Colliers North American Port Analysis - 2013


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Colliers North American Port Analysis - 2013

  1. 1. NORTH AMERICAN PORT ANALYSIS | PAPER PAPER | APRIL 2013 COLLIERS INTERNATIONAL | WHITE WHITE COLLIERS 1H 2013 APRIL 2013 North American Port Analysis NORTH AMERICAN PORT AWARDS:› “MAKING THE GRADE” CAPEX OR CAPSIZE Tops in CapEx Spending K.C. CONWAY Chief Economist | USA THE PORTS OF LOS ANGELES AND LONG BEACH› “GET ‘ER DONE” Disaster Recovery Tested NEW YORK AND VIRGINIA PORT AUTHORITIES› “WELCOME TO THE POST-PANAMAX CLUB” Membership now at 7 PORT OF BALTIMORE› “GROW, GROW, GROW YOUR PORT $$$$$$$$$$$$$$$$$$ QUICKLY INTO THE P-PMX ERA” Fastest Growing North American Port $$$$$$$$$$$$$$$$$$ PORT OF VIRGINIA $$$$$$$$$$$$$$$$$$› THE “INCREDIBLE BULK” PORT Recognizing America’s “Fourth Coast” PORT OF DULUTH-SUPERIOR, MN› BEST LOGISTICS Port and inland distribution markets that invest CapEx in their transportation infrastructure Cutting-edge Technology Drives Growth will capture the economic opportunities from changing global trade patterns and evolving GEORGIA PORT AUTHORITY AND GEORGIA e-commerce. Those that don’t invest the needed CapEx risk capsizing their economies. CENTER OF INNOVATION FOR LOGISTICS America needs $3.6 trillion in funding for infrastructure by 2020 to remain competitive› NORTH AMERICA’S MOST (ASCE 2013 Infrastructure Report Card). EFFICIENT CONTAINER PORT Port Automation at Its Best PORT OF CHARLESTON, SC Key Takeaways› “ABOVE-IT-ALL” › America’s infrastructure received a D+ grade from the American Society of Civil Leading Air Cargo Port Engineers (ASCE). Although ports and rail earned a C, America’s infrastructure is only MEMPHIS AIR CARGO PORT as healthy as its weakest link: inland waterways, roads and airports.› “FLORIDA’S BEST-KEPT SECRET” › The balance of influence in trade is shifting from Asia to Latin America, and from West …but for how long? Coast to Gulf/East Coast ports. Expanding U.S. trade with Latin America, Russia and India PORT EVERGLADES offset impact of Eurozone recession and China’s slowing GDP.› “GONE WITH THE GRAIN” › Latin America is the next big growth opportunity, in the early stages of a growth economy. Wheat and Grain Exports PORTS OF PORTLAND AND SEATTLE Demand for U.S. goods is growing: Walmart’s Q4 2012 net sales growth in LATAM was greater than in Asia—a first. Learn more on pages 12-16 › Globally, foreign investors are recognizing the value to be unlocked in North American port cities. In the latest 2012 Association of Foreign Investment in Real Estate (AFIRE) report released January 2013, three of the top 5 global cities for investment were American port cities (NY, San Francisco and Houston). › The Great Lakes region is an overlooked “Fourth Coast” and the undisputed leader in bulk cargo trade. Great Lakes ports account for 28% of U.S. GDP, processing 240 million tons of cargo annually. P. 1
  2. 2. NORTH AMERICAN PORT ANALYSIS | WHITE PAPER | APRIL 2013 › Air cargo’s role in global trade will be defined by the tug-of-war between energy/infrastructure costs and e-commerce growth in the first post-Panamax decade (2015 – 2025). Air cargo is expanding primarily in the Middle East, Africa, and Asia Pacific, where underdeveloped infrastructure makes air freight the primary option. In North America, only a handful of North American air cargo centers will survive, as overall volume declines and e-commerce becomes the primary driver. WORLD FREIGHT TRENDS International Domestic Totals 10 8 6 % Change (tonnage) 5 2 0 2 -4 -6 -8 -10 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2012 › Intermodal transportation activity was at an all-time high in 2012, and is the next transportation growth segment in the post-Panamax era. Intermodal capacity differentiates top-tier inland distribution MSAs (Atlanta, Memphis, Louisville, Columbus, Indianapolis, Dallas, Kansas City and Denver) from ancillary MSAs (Orlando, Birmingham, Charlotte, Las Vegas and California’s Central Valley). › Impact on industrial real estate will be different, with development and investment activity directionally pointed at port markets, inland distribution markets with dominant intermodal facilities, and a handful of dominant air cargo markets. › More container cargo will migrate to rail, due to new hours-worked rules and other regulations impacting the trucking industry. Rail speed, reliability and cost now rival movement of goods by truck. And, environmental and traffic congestion challenges will enhance the movement of cargo traffic to rail. › Port labor strife is a bubbling global concern for port authorities, shippers, manufacturers and retailers. The risk of port labor disruption is not just an East or West Coast issue in the U.S., but a global issue. The same port labor issues from the most recent East Coast threatened port strike are at play in Brazil and in parts of Europe.  Read more at P. 2
  3. 3. NORTH AMERICAN PORT ANALYSIS | WHITE PAPER | APRIL 2013 TOP 10 STATES FOR FTZ ACTIVITY THE ECONOMY, GDP GROWTH AND PORT ACTIVITY CY 2012 | IMPORTS Since the release of Colliers’ previous North American Ports Outlook report, port and 1 Texas intermodal activity have sprung forward despite a fall in GDP over the winter. Historically, 2 Louisiana when GDP decreases from, say 3.1% to 0.1% (as was the case in 2H 2012), we see 3 California contraction in port, intermodal and industrial activity. Why didn’t that happen in Spring 2013? 4 Illinois Due to a combination of factors, including: 5 Pennsylvania • Retailers remaking supply chains: Distribution and manufacturing activity normally 6 Kentucky fueled by consumer spending is instead being driven by retailers investing capital in 7 New Jersey supply chain improvements: new distribution centers, logistics and IT to expand their 8 Mississippi consumer base globally via e-commerce—instead of opening new stores during a 9 Ohio period of high unemployment and anemic job growth. Distribution and logistics center 10 South Carolina construction is up nearly 300% over a year ago; Georgia, Tennessee and Indiana are the leading states, with new construction for the likes of Amazon, FedEx, Home Depot, TOP 10 STATES FOR FTZ ACTIVITY CY 2012 | EXPORTS Lowes, Rubbermaid, Volkswagen and Whirlpool. 