The Local and Regional Economic Impacts of the Cleveland Harbor Final Report

Transcription

1 The Local and Regional Economic Impacts of the Cleveland Harbor Final Report Prepared for: PORT OF CLEVELAND 110 W. 9 th Street Suite 300 Cleveland, OH Prepared by: MARTIN ASSOCIATES 941 Wheatland Avenue, Suite 203 Lancaster, PA May 6, 2016

2 TABLE OF CONTENTS I. INTRODUCTION AND OVERVIEW IMPACT DEFINITIONS METHODOLOGY Data Collection Direct Impacts Induced Impacts Indirect Impacts Related Impacts Tax Impacts SUMMARY OF RESULTS... 7 II. ECONOMIC IMPACTS OF MARITIME CARGO ACTIVITY ECONOMIC IMPACT STRUCTURE The Surface Transportation Sector The Maritime Services Sector Related Shipper/Consignees Cleveland Cuyahoga County Port Authority COMMODITIES INCLUDED IN THE ANALYSIS MARITIME CARGO EMPLOYMENT IMPACTS Direct Maritime Cargo Job Impacts Job Impacts by Category Direct Job Impacts by Commodity Distribution of Direct Cargo Jobs by Place of Residence Induced Jobs Indirect Jobs Related User (Shipper/Consignee) Jobs TOTAL ECONOMIC VALUE AND BUSINESS REVENUE IMPACTS Direct Business Revenue of Providing Services PERSONAL EARNINGS IMPACT TAX IMPACTS III. COMPARISSON OF IMPACTS

3 I. INTRODUCTION AND OVERVIEW The Port of Cleveland consists of four public terminals handling containers, break bulk, iron ore, limestone, and cement. Additionally, there are thirteen private terminals operating on the Cuyahoga River, from the confluence with the Old River to the Denison Avenue Bridge. These private terminals handle commodities including sand and aggregates, limestone, coal and coke, salt, slag, cement, and petroleum products. In total, these terminals handled 13.3 million tons of cargo in The tonnage moved on more than 850 vessels and barges calling the public and private marine terminals within the Cleveland Harbor. Iron ore and limestone, including transshipped tonnages, account for more than 9.5 million tons of the 13.3 million tons handled at the public and private terminals in the Cleveland Harbor, followed by salt that is mined in Cleveland. The iron ore is typically moved from Lake Superior in self-unloading lakers, and discharged at the Cleveland Bulk Terminal. From there, the ore is loaded onto smaller river lakers and barges for its journey to the ArcelorMittal facility on the Cuyahoga River. The limestone moves on smaller lakers from such ports as Cedarville on Lake Michigan. A portion of the limestone handled in Cleveland is used to remove impurities in the steel making process while the balance is used in the construction industry or as a scrubbing agent at coal-fired power generation facilities. The lakers carrying the limestone destined for the steel mill are capable of directly transiting the Cuyahoga River for direct offloading upstream. The resulting steel products are moved from the Arcelor facility to users throughout the region. This facility consists of two blast furnaces, feeding two steelmaking facilities on the site. The steel products manufactured at this facility include steel sheets and slab. Truck and rail are used to transport the finished product to automotive manufacturers and steel service centers. Other markets served by this facility include producers of converters and tubular applications. With respect to salt, the Cargill Deicing operation in Cleveland consists of a mine under Lake Erie where the salt is extracted and shipped throughout the Great Lakes Region via the Port of Cleveland. In addition, the salt operation also supplies local and regional markets via truck and rail. General cargo, including containerized cargo, handled at the Port of Cleveland includes turbines and diesel generators imported to be used to update coal fired power plants, machinery imported to be used in the regional auto industry and other manufacturing operations, and steel products including coil and slab for local and regional use in manufacturing, construction and steel center distribution. General cargo exports include machinery and turbines produced regionally. These general cargoes are moved to and from the port terminals by truck and rail, stored at the marine terminals prior to vessel loading and after vessel discharge, and then loaded or discharged onto the vessels by members of the International Longshoremen s Association. As demonstrated, the cargo moving via the Port s marine terminals has a far reaching impact into the local and regional economies, and is not just limited to activity at the marine terminals. The imported cargo is used in local and regional steel mill operations and regional manufacturing, while the export cargo is produced regionally, trucked and railed to the port to serve domestic and international destinations. The purpose of this economic impact analysis is to quantify the impact of the Port of Cleveland. As demonstrated, the impact is not just limited to the loading and off-loading of the vessels, but the products imported and exported are consumed and produced locally and regionally, creating jobs, income, revenue and taxes at every stage of the logistics supply chain. To measure the economic impacts of the Port of Cleveland cargo operations, the study employs methodology and definitions that have been used by Martin Associates to measure the economic impacts of seaport activity at more than 500 ports in the United States and Canada. It is to be emphasized that only measurable impacts are included in this study. In order to ensure defensibility, the Martin Associates approach to economic impact analysis is based on data developed through an extensive interview and telephone survey program of the Cleveland Harbor terminals and the firms providing cargo services within the Cleveland Harbor. Specific re-spending models

4 have been developed for the Cleveland area to reflect the unique economic and consumer profiles of the regional economy. This study focuses on impacts generated during calendar year 2015, which uses the latest data available from the Cleveland Cuyahoga County Port Authority (CCCPA) and private terminal operators. Impacts are estimated in terms of jobs, personal earnings, business revenue, and state and local taxes. In addition to the baseline impact estimates, computer models specific to each terminal operation have been prepared that can be used in evaluating the sensitivity of impacts to changes in tonnage, labor productivity, labor work rules, commodity mix, inland origins/destinations of commodities and vessel size. 1. IMPACT DEFINITIONS The impacts are measured in terms of: Jobs [direct, induced, indirect and related users]; Personal income; Business revenue; and State and local taxes. Each impact measurement is described below: Direct, Induced and Indirect jobs - Direct jobs are those that would not exist if activity at the Harbor s cargo facilities were to cease. Direct jobs created by maritime cargo activity at the Harbor/River terminals are those jobs with the firms directly providing cargo handling and vessel services, including trucking companies, terminal operators and stevedores, members of the International Longshoremen s Association (ILA), non-union dockworkers, freight forwarders and customshouse brokers, vessel agents, vessel and barge crewmembers, pilots and tug assist companies. It is to be emphasized that these are classified as directly generated in the sense that these jobs would experience near term dislocation if the Harbor s cargo facilities were closed. These jobs are, for the most part, local jobs and are held by residents of Cuyahoga County. Induced jobs are jobs created in the Cleveland area by the purchases of goods and services by those individuals directly employed by each of the Harbor s lines of business. These jobs are based on the local purchase patterns of Cleveland area residents. The induced jobs are jobs with grocery stores, restaurants, health care providers, retail stores, local housing/construction industry, and transportation services, as well as with wholesalers providing the goods to the retailers. Indirect jobs are created throughout the Cleveland area as the result of purchases for goods and services by the firms directly impacted by Cleveland Harbor activity, including the tenants, terminal operators and the firms providing services to cargo operations. The indirect jobs are measured based on actual local purchase patterns of the directly dependent firms, and occur with such industries as utilities, office supplies, contract service providers, maintenance and repair, and construction. Related shipper/consignee (related user) jobs with firms using the cargo terminals to ship and receive cargo. These jobs are not entirely dependent upon the Harbor activity, but reflect the importance of the Harbor to local firms. While the facilities and services provided in the seaport are a crucial part of the infrastructure allowing these jobs to exist, they would not necessarily be immediately displaced if marine cargo were to cease. These jobs include jobs associated with containerized cargo, iron ore and primary steel mill operations, as well as salt, aggregates and limestone.

