Trey W' Boring

1
Logistics Trends, FTZ and the International
Supply Chain

• Trey W. Boring
• Senior Vice President
• IMS Worldwide, Inc.

OWIT March 15, 2007
2

• The World of Logistics Hits
• at the Very Heart of Todays Business
• Imports are a part of more Supply Chains.
• Movement of merchandise becomes more critical.
• Supply Chain processes impacts your decisions.
• Supply Chain issues impact site location
  decisions.
• Because of that, it impacts companies and
• communities development decisions.
• Intimate knowledge of what changes are coming and
  where, makes the Logistics and Supply Chain
  Professionals job easier.

3
The Earth is RoundNew Routes to the New World!
Narvik, Norway
Prince Rupert, Canada
Vostochny, Russia
Rotterdam, Netherlands
New York
Norfolk
North China
Los Angeles
Savannah
Hong Kong, China
HOUSTON
Punto Colonet
Lazaro Cardenas
Singapore
4
Port Diversions

• Port Diversion Strategies
• - Wal-Mart new DC Houston, Savannah, Norfolk
• - Target, IKEA, Toys R US and others following!
• - Nike, Best Buy, Canon have stated objectives
  of 50 to 75 diversions OUT of LA/LB
• - Direct SUEZ service to the East Coast easing
  some LA/LB capacity (starts this year!)
• - SE Gulf Ports seeing 20 growth per year
• New out of the box thinking and strategies
• Taking into account the (now) 7-11 day delay

5
Intermodal Trade Volume
Double digit growth Impact on Ports

• LA/ LongBeach/Ports
• 2006 Stats
• 14.8 M TEUs
• 65 Transferred to Inland Ports

Source Double Stack Container Systems
Implications for US Railroads and
Ports (Washington US Department of
Transportation)
6
BNSF INTERMODAL YARD ALLIANCE, TX
7
New or Expanding Regional Hubs

• Dallas/Fort Worth, TX
• Inland Empire (Southern California)
• Western, PA
• Chicago, IL
• Columbus, OH
• Atlanta, GA
• Houston, TX
• Kansas City, KS
• Memphis, TN (and Northern Mississippi)
• Phoenix, AZ

8
How Does the FTZ Program Effect These Logistics
Changes?

• Imports are increasing Every Supply Chain is
  potentially touched by imports.
• FTZ Offers Savings in the Supply Chain
• Cost Cutting An FTZ operation used by an
  importer will definitely lower his/her Supply
  Chain costs!
• Velocity Improvement By using an FTZ, importers
  can SPEED UP their supply chains.
• Supply Chain Security As this requirement
  increases for all importers, an FTZ offers
  immediate compliance WITH an Economic Advantage.

9
How Does this impact 3PL and 4PL usage?

• Greater need for international trade expertise
• A CHB, Freight Forwarder, Consolidator
• More elements to the Supply Chain
• Freight moves from manufacturer to export port
• Ocean or Air move to the U.S.
• Freight moves from import port to the companys
  facility or its customers.
• Cost Benefit for Outsourcing
• Companies often outsource manufacturing
• Analysis of costs vs. benefits

10
CONCLUSION

• We know imports will continue to grow.
• New gateway ports and new inland ports are
  emerging.
• There are now MANY more opportunities for FTZ
  development and 3PL and 4PL usage for importers.

11
IMS Worldwide, Inc.

• Global Logistics
• Foreign-Trade Zone Consultants
• Over 195 Projects Completed Nationwide
• Serving Public and Private Clients
• for Over 30 Years
• 1-800-741-9286 www.imsw.com