market analysismarket analysis - toledo metropolitan area ... 07 tems presentations... · market...

Market AnalysisMarket Analysis

• Production and design services provided by:– Lauerer Markin Group– Thread Information Design

• Strategy support provided Great Lakes Marketing

We finally have the CATALYST (global sourcing)!!We finally have the CATALYST (global sourcing)!!CoBA6

UnrealizedUnrealizedpotential and potential and underutilized underutilized

assetsassets

Emergence Emergence of global of global sourcingsourcing++ ==

Leadership & Leadership & Global LogisticsGlobal Logistics

CoBA6 College of Business Administration, 5/17/2006

Situational AnalysisSituational Analysis• U.S. transportation system is overwhelmed

– Passenger vehicle traffic will increase 50% by 2030– Freight traffic will increase by 50% by 2020

• Cannot build enough highways and rail to meet demand• China to become top US trading partner within three

years• Imports from Asia/China

– Doubling by 2000-2010– Exponentially shifting to high-value, time-sensitive goods

• Asian exporters (and U.S. DOT) deeply concerned about US distribution bottlenecks

Situational AnalysisSituational Analysis• Trucking industry is challenged by:

– New hours of service rules

– High cost of fuel

– Shortage of drivers and equipment

– Increased costs of drayage/cartage

– Increased highway congestion

• Port throughput and efficiencies are enhanced by a transfer of product from boat to rail

• Rail transport to the distribution centers requires an intermodal/rail ramp

Situational AnalysisU.S. Dept. of TransportationSituational AnalysisU.S. Dept. of Transportation

“America's freight network is a lifeline for our nation's manufacturers, farmers and businesses…”

Norman Mineta, U.S. Secretary of transportation

March 2003The JOURNAL of COMMERCE

The solution for U.S. businesses will require “lots of money,” said Eskew, but that money should be targeted strategically using a holistic strategy. By that, Eskew means taking into account how all air-, ground- and water-based transport systems work together and increasing the integration of the different modes. “All the port capacity in the world won’t prevent bottlenecks if there isn’t enough rail freight capacity on which to unload the ocean shipments,”

Mike Eskew

Situational AnalysisU.S. Dept. of TransportationSituational AnalysisU.S. Dept. of Transportation

• “…Understanding the nature of freight flows will help ensure our ability to remain competitive in the global marketplace and to continue to meet the economic and transportation challenges of the 21st century."

The agency is estimating that by 2020 America's transportation system will handle cargo valued at almost $30 trillion, compared with $9 trillion today.Volumes, in tons, will increase by almost 70 percent over the current 15 billion tons. The department also says that international freight volumes will almost double by 2020. As a result, each state will experience large freight volumes onits transportation infrastructure over the next 20 years, with the potential for increased congestion and greater inefficiencies throughout the nation's transportation system.”

PlanningPlanning

• Containerized intermodal transportation and distribution is the key strategy for the future

• Transportation terminals must be either retro-fitted or newly developed to handle intermodal traffic

• Retro-fit is time consuming and expensive• Green/brownfield development is recommended

Shipping ContainersShipping Containers• International shipments (except for bulk goods) are

delivered by shipping containers

• Shipping containers require significant maneuvering and staging areas with specialized material handling equipment

• Single source, port-to-door routing from manufacturer to distributor is often desired

Points of CongestionPoints of Congestion• “West Coast ports anticipate double-digit container growth, fuel

costs are climbing to all time highs, and capacity is tight. Concerns abound that increasing volume will compound existing infrastructure problems and further expose intermodal disconnects, labor strife, driver shortages and the cost of moving product in highly congested areas”…

• …“Many importers, contract manufacturers, and retailers are considering strategic, long-term measures to alleviate stress in their supply chains by creating more reliable transportation options.”

