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TAG infrastructure society logistics presentation by Page Siplon

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  • 1. Page SiplonExecutive DirectorGeorgia Center of Innovation for Logistics
  • 2. TAG Infrastructure Society 1) Defining the Game 2) Rules of Engagement 3) How to Score and Win
  • 3. What is logistics?
  • 4. TAG Infrastructure SocietyThe Logistics Ecosystem: Users & Providers Logistics Establishments – 2010 Logistics Employment – 2010PROVIDERS: 11,000 PROVIDERS: 142,349+ USERS: 33,000 + USERS: 884,000 Total: 44,000 Total: 1,026,349
  • 5. 11,000LogisticsProvidersin Georgia Employment Size
  • 6. 10% of TOTAL sales revenuefor any company goes to “logistics” 9% Transportation 22% Warehousing 49% Inventory Carried 20% Customer Service
  • 7. $700.0 M$600.0 M Investment$500.0 M $432.0 M$400.0 M $304.0 M$300.0 M $163.5 M $142.7 M $165.2 M$200.0 M $125.1 M$100.0 M $.0 M 12,000 10,462 Employment 10,000 8,000 6,000 2,364 2,631 2,604 4,000 1,574 983 1,442 2,000 0 60 46 50 50 Project Count 41 40 32 29 30 30 20 16 10 0 2006 2007 2008 2009 2010 2011 2012
  • 8. TAG Infrastructure Society… Every SupplyChain is unique
  • 9. TAG Infrastructure SocietyAnd so is every State…Georgia has many “Unfair Advantages”• Roads: Nationally top-ranked highway system• Rail: Most extensive network in South East• Air: World’s busiest passenger airport, #10 for cargo• Services: 90% of top 25 3PL’s operate out of GA• Technology: National core for technology providers• Seaports: Fastest growing and 4th largest in USA
  • 10. THE ECONOMIC IMPACT OF GEORGIA’S DEEPWATER PORTS STATEWIDE• 352,146 full & part-time jobs• $66.9 billion in sales• $32.4 billion in gross state product• $18.5 billion in income• $2.5 billion in state & local taxesSource: Terry College of Business, University of Georgia, FY2011 11
  • 11. PORT OF SAVANNAH THROUGHPUT TWENTY-FOOT EQUIVALENT CONTAINER UNIT (TEU) VOLUME, 10 FISCAL-YEAR HISTORY 2.98 Million TEUs A New Record 3,000 2,500(in thousands) TEUs 2,000 1,500 1,000 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Source: GPA Mktg. (loads & empties)
  • 12. PORT OF SAVANNAH CONTAINER GROWTH10 FISCAL YEAR HISTORY COMPARED TO NATIONAL AVERAGE ↑2.3 % Savannah accounts for ↑8.6% ↑21.2% 13.7% of the nations TEU ↑8.6% growth since 2002 ↓11.7% ↑14.8%(Base year FY2002) Growth Index ↑12.3% ↑12.3% ↑29.2% ↑5.8% ↑4.2% ↑5.1% ↑8.5% ↑1.4% ↑8.6 ↓13.1% ↑3.2% ↑8.7% ↑10% ↑9.6% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Port of Savannah SOURCE: GPA Mktg (loaded only) National Average
  • 13. TOP 10 U.S. PORTS10-YEAR COMPOUND ANNUAL GROWTH RATES (CY2002 TO 2011) Los Angeles 4.4% Long Beach 3.1% NY/NJ 5.2% Savannah 10.6% Oakland 3.6% Seattle 4.5% Virginia 3.9% Houston 5.8% Tacoma 1.2% Charleston -1.0% -2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% Percentage GrowthSource: AAPA
  • 14. FY2012 TOP 10 U.S. EXPORT PORTSBY CONTAINERIZED TONNAGE1. Los Angeles 17.182. Savannah 13.27 54% Export/46% Import3. Long Beach 12.084. Houston 10.875. New York 9.486. Oakland 7.817. Seattle 6.42 Savannah ships 11.6% of8. Norfolk 6.25 U.S. export tons9. Charleston 5.2510. Tacoma 4.14 Millions of TonsSource: U.S. Dept. of Commerce, Census Bureau, Foreign Trade Division
  • 15. PORT OF SAVANNAHWEEKLY CONTAINER VESSEL CALLS
  • 16. TAG Infrastructure Society 1) Defining the Game 2) Rules of Engagement 3) How to Score and Win
  • 17. TAG Infrastructure SocietyWhat’s Changing? Population & Demand
  • 18. The US population is currently over 310 Million People
  • 19. TAG Infrastructure SocietyGen Y 80-90 Million
  • 20. 70% TAG Infrastructure Society of consumers live eastof Dallas and Chicago
  • 21. …by the year 2050+ 100 Million People in USA ___X 40 Tons/Person___ 4 BILLION TONS IN USA
  • 22. 2011 Georgia Road freight… $1.7 TRILLION - VALUE 570 MILLION - TONS 46 MILLION - TRUCK MOVES
  • 23. 12 Million!!