5 Personal income impact consists of wages and salaries received by those directly employed by Harbor activity, and includes a re-spending impact which measures the personal consumption activity in the Cleveland area of those directly employed as the result of Cleveland Harbor cargo activity. Indirect personal income measures the wages and salaries received by those indirectly employed. Business revenue consists of total business receipts by firms providing services in support of the river cargo. Local purchases for goods and services made by the directly impacted firms are also measured. These local purchases by the dependent firms create the indirect impacts. State and local taxes include taxes paid by individuals as well as firms dependent upon the Cleveland Harbor cargo and mixed use activity. 2. METHODOLOGY 2.1. Data Collection The impacts of Cleveland Harbor presented in this report were estimated based on telephone and personal interviews with 78 firms in the Cleveland area. This represents the universe of the cargo businesses (with the exception of trucking and freight forwarding firms) operating in the Cleveland Harbor and along the Cuyahoga River. It is to be emphasized that a 96% response rate was achieved from these firms. The direct impacts are measured at the firm level of detail, and aggregated to develop the impacts for the Cleveland Harbor. Each firm surveyed provided Martin Associates with detailed employment levels (both full time and part time), annual payroll, local purchases and the residence of the employees. Data was collected from the CCCPA and private cargo terminals to estimate the 2015 impacts Direct Impacts The results of these interviews were then used to develop the baseline direct job, revenue, and income impacts for the cargo activity and for the economic sectors and job categories associated with each activity. This baseline survey data was also used to develop operational models that can be used to update the impacts of the marine cargo activity on an annual basis and to evaluate the impacts of changes in: Marine cargo tonnage, by commodity; Seaport labor productivity, and work rules; Modal distribution of river cargo (what percent of the inland transportation of a commodity is truck versus rail), as well as the geographical distribution of each commodity; and Vessel/barge calls. Also, the operational models can be used to evaluate alternative facilities expansion projects and new construction, such as a new or expanded marine cargo or cruise terminal.

6 2.3. Induced Impacts Induced impacts are those generated by the purchases of the individuals employed as a result of cargo activity. For example, a portion of the personal earnings received by those directly employed due to activity at the seaport is used for purchases of goods and services, both in-state, as well as out-of-state. These purchases, in turn, create additional jobs in the state of Ohio, which are classified as induced. To estimate these induced jobs, a personal earnings multiplier for the state of Ohio was developed from data provided by the Bureau of Economic Analysis, Regional Input-Output Modeling System. This income multiplier is used to estimate the total personal earnings generated in the state. A portion of this total personal earnings impact is next allocated to specific local purchases (as determined from consumption data for Cleveland Metropolitan Area residents, as developed from the U.S. Bureau of Labor Statistics, Consumer Expenditure Survey, ). These purchases are next converted into retail and wholesale induced jobs in the regional economy. Induced jobs are not estimated at lower levels of purchasing rounds (after the wholesale round) since it is not possible to trace with a sufficient degree of accuracy, geographically, where purchases at the remaining levels occur. However, about 80 percent of the consumption will likely occur at the first two rounds of purchases, which are most likely local retail and wholesale purchases Indirect Impacts Indirect jobs are generated in the local economy as the result of purchases by firms that are directly dependent upon activity at the marine cargo terminals along the Cuyahoga River. These purchases are for goods such as office supplies and equipment, maintenance and repair services, raw materials, communications and utilities, transportation services and other professional services. To estimate the indirect economic impact, local purchases, by type of purchase, were collected from each of the 78 firms interviewed. These local purchases were then combined with employment to sales ratios in local supplying industries, developed from U.S. Bureau of Economic Analysis, Regional Input-Output Modeling System for the state of Ohio. These jobs to sales ratios capture the numerous spending rounds associated with the supply of goods and services. Special care has been exercised to avoid double counting the indirect impacts, and to specifically include only the expenditures by the directly dependent firms that are, in fact, local Related Impacts Related impacts measure the jobs with shippers and consignees moving cargo through the marine terminals. Related jobs are not dependent upon the port marine terminals to the same extent as are the direct, induced, and indirect jobs. It is the demand for the final products which creates the demand for the employment with these shippers/consignees, not the use of Cleveland terminals, and therefore these firms can and do use other ports. For example, when hurricane devastation renders a port s terminals inoperable, essentially suspending operations at the port, the direct, induced, and indirect jobholders are immediately affected with similar consequence. However, the jobs held with related users, such as manufacturing as well as wholesale and retail distribution, throughout the unaffected areas of the state will continue to operate. Related impacts for the Harbor facilities were estimated by multiplying the value of the cargo moving via the marine terminals with jobs to sales ratios specific to the exporters and importers. 1 1 The value of cargo moving via the marine terminals was determined from U.S. Census of Foreign Trade Statistics, while the ratios of jobs to sales data for related Ohio exporters and importers were developed from data supplied to Martin Associates by the Bureau of Economic Analysis, Regional Input-Output Modeling System.