1 Texas • Shift in global trade patterns: Although Europe is both the United States’ and China’s 2 Louisiana largest trading partner, with a GDP in excess of $13 trillion (second only to the U.S. 3 South Carolina and nearly double that of China’s $7.3 trillion economy), the U.S. has experienced net 4 Mississippi growth in global trade despite an ongoing European recession and a slowing GDP in 5 Florida China. The offset for the U.S. has come from expanded trade to Latin America, India 6 Alabama and Russia. 7 Puerto Rico Latin America is the next big growth opportunity, and can be for the East and Gulf 8 Louisiana Coasts what Asia is for California. Much like the United States in the 1950s, Latin 9 Indiana American countries are in the early stages of a growth economy with a newly 10 California developed middle class. They are looking for the American lifestyle and products ranging from apparel and autos to electronics and media. The demand for American goods is growing so rapidly that Walmart revealed in its Q4 2012 earnings that, for the first time, the net sales growth in Latin America surpassed that of Asia. With a full two years to go until completion of the Panama Canal locks expansion project, two Gulf Coast states (Texas and Louisiana) have already surpassed California in both import and export Foreign Trade Zone (FTZ) activity. And, California has fallen to tenth place in FTZ export activity, having been displaced by Texas and five Southeastern port states (LA, SC, FL, AL & MS). • Energy and agriculture: The U.S. and North America in aggregate have become net exporters of carbon-based energy; and agriculture exports—especially wheat—are growing at near double-digit rates. This global demand is fueling capital spending to expand or upgrade coal transload facilities (Port of Norfolk), construct new intermodal container transfer facilities (Port of Mobile), and develop liquefied natural gas (LNG)Port of VA/Norfolk Southern Coal Transload Facility distribution plants (Delaware River Port Authority, Florida and Texas ports). Source: Steve Earley | The Virginian-Pilot P. 3
  4. 4. NORTH AMERICAN PORT ANALYSIS | WHITE PAPER | APRIL 2013 • Rebirth of automobile manufacturing: Auto assembly in the U.S. has soared from less than 10 million units just a couple of years ago to more than 16 million units in 2012. Japan is struggling to repower its economy following the Sendai Earthquake, and Germany’s manufacturers face a currency disadvantage versus the U.S.. Further the U.S. offers a low cost of energy, and a highly skilled labor force. As a result, Volkswagen has expanded manufacturing to Chattanooga, TN, BMW and Mercedes have ramped up manufacturing in AL and SC, and all Japanese auto brands are accelerating assembly activity in states from TX to TN. Intermodal rail traffic from auto assembly is up double digits between the inland factories and ports, and auto exports to Latin America are at all-time highs. Auto manufacturing is the most visible part of an overall trend in onshoring of manufacturing operations, which includes aircraft and furniture, etc. Taken together, these factors underscore the importance of monitoring GDP among the top twenty global economies. We can easily do so, thanks to the assistance of Trading Economics  Read more at The following table shows that the top 20 global economies do not necessarily have the fastest-growing GDPs. So which economies do; and how is North American trade geared to these growth economies? GDP GROWTH OF 20 LARGEST GLOBAL ECONOMIES VS. 20 COUNTRIES WITH FASTEST GROWING GDP COUNTRY GDP MILLION COUNTRY GDP YOY GDP QOQ (USD) (%) (%) 1 United States 15,094 1 Thailand 18.90 3.60 2 Euro Area 13,076 2 Ethiopia 10.70 3 China 7,298 3 China 7.90 2.00 4 Japan 5,867 4 Nigeria 6.99 6.99 5 Germany 3,571 5 Philippines 6.80 1.50 6 France 2,773 6 Bangladesh 6.30 6.30 7 Brazil 2,477 7 Indonesia 6.10 -1.45 8 United Kingdom 2,432 8 Vietnam 5.44 5.44 9 Italy 2,194 9 India 4.50 1.30 10 Russia 1,858 10 Pakistan 3.67 3.67 11 India 1,848 11 Iran 3.40 12 Canada 1,736 12 Mexico 3.20 0.80 13 Spain 1,491 13 Russia 2.90 0.60 14 Australia 1,372 14 Egypt 2.20 2.20 15 Mexico 1,155 15 United States 1.60 0.10 16 South Korea 1,014 16 Turkey 1.60 0.20 17 Indonesia 847 17 Brazil 1.40 0.60 18 Netherlands 836 18 Japan 0.50 0.00 19 Turkey 773 19 Germany 0.10 -0.60 20 Switzerland 636 20 Euro Area -0.90 -0.60 P. 4
  5. 5. NORTH AMERICAN PORT ANALYSIS | WHITE PAPER | APRIL 2013While the United States has the largest GDP of all global economies Where will funding for America’s port and freight transportationin terms of absolute U.S. dollars, it’s YOY GDP over the past four needs come from?quarters ranks only 15th among the world’s economies—and isn’t According to the American Association of Port Authorities’ mid-2012even in the top 5 for the 20 largest global economies. However, U.S. survey of its 82 member ports, less than 10 percent of the $500port, intermodal and trade activity is growing due to our expanding billion annual shortfall quantified by ASCE can be met by public andtrade with Latin American countries (such as Mexico with a +3.2% private funding available to the nation’s port authorities. In otherGDP), Russia (especially important to the ports in the Great Lakes words, the remaining $450 billion annual shortfall must be providedregion), Vietnam, and Africa (5%–7% GDP growth. The key takeaway by Congress and federal funding sources. In 1986, the Harboris that global GDP growth is decelerating in Europe and Asia, but Maintenance Fee, a 0.04 percent tax on the value of waterborne cargoaccelerating in Latin America, Canada, and Russia. This shift in (increased to 0.12 percent in 1990), was established to address thisGDP growth is redefining which North American ports and inland funding, but over the past two decades Congress has diverted moredistribution centers will likely experience the most activity in the first than half the annual collections, depleting the Harbor Maintenancepost-Panamax decade, as the Gulf coast, Southeast Atlantic coast, Trust Fund by billions of dollars. Congresswoman Janice Hahn (CA,and Great Lakes ports that are strategically positioned to benefit. 