  • 24. Future Georgia Freight Demand Opportunity Curves Port of Savannah Atlanta Metro Through Trucks Medium 2.0% annual growth 2.0% annual growth “Build Out” Current Facilities Growth Growth in 1990’s and 2000’s Growth in1990’s and 2000’s 2050 = 125% Scenario 2050 = 80% increase 2050 = 81% increase High “Build Out” Current Facilities 3.9% annual growth 3.9% annual growth Growth and Develop Jasper Port Growth in 1980’s and 1990’s Growth in 1980’s and 1990’s Scenario 2050 = 443% increase 2050 = 284% increase 2050 = 288% increase Medium Growth High Growth TEU’s (in Millions) ATL Truck Tons (in Millions) Through Truck Tons (in Millions) 15.2 15 1,500 1,322 1,500 714 8.9 1,000 832 1,000 10 737 7.3 1.0 353 500 500 464 393 5 618 197 6.3 6.3 479 2.8 344 190 267 344 0 0 0 2010 2030 2050 2010 2030 2050 2010 2030 2050Source: Port of Savannah, 2007 IHS/Global Insight TRANSEARCH data, Consultant analysis. 25
  • 25. TAG Infrastructure SocietyWhat’s Changing? Bricks to Clicks
  • 26. The explosion of multi-channel delivery and the use of “online platforms” including e-commerce, smart- phone based sales (m-commerce), and the emergence of s-commerce tools leveragingFacebook, Twitter and other social media outlets are changing the way we need to look at “logistics”.
  • 27. TAG Infrastructure Society Today, 91% of all purchases aremade at a physical store, but expectedto fade to only 76% over the next 5 years. E-commerce will grow to $280 billionin total sales by 2015 and $2.7 trillion by2025 representing a full 30% of all retail sales. 30% of growth was attributed to the5.5 million consumers who shopped onlinefor the first time in 2010.
  • 28. TAG Infrastructure Click to edit Master title style Society Source: Logistics Viewpoints Source: IDC Retail Insightsthe top ten Facebook brands added 115 MILLION FANS in 2010
  • 29. TAG InfrastructureClick to edit Master title style Society Late 2010, Proctor & Gamble began selling Pampers directly through Facebook… 31,913 fans/month 1,000 orders/day Source: Logistics Viewpoints Source: IDC Retail Insights
  • 30. I’ll have aTAG Infrastructure Society Click to edit Master title stylemedium triple-shot, half-caff, no whip mocha… extra hot. Consumers Expect Personalization
  • 31. TAG InfrastructureClick to edit Master title style SocietyWal-Mart now offers over 1,000 customizable items online
  • 32. TAG InfrastructureClick to edit Master title style SocietyWal-Mart now offers over 1,000 customizable items online
  • 33. TAG InfrastructureClick to edit Master title style Society
  • 34. TAG InfrastructureClick to edit Master title style Society Their NikeID co-creation platform generates over… $100M/year
  • 35. TAG InfrastructureClick to edit Master title style Society Consumer Responsiveness: 1958 Lag Time for Significant Changes in Store Demand to Cascade Across the Extended Supply Chain? 6 Months Typical Out of Stocks at the Retail Shelf? 8-10% Source: Logistics Viewpoints Source: Logistics Viewpoints
  • 36. TAG InfrastructureClick to edit Master title style Society Consumer Responsiveness: Today Lag Time for Significant Changes in Store Demand to Cascade Across the Extended Supply Chain? 3-6 Weeks Typical Out of Stocks at the Retail Shelf? Still 8-10% Source: Logistics Viewpoints FASTER, BETTER, CHEAPER ?