7 2.6. Tax Impacts The tax impacts include state and local taxes collected from all sources, both personal and business taxes. The state and local per capita income tax burdens (developed by the Tax Foundation for the state of Ohio) are applied to the total direct, induced and indirect income impacts to estimate total state and local taxes created by activity in the Cleveland Harbor. 3. SUMMARY OF RESULTS Exhibit I-1 provides a breakdown by cargo results for the economic impact analysis of the Cleveland Harbor. Exhibit I Economic Impact of Cleveland Harbor Cargo* CLEVELAND - CUYAHOGA RIVER CARGO JOBS DIRECT 4,084 INDUCED 3,993 INDIRECT 6,649 RELATED JOBS 5,546 TOTAL JOBS 20,273 PERSONAL INCOME DIRECT $237,248 INDUCED/RESPENDING $516,797 INDIRECT $312,276 RELATED INCOME $378,021 TOTAL PERSONAL INCOME $1,444,342 BUISNESS REVENUE BUSINESS SERVICES REVENUE $514,685 TENANT/DEPENDENT SHIPPER REVENUE $1,302,322 DEPENDENT SUBTOTAL $1,817,006 VALUE OF RELATED OUTPUT $1,143,853 TOTAL $2,960,859 LOCAL PURCHASES $626,648 STATE & LOCAL TAXES DIRECT, INDUCED AND INDIRECT $103,433 RELATED TAXES $36,668 TOTAL STATE AND LOCAL TAXES $140,101 *Totals may not add due to rounding

8 In 2015, the Cleveland Harbor supported 20,273 jobs in the state of Ohio. Of these jobs, 4,084 jobs are directly created by port activities, while another 3,993 induced jobs are generated in the Cleveland area as a result of local purchases made by those directly employed due to Cleveland Harbor activity. In addition, there are 6,649 indirect jobs supported in the Cuyahoga County area as the result of $626.6 million of local purchases by directly dependent firms. In addition, the cargo moving via Cleveland Harbor terminals supports 5,546 related jobs throughout the state of Ohio. The majority of these jobs are associated with the services related in support of primary steel manufacturing. The 4,084 direct jobs received $237.2 million of direct wage and salary income, for average earnings of $58,086 per direct employee. This compares to an average wage throughout the state of Ohio of $47,944 in As a result of local purchases with this $237.2 million of direct wages and salaries, an additional $516.8 million of income and local consumption expenditures were created in the state of Ohio. It is this re-spending impact that supported the 3,993 induced jobs. 3 The indirect job holders received $312.3 million in personal income. In total, $1.4 billion of personal income was supported by Cleveland Harbor operations, including the $378.0 million received by those employed with the related users of the Harbor. Local businesses received $514.7 million of sales revenue from providing services to the ocean cargo activity and mixed use real estate activity. The dependent users located in the Harbor generated an additional $1.3 billion in economic activity. This does not include the value of the cargo moving via the Port. The cargo activity at the Harbor created an additional $1.1 billion of related economic output in the state. It is to be emphasized that only the economic activity associated with the raw materials and finished products that move via the public and private marine terminals at the Port of Cleveland is included. As a result of the cargo activity at the Cleveland Harbor, a total of $140.1 million of state and local tax revenue was generated. The total economic value of the marine cargo and vessel activity at the Port of Cleveland including the revenue and value added at each stage of moving an export to the Port or an import from the marine terminals is estimated at nearly $3.5 billion. The total economic value consists of monetary measures that are independent of each other and combining these measures does not result in double counting of the impacts. This includes the $0.5 billion of direct business revenue received from businesses providing cargo and vessels services at the port and moving the cargo to and from inland destinations and origins; $1.3 billion of revenue from port dependent tenants; the $0.5 billion of respending and local personal consumption impact; and the $1.1 billion of value of output supported by the related users. This $1.1 billion includes the revenue and value added at each stage of production, including support firms providing goods and services during the production of the export. The total economic value with users of import cargo includes the economic value of the imported cargo moving through the seaport to final consumption either by individuals or industry. It is to be emphasized that the $1.1 billion of output with related users would not disappear from the U.S. economy should the cargo move through another port, as it is the demand for the export and import cargo that drives the value of the cargo and generates the user economic value. If the cargo were to move to another port, the logistics cost of moving the imports and exports would increase, but the value would still be generated in other regions and/or other states due to the demand for the export and import products; however, the $0.5 billion of direct business revenue, the $1.3 billion of tenant and dependent shipper revenue, and the $0.5 billion of re-spending and local consumption expenditures would be lost from the local economy. The related economic value 2 U.S. Bureau of Labor Statistics, First Quarter 2015, U.S. Midwest Information Office 3 The induced income impact also includes local consumption expenditures and should not be divided by induced jobs to estimate the average salary per induced job. This re-spending throughout the region is estimated using a regional personal earnings multiplier, which reflects the percentage of purchases by individuals that are made within the state. Hence, the average salary would be overestimated.

9 demonstrates at a given point of time, the magnitude of the influence of the Port of Cleveland public and private marine terminals. It is to be emphasized that these components of the total economic value are non-additive. The last economic impact study of the Port of Cleveland was conducted in This study was conducted by Martin Associates and uses the same methodology as the current study. Therefore, direct comparisons can be made. Between 2008 and 2015, cargo activity at the Port s public and private marine terminals increased by 4.1 million tons. As a result, the overall economic impact of the port operations increased. Direct, induced and indirect jobs grew by 349 jobs, and overall economic value of the Port grew from $2.3 billion to $3.5 billion. In summary, there are 4,084 jobs in the Cleveland area that are directly dependent on the cargo activity occurring in the Cleveland Harbor. If all of these employees worked for a single company it would be the thirteenth largest employer in Cuyahoga County behind Swagelok Company (4,184 full-time equivalent employees,) and ahead of Giant Eagle Inc. (3,530 full-time equivalent employees.) 4 The total contribution to the state s economy, including value of economic activity and re-spending is nearly $3.5 billion. This represents 0.6% of the Ohio s GDP as estimated by the Bureau of Economic Analysis. 5 Finally, as noted, the directly generated jobs receive an average annual salary of $58,086, which is 21% greater than the average state-wide annual salary in Ohio. The balance of the report describes in detail the impacts created by maritime cargo operations of the Cleveland Harbor. 4 Crain s Cleveland Business, List of Cuyahoga County s Largest Employers Proves Cleveland is a Health Care Town. < 5 Bureau of Economic Analysis, Current-Dollar Gross Domestic Product (GDP) by State, 2014:III-2015:III, March 2, 2016.