• Inbound Logistics – June 2005

North American Coastal PortsNorth American Coastal Ports

Primary West Coast Ports1. Port of Los Angeles – 4,874,730 TEUs

2. Port of Long Beach – 3,764,257 TEUs

3. Port of Vancouver – 1,664,906 TEUs

4. Port of Oakland – 1,197,331 TEUs

5. Port of Seattle – 1,049,105 TEUs

6. Port of Tacoma – 940,638 TEUs

TEU = Twenty Foot Equivalent Unit

Alternative Investment Example at VancouverAlternative Investment Example at Vancouver

Holistic ApproachHolistic Approach

Intermodal Transfer

FlowFlow

Re-distribution

FlowFlow

With an industrial park adjacent to rail ramps, containers can be shuttled (via hostlers) directly from the train to the facility

For industrial locations in the area, but not adjacent, a short dray or even a longer cartage still provides operating economies of scale and savings

Cargo AirportCargo AirportCombined with rail and truck, air cargo ground operations become extremely efficient

Enables operators to provide full-service options to customers who have combinations of time sensitive cargo as well as bulk shipments

Service from CaliforniaService from California

Toledo

Maritime DistanceMaritime DistancePrince

Rupert** Vancouver** Los Angeles*

Shanghai2,905.04 miles

4,675.21 kilometers3,175.79 miles5,110.94 kilometers

3,544.67 miles5,704.59 kilometers

Yantai2,910.01 miles

4,683.21 kilometers3,182.00 miles5,120.93 kilometers


Xiamen3,143.50 miles

5,058.97 kilometers



Hong Kong3,313.03 miles

5,331.80 kilometers



*2-3 more days at sea to LA and 2-3 more days return**Rapidly growing in capacity and importance

Modernized Flow (example)Modernized Flow (example)

Toledo

Value of Lake Erie West RegionValue of Lake Erie West Region

• Incomparable location• Existing infrastructure • Complete transmodal capability• Anchor clients already here or nearby• Central to North American industrial sector

Access to MarketsAccess to Markets

300 Mile Radius

Toledo

300 Mile Demographics300 Mile Demographics

2005 Population Estimate 49,415,140

Estimated Median Age 36.74

Estimated Average Age 37.46

Estimated Average Household Income $62,611

Estimated Per Capita Income $24,532

Example: Automotive IndustryExample: Automotive Industry

This 300 mile (500 KM) radius contains:

37 of 64 assembly plants in the US and Canada

126 of the top 150 OEM supplier headquarters and over 60% of their facilities in the US and Canada

The destination of more than half of all imported automotive parts

China is becoming top-tier one supplier to US

Value Proposition for Global LogisticsValue Proposition for Global Logistics

• Logistics hub for global sourcing– Existing and growing need

• Embedded supply chain– Rapidly growing customer

demand• Distribution solution based

execution– Low-hanging fruit– Built-in Opportunity

PotentialPotential

• As supplier locations change, identifying and securing the optimum distribution point(s) becomes paramount for long-term, cost-effective logistics

• A strategically located transportation/logistics hub, with rail ramps offering more efficient global connectivity, will bring a distinct, substantial, and NECESSARY competitive advantage to regional industrial base

Lake Erie West Hub

VisionVisionFaster/CheaperCustomer

DirectR

edistribution

Improved Service

Levels

Embedded Supply Chain

Maximum Efficiency

Con

trolle

d

Bord

er

Secu

re

Multi ModalExce

llent Capacity

Usage

Points of DifferentiationPoints of Differentiation

Coastal Port Lake Erie West HubLanded goods RedistributionShipper to port Customer direct

Ocean specific Unlimited geography

Multi-modal support Multi-modal integration

Customer-dependent supply chain Embedded supply chain

National security issues Controlled borders

StrengthsStrengths

• Lack of congestion– Slot-free airport– Exclusive airspace for Toledo, not dependent on Detroit or

Cleveland– Access to global markets via air and water– Railroad with capacity available in existing rights of way– Minimal highway congestion

CoBA2CoBA3

Elements of the Lake Erie West Global Logistics Hub

StrategiesStrategies

• Develop vision– Prepare situation analysis– Define value proposition– Define internal partners

• Define external strategic partners• Plan for long-term development• Develop promotional campaign

VISIONVISIONSituational Value Internal Analysis Proposition Partners

ID EXTERNAL ID EXTERNAL PARTNERSPARTNERS

LONG TERM LONG TERM DEVELOPMENT PLANDEVELOPMENT PLAN

MARKETINGMARKETING

Strategy ExecutionStrategy Execution

• Vision– Conduct moderated planning sessions for situational

analysis, development of value proposition and identification of internal partners

– This must yield an overall, mutually agreed-upon strategic foundation

Strategy ExecutionStrategy Execution

• ID external partners– Identify major, ramp-based commercial

developers/investors– Develop plan to establish anchor clients such as:

FedEx, UPS, BAX/Schenker, DHL, Yellow Freight, etc.