44th District) and Congressman Ted Poe (TX, 2nd District) are the leading advocates to reform the Harbor Maintenance Trust and restrictINFRASTRUCTURE SPENDING AND PORT CAPEX Congress’ use of this revenue. For now, manufacturing, retail andColliers’ 2011 and 2012 North American Port Outlook reports shipping industries are aligning their private facilities investments withfocused initially on the expansion of the Panama Canal lock system those ports that are spending the CapEx to remain competitive andand U.S. ports’ preparations to receive the larger Post-Panamax connected to inland consumer, production, and materials markets; andvessels in 2015. It’s now appropriate to focus on the infrastructure these markets are retaining and adding jobs to their local economies.linkages to the ports that enable raw materials and finished goods Port cities unwilling or unable to spend on port infrastructure riskto move between the ports and inland markets or manufacturing capsizing their economies.centers. Unfortunately, the nation’s most respected professional andgovernmental engineering entities are warning us that infrastructure Who are the CapEx leaders? Here are the top five ports in Northspending on our port linkages are woefully inadequate—to the tune America for port-centric CapEx in 2013 (i.e., spending at least $100of approximately $500 billion per year between now and 2020. million during CY 2013 on post-Panamax readiness, terminal upgrades or expansions, and rail or cargo loading facility enhancements):Last summer, the U.S. Army Corps of Engineers report to Congresson North American ports’ post-Panamax readiness ranked the U.S. NORTH AMERICAN PORTS LEADING IN CAPEX SPENDING23rd globally in infrastructure competitiveness. Now, the American TOP 5 SPENDING AT LEAST $100 MILLION IN 2013Society of Civil Engineers (ASCE) has released its once-every-4-years RANK PORT 2013 BUDGETED CAPEX2013 report card on infrastructure,  Read more at Los Angeles & 1 $1.0 billion (30% LA & 70% LB). Approximately half justgiving the U.S. an overall grade of D+; D means “in poor condition.” Long Beach on port terminal and rail projects.While ports and rail managed a C, our infrastructure in the intermodal 2 New York $345 million Allocation from $3.0 billion budget just to the port and not airports and World Trade Center constructionage is only as strong as its weakest link; key infrastructure links to ourports (inland waterways, bridges and roads) received even worse 3 Houston $220 milliongrades. The price tag to bring America’s infrastructure back to a B, 4 Charleston, SC $157 millionor “acceptable” grade? $3.6 trillion. Georgia Ports– 5 $100 million SavannahCompounding this infrastructure funding shortfall is our fiscal crisisat both a federal and state level. When vital freight transportation states Note 1: The state of Florida has budgeted $288 million among its 15 ports, but detailed allocations by port/project were not Illinois and California are fiscally wrecked, and existing U.S. debt Note 2: The above top five rankings will vary annually and reflect only 2013to annual GDP ratio exceeds 100%, the question arises: budgeted CapEx vs. an average annual figure beyond 2013. P. 5
  6. 6. NORTH AMERICAN PORT ANALYSIS | WHITE PAPER | APRIL 2013 33.5 m (110’)Who will be ready by 2015 to Ranking CapEx for North America’s ports is more an art than a science, because budgeting, 294.1 m (965’)receive the Fifth Generation appropriation, and actual funding of projects is different for each port authority and state. Theocean shipping container vessels assets under jurisdiction also vary widely, complicating apples-to-apples comparison. For 32.3 m (106’)capable of transporting up to example, the Port Authority of New York has a $3.0 billion budget—more than $2.0 billion of 304.8 m (1,000’)12,500 containers? And which which is allocated to the rebuilding of the World Trade Center, upgrading passenger airportsNorth American ports are leaders at LaGuardia and Kennedy airports, and repair of non-port related transportation tunnels. 12.8 m (42’)in twenty-foot equivalent ocean Therefore, only the $346 million of New York’s $3.0 billion budget (39.5’) is allocated to port draft 12.4 m thatcontainer transportation in 2013? terminals and related projects has been used for this CapEx comparison.The following tables on page 7 Because the annual appropriations process and timing of project spending variesreveal that: considerably from the stated budget (thanks to the political process or events like 55 m (180’) › 7 North American ports hurricanes), ports such as Seattle or Mobile could just as easily be among the top five are currently post-Panamax in 2014’s budget rankings. 366 m (1,200’) ready—6 U.S. and 1 Canadian (Port Prince Rupert) But we do know that five of America’s ten busiest container ports are spending heavily on 49 m (160’) port infrastructure in 2013 to remain globally competitive. Norfolk, Seattle, and Miami have › 11 ports are on track to be already spent in excess of $100 million in CapEx from 2010–2012, m (1,400’)appropriated 427 or have post-Panamax ready by 2015 project funding after 2013 that will likely place them among in top five in 2014, as ports like when the expanded Panama Canal Charleston and Savannah conclude their upgrade projects. As a result of the budgeted 2013 locks open. 18.3 m (60’) CapEx spending by CA, NY, TX, SC, GA and FL port authorities and state legislatures, Colliers draft › Only the ports of New York, recognizes each as “Making the Grade” for port CapEx spending—led by (50’) ports of Los 15.2 m the Seattle and Portland experienced Angeles and Long Beach, which get an A. less TEU container traffic in 2012 than in 2011. New York’s decrease was attributable to Hurricane Sandy (some cargo was re-routed 2nd Generation 3rd Generation 4th Generation 5th Generation 1971-1990 1990-2000 to Virginia). However, Portland’s 1970-1980 1st Generation and Seattle’s declines were due Pre-1970 to port labor strife (Portland) and Sea increasing competition (Seattle) Level 10’ from nearby Port Prince Rupert 20’ <9m 10 m 11.6-12.8 m 30’ 12.8-14 m > 14 m port authorities and state 40’ 50’ legislatures in CA, NY, TX, SC, GA and FL, along Canada’s West/Pacific Coast. P. 6