10 II. ECONOMIC IMPACTS OF MARITIME CARGO ACTIVITY Waterborne cargo activity at a seaport contributes to the local and regional economy by generating business revenue to local and national firms providing vessel and cargo handling services at the marine terminals. These firms, in turn, provide employment and income to individuals, and pay taxes to state and local governments. Exhibit II-1 shows how activity at marine terminals generates impacts throughout the local, state and national economies. As this exhibit indicates, the impact of a seaport on a local, state or national economy cannot be reduced to a single number, but instead, the seaport activity creates several impacts. These are the revenue impact, employment impact, personal income impact and tax impact. These impacts are non-additive. For example, the income impact is a part of the revenue impact, and adding these impacts together would result in double counting. Exhibit II-1 shows graphically how activity at Port of Cleveland s public and private marine terminals generate the four impacts. Exhibit II-1 Flow of Economic Impacts Generated by Marine Activity Seaport Activity Value of Imports/Exports Business Revenue Related Users Output Payroll Retained Earnings, Dividends Investments Local Purchases Related User Personal Income Direct Jobs Respending Induced Jobs Indirect Jobs Related User Jobs State & Local Taxes At the outset, activity at the port generates business revenue for firms which provide services. This business revenue impact is dispersed throughout the economy in several ways. It is used to hire people to provide the services, to purchase goods and services, and to make Federal, state and local tax payments. The remainder is used to pay stock-holders, retire debt, make investments, or is held as retained earnings. It is to be emphasized that the only portions of the revenue impact that can be definitely identified as remaining in the local economy are those portions paid out in salaries to local employees, for local purchases by individuals and businesses directly dependent on the seaport, in contributions to state and local taxes, in lease payments to the Port of Cleveland by tenants, and wharfage and dockage fees paid to the Port.

11 The employment impact of seaport activity consists of four levels of job impacts. Direct employment impact -- jobs directly generated by seaport activity. Direct jobs generated by marine cargo include jobs with railroads and trucking companies moving cargo between inland origins and destinations and the marine terminals, longshoremen and dockworkers, steamship agents, freight forwarders, stevedores, etc. It is to be emphasized that these are classified as directly generated in the sense that these jobs would experience near term dislocation if the activity at Port of Cleveland marine terminals were to be discontinued. Induced employment impact -- jobs created throughout the local economy because individuals directly employed due to seaport activity spend their wages locally on goods and services such as food, housing and clothing. These jobs are held by residents located throughout the region, since they are estimated based on local and regional purchases. Indirect jobs -- are jobs created locally due to purchases of goods and services by firms, not individuals. These jobs are estimated directly from local purchases data supplied to Martin Associates by the companies interviewed as part of this study, and include jobs with local office supply firms, maintenance and repair firms, parts and equipment suppliers, etc. It is to be emphasized that special care was taken to avoid double counting, since the current study counts certain jobs as direct (i.e., trucking jobs, jobs with railroads, jobs with insurance companies and admiralty law firms, etc.) which are often classified as indirect by other approaches, notably the input/output model approach. Related shipper/consignee (related user) jobs with firms using the cargo terminals to ship and receive cargo. These jobs are not entirely dependent upon the Harbor activity, but reflect the importance of the Harbor to local firms. While the facilities and services provided in the seaport are a crucial part of the infrastructure allowing these jobs to exist, they would not necessarily be immediately displaced if marine cargo were to cease. These jobs include jobs associated with containerized cargo, iron ore and primary steel mill operations, as well as salt, aggregates and limestone. It is important to note that these shippers/consignees also use other ports and are not completely dependent upon the Port of Cleveland. The level of employment with these firms is driven by the demand for the firms' products, not because the Port of Cleveland is used. Therefore, these related jobs are not dependent upon port activity, and their degree of dependence on the Port of Cleveland is much less than the other components of the job impact. 6 The personal earnings impact is the measure of employee wages and salaries (excluding benefits) received by individuals directly employed due to seaport activity. Re-spending of these earnings throughout the regional economy for purchases of goods and services is also estimated. This, in turn, generates additional jobs -- the induced employment impact. This re-spending throughout the region is estimated using a regional personal earnings multiplier, which reflects the percentage of purchases by individuals that are made within the Cleveland region. The re-spending effect varies by region -- a larger re-spending effect occurs in regions that produce a relatively large proportion of the goods and services consumed by residents, while lower re-spending effects are associated with regions that import a relatively large share of consumer goods and services (since personal earnings "leak out" of the region for these out-of-regional 6 The related jobs, income, value of output and taxes should not be used when evaluating the incremental economic impacts of specific port projects or the impacts of changes in cargo volume. These related impacts are net of the direct, induced and indirect impacts generated by port activity.

12 purchases). The direct earnings are a measure of the local impact since they are received by those directly employed by seaport activity. Tax impacts are payments to the state and local governments by firms and by individuals whose jobs are directly dependent upon and supported (induced jobs) by activity at the marine terminals. 1. ECONOMIC IMPACT STRUCTURE Economic impacts are created throughout various business sectors of the state and local economies. Specifically, four distinct economic sectors are impacted as a result of activity at the seaport terminals. These are the: Surface Transportation Sector; Maritime Services Sector; Related Shippers/Consignees Sector; and Cleveland Cuyahoga County Port Authority. Within each sector, various participants are involved. Separate impacts are estimated for each of the participants. A discussion of each of the economic impact sectors is provided below, including a description of the major participants in each sector The Surface Transportation Sector The surface transportation sector consists of both the railroad and trucking industries. The trucking firms and railroads are responsible for moving the various cargoes between the seaport terminals and the inland origins and destinations. Also included is the pipeline transportation of petroleum products received at the Cleveland Harbor terminals and destined for airports and end users within the region The Maritime Services Sector This sector consists of numerous firms and participants performing functions related to the following maritime services: Maritime Cargo Transportation; Vessel Operations; Cargo Handling; and Federal, State and Local Government Agencies. A brief description of the major participants in each of these four categories is provided below: Maritime Cargo Transportation Participants in this category are involved in arranging for inland and water transportation for export or import freight. The freight forwarder/customs broker is the major participant in this category. The freight forwarder/customs broker arranges for the freight to be delivered between the terminals and inland destinations, as well as the ocean transportation. This function performed by freight forwarders and customshouse brokers is most prevalent for containerized and general cargo commodities.

13 Vessel Operations This category consists of several participants. The steamship agents provide a number of services for the vessel as soon as it enters the port. The agents arrange for medical and dental care of the crew, for ship supplies as well as payment of various expenses including port charges (where applicable). The agents are also responsible for vessel documentation. In addition to the steamship agents arranging for vessel services, those providing the services include: - Chandlers - supply the vessels with ship supplies (food, clothing, nautical equipment, etc.); - Towing firms - provide the tug service to guide the vessel to and from port; - Vessel and barge crewmembers those individuals aboard the vessels and barges to and from port; - Pilots - assist in navigating the vessels to and from Cuyahoga River maritime terminals; - Bunkering firms - provide fuel to the vessels; - Marine surveyors - inspect the vessels and the cargo; and - Shipyards/marine construction firms - provide repairs (either emergency or scheduled) and seasonal lay-ups as well as marine pier construction and dredging. Cargo Handling This category involves the physical handling of the cargo at the terminals between the land and the vessel. Included in this category are the following participants: - Longshoremen & dockworkers - include members of the International Longshoremen's Association (ILA), as well as those dockworkers with no union affiliation that are involved in the loading/unloading of cargo from the vessels and barges, as well as handling the cargo prior to loading and after unloading; - Stevedoring firms - manage the longshoremen and cargo-handling activities; - Cargo terminal operators - provide services to operate the maritime terminals, track cargo movement and provide security where cargo is loaded and off-loaded, as well as the petroleum terminal and pipeline operators which includes petroleum tank farm operations; and - Warehouse operators - store cargo after discharge or prior to loading and consolidate cargo units into shipment lots. In many cases the freight forwarders and consolidators are also involved in warehousing activity. Government Agencies This service sector involves federal, state and local government agencies that perform services related to cargo handling and vessel operations at the Port. Department of Homeland Security (DHS), which includes (but is not limited to) Customs and Border Protection (CBP), US Immigration and Customs Enforcement (ICE) and U.S. Coast Guard, U.S. Department of Labor, U.S. Department of Agriculture and the U.S. Army Corps of Engineers, are involved.

