Logistics Trends

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Logistics Trends the Impact on Industrial Real
Estate

• Curtis Spencer
• President
• IMS Worldwide Inc.

Fisher Center for Urban Economics, UC Berkeley
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• The Logistics Process and Real Estate
• How do they match up?
• Understanding the Ports
• Understanding Rail Ramps-Inland Ports
• CHINA!
• But where do we build?

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LA-Long Beach Container Volumes
TEU (million)
Source 2001 Mercer Mgmt Consulting based on 6.5
compounded
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World Port RankingBased on 2004 TEU Volume
Source American Association of Port Authorities
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Top 10 U.S. Ports, 2005 TEU Volume

• Los Angeles 7,484 22
• Long Beach 6,709 20
• NY/NJ 4,792 15
• Oakland 2,727 8
• Seattle 2,087 6
• Tacoma 2,066 6
• Charleston 1,986 6
• Norfolk (VA) 1,981 6
• Savannah 1,901 6
• Houston 1,582 5
• TOTAL VOLUME 2004 29,805,000 TEU
• TOTAL VOLUME 2005 33,315,000 TEU
• Capacity for 8000 TEU vessels (Halifax and
  Prince Rupert)

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Container Ship Evolution
CONTAINER SHIP SIZES AND PORT REQUIREMENTS
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Port Diversions Strategies

• Wal-Mart new DC Houston, Savannah, Norfolk
• Target, IKEA, Toys R US are following!
• Nike, Best Buy, Canon have stated objectives of
  50 to 75 diversions OUT of LA/LB
• Direct SUEZ service to USEC easing some LALB
  capacity (started 2005-2006)
• SE Gulf Ports seeing 15 to 20 growth rates
• New out of the box thinking and strategies
• Its happening NOW!

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The Earth is RoundNew Routes to the New World!
Narvik, Norway
Vostochny, Russia
Prince Rupert, Canada
Sydney NS
North China
Rotterdam, Netherlands
New York
Norfolk
Los Angeles
Savannah
Hong Kong, China
HOUSTON
Bombay
Punto Colonet
Lazaro Cardenas
Singapore
Existing NEW Routes for Imports into the USA
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What is an Inland Port?

• The simple definition of an Inland Port is a
  strategic location inland away from a port that
  off-loads containers for a large population base.
  Usually connected to an excellent Interstate
  Highway crossroads.
• We define it exclusively as an intermodal
  facility, the end of the rail-ramp, from a port
  complex.
• What does it look like?

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BNSF INTERMODAL YARD ALLIANCE TX
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CHICAGO INTERMODAL TERMINAL
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Why do we care about the Inland Port?

• As Developers/Investors, understanding the
  logistics process and Port growth is fun, but
  WE want to know
• Where Does the Box come to rest?
• Where is it getting opened?
• Because THAT is where vertical is to be built!!
• Its fine and good to understand where the TEU is
  coming through, BUT, I want to know where it
  comes to rest!

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Hottest NEW Inland Ports
HARRISBURG 1.5 MM TEUs
CHICAGO 4 MM TEUs
KANSAS CITY 1 MM TEUs
COLUMBUS 3 MM TEUs
Front Royal 2 MM TEUs
INLAND EMPIRE 7.5 MM TEUs
MEMPHIS 3 MM TEUs
DALLAS 2 MM TEUs