  7. 7. NORTH AMERICAN PORT ANALYSIS | WHITE PAPER | APRIL 2013Updated Port TEU rankings and post-Panamax readiness: NORTH AMERICAN POST-PANAMAX PORT NORTH AMERICAN PORT TEU READINESS UPDATE CONTAINER VOLUME UPDATE TEU 2012 2011 PORT COAST P-PMX STATUS P-PMX UPDATE PORT RANK TEUs TEUs New York Eastern U.S. In Process Bayonne Bridge being raised 1 14,200,000 13,900,000 LA/Long Beach Philadelphia Eastern U.S. Not before 2015 Dredging Delaware River to 45 feet 2 5,100,000 5,500,000 New York Baltimore Eastern U.S. P-PMX Ready Joined P-PMX Club in 2013 3 3,000,000 2,900,000 Savannah, GA Norfolk VA Eastern U.S. P-PMX Ready First East Coast port to be P-PMX 4 2,350,000 2,300,000 Oakland Charleston, SC Eastern U.S. In Process Dredging + developing new inland port 5 2,100,000 1,850,000 Norfolk, VA Savannah, GA Eastern U.S. Not before 2015 Study completed/Dredging to 47 feet 6 1,925,000 1,865,000 Houston Jacksonville, FL Eastern U.S. Not before 2015 Dredging and bridge height hurdles 7 1,870,000 2,000,000 Seattle, WA Port Everglades Eastern U.S. Not before 2015 Dredging application in process 8 1,435,000 1,385,000 Charleston, SC Miami Eastern U.S. In Process New Super P-PMX cranes ordered 9 930,000 910,000 Port Everglades Tampa Gulf Coast Not before 2015 No plans to dredge or raise Skyway Br 10 925,000 915,000 Miami Mobile, AL Gulf Coast P-PMX Ready Deepest port on Gulf @ >60 feet 11 920,000 900,000 Jacksonville, FL New Orleans Gulf Coast Not before 2015 No plans or funding to upgrade further 12 680,000 630,000 Baltimore Houston Gulf Coast In Process Dredging and upgrading cranes 13 565,000 410,000 Prince Rupert LA/Long Beach West Coast P-PMX Ready Despite being P-PMX, #1 in CapEx 14 295,000 290,000 Philadelphia Oakland West Coast P-PMX Ready 15 200,000 165,000 Mobile, AL Portland West Coast Not before 2015 Port Slowdown in 2012 - port labor 16 185,000 200,000 Portland Seattle, WA West Coast P-PMX Ready Increasing competition with Port Rupert N/A - A cruise & bulk cargo port Tampa Prince Rupert Canada/Pacific P-PMX Ready Fastest-growing Pacific Coast port N/A - A cruise & bulk cargo port New Orleans P-PMX ready ports: 7 36,680,000 Annual TEUs Top 16 N.Am Port TEU volume P-PMX ready ports by 2015: 11 P. 7
  8. 8. NORTH AMERICAN PORT ANALYSIS | WHITE PAPER | APRIL 2013AMERICA’S FOURTH COAST: THE GREAT LAKES TOP 20 GREAT LAKES PORTS BY TONNAGE PORT NAME TOTAL Duluth, MN- Superior, WI 45,341,808 Chicago, IL 22,659,554 Indiana Harbor, IN 15,380,630 Two Harbors, MN 13,432,959 Detroit, MI 12,836,319 Toledo, OH 10,954,686 Cleveland, OH 10,637,330 Gary, IN 9,030,152The more than 200 ports and harbors of the Great Lakes account for 28% of U.S. GDP Marquette/Presque Isle, MI 8,807,609Eight U.S. states border the five respective lakes (Huron, Ontario,Michigan, Erie and Superior, or “HOMES”) and are home to the bulk St. Clair, MI 7,880,383cargo that fuels American industry, from energy that powers our Ashtabula, OH 6,905,941nation, to iron ore for our auto and heavy equipment industries, tolumber, aggregates and cement for our construction industries, to Stoneport, MI 6,625,427wheat and potash for our agricultural and food processing industries.The Great Lakes region and its ports are as important to the U.S. and Silver Bay, MN 6,603,511global economy in terms of dry-bulk cargo as the Gulf Coast is for oil, Escanaba, MI 6,339,642natural gas and seafood. Burns Harbor, IN 6,283,154The Great Lakes region’s 117 federally recognized harbors and Calcite, MI 5,833,59685 active freight-handling ports account for 28% of U.S. GDP andprocess an astonishing 240 million tons of cargo annually. Because Port Inland, MI 5,705,843the Great Lakes ports move more bulk than containerized cargo, anapples-to-apples ranking comparison with the East, Gulf and West Conneaut, OH 4,654,172coast container ports isn’t possible. But in terms of tonnage, the Milwaukee, WI 3,240,169Great Lakes region is the “Incredible Bulk” of North American cargoports. The leader of this trade is not Chicago, Detroit, Cleveland, Alpena, MI 3,098,860Milwaukee or Buffalo, but Duluth, Minnesota. This table details thefigures that make Port Duluth-Superior the undisputed “Incredible Source: USACE, “U.S. Waterways Data: Port and Waterway Facilities,” Feb. 2010Bulk” cargo port. P. 8
  9. 9. NORTH AMERICAN PORT ANALYSIS | WHITE PAPER | APRIL 2013Six Great Lakes ports (Duluth-Superior, Chicago, Detroit, Toledo, The critical question for Congress with respect to the HarborCleveland and Gary) transport approximately half the bulk cargo that Maintenance Tax debate underway is:moves across the Great Lakes annually. In other words, six of the85 active commercial cargo ports along the Great Lakes handle Where is the fair share of CapEx for port maintenance, repairs,50 percent of the bulk cargo. Port Duluth-Superior handles and upgrades for the six Great Lakes ports that account for moreapproximately 20 percent of the Great Lakes bulk cargo; Chicago is than 25% of U.S. GDP?second, moving nearly 10 percent of the bulk cargo. The This becomes an even more urgent question in light of the “D”iron-ore-dependent auto manufacturing MI, IN and OH port cities of grade given by the ACSE to U.S. inland waterways and levees,Detroit, Toledo, Cleveland and Gary, IN, collectively handle another and their importance not only to the Great Lakes region, but also to20 percent. industry in the heartland and Southern U.S. This was highlighted in February 2013 by the U.S. Department of Transportation MaritimeThe region’s port infrastructure is the most capital-intensive of all Administration’s most comprehensive study of the Great LakesNorth American coastal areas, due to weather extremes, coastline transportation system since World War II, Status of the U.S.-Flagerosion mitigation infrastructure and breakwaters (offshore structures Great Lakes.  Read more at to protect commercial ports and harbors from erosiondue to excessive wave action that not even the West/Pacific coast The key graphic from this report is a map of the marine highwayencounters), as well as the Soo Locks system (which links the lakes to corridors, below. The strategic importance of North America’s inlandthe Atlantic Ocean via the St. Lawrence River). Great Lakes ports waterways has never been made so clear via a single map or graphic.are heavily dependent on their share of the Harbor Maintenance Tax, Note also the vital cities where the primary rivers converge, such asand the region is at far greater risk from revenue shortfall than any St. Louis, Missouri.other in North America, because it lacks the population density andeconomic diversity to offset the loss of port infrastructure revenuefrom other means. Unfortunately, Congress is slow to realize that its M-5 (AK) M-84 M-90reallocation of tax revenue from port-generated activity threatens to M-5 M-87capsize the economies of eight Great-Lakes-bordering-states, and M-90 M-71-75undermine America’s rebounding auto, steel, construction and M-75agricultural industries, which account for more than three-quarters M-580 M-55 M-90 M-95 M-70 M-70 M-64of U.S. trade activity. M-40 M-5 M-65 Elevation 601 ft M-55 M-95 Elev 577 ft M-49 Elev 572 ft Elev 152 ft MH Corridor Elev 569 ft Iroquois M-10 MH Niagara Dam Connector Falls Beauharnois Dam M-A1 MH Crossing St. Clair Elev 243 ft Elev 69 ft M-2 River Detroit River Elev 20 ft Elev 0 ft Lake St. Clair Lake St. Lawrence Map of Marine Highway Corridors St. Francis River Atlantic Lake Huron Ocean US DOT Marine Admin 2013 report on Great Lakes Water Transportation depth 750 ft Lake Ontario Lake Michigan depth 923 ft depth 802 ft To learn more, watch “Economic Revival in the Heartland,” Lake Superior depth 1,333 ft Lake Superior a discussion on reconnecting river city economies to their depth 1,333 ft infrastructure, hosted by the St. Louis Federal Reserve District Bank, and sponsored by Colliers and the St. Louis Urban Land Institute.  View video at View of Soo Locks connecting the Lakes to the Atlantic P. 9
