port of san francisco maritime cargo market and warehouse analysis prepared by cbre consulting...

Port of San Francisco

Maritime Cargo Market and Warehouse Analysis

Prepared byPrepared byCBRE ConsultingCBRE Consulting

Martin AssociatesMartin Associates∙∙

January 13, 2009January 13, 2009


Study PurposeStudy Purpose

• Examine current Port of San Francisco Examine current Port of San Francisco cargo basecargo base– BulkBulk– BreakbulkBreakbulk– Competing portsCompeting ports– Current situationCurrent situation– Factors influencing port selectionFactors influencing port selection

• Identify potential new cargo opportunitiesIdentify potential new cargo opportunities• Identify economic impact of potential Identify economic impact of potential

opportunitiesopportunities• Discuss implications and conclusionsDiscuss implications and conclusions


Source: Port of San Francisco

Dry Bulk Cargo Handled at Port of San Dry Bulk Cargo Handled at Port of San FranciscoFrancisco

1,800,000

1,600,000

1,400,000

1,200,000

1,000,000

800,000

1999

Sand Aggregate

Metr

ic T

on

s

600,000

400,000

200,000

2000 2007200620052004200320022001

0

Port of San Francisco’s cargo tonnage has Port of San Francisco’s cargo tonnage has been dominated by dry bulk cargobeen dominated by dry bulk cargo


Bulk Market OutlookBulk Market Outlook

• Current dry bulk tenants see flat/negative Current dry bulk tenants see flat/negative growth over the near term due to economic growth over the near term due to economic conditionsconditions– It appears cement and aggregate supplies It appears cement and aggregate supplies

from current tenants are adequate to handle from current tenants are adequate to handle market needsmarket needs

– Biodiesel facility at Darling International will Biodiesel facility at Darling International will require additional feedstock, however it will require additional feedstock, however it will not come via waternot come via water

• Port has available facility at Pier 96 if another Port has available facility at Pier 96 if another bulk shipper can be identifiedbulk shipper can be identified


Source: Port of San Francisco

Breakbulk Cargo Handled at Pier 80 by CommodityBreakbulk Cargo Handled at Pier 80 by Commodity

300,000

250,000

200,000

150,000

Ton

s

100,000

50,000

2002 20072006200520042003

0

Steel Newsprint Lumber Project

Port of San Francisco’s breakbulk cargo tonnagePort of San Francisco’s breakbulk cargo tonnage


Breakbulk Steel OutlookBreakbulk Steel Outlook

• Overall, steel imports reflect the strength of the US Overall, steel imports reflect the strength of the US economyeconomy

• Near term forecast - flat volumes for Bay Area Near term forecast - flat volumes for Bay Area customerscustomers

• Port partnering with ILWU to increase productivity and Port partnering with ILWU to increase productivity and competitivenesscompetitiveness

• Illinois Street Bridge will offer more options to move Illinois Street Bridge will offer more options to move freight inland via railfreight inland via rail

• Bay Bridge ProjectBay Bridge Project– Some steel work left to do, potential additional Some steel work left to do, potential additional

opportunitiesopportunities


Northern California Ports Northern California Ports Non-Containerized Cargo SummaryNon-Containerized Cargo Summary

• Port of San Francisco has Bay Area’s only breakbulk Port of San Francisco has Bay Area’s only breakbulk

terminal; imported steel dominates cargo mixterminal; imported steel dominates cargo mix

• Port of Stockton has been primary competitor in the Port of Stockton has been primary competitor in the

breakbulk market (steel products, windmill parts)breakbulk market (steel products, windmill parts)

• Newsprint import business has dried upNewsprint import business has dried up

• Benicia has been the dominant player in the auto Benicia has been the dominant player in the auto

market, however Richmond is capitalizing on market, however Richmond is capitalizing on

opportunitiesopportunities

• Oakland handles no non-containerized cargoOakland handles no non-containerized cargo


ImplicationsImplications

Current/Existing MarketsCurrent/Existing Markets

The Port’s key and most stable line of business has been bulk cargoesThe Port’s key and most stable line of business has been bulk cargoes

Breakbulk at Pier 80 has been unstableBreakbulk at Pier 80 has been unstable

– Breakbulk steel is volatile and extremely sensitive to world market Breakbulk steel is volatile and extremely sensitive to world market

conditionsconditions

Key obstacles to cargo growthKey obstacles to cargo growth

– Port is geographically “isolated”Port is geographically “isolated”

– Impediments to freight rail access, especially tunnel clearanceImpediments to freight rail access, especially tunnel clearance

– Market perception of productivity and competitiveness of labor at Pier 80 Market perception of productivity and competitiveness of labor at Pier 80


Implications Implications

Potential New Cargo OpportunitiesPotential New Cargo Opportunities

Project cargo – particularly windmills are a growing market with over 225 Project cargo – particularly windmills are a growing market with over 225

projects in the planning stages across the US – over 12,000 wind towersprojects in the planning stages across the US – over 12,000 wind towers

Autos – potential to develop national distribution from Port if rail tunnel Autos – potential to develop national distribution from Port if rail tunnel

clearance issue can be solvedclearance issue can be solved

Breakbulk fruit - will be displaced from SoCal ports, but due to fumigation Breakbulk fruit - will be displaced from SoCal ports, but due to fumigation

this opportunity may not be realistic for the Portthis opportunity may not be realistic for the Port

Containerized fruit – bananas/pineapples from a single user such as Dole, Containerized fruit – bananas/pineapples from a single user such as Dole,

offer the most potential as no fumigation requiredoffer the most potential as no fumigation required


ImplicationsImplicationsFocus of Marketing EffortsFocus of Marketing Efforts

Focus Pier 80 marketing efforts on long-term, sustainable Focus Pier 80 marketing efforts on long-term, sustainable cargo. Include the following:cargo. Include the following:• Windmills and project cargoWindmills and project cargo

• Auto processors and manufacturersAuto processors and manufacturers

• Single containerized fruit tenant with volume to bring in regular serviceSingle containerized fruit tenant with volume to bring in regular service

• Regional steel importers where the Port has a competitive advantage to Regional steel importers where the Port has a competitive advantage to induce callsinduce calls

Address any terminal and labor issues which could impact Address any terminal and labor issues which could impact future cargo opportunitiesfuture cargo opportunities

Identify actual cost of rail tunnel repairs for tri-level auto railcarsIdentify actual cost of rail tunnel repairs for tri-level auto railcars

Investigate fumigation restrictions within the CityInvestigate fumigation restrictions within the City


Thank YouThank You

port of san francisco maritime cargo market and warehouse analysis prepared by cbre consulting...

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