7a supp
ITEM NO: ______7A_PPT_______ DATE OF MEETING: April 9, 2013__ Competitive Situation Briefing - Containers Port of Seattle Commission, April 9, 2013 Ships are Getting Bigger And carrier focus is cost containment Large Vessel Fleet & Order Book 10,000+ TEU Ships Source: AXS Alphaliner & POS internal data Terminal Capacity Expansion for Big Ships POS Market is Targeted by Other Ports Prince Rupert, Canada Vancouver, Canada Nova Scotia, Canada Seattle Oakland New York Norfolk LA/LB Savannah Jacksonville Mobile Lazaro Cardenas, Mexico Continued Canadian Encroachment Gateways & Corridors Initiative CN Joliet, IL Intermodal Facility British Columbia and Washington Port Volume Trends 4500 4000 CN Indiana Agreement 3500 3000 Thousands 2500 TEU 2000 1500 1000 500 0 2005 2006 2007 2008 2009 2010 2011 2012 Sea/Tac BC Ports Coordinated Expansion Of BC Ports 10 PMV Inner Harbor Millions Improvements* 8 6 High Case Thruput Planned Capacity TEUs Base Case Thruput 85% Port Capacity 4 Roberts Bank Terminal 2 Low Case Thruput In EIS and Prince Rupert community Phase 2-2 outreach phase Prince Rupert Source: Port of 2 Phase 2-1 Metro Vancouver Shovel ready, * Unspecified permits in place - 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 Year Vancouver B.C. Expansion Plan Roberts Bank Terminal 2 Project Potential Impact from Shifting Trade Patterns Traditional Manufacturing Cargo Battle Ground Areas New Suez Canal Manufacturing Panama Canal Areas Singapore Forecasted Growth in Container Activity Near 12% Sourcing 10% 8% 6% 4% 2% 0% 2011 2012 2013 2014 2015 2016 2017 North America World Capacity for Exports Loaded to TEU Capacity Loaded to Deadweight Capacity 7.5 MT per TEU 13.5 MT per TEU Cargo Value per TEU: Cargo Value per TEU: $37,468 $12,639 PNW Equipment Shortages for 40' HC & Reefers Imports Exports PNW Supply/Demand Imbalance Hay to China Pacific NW Ports $1,100-$1,500 ocean freight to China 53' trailer backhaul Rate differentials rate to S. California creates opportunity to source hay in I-15 corridor more competitively than in WA. SO. California Ports Hay press plant $200-$300 ocean near Ports freight to China Incentives to Anchor Cargo State Tax Incentives Georgia Virginia South Carolina Georgia Virginia South Carolina Job Tax Credit up to $3500 per Barge & Rail Usage Tax Credit Port Usage Tax Credit up to Barge & Rail Usage Tax Credit Job Tax Credit up to $3500 per job Port Usage Tax Credit up to $8M job $25/TEU $8M $25/TEU Investment Tax Credit for International Trade Facility Tax W&D tax credit up to $1M Manufacturing Credit $3000 for every Investment tax credit for International Trade Facility Tax Inventory Tax Exemption When employee or 2% of an capital manufacturing 2.5% Investment Tax Credit for Credit $3000 for every employee or Shipped out of State investment that increases port W&D tax credit up to $1M Manufacturing 2% of an capital investment that Investment Tax Credit for volume increases port volume Manufacturing Virginia Manufacturer's Port Port Tax Credit gives bonus on Volume Tax Credit $50/TEU top of Jobs & Investment credits Inventory Tax Exemption When Virginia Manufacturer's Port Volume Investment tax credit for of $1250/job and 5% of Shipped out of State Tax Credit $50/TEU manufacturing 2.5% investment for increased Investment Tax Credit for volumes through the Port Manufacturing Port Specific Incentives Port Tax Credit gives bonus on top of Jobs & Investment credits of Long Beach Portland Vancouver Virginia $1250/job and 5% of investment $10 for every Carriers get a $10 per Intermodal Incentive First Port of Call additional container container incentive to $10 per TEU paid Incentive: $150 per box moved by rail call at the Port, not to directly to the Ocean The port on Aug. 1 will exceed $1 million. carrier. cap its daily dockage Wharfage discount: fees at $8,641 for 10%-2.9% ships longer than 1,132 feet Port of Seattle Situation Trans-Pacific Trade Market Share Imports from Asia by Coast with Sea-Tac 90% 80% 70% 2002 Lockout 60% Rail Contract Labor Renewals Shortages 50% 40% 30% 20% 10% 0% 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 East/Gulf Coasts West Coast Sea/Tac Port of Seattle Strategic Focus Continue infrastructure improvements to handle large ships efficiently & cost effectively. Work with port stakeholders to find ways to increase terminal productivity. Work with the state & local stakeholders to increase and anchor imports to help support exports. Promote PNW transloading alternative to importers to keep equipment local in support of exports. Continue to address the HMT imbalance. Thank You
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