  10. 10. NORTH AMERICAN PORT ANALYSIS | WHITE PAPER | APRIL 2013AIR CARGO – LANDING OR TAKING OFF? INTERMODAL–THE 21ST CENTURY DEFINITION ISAir cargo’s role in global trade during the first post-Panamax decade Industrial Now Turns Especially to Rail to Move Oceanis caught in a tug-of-war between energy/infrastructure costs and Distribution Across Lande-commerce growth. According to the latest YE 2012 AirportsCouncil International World Freight Trends report, air cargo is What is intermodalism, and what does it have to do with the ports?expanding primarily in the Middle East (+4.2% YOY growth), Africa Intermodalism is quite simply a system whereby standard-sized(+2.1% YOY), and Asia Pacific (+0.5% YOY) where port, rail and road cargo containers are moved seamlessly between different modesinfrastructure is inadequately developed, and air freight is often the of transport. As stated in Colliers’ August 2012 North Americanonly option. In Europe, North America and Latin America—where Ports Outlook, intermodalism has advanced from the equivalentenergy costs are high and more affordable port and rail options exist of the ice age to the space age, and is the next transportationto move cargo—air freight volume is declining (-3.0% YOY in Europe; growth segment in the post-Panamax era. No longer can a shipping-0.2% in North America; and -0.2% in Latin America). E-commerce company, manufacturer, or retailer think of modes of transportationis the growth engine in North American air cargo; due to the logistics in isolation. Rail, road, air and water are all interconnected andof e-commerce, only a handful of North American air cargo centers integral parts of the global supply chain. Volatile energy prices,will survive. congestion at key inland intermodal points, and the need to fill emptied containers returning to port (or “match-back”) are part of intermodalism. MEMPHIS NOW #1 IN AIR GLOBAL CARGO According to Airports Council International, in February, Memphis overtook Hong Kong and Intermodal transportation reached an all-time high last year: Shanghai to top the list of Asian, European and Intermodal container volumes ended 2012 with 13.1 million moves, North American air cargo markets, as measured surpassing the previous year by 5.9 percent and the previous by metric tons of air cargo handled annually. With its BNSF intermodal facility, Colliers recognizes Memphis as the top North benchmark year of 2007 by 9.8 percent, according to the Intermodal American market for e-commerce. Association of North America’s Intermodal Market Trends & Statistics report. And, intermodal carload traffic in Q1 2013 is up over 200,000 carloads from Q1 2012.Memphis is currently the global leader in volume and takeoffs,and the 3.2 million metric tonnes it handles annually keep it in a This intermodal growth holds tremendous economic and real estateweek-to-week race with Hong Kong for the top spot overall. In the development potential—and the proof is in new development activity.U.S., the top five air cargo markets are Memphis (FedEx), Anchorage, Since the previous Colliers North American Ports Outlook in AugustLouisville (UPS), Miami, and Indianapolis. Chicago, Dallas, Los Angeles, 2012, more than a dozen states have completed or commencedNY/NJ and Atlanta make the top-ten domestic ranking, and are in the construction on new or expansion intermodal projects to moretop 30 globally. Other than Seattle, Denver, Phoenix, and maybe one efficiently link ports to inland distribution and manufacturing centers.other Midwestern airport to service the Great Lakes region (likely Fueling this growth and development is a combination of:Minneapolis or St. Louis), there is not much room for air cargo • Retailers remaking their supply chains by relocating primarygrowth in North America. distribution and logistics centers to Tennessee (Memphis), Indiana (Indianapolis), Georgia, Florida, South Carolina (Greenville/Greer), Texas, Arizona (Phoenix), Michigan and right-to-work states; and • Expansion of manufacturing activity, from autos and appliances to electronics and medical devices. P. 10
  11. 11. NORTH AMERICAN PORT ANALYSIS | WHITE PAPER | APRIL 2013 For these reasons, the demand driver for industrial real estate for 2013–2015 is the restructuring of the North American supply chain. Industrial real estate development and investment activity in 2013 is directionally pointed toward port markets, inland distribution markets with dominant intermodal facilities (e.g., Atlanta, Memphis, Dallas, Denver, Los Angeles and Philadelphia), and a handful of dominant air cargo markets, such as Memphis and Louisville. Colliers has identified five differentiating trends that will dictate where industrial real estate will be most in demand: Differentiating trends are: • Port markets matter more if they...Finally, trucking and river barge traffic are diminishing in their • …are post-Panamax ready;importance as a means of moving both container and bulk cargo. • …occupy a commodity or product niche, such as coalThe volatility in diesel costs and water levels make both modes of (Norfolk, VA), grain (Seattle, Portland, Prince Rupert),transportation expensive and less reliable compared to rail. And, autos (Baltimore, Savannah, Charleston, Jacksonville,new work-hours rules for truckers will only compound the trucking Seattle), poultry or pharmacy (Savannah); orindustry’s shortage of drivers and profit margin challenges. Fundingfor inland waterways and environmental air quality regulations • …are aligned with the national intermodal rail system;also impact the future of both river barge and over-the-road cargo that is, physically connected to one of the seven Class-1transport. River barge and trucking companies need to view North American railroads. Tampa, Jacksonville, Charleston,themselves as part of a