Deal-Flow Analysis DefinitionDeal-Flow Analysis Definition

ExistingAssetUse

StrategyAlignment

New Customers

New Revenue New Jobs

Percentage of re-use

Desirability of co-use

Alignment with vision

Regional impact

Potential to attract new customers

New sources of revenue

New jobs created

Deal-Flow AnalysisExample: Heartland HubDeal-Flow AnalysisExample: Heartland Hub

0

25

50

75

100

Existing Asset Use

Strategy Alignment

New Customers

New Revenue New Jobs

Deal-Flow AnalysisDeal-Flow Analysis

• Score– Add the points

400 – 500 = Must execute300 – 400 = Prioritize200 – 300 = Look for improvements0 – 200 = Low probability for success; potential threats

Impact AnalysisImpact Analysis

5%

15%

30%30%

20%

GatekeeperInfluencersValue AddersUsersImplementers

Heartland Hub

Proportional impact at each phase

GatekeeperGatekeeper

• Asset Management• Decision Maker

– For example:• Port Authority

InfluencersInfluencers• Regulatory Impact• Specific Execution • Impact on Funding

– For example:• TAGNO• Toledo Mayor’s Office• Port Authority• Chamber of Commerce• LCIC…

Value AddersValue Adders• Provide support services• Greatest potential to differentiate our hub

– For example:• Maintenance providers• Fuel depot…

UsersUsers

• Generate Revenue– For example:

• Anchor clients• Distribution companies…

ImplementersImplementers

• Develop and Operate Assets– For example:

• Investors• Developers• Operators…

Phases of Impact AnalysisPhases of Impact Analysis

• Start-up Phase• Development Phase• Marketing Phase• Usage Phase• Enhancement Phase

Phases of Impact AnalysisStart-up Phase

Phases of Impact AnalysisStart-up Phase

30%

30%

5%

5%

30%GatekeeperInfluencersValue AddersUsersImplementers

Heartland Hub

Phases of Impact AnalysisDevelopment Phase

Phases of Impact AnalysisDevelopment Phase

10%

20%

10%

20%

40%GatekeeperInfluencersValue AddersUsersImplementers

Heartland Hub

Phases of Impact AnalysisMarketing Phase

Phases of Impact AnalysisMarketing Phase

35%

20%

15%

10%

20%


Heartland Hub

Phases of Impact AnalysisUsage Phase

Phases of Impact AnalysisUsage Phase

5%5%

30%

50%

10%


Heartland Hub

Phases of Impact AnalysisEnhancement Phase

Phases of Impact AnalysisEnhancement Phase

25%

15%

20%

20%

20%


Heartland Hub

Near Term/Mid Term ProcessNear Term/Mid Term ProcessFinalize Vision/Value proposition

Identify target segments

Develop promotional campaign

Engage investors/developers

Heartland Hub

VisionVisionFaster/CheaperCustomer

Direct Redistribution

Improved Service

Levels

Embedded Supply Chain

Maximum Efficiency

Con

trolle

d

Bord

er

Secu

re

Multi ModalExce

llent Capacity

Usage

Points of DifferentiationPoints of Differentiation

Coastal Port Heartland HubLanded goods RedistributionShipper to port Customer direct

Ocean specific Unlimited geography

Multi-modal support Multi-modal integration

Customer-dependent supply chain Embedded supply chain

National security issues Controlled borders

Engage Investors/DevelopersEngage Investors/Developers

• Identify transportation/distribution investors• Entice large-scale institutional money• Motivate rapid development/expansion• Assist in their business development

Identify Target SegmentsIdentify Target Segments

• Initial focused geographical development– China inbound– China outbound– Integration with Canadian ports

• Automotive industry service• Leverage complementary ports

Deploy Promotional CampaignDeploy Promotional Campaign

• Engage federal/state government partners• Develop image and brand• Gain local commitment from strategic partners• Build external awareness• Engage investment partners

Critical Success FactorsCritical Success Factors• Speak with one voice

– Internal unity• Clearly define roles and responsibilities

– Secure long-term commitments• Execute vision in steps

– Work toward a series of continuous victories– Communicate successes

• Adapt to market influences– Monitor response/impact– Adjust execution accordingly

• Make sure everybody wins– Share the rewards/recognition– Ensure continuous reinvestment

Select ImplementerSelect Implementer

Toledo Port Authority

Pursue PartnersPursue PartnersToledo Port Authority

market analysismarket analysis - toledo metropolitan area ... 07 tems presentations... · market...

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