 USA

Dubai, UAEExecutive Suite

P.O. Box 121601Sharjah, United Arab Emirates (U.A.E.)

Shanghai, China31F Jin Mao Tower88 Shi Ji Avenue

Shanghai 200120, China

Page 35© 2008 Boston Strategies International, Inc.7/7/2008

David Jacoby: [email protected]


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