relay race in the movement of freight, Savannah, Philadelphia, Mobile, and New Orleans arerather than as a single-carrier-dominated mode of transportation. examples along the East and Gulf coasts.Intermodal truly is “Industry Now Turning Especially to Rail to Move • Intermodal and logistics differentiate top-tier inlandOcean Distribution Across Land.” distribution MSAs (e.g., Atlanta, Memphis, Louisville, Columbus, Indianapolis, Dallas, Kansas City and Denver)THE INDUSTRIAL R.E. IMPACT IS GOING TO BE DIFFERENT from those that will be ancillary to the national supply chainThe 21st century’s industrial renaissance is unlike the industrial (e.g., Orlando, Birmingham, Charlotte, Las Vegas andboom periods in the 20th century that resulted in the construction California’s Central Valley).of factories employing thousands of laborers. The modern • Inland waterways are diminishing in importance as a means ofmanufacturing returning to the U.S. today requires the integration moving bulk cargo, due to the inefficiency and unreliability of thisof sophisticated logistics to reduce transportation, warehousing, and mode of transportation owing to unpredictable drought or flood.handling costs, as well as the time it takes to deliver materials Congress’ failure to fund inland waterway infrastructure onlyand finished goods to end consumers. Supply chains are being compounds the challenges to river barge freight.redesigned to eliminate choke-points and inefficiencies. • Changes to environmental and labor regulations are driving cargo away from trucking and toward rail.Manufacturers and retailers are intensely focused on developing themost efficient path for goods and materials to move across the globe • Air cargo facilities are vital to e-commerce. In 3–5 years,via ocean and land. Rising energy costs, logistics technology, and there will be at most a half-dozen dominant U.S. air cargochanging trade routes due to the Panama Canal expansion are all markets. Candidates include Memphis, Louisville, Columbus,changing where industrial real estate is most in demand. Miami, New York, Los Angeles, Seattle and Denver. Because P. 11
  12. 12. NORTH AMERICAN PORT ANALYSIS | WHITE PAPER | APRIL 2013 of the costs involved, air cargo in the U.S. will follow the same hub-and-spoke model adopted by passenger air carriers to maximize traffic. If your airport lacks a port partnership (e.g., Columbus with Virginia, Atlanta with Savannah), it won’t be a dominant air cargo market in five years. MSAs such as St. Louis should consider a port partnership with the likes of Mobile, AL, to revitalize their freight transportation industry. In markets like St. Louis, where the rail and river elements already exist, development of air cargo may make sense and have material economic implications. Memphis and Louisville, KY, are case studies in developing a globally dominant air cargo port. These influences are already appearing in the industrial warehouse data, with the Panama Canal expansion still two years away. According to Colliers Q4 2012 North American Industrial Outlook.  Read more at The presence of intermodal rail operations is the common denominator in the most active industrial markets. Thirty percent of Q4 North American net absorption occurred in just five MSAs: Chicago (7.0 MSF), Detroit (4.7 MSF), Los Angeles – Inland Empire (4.4 MSF), Dallas/Ft. Worth (3.2 MSF), and Memphis (2.9 MSF). All five markets are home to the nation’s busiest intermodal rail operations, except of Chicago. Los Angeles, Dallas, Memphis (FedEx and BNSF intermodal facility), Philadelphia (new intermodal facility online in 2H 2012), Louisville, KY (UPS), and Atlanta all ranked in the top ten with respect to net absorption in Q4. Thirteen of the 15 U.S. warehouse markets with the lowest vacancy rates are top-20 North American port or top-ten inland distribution markets, with intermodal rail connecting to one or more of the seven Class-1 North American railroads. TOP 10 U.S. INDUSTRIAL MARKETS | ABSORPTION Q4 2012 CY 2012 MSA MSA (MSF) (MSF) 1 Chicago 7.006 Chicago 13.438 (Intermodal) (Intermodal) 2 Detroit 4.685 Dallas/Ft. Worth 9.728 (Auto + Housing) (Intermodal) 3 Los Angeles–Inland Empire 4.405 Detroit 9.169 (Intermodal) (Auto-recovery) 4 Dallas/ Ft. Worth 3.223 Los Angeles–Inland Empire 8.470 (Intermodal) (Intermodal) 5 Memphis 2.905 Los Angeles–Coastal 8.375 (Intermodal) (Port) 6 Philadelphia 2.900 Atlanta 7,400 (Port + Intermodal) (Intermodal) 7 Phoenix 2.519 Houston 6.245 (Housing) (Port) 8 Los Angeles 2.235 Phoenix 5.137 (Port) (Housing Recovery) 9 Louisville 2.227 Columbus 4.916 (Air Cargo) (Air Cargo) 10 Richmond 2.223 Seattle 3.916 (Port) (Port) P. 12
  13. 13. NORTH AMERICAN PORT ANALYSIS | WHITE PAPER | APRIL 2013 Colliers 1H 2013 North American Port Awards: Colliers’ 1H 2013 North American Port Awards recognize CapEx spending, disaster preparedness, port efficiency, excellence in logistics, cargo and container growth, and less-well-known port markets: “MAKING THE GRADE” “WELCOME TO THE POST-PANAMAX CLUB” Tops in CapEx Spending Membership now at 7 PORTS OF LOS ANGELES AND LONG BEACH PORT OF BALTIMOREThis is a new Colliers Port award, and correlates with this Since Colliers’ Summer 2012 North American Ports Analysisreport’s theme, CapEx or Capsize. Of all the freight transportation report, a second East Coast port has joined the post-Panamaxinfrastructure elements evaluated by the American Society of Civil club: Baltimore is now capable of receiving container vesselsEngineers (ASCE), only ports and rail received a 2013 grade better transporting up to 12,500 TEUs, providing both overflow reliefthan poor (D) or failing (F). State, port authority, and private and competition to the port of New York. Baltimore is also likelyindustry CapEx spending in these two vital segments earned a to become an increasingly important port for auto imports andmediocre (C) grade. And among the North American ports, exports that are primarily processed via New York or SoutheasternL.A. and Long Beach are spending the most in 2013. Four other ports, such as Brunswick, GA, Charleston, SC, and Jacksonville, FL.North American ports earned a passing grade for 2013 CapEx While the East coast has yet to match the Post-Panamax readinessspending of at least $100 million on infrastructure projects. of the West coast, the addition of a second P-PMX port prior toSee the full list of CapEx leaders on page 5 of this report. 