Breakbulk Business Update Jeff Brubach - - PowerPoint PPT Presentation

Breakbulk Business Update

Jeff Brubach Andre Elmaleh Manager, Business Development Sr. Manager Business Development

Item No.: 5B.1_supp Date of Meeting: June 4, 2019

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Breakbulk Business Overview

Breakbulk is a core part of the Northwest Seaport Alliance (NWSA) business

• portfolio. Both harbors have been handling this cargo since their inceptions.

Breakbulk business compliments other NWSA business and adds to the economic vitality of the region, while creating a significant number of diverse jobs. What is Breakbulk? Breakbulk is cargo that either cannot fit, or isn’t efficient to ship in containers, nor is it large quantities of unpackaged cargo in either liquid or granular form (bulk cargo). Examples of Breakbulk Cargo Include: Agricultural/Mining/Construction equipment, Modules for energy projects, Tram Railcars

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Current Breakbulk Handling Facilities

East-Blair 1 (EB-1) Terminal Features

• 18 acres
• Pier strength: 1,000 psf with 2,000 psf heavy lift section *
• On-dock Rail *
• Dedicated professional customer service group
• Near-dock processing facility for high and heavy cargo
• Easy access to I-5 for truck cargo *

* Critical breakbulk facility feature

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Current Breakbulk Handling Facilities

Terminal 7 / Blair Terminal Features

• Used for military cargo and breakbulk overflow
• Available covered storage
• Near-dock rail access
• Easy access to I-5 for truck cargo *

* Critical breakbulk facility feature

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NWSA Breakbulk Customers...Who Are They?

Ocean Carriers: Carriers have direct relationships with ports and guide customers to gateways that best meets their needs. Beneficial Cargo Owners: BCO's have influence over port selection and work with carriers to create low-cost, quality supply chains.

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NWSA Breakbulk Customers (continued)

Freight Forwarders: Forwarders secure end-to-end supply chain details for customers completing large projects or moving single pieces of cargo. Engineering Procurement Construction Companies: EPC's perform all services for specific projects, spanning from design to site delivery.

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Top NWSA Non-Container Commodities

• 1. Machinery/Construction

Equipment 170,578 MT (2018)

• 2. Agriculture Equipment

23,978 MT (2018)

• 3. U.S. Military

16,501 MT (2018)

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NWSA: U.S. Military Strategic Ports

• The Port of Tacoma serves as a

strategic seaport.

• The Port of Seattle serves as an

alternate strategic seaport.

• The NWSA relationship allows both

ports to work cohesively in times

• f national emergency to serve both

military and commercial customers.

• The NWSA handles 2-3 U.S. Military
• utloads per year.

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International Markets Served

• Top Countries of Origin
• Japan
• Korea
• Belgium
• Top Countries of Destination
• Japan
• Belgium
• Panama

NWSA Breakbulk Volume:

80% 20% Import Export

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NWSA Breakbulk Tonnage Trend

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NWSA Breakbulk Cargo Trends

• 2,000

4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 2016 2017 2018

Number of Pieces Handled

Import Export

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Breakbulk Market Trends

• Near-sourcing of project cargo
• Containerized shipment of breakbulk equipment (SKD)
• Shipping on flat racks via container vessels

Breakbulk Market Key Drivers

• Renewable energy project demand
• Housing/construction market shift to "modulization"
• Increased demand from emerging markets
• Project cargo requirements

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NWSA Competitive Advantages

• Geographical proximity to Asia
• Dual Class 1 rail service
• On-dock rail at breakbulk facilities
• Heavy-lift capability
• Experienced labor force
• NWSA customer service team support
• Served by most major Ro-Ro ocean carriers
• Service to Canadian markets

13

Competitive Landscape

• Import: 42% (1)
• Export: 44% (1)
• Total: 43% (1)

NWSA 43% Vancouver, WA 37% Kalama 9% Longview 5% Bellingham 3% Portland, OR 2% NWSA Vancouver, WA Kalama Longview Bellingham Portland, OR Aberdeen Everett Anacortes Olympia

Pacific Northwest Breakbulk Market Share

(measured in metric tons)

Source: 2017 PIERS data

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Competitive Landscape

• Import: 15% (2)
• Export: 14% (2)
• Total: 15% (2)

Los Angeles 30% NWSA 15% Vancouver, WA 13% San Francisco 12% Long Beach 11% Oakland 7% Los Angeles NWSA Vancouver, WA San Francisco Long Beach Oakland Kalama Vancouver, BC Stockton Longview

U.S. West Coast Breakbulk Market Share

(measured in metric tons)

Source: 2017 PIERS data

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Competitive Landscape

• Import: 2% (15)
• Export: 3% (12)
• Total: 2% (13)

Houston 21% Mobile 14%

• S. Louisiana

12% New Orleans 12% New York 6% Corpus Christi 6% Brownsville 5% Los Angeles 5% Philadelphia 5% Baltimore 4% Galveston 4% Charleston 3% NWSA 2% Houston Mobile

• S. Louisiana

New Orleans New York Corpus Christi Brownsville Los Angeles Philadelphia Baltimore Galveston Charleston NWSA

U.S. Breakbulk Market Share

(measured in metric tons)

Source: 2017 PIERS data

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NWSA Breakbulk Commercial Strategy

• Actively manage and grow key customer

relationships

• Represent NWSA with targeted customer
• utreach at industry events​
• Align stakeholders to fulfill needs of key

customers and increase volume through NWSA gateway

• Strategic use of social media to promote

NWSA breakbulk advantages has translated to new business

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Financial Overview

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$- $2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 2016 2017 2018 2019 Budget 2019 actual (Estimated)

Military and RO-RO Revenue

EB1 T7

NWSA Supported Breakbulk Jobs

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• Rail Transportation: 1,690
• Truck Transportation, Logistics, Warehousing: 1,100
• Maritime Support Services: 440
• Navigation Services: 340
• Government: 200
• Terminal Operations, Stevedoring, Longshore: 110

Source: 2019 NWSA economic impact analysis

Conclusion

• Breakbulk has a rich history in Tacoma and Seattle with a bright future

ahead.

• Breakbulk is a key component of the NWSA's diversified business portfolio.
• Unique in operation and customer base, breakbulk operations are a

significant source of jobs.

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