  • 37. Supply Chain Priority List: 1) Faster 1) Better 1) Cheaper
  • 38. Supply Chain Priority List: 2) Faster 2) Better 2) Cheaper
  • 39. TAG Infrastructure SocietyRise in E-Commerce and Mobile Technology Is Fueling Complexity and Opportunity in LOGISTICS: Increasing need for fulfillment operations andregionalized distribution hubs Continued growth in outsourcing logisticsoperations to 3PL’s that can ADD value Increased demand and frequency for smallpackage delivery Shortage of capable and well-roundedsupply chain management talent
  • 40. TAG Infrastructure Society Value Added Logistics Services Will Continue to Grow in Demand The 3PL Industry is expected to grow to $141 Billion ingross revenue in 2011 From 2009-2010 the increase in 3PL net revenues was4.7x the rate of U.S. GDP growth 77% of the Fortune 500 and all of the Fortune 100 useat least one 3PL. (Walmart = 32) 90% of the Top-25 3PL’s operate out of GA
  • 41. TAG Infrastructure SocietyWhat’s Changing?Global Trade Routes
  • 42. 40% of the world’s population will achieve middle class by 2020 Source: McKinsey Quarterly
  • 43. 70 Million People cross the threshold to the middle class each year, and virtually all are in emerging economies Source: Goldman Sachs
  • 44. TAG Infrastructure Society `
  • 45. TAG Infrastructure Society 100 YEARS LATER!
  • 46. Center of Innovation for Logistics
  • 47. Cargo Origin = CHINACargo Destination = ATLANTA
  • 48. Cargo Origin = CHINACargo Destination = ATLANTA ALL WATER ROUTES TO E.C. LAND BRIDGE FROM W.C.
  • 49. Actual Market Share by Route 2009-2011 ALL WATER ROUTES TO E.C. LAND BRIDGE FROM W.C.
  • 50. Major Port Depths 60 58 56Feet at MLW 54 52 50 48 46 44 42 40 Source: U.S. Army Corps of Engineers, Dec. 2010
  • 51. SHEP TIMELINE Reconnaissance Study Feasibility Study Tier I EIS & Feasibility Report Issued WRDA Authorization1996 1997 1998 1999 Tier I 1996 – Reconnaissance Study Completed 1998 – Feasibility Study Completed 1999 – WRDA Authorization requires a “Tier II” EIS and GRR
  • 52. SHEP TIMELINE Draft Tier II EIS/GRR Released Reconnaissance Study & Public Comment Feasibility Study Final Tier II EIS Released Tier I EIS & Feasibility & Public Review Report Issued Final Chief’s Report WRDA & Agency Approval Authorization Released 64 Individual Studies1996 1997 1998 1999 11/10 4/12 8/12 Tier II 2011 – Tier II EIS/GRR Completed – 64 individual studies 2012 – SHEP Plan Finalized and Approved $5.50 of benefits for every $1.00 in project cost $181M in state funds approved* $600,000 in President’s FY12 Budget
  • 53. SHEP TIMELINE Draft Tier II EIS/GRR Record of Reconnaissance Study Released & Public Decision Comment Feasibility Study Final Tier II EIS Released Begin Tier I EIS & Feasibility & Public Review Construction Report Issued Final Chief’s Target WRDA Report & Agency Completion Authorization Approval Released 64 Individual Studies1996 1997 1998 1999 11/10 4/12 8/12 Fall 2013 2016 2012 What Happens Next? Record of Decision – Fall 2012 Construction Begins –2013 Target Completion – Late 2016
  • 54. TAG Infrastructure Society 1) Defining the Game 2) Rules of Engagement 3) How to Score and Win
  • 55. TAG Infrastructure Society
  • 56. TAG Infrastructure Society
  • 57. Source:
  • 58. - Regulatory environment - Market access LOCAL ASSETS - Labor relations - Container/bulk port accessCRITICAL IMPORTANCE - Business climate - Highway access - Air cargo and passenger access - Telecommunications - Rail accessMINIMAL IMPORTANCE - University presence and quality - Workforce availability/quality - Logistics service providers NON-COMPETITIVE VERY COMPETITIVE - Utility services - Quality of life - Cost of living - Weather/Climate Source:
  • 59. LOCAL COST FACTORS - State IncentivesCRITICAL IMPORTANCE - Local Incentives - Electrical power - National Logistics costs - Regional logistics costs - Property taxesMINIMAL IMPORTANCE - Construction costs - Corporate income taxes - Workforce wages NON-COMPETITIVE VERY COMPETITIVE Source:
  • 60. TAG Infrastructure SocietyINDUSTRY INFRASTRUCTUREVOLUME CAPACITYVELOCITY CAPABILITYVISIBILITY CONNECTIVITY Opportunity is missed by most because it is dressed in overalls and looks like work. - Thomas Edison
  • 61. TAG Infrastructure SocietyThinking Globally, Acting Locally…Annual Georgia Logistics Summit:Over 1,600 attended from 28 states and 7 nations in 2012; 85% from private industry MARCH 19 – 20, 2013 63
  • 62. TAG Infrastructure Society