2015 is noteworthy. When the later additions of New York, Charleston and Miami join the Post-Panamax Club by 2015, the “GET ‘ER DONE” East Coast and West Coast will have parity at five -Panamax-ready Disaster Recovery Tested ports each. For an overview of North American post-Panamax NEW YORK AND VIRGINIA PORT AUTHORITIES readiness, see page 7 of this report.The 1H 2013 “Get ‘er Done” award, a legacy Colliers Port “GROW, GROW, GROW YOUR PORTAward, recognizes the New York Port Authority’s responsiveness QUICKLY INTO THE P-PMX ERA”in reopening following Superstorm Sandy, and the collaboration Fastest-Growing North American Portbetween New York and Virginia in re-routing vital cargo and PORT OF VIRGINIAcontainer ships before, during and after the storm. The port ofNew York was operational within days of this record-setting The Port of Virginia is not content to rest on its laurels as the Eaststorm, and the Port of Virginia demonstrated the importance of Coast’s original 50-foot deep post-Panamax port: It’s now focusedcollaboration and redundancy in receiving and processing affected on growth. In 2012, the Port of Virginia earned an A+ grade in thiscontainership cargo during the storm. Sandy also brought to light effort, and was the fastest- growing container port on the Easthow vital the American Logistics Aid Network (ALAN) is to Coast. In 2012, the port handled 2,100,000 TEUs, the second-bestAmerica’s supply-chain. ALAN helped millions of Northeasterners year in its history, behind 2007. The Port of Virginia registeredduring the storm, by engaging industry to support of relief growth in the last eleven months of 2012:organizations and, communities, making supply-chain-related • Containers: 2,100,000 TEUs, up 9.8%donation needs visible to the logistics industry, and establishing • General Cargo Tonnage: 17,513,093, up 12.1%an efficient process for providing needed goods and services • Total Rail Containers: 385,804, up 16.8 %through its Web portal. • Barge Containers: 8,009, up 82.5% Read more at • Ship Calls: 1,963, up 7.4% • Vehicle Units: 40,031, up 28.5% continued on page 14 P. 13
  14. 14. NORTH AMERICAN PORT ANALYSIS | WHITE PAPER | APRIL 2013Ironically, as this report was going to press, Virginia Port Authority BEST LOGISTICSinterim director Rodney Oliver had this to say on the release of the Cutting-edge Technology Drivesabove statistics: Growth GEORGIA PORT AUTHORITY AND GEORGIA CENTER OF INNOVATION FOR LOGISTICS “This is not the type of thing we’ll get an award for, but it shows that our effort to market the deepest The ports of Los Angeles and Long Beach have long histories as shipping channels on the East Coast, an expanding rail pioneers in logistics, processing the most container units in North network, the modern container terminals that we own America. But in the coming post-Panamax era, the West Coast and operate and a commitment to customer service could take a cue from the shallowest North American port, which and continual improvement is drawing attention—and has grown to become one of the five busiest: the Port of Savannah, business—to Virginia.“ GA. Due in large part to logistics and cutting-edge technology, the Georgia Center of Innovation for Logistics has put the Port ofMr. Oliver and the “Get ‘er Done” professionals at the Savannah into the global spotlight for more than just pulp andPort of Virginia can be proud that their efforts are indeed poultry: high-value cargo such as pharmaceuticals and autos. Theaward-winning. Colliers recognizes your hard work! Port of Savannah and other Georgia ports have grown dynamically over the past decade due to their understanding of logistics and THE “INCREDIBLE BULK” PORT Recognizing America’s “Fourth Coast” their coordination with rail, air, and truck cargo. Even the president PORT OF DULUTH-SUPERIOR, MN and Congress have recognized the Georgia Center of Innovation for Logistics as best-in-class, consulting the Center’s ExecutiveThis is a another new Colliers Port Award, that recognizes the Director Page Siplon for advice on enhancing port operationsimportance of the Great Lakes region and its ports. The Great and increasing global trade through supply chain and logisticsLakes region’s 117 federally recognized harbors and 85 active technology. Given the excellent port options along the East andfreight-handling ports account for 28% of the US GDP and process Gulf coasts, if you’re drawing the likes of Toyota, you’re doingan astonishing 240 million tons of cargo annually. Because the something right. And that something is logistics.Great Lakes ports move more bulk than containerized cargo, anapples-to-apples ranking comparison with the East, Gulf and West Visit the Center’s website to learn what Colliers International and soCoast container ports isn’t possible. But in terms of tonnage, the many global companies see in logistics at the port of Savannah. Don’tGreat Lakes region is the “Incredible Bulk” of North American miss the latest Logistics Market Snapshot—the only one of its kind among North American Ports.  Read more at the leader in the Great Lakes? Not Chicago, Detroit orCleveland—but Duluth, Minnesota. LOGISTICS MARKET SNAPSHOT | MARCH 2013 MULTIMODAL:See page 8 of this report to learn more about America’s “Fourth Coast,” Dow Jones Down Jones Transportation index rose 3.9% during the month of Feb.and why Port Duluth-Superior is the undisputed “Incredible Bulk” Transportation Index (Stock performance of twenty large, well-known U.S. companies in the transportation industry, average of Feb 10-March 10.cargo port. NASDAQ NASDAQ Transportation Index decreased 1% in February. (Averaged share weights of NASDAQ-listed companies classified as transportation Transportation Index companies, average of Feb 10-Mar 10) DOT Freight The USDOT’s freight transportation services rose 1.2% in Jan 2013. The Transportation Index index’s reading of 111.3 was up 1.3% from Jan 2012. (Source: U.S. Dot) The February shipments index rose 5.6% over the previous month and rose 0.5% year-over-year. The February expenditures index increased 1.8% for the month, and decreased 1% year-over-year. (Source: Cass Freight Index Cass Information Systems | (Based upon transportation dollars and shipments of Cass clients comprised of over 400 shipping companies) In January, the U.S. imported about $228.8 billion of cargo. January Import Volumes U.S. imports have increased 1.8% in terms of value from Dec, and fell 0.9% year-over-year. (Source: U.S. Census) continued on page 15 P. 14
  15. 15. NORTH AMERICAN PORT ANALYSIS | WHITE PAPER | APRIL 2013 NORTH AMERICA’S MOST EFFICIENT North American market for e-commerce and “Above all others” CONTAINER PORT as North America’s leading air cargo port. Nike’s recent decision Port Automation at Its Best to move a key distribution center to Memphis was based due to PORT OF CHARLESTON, SC the city’s air cargo and BNSF intermodal advantages. The other top 10 North American air cargo markets include Anchorage,This award is a new addition to Colliers’ semi-annual Port Louisville (UPS), Miami, Indianapolis. Chicago, Dallas,Analysis report, and comes on the heels of a year of strife and Los Angeles, NY/NJ and Atlanta.fear of job loss from port automation. A strike was eventuallyaverted, as—to their credit—the International Longshoremen’s “FLORIDA’S BEST-KEPT SECRET“Association (ILA) and the United States Maritime Alliance (USMX) …but for how long?both realized in 2012 that East Coast port job growth is possible PORT EVERGLADESwith the implementation of automation technology. The shiningexample of port automation and efficiency is being provided by the Florida has more commercial ports (15) than any other state inPort of Charleston. With a reported average of 43 crane moves per the U.S., and there’s much confusion over port TEU activityhour (the metric used for this award), Charleston now boasts the because many of the state’s ports overlap U.S. Customs Districts.most efficient port in North America. While West Coast ports have Port Everglades is probably the least understood Florida port,now surpassed an average of 30 crane moves per hour, they’re and certainly its best kept secret. Because it shares a Customsspending the most in CapEx to upgrade to more than 40 crane District with Miami, some of its container traffic is ascribed tomoves per hour. the Port of Miami. With the aid of both U.S. Customs and Port Everglades authorities, Colliers has learned that Port EvergladesRefer to the Journal of Commerce’s Fall 2012 feature on global actually handled more TEUs in 2012 than any other Florida port:port productivity: Port Productivity’s New Gold Standard. approaching 1.0 million annual TEUs. Port Everglades is now Read more at among North America’s ten busiest container ports, and is rapidly growing its Latin American trade. Although it has yet to process “ABOVE IT ALL” an application to dredge its port depth to post-Panamax levels, Leading Air Cargo Port it’s capable of more container traffic growth. At the beginning of MEMPHIS AIR CARGO PORT 2013, the Florida Ports Council produced its inaugural State of Florida Ports report, profiling every Florida seaport, with economicThis award recognizes the evolution of the post-Panamax story impact information and status updates for major projects andinland, and the importance of e-commerce to the supply chain accomplishments. The report also describes the strides thatand ports. Not all modes of freight transportation will be as Florida’s seaports have made due to the strategic investmentsdominant as they once were in the first post-Panamax decade and regulatory relief supported by Governor Rick Scott and(2015–2025)—river barges and air cargo, for example. Air cargo’s the Florida legislature, and the preparations to capture futurerole in global trade during the first post-Panamax decade is a international and domestic business for Florida. Port Evergladestug-of-war between energy/infrastructure costs and e-commerce is acknowledged, too:growth. E-commerce is the growth engine in North American aircargo and it’s made Memphis the king of air cargo, globally. “Port Everglades will soon be able to serve vast volumes of rail traffic thanks in part to the 30-yearAccording to Airports Council International, in February 2013 lease with the Florida East Coast Railway LLC (FEC)Memphis overtook Hong Kong and Shanghai to top the list of to build and operate the port intermodal containerAsian, European and North American air cargo markets, as transfer facility (ICTF).”measured by metric tons of air cargo handled annually. With itsBNSF intermodal facility, Colliers recognizes Memphis as the top continued on page 16 P. 15
  16. 16. NORTH AMERICAN PORT ANALYSIS | WHITE PAPER | APRIL 2013 522 offices in 62 countries on 6 continents The significance of a key infrastructure linkage like the Florida East Coast Railway to United States: 147 future global trade and container traffic growth should not be underestimated, especially Canada: 37 Latin America: 19 for Port Everglades. Asia Pacific: 201 EMEA: 118 For now, Port Everglades is Florida’s best kept secret…but not for long. See page 7 of this • 1.8 billion in annual revenue report for North American Port rankings by TEUs. • 1.25 billion square feet under management For more coverage on the Florida’s ports, refer to the Florida Ports Council or Dredging • Over 12,300 professionals and staff News’ recent analysis of the State of Florida Ports report.  Read more at “GONE WITH THE GRAIN” COLLIERS INTERNATIONAL Wheat and Grain Exports 601 Union Street, Suite 4800 PORTS OF PORTLAND AND SEATTLE Seattle, WA 98101 TEL +1 206 695 4200 This award will come as a surprise to many in the heartland of the U.S. and the Gulf Coast states, who are under the impression that all of America’s grain after harvest moves south along the nations’ river-ways to the Gulf. This is no longer the case: FOR MORE INFORMATION Portland is the top-ranking port for wheat export, and Seattle has the most modern K.C. Conway grain export facilities in North America. This award recognizes the significance of Chief Economist | USA grain exports to the economies of both the U.S. and Pacific Northwest. However, TEL + 678 458 3477 1 EMAIL these two Pacific Northwest ports need to keep an eye on a Canadian port to their north: Port Prince Rupert, which is now post-Panamax ready, and gearing up its port James Cook Director of Research | USA and rail facilities to handle more of both Canada and North America’s northern plains TEL +1 602 633 4061 wheat and grain crops. EMAIL CONTRIBUTORS Also, there are two legacy awards from previous Port Analysis reports that we Bridget Berry still stand by: Research Analyst | USA Jennifer Macatiag North America’s Most Irreplaceable Port: Port of Houston (It’s more than just energy...) Graphic Designer | USA Aaron Finkelstein North America’s “Up-and-Comer”: Port of Mobile (Deepest port on the Gulf) Communications Manager | USA Copyright © 2013 Colliers International. The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report. Accelerating success. P. 16