14 1.3. Related Shipper/Consignees Related jobs consist of jobs with related shippers/consignees shipping and receiving cargo through the Harbor terminals. Only the user industry activity that can be linked to the movement of cargo (either raw materials or finished products) through the Cleveland Harbor is considered in this related user impact Cleveland Cuyahoga County Port Authority The Cleveland Cuyahoga County Port Authority includes those individuals whose purpose is to oversee port activity at the public terminals. 2. COMMODITIES INCLUDED IN THE ANALYSIS A major use of an economic impact analysis is to provide a tool for port development planning. As a port grows, available land and other resources for port facilities become scarce, and decisions must be made as to how to develop the land and utilize the resources in the most efficient manner. Various types of facility configurations are associated with different commodities. For example, containers, automobiles and roll-on/roll-off cargo require a large amount of paved, open storage space, while certain types of break bulk cargoes such as steel coil, lumber and plywood may require covered storage. Perishable commodities require temperature controlled warehouses and some dry bulk cargo requires covered storage and special dust removing equipment, while tank farms are needed to store liquid bulk cargo. An understanding of the commodity's relative economic value in terms of employment and income to the local community, the cost of providing the facilities, and the relative demand for the different commodities is essential in making future port development plans. Because of this need for understanding relative commodity impacts, economic impacts are estimated for the following commodities handled at the public and private cargo terminals: Containers; Steel Products; Sand/Aggregates; Limestone; Coal/Coke; Iron Ore; Salt/Minerals; Slag; Cement; Petroleum Products; Asphalt; and Other Break Bulk It should be emphasized that commodity-specific impacts are not estimated for each of the economic sectors described in Section II.1. Specific impacts could not be allocated by individual commodities with any degree of accuracy for maritime construction, ship repair, or the state and Federal government due to the fact that it is difficult to estimate the percentage of resources that are dedicated to one commodity over another. For example, maritime construction may occur at a terminal that is multiuse and cannot be attributed to a specific commodity.

15 3. MARITIME CARGO EMPLOYMENT IMPACTS The employment generated by maritime cargo activity at the Cleveland Harbor is estimated. First, the total employment that is in some way related to the activities at cargo terminals is estimated from the 2015 interview process of 78 harbor front and riverfront occupants as well as service providers and 2015 data obtained by the CCCPA as described in the methodology; Second, the subset of total employment that is judged to be totally dependent (i.e., direct jobs) on port activity is analyzed as follows: o o o The direct job impact is estimated by detailed job category, i.e., trucking, ILA/dockworkers, steamship lines, steamship agents, chandlers, surveyors, etc.; The direct job impact is estimated for each of the key commodities/commodity groups; The direct job impact is estimated based on the residency of those directly employed; Induced and indirect jobs are estimated; Finally, jobs related to the maritime activity at the cargo terminals are described. It is estimated that 20,273 jobs are directly or indirectly supported by port activities at the cargo terminals within the Cleveland Harbor. Of the 20,273 jobs: 4,084 jobs are directly generated by activities at the cargo terminals and if such activities should cease, these jobs would be discontinued over the short term. 3,993 jobs (induced jobs) are supported by the local purchases of the 4,084 individuals directly generated by port activity at the cargo terminals. An additional 6,649 indirect jobs were supported by $626.6 million of purchases in the local and regional economy by firms providing direct cargo handling and vessel and barge services. 5,546 jobs related to cargo loaded and discharged over the docks in the Cleveland Harbor. These jobs are supported in the state s manufacturing and retail and wholesale and distribution industries and the in-state industries supporting the movement, processing and distribution of all commodities, primarily concentrated with primary steel manufacturing support services within the state Direct Maritime Cargo Job Impacts In 2015, about 13.3 million tons of waterborne cargo moved via the Cleveland Harbor terminals. As a result of this activity, 4,084 full-time jobs were directly created 7. In this section the jobs are analyzed in terms of: Distribution by job category; Distribution by commodity group; and Distribution by county and state of residency. 7 Jobs are measured in terms of full-time worker equivalents. If a worker is employed only 50 percent of the time by activity at a Harbor cargo terminal, then this worker is counted as.5 jobs.

16 These distributions are developed in more detail below Job Impacts by Category Exhibit II-2 presents the distribution of the 4,084 direct jobs by type of job. The exhibit indicates that the majority of direct jobs (2,057) are with dependent users located on the Cuyahoga River followed by trucking jobs (1,193) moving cargo to and from the terminals, barge and laker crewmembers, terminal employees/dockworkers and maritime service providers. Exhibit II-2 Cargo Employment Impacts by Sector and Job Category SECTOR DIRECT JOBS SURFACE TRANSPORTATION RAIL 27 TRUCK 1,193 MARITIME SERVICES TERMINAL EMPLOYEES/DOCKWORKERS 265 TOWING/PILOTS 31 LINES AND AGENTS 10 MARITIME SERVICES/SHIP REPAIR 96 GOVERNMENT 26 BARGE AND LAKER 361 DEPENDENT SHIPPERS/CONSIGNEES 2,057 PORT AUTHORITY 19 TOTAL 4,084 *Totals may not add due to rounding Direct Job Impacts by Commodity Most of the 4,084 jobs considered to be generated by port activity can be associated with the handling of specific commodities or commodity groups. Certain employment categories such as government employees cannot be identified with a specific commodity. As a result, employment in these groups (which totaled 133) was not allocated to commodity groups. Exhibit II-3 presents the relative employment impacts in terms of commodity groups.

