Understanding the Effects of Global Logistics and The FTZ Program

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Understanding the Effects of Global Logisticsand
The FTZ Program

• By Curtis D. Spencer,
• President IMS Worldwide Inc.
• Member of the 9th COAC

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The Objective of this presentation is the use of
FTZs as a powerful leasing tool

• Today, CBRE Brokers from LA, Atlanta, New Jersey
  and Houston are using the FTZ Program to LEASE
  BLDGS!!
• Millions of Feet have been won using this tool
• It is here for CBRE Industrial brokers NOW,
• And it is FREE to all CBRE Industrial Teams,
• But first, lets put this Global Logistics info
  to work for YOU!

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Knowing where the containers are coming into the
Ports wont help us..

• Until we know where they are going to STOP!
• The real value prop in all of this logistics
  business, is in where the goods will get off the
  global conveyor belt and get put into a
  BUILDING!
• Here is a good idea of existing and new locations
  where Vertical will happen.

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Shanghai to North American Port Destinations -
2006
2006 - ADD 7-10 Days Delay!
Source ShipmentLink.com (Evergreen) Sailing
Schedules
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The Earth is RoundNew Routes to the New World!
Narvik, Norway
Vostochny, Russia
Prince Rupert, Canada
North China
Rotterdam, Netherlands
New York
Norfolk
Los Angeles
Savannah
Hong Kong, China
HOUSTON
Bombay
Punto Colonet
Lazaro Cardenas
Singapore
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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 as exclusively 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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THE NEW NAFTA RailRoad (aka Kansas City S.)
SAN FRANCISCO
LOS ANGELES
ENSENADA
ALTAMIRA
VERACRUZ
LAZARO CARDENAS
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New or Expanding Regional Hubs

• DALLAS/FORT WORTH
• INLAND EMPIRE (S. CALIFORNIA)
• WESTERN PA
• CHICAGO
• COLUMBUS, OHIO
• ATLANTA
• NEW HOT HUBS
• HOUSTON
• KANSAS CITY
• MEMPHIS NORTHERN MISS.
• PHOENIX

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So.If we tie in the location of where the boxes
get unloaded to a Federal Benefit Stream, we
get the Perfect Storm
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We want to use the FTZ programto maximize the
locational benefitsIE Product Differentiation!

• FTZs bring a product (park or building) a
  serious and sought-after benefit, that stays with
  the building.
• Importers are catching on!
• So are the REITs and private developers

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Which Developers/REITS are applying for FTZs
nationwide?

• Carson Companies
• The Allen Group
• Kennedy Advisors
• Sares-Regis
• DP Partners
• Catellus
• OPUS
• Duke

• ProLogis
• IDI
• AMB Properties
• Majestic Realty
• First Industrial
• Centerpoint Prop.
• ING Clarion
• Hillwood/Perot
• KTR

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Who Uses FTZs?

• EXEL LOGISTICS (11 sites)
• APL LOGISTICS
• RYDER LOGISTICS
• NIPPON EXPRESS LOGISTICS
• USF WORLDWIDE/LOGISTICS
• GATX (NOW APL) LOGISTICS
• AIRBORNE LOGISTICS-DHL
• DSC LOGISTICS
• NYK LOGISTICS
• EGL Global Logistics (4 locations)

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• GM, Ford and Toyota, Chrysler
• Exxon/Mobil and Chevron/Phillips
• Merck and Abbott Labs
• Intel and ST Microelectronics
• Dell and IBM, Sony and NEC
• Petsmart and Pier 1
• Whirlpool and Sears
• Yamaha, Thompson Electronics
• JC Penney, Skechers

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Retail Importers Using FTZs

• Gymboree
• Helen of Troy
• Sharp Electronics
• J C Penneys
• JVC Electronics
• Pioneer Electronics
• Thompson Consumer Electronics
• Conair
• JJ Baker
• Oneida

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• Nine West
• Coach Leather Goods
• Mercury Marine
• Sony (3) Adding 7 DCs LA
• LA Gear
• Lex Mark Printers
• Keds
• Clarion

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• Dell Computers
• HP-Compaq
• Onkyo
• Winnebago
• Skechers
• Reebok
• Addidas
• IKEA (3)
• Black and Decker (4)
• Academy Sport Goods (2 DCs)
• Laufen Tile (3 DCs)

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What is this FTZ Business, and why do I need to
know about it?

• Cost Cutting An FTZ, can now definitely lower
  your TENANTs supply chain costs!
• Velocity Improvement By using an FTZ, your
  TENANT can SPEED UP the supply chains..Guaranteed
  !
• Supply Chain Security an FTZ offers immediate
  compliance (CTPAT Best Practice!) WITH rebates.

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How do Clients make money in an FTZ?

• Duty Deferral
• Duty Elimination
• Duty Reduction
• Inventory Tax Savings (AZ, TX, OH)
• Merchandise Processing Fee Elimination

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MPF Savings

• Weekly entry for all zones allows 24/7 shipping
  during a week, with only ONE entry filed at the
  end of the next week.
• The FTZ Importer only pays one MPF fee for one
  weekly entry.
• This reduction significant savings in MPF over
  a year.

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15 receipts inbound per week. MPF 7,275
Pre-Foreign-Trade Zone
Shipments into Site
75 shipments out per week one entry filed at
end of week. MPF 485
Foreign-Trade Zone
Shipments into commerce with weekly entry.
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CONSUMER GOODS IMPORTER/TENANT
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Benefit to the Client
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Distribution Center VMI Components
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Distribution Center VMI Components
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The Future

• Weekly Entry
• Weekly Entry is Here to Stay
• MPF is Here to Stay As Well
• Now, this FTZ benefit is the Highest Benefit to
  Large Distribution Importer
• Direct Delivery
• Tool for Decreasing Supply Chain Cycle Time.
  FTZs give SUPPLY CHAIN VELOCITY!!

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Which Tenants Qualify?

• BLDG SIZE 350,00 ft
• IMPORT SIZE 100 Million
• CONTAINERS 4,000
• ENTRIES/YEAR 1,000

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Why is this important to ME?

• Brokers exist to provide Value-Added services in
  the area of maximum value to the tenant.
• Jimmy D is working overtime to get all of us to
  incorporate Supply Chain Issues into our service
  mix!!
• Brokers that add this kind of value .50 to
  2.00 PER FOOT VALUE are going to lease more
  buildings!

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Why is this important to ME?

• FTZ designation for an importer reduces Cost, and
  provides a commercial-operational incentive and a
  cash incentive.
• This is the first time in FTZs 68 year history
  that these claims for improved supply chain
  management, and Cost Savings could occur.

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• FTZ designation for your customer a reduction
  in their costs, and an improvement in their
  SC-VELOCITY!
• FTZ status creates a better mouse-trap for any
  Broker.
• Get inside your customers decision tree.

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Conclusion

• Importers Tenants are searching for more value
  added services for their dollar.
• FTZ weekly entry and direct delivery offer an
  opportunity to CBRE to greatly increase their
  clients cash flow and margins by utilizing this
  knowledge base provided for by IMSW.
• IMS Worldwide and CBRE are announcing a Full FTZ
  Services product for all Brokers to use.

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IMS Worldwide, Inc Foreign-Trade Zone
Logistics Consultants Partnering with CBRE since
2001

• Over 185 Projects Completed Nationwide
• Serving Public and Private Clients
• For Over 29 Years
• 1-800-741-9286
• www.imsw.com