17 Exhibit II-3 Distribution of Direct Cargo Job Impact by Commodity COMMODITY DIRECT JOBS CONTAINERS 44 STEEL COILS 521 SAND/AGGREGATE 170 LIMESTONE 489 COAL/COKE 14 IRON ORE 1,763 SALT/MINERALS 511 SLAG 35 CEMENT 177 PETROL PRODUCTS 10 ASPHALT 74 OTHER BREAK BULK 143 NOT ALLOCATED 133 TOTAL 4,084 *Totals may not add due to rounding The movement of iron ore used in local steel manufacturing support the largest number of direct jobs, 1,763, followed by the import of coils (521 jobs), the movement of locally mined salt (511 jobs), and then the distribution of limestone (489 jobs). The majority of the remaining direct jobs is supported by the movement of cement, sand/aggregates, and other break bulk Distribution of Direct Cargo Jobs by Place of Residence To underscore the geographic scope of the impacts generated by the cargo terminals, Exhibit II-4 presents the distribution of the 3,723 direct jobs (excluding those employed in the Laker sector,) by place of residency. The geographic employment analysis is based on the results of the interviews with firms in the maritime community. As this exhibit indicates, about 79% of the direct job holders reside in Cuyahoga County - 35% reside in Cleveland while another 44% live in other parts of Cuyahoga County.

18 3.2. Induced Jobs Exhibit II-4 Distribution of Direct Cargo Jobs by Place of Residence COUNTY PERCENT NUMBER CLEVELAND 35.3% 1,315 CUYAHOGA 43.6% 1,624 LAKE 4.5% 169 LORAIN 5.4% 201 ASHTABULA 3.1% 115 GEAUGA 2.4% 91 MEDINA 1.3% 47 SUMMIT 3.5% 129 OTHER 0.9% 33 TOTAL 100.0% 3,723 The 4,084 directly employed individuals due to activity at the cargo terminals received wages and salaries, a part of which was used to purchase local goods and services such as food, housing, clothing, transportation services, etc. As a result of these local purchases, 3,993 induced jobs in the regional economy were supported. The majority of the induced jobs are with local and regional private sector social services, business services, educational services and state and local government agencies, followed by jobs in the food and restaurant sector, and then jobs in the construction and home furnishings sector Indirect Jobs In addition to the induced jobs generated by the purchases by directly employed individuals, the firms providing the direct services and employing the 4,084 direct jobs make local purchases for goods and services. These local purchases by the firms dependent upon the cargo facilities generate additional local jobs - indirect jobs. Based on interviews with the cargo-related firms, these firms made $626.6 million of local and in-state purchases. These direct local purchases created an additional 6,649 indirect jobs in the local economy Related User (Shipper/Consignee) Jobs *Totals may not add due to rounding **Total excudes jobs associated with Lakers as the location of residence of crew members could not be estimated In addition to the direct, induced and indirect jobs, an estimate of jobs related to cargo moving via the Port was developed. It is estimated that 5,546 jobs with regional steel processing and construction firms are related to cargo moving via the Cleveland Harbor marine cargo terminals. It is to be emphasized that these jobs are only related jobs, not jobs dependent upon the Cleveland Harbor. 4. TOTAL ECONOMIC VALUE AND BUSINESS REVENUE IMPACTS The total economic value of the marine cargo and vessel activity at the Port of Cleveland including the revenue and value added at each stage of moving an export to the Port or an import from the marine terminals is estimated at nearly $3.5 billion. This includes the $0.5 billion of direct business revenue received from businesses providing cargo and vessels services at the port and moving the cargo to and from inland destinations and origins; $1.3 billion of revenue from port dependent tenants; the $0.5 billion of re-spending and local personal consumption impact; and the $1.1 billion of value of output supported by the related users. This $1.1 billion of value of output includes the revenue and value added

19 at each stage of production, including support firms providing goods and services during the production of the export. The economic value of output with users of import cargo includes the economic value of the imported cargo moving through the seaport to final consumption either by individuals or industry. It is to be emphasized that the $1.1 billion of output with related users would not disappear from the U.S. economy should the cargo move through another port, as it is the demand for the export and import cargo that drives the value of the cargo and generates the user economic value. If the cargo were to move to another port, the logistics cost of moving the imports and exports would increase, but the value would still be generated in other regions and/or other states due to the demand for the export and import products; however, the $0.5 billion of direct business revenue, the $1.8 billion of tenant and dependent shipper revenue, and the $0.5 billion of re-spending and local consumption expenditures would be lost from the local economy. The related economic value demonstrates at a given point of time, the magnitude of the influence of the Port of Cleveland public and private marine terminals. 4.1 Direct Business Revenue of Providing Services The balance of the discussion focuses on the $514.7 million of direct business revenue generated from the provision of services to the cargo, vessels and barges handled at the Cleveland Harbor marine terminals. Exhibit II-5 shows the distribution of this revenue impact by category and economic sector. As this exhibit indicates the barge and laker transportation activities receive the largest share of the total revenue impact, $260.9 million, followed by trucking firms that receive about $143.3 million. Exhibit II-5 Revenue Impact by Category and Economic Sector SECTOR REVENUE ($1,000) SURFACE TRANSPORTATION RAIL $32,976 TRUCK $143,279 MARITIME SERVICES TERMINAL EMPLOYEES/DOCKWORKERS $26,200 TOWING/PILOTS $20,471 LINES AND AGENTS $326 MARITIME SERVICES/SHIP REPAIR $26,172 GOVERNMENT N/A BARGE AND LAKER $260,891 PORT AUTHORITY $4,369 TOTAL $514,685 *Totals may not add due to rounding Similarly, Exhibit II-6 shows the direct revenue impact by commodity. It should again be noted that the revenue received by shippers/consignees from the sales of the products (value of the commodities) moving via the seaport terminals is not included, since product value is determined by the demand for the product, not the use of the cargo terminals.

20 Exhibit II Cargo Revenue Impacts by Commodity COMMODITY REVENUE ($1,000) CONTAINERS $3,380 STEEL COILS $93,799 SAND/AGGREGATE $25,087 LIMESTONE $79,285 COAL/COKE $1,792 IRON ORE $156,580 SALT/MINERALS $69,462 SLAG $4,151 CEMENT $29,466 PETROL PRODUCTS $445 ASPHALT $4,447 OTHER BREAK BULK $16,290 NOT ALLOCATED $30,501 TOTAL $514,685 As this exhibit indicates iron ore and finished steel products combined generate the largest direct revenue impacts, followed limestone and salt/minerals. 5. PERSONAL EARNINGS IMPACT The income impact is estimated by multiplying the average annual earnings (excluding benefits) of each port participant, i.e., truckers, steamship agents, pilots, towing firm employees, longshoremen, warehousemen, etc., by the corresponding number of direct jobs in each category. The individual annual earnings in each category multiplied by the corresponding job impact resulted in $237.2 million in personal wage and salary earnings. It is important to emphasize that the average annual earnings of a Harbordependent job is about $58,086, compared to the state-wide average annual income of $47,944. These relatively high paying jobs will have a much greater economic impact in the local economy through stimulating induced jobs than will a job paying lower wages. The impact of the re-spending of this direct income for local purchases is estimated using a personal earnings multiplier. The personal earnings multiplier is based on data supplied by the Bureau of Economic Analysis (BEA), Regional Input-Output Modeling System (RIMS II). The BEA estimates that for every one dollar earned by direct employees generated by activity at the cargo terminals, an additional $2.18 of personal income and consumption expenditures would be created as a result of re-spending the income for purchases of goods and services produced locally. Hence, a personal earnings multiplier of $3.18 was used to estimate the total income and consumption impact of $516.8 million, inclusive of the respending effect. This additional re-spending of the direct income generated the 3,993 induced job impacts. The 6,649 indirect job holders earned $312.3 million in indirect wages and salaries. The 5,546 related shipper/consignees of the cargo moving via the Harbor received about $378.0 million of personal income. Therefore, the total personal income impact and consumption impact created by Cuyahoga River cargo activity is estimated at just over $1.4 billion. 6. TAX IMPACTS *Totals may not add due to rounding State and local tax impacts are based on per employee tax burdens which are developed at the county, local and state jurisdictional levels. These tax per employee burdens are essentially tax indices that are used to allocate total taxes at each level of government to economic activity generated by the cargo

21 terminals. To estimate the per employee tax indices, total taxes received at each governmental level in Ohio was developed from the Tax Foundation, which reports total state and local taxes from all sources as a percent of total personal income. Cargo activity supporting direct, induced and indirect impacts generated $103.4 million of state, county and local taxes. As a result of the economic activity created by the related shipper/consignees, an additional $36.7 million of state and local taxes were generated for a total cargo tax impact of $140.1 million. The state of Ohio receives approximately 55.6% of the tax revenues, while the local governments received 44.4% 8 of the tax impact as illustrated in Exhibit II-7. Exhibit II-7 Distribution of State and Local Tax Revenue TAXES BY CATEGORY ($1,000) STATE LOCAL TOTAL DIRECT, INDUCED, & INDIRECT $57,539 $45,894 $103,433 RELATED $20,398 $16,270 $36,668 TOTAL $77,938 $62,164 $140,101 *Totals may not add due to rounding 8 State and Local Government Finances by Level of Government and by State: , U.S. Census Bureau, 2013 Annual Surveys of State and Local Government Finances.

22 III. COMPARISSON OF IMPACTS The last economic impact study conducted for the Port of Cleveland was conducted by Martin Associates in 2010, using 2008 cargo data. Since the last study, several structural and operational changes have occurred. With respect to the structural changes, the personal income multiplier for waterborne transportation, as estimated for the state of Ohio by the U.S. Bureau of Economic Analysis, has fallen from 4.37 to This reduction in the personal income multiplier reflects an increase in the savings rate per dollar of income earned (or conversely a decline in consumption per dollar), which has occurred since the 2008 recession. This reduction results in a lower re-spending impact and personal consumption impact per dollar of personal income, in turn reducing the induced job impact for a dollar of income earned. Secondly, the results of a new Economic Census for 2012 were released by the U.S. Bureau of Census. In the previous study (2012), the 2007 Economic Census was used to estimate induced impacts. The jobs to sales ratios in the updated Economic Census data are smaller than those estimated in the 2007 Economic Census. The lower jobs per sales ratios, which are used to translate the local purchases by the direct employees into induced jobs, add to the decline in induced jobs resulting from the lower income multiplier. The reduced jobs to sales ratios in the Economic Census reflect both an increase in overall productivity in the U.S., as well as the jobless recovery from the recession of 2008 and As is well documented in economic literature, more jobs have been filled with part time employees and some jobs have not been refilled. 9 As a result of these structural shifts, the induced job impacts per dollar of income are lower in this most recent study compared to the 2008 economic impacts. From an operational perspective, total tonnage handled by Cleveland terminals grew by about 4.1 million tons. The overall growth in tonnage was driven by iron ore handled and transshipped by Cleveland Bulk Terminal. Exhibit III-1 presents the changes in tonnages between 2008 and Exhibit III-1 Change in Tonnage by Commodity, TONS 2008 TONS COMMODITY (1,000) (1,000) CHANGE CONTAINERS STEEL COILS/BREAK BULK SAND/AGGREGATE LIMESTONE 2,228 2, COAL/COKE IRON ORE** 7,342 3,856 3,486 SALT/MINERALS** 1, SLAG CEMENT PETROL PRODUCTS/ASPHALT TOTAL 13,326 9,219 4,107 *Totals may not add due to rounding **Includes intraport tonnages As a result of the growth in cargo, the dependent direct, induced, and indirect jobs increased by 349. When the non-dependent, related jobs are included, total jobs increased by more than 2,400 jobs. A major driver of this growth is the new containerized and break bulk cargo service at the Port of Cleveland. There are typically many more jobs in manufacturing, wholesale, and retail that are related to containerized cargos 9.

23 and break bulk cargo (including manufacturing equipment and project cargo) than are associated with bulk cargos that are typically handled by Great Lakes ports. Exhibit III-2 shows the change in impacts between 2008 and Exhibit III-2 Change in Economic Impacts, CHANGE JOBS DIRECT 4,084 3, INDUCED 3,993 4, INDIRECT 6,649 6, TOTAL JOBS 14,727 14, PERSONAL INCOME ($1,000) DIRECT $237,248 $152,445 $84,803 INDUCED/RESPENDING $516,797 $514,394 $2,402 INDIRECT $312,276 $273,238 $39,038 TOTAL PERSONAL INCOME $1,066,321 $940,077 $126,244 DIRECT BUSINESS REVENUE ($1,000) BUSINESS SERVICES REVENUE $514,685 $433,918 $80,767 TENANT/DEPENDENT SHIPPER REVENUE $1,302,322 $1,077,366 $224,956 TOTAL $1,817,006 $1,511,284 $305,722 LOCAL PURCHASES ($1,000) $626,648 $507,987 $118,661 STATE & LOCAL TAXES ($1,000) $103,433 $97,768 $5,665 RELATED IMPACTS RELATED JOBS 5,546 3,455 2,092 RELATED INCOME ($1,000) $378,021 $139,773 $238,248 RELATED VALUE OF OUTPUT ($1,000) $1,143,853 $301,527 $842,326 RELATED TAXES ($1,000) $36,668 $14,536 $22,132 *Totals may not add due to rounding Direct jobs increased by 341 jobs since 2008 and indirect jobs grew by 330, reflecting the increase of $118.7 million of local purchases. Induced jobs decreased by 322 reflecting the decline in the income multiplier and jobs per sales ratios previously mentioned. Direct, induced, and indirect state and local taxes generated by port activity grew by $5.7 million while directly dependent business revenue grew by $305.7 million. This includes the revenue received from providing services to the vessels and cargo handled at the Port, as well as revenue generated by the port dependent tenants. Total economic value of Cleveland Harbor maritime activity increased from $2.3 billion in 2008 to $3.5 billion in 2015, while total jobs that are in some way related to the Port grew by 2,092 jobs. The total value of economic activity includes the direct revenue generated by the marine terminals, the revenue generated by the port dependent shippers/consignees, the re-spending impact of personal income, and the value of output of the related shippers/consignees using the Port. Exhibit III-3 presents the changes in job impacts by commodity between 2008 and As this exhibit demonstrates, jobs generated for nearly all commodities increased with the exception of slag and petroleum products. The decline in jobs associated with petroleum products reflects the lack of waterborne cargo at one of the private terminals in Steel and break bulk jobs are down fewer tons being trucked inland.

24 Exhibit III-3 Change in Direct Jobs by Commodity, DIRECT JOBS DIRECT JOBS COMMODITY CHANGE CONTAINERS STEEL PRODUCTS/BREAK BULK SAND/AGGREGATE LIMESTONE COAL/COKE IRON ORE 1,763 1, SALT/MINERALS SLAG CEMENT PETROL PRODUCTS/ASPHALT NOT ALLOCATED TOTAL 4,084 3, *Totals may not add due to rounding The change in direct jobs by type of job is shown in Exhibit III-4. As shown in this exhibit, the largest loss occurred in the Maritime Services category. The primary driver of this decline is the closure of Cleveland Ship Repair. The decline in surface transportation jobs is driven primarily by a decrease in the amount of steel and break bulk being shipped to inland destinations by truck and rail. SECTOR Exhibit III-4 Change in Direct Jobs by Job Category, DIRECT JOBS 2015 DIRECT JOBS 2008 CHANGE SURFACE TRANSPORTATION RAIL TRUCK 1,193 1, MARITIME SERVICES TERMINAL EMPLOYEES/DOCKWORKERS TOWING/PILOTS LINES AND AGENTS MARITIME SERVICES/SHIP REPAIR GOVERNMENT BARGE AND LAKER DEPENDENT SHIPPERS/CONSIGNEES 2,057 1, PORT AUTHORITY TOTAL 4,084 3, *Totals may not add due to rounding In summary, there are 4,084 jobs in the Cleveland area that are directly dependent on the cargo activity occurring in the Cleveland Harbor. If all of these employees worked for a single company it would be the thirteenth largest employer in Cuyahoga County behind Swagelok Company (4,184 full-time equivalent employees,) and ahead of Giant Eagle Inc. (3,530 full-time equivalent employees.) 10 The total contribution to the state s economy, including value of economic activity and re-spending is nearly $ Crain s Cleveland Business, List of Cuyahoga County s Largest Employers Proves Cleveland is a Health Care Town. <

25 billion. This represents 0.6% of the Ohio s GDP as estimated by the Bureau of Economic Analysis. 11 Finally, as noted, the directly generated jobs receive an average annual salary of $58,086, which is 21% greater than the average state-wide annual salary in Ohio. 11 Bureau of Economic Analysis, Current-Dollar Gross Domestic Product (GDP) by State, 2014:III-2015:III, March 2, 2016.

26 Port of Cleveland Cargo Market Assessment Final Draft Prepared for: PORT OF CLEVELAND 110 W. 9 th Street Suite 300 Cleveland, OH Prepared by: MARTIN ASSOCIATES 941 Wheatland Avenue, Suite 203 Lancaster, PA December 5, 2016

27 TABLE OF CONTENTS 1 INTRODUCTION AND OVERVIEW BASE CARGO MARKET OVERVIEW OF THE GREAT LAKES MARKET OVERVIEW OF CCCPA EXISTING BASE CARGO MARKET IRON ORE MARKET CEMENT, AGGREGATES AND LIMESTONE MARKET GENERAL CARGO AND STEEL MARKET CLEVELAND-EUROPE EXPRESS OFFSHORE WIND ENERGY COMPONENTS BASE CARGO AND OPPORTUNITIES FORECAST SUMMARY... 41

28 Thousand Tons 1 Introduction and Overview As part of the Port of Cleveland Strategic Plan Update, Martin Associates was retained by the Cleveland-Cuyahoga County Port Authority (CCCPA) to develop a cargo market assessment of the Port. This cargo market analysis focuses on: The Great Lakes market in which the Port of Cleveland competes; the historical flows of CCCPA base cargoes which include iron ore, limestones, cement, aggregate general cargo, steel and container activity associated with the Cleveland-Europe Express; the Port s current market conditions; future outlook; and, future cargo projections by commodity type. Potential new cargo market opportunities for the CCCPA are also discussed. 2 Base Cargo Market 2.1 Overview of the Great Lakes Market Historically, the Great Lakes cargo market has been driven by the demand for bulk commodities that are typically tied to a single local producer or user such as a mine, farm, manufacturing or utility plant, essentially creating a captive supply chain. This includes both raw materials such as iron ore, coal, limestone used in manufacturing, as well as finished and semi-finished outbound products such as steel and grain. These industries, typically dealing in dry and liquid bulk materials, have taken advantage of the economies of scale that can be achieved by using large waterborne shipments in order to compete in their respective markets. These markets tend to be non-dynamic growth markets, and are often driven by domestic and international economic conditions Conversely, the Great Lakes ports have been at a disadvantage to compete for discretionary cargoes - those that are subject to competition which is influenced by transportation costs and transit time due to the seasonality and vessel-size limitations of the St. Lawrence Seaway. For example, general cargo commodities such as steel, that historically moved via break bulk carriers via Great Lakes ports, have continually shifted to coastal ports in favor of more competitive costs, transit times and levels of service. From 2006 through 2014, the total Great Lakes tonnage exhibited a 23.5% decline in total tonnage from 173 million tons in 2006 to 132 million on Great Lakes ports were particularly impacted heavily by the recession in 2009, which impacted the production of the U.S. steel industry, hence impacting the demand for iron ore. During subsequent recovery, tonnage has remained relatively flat. Exhibit 1 - Total Great Lakes Tonnage U.S. Ports Foreign and Domestic Tonnage 200, , ,000 50, Source: USACE Waterborne Commerce Statistics Other Iron & Steel Grain Sand & Gravel Cement & Concrete Non-Metal. Min. Limestone Coal Lignite Iron Ore

29 Millions of Tonnes Similarly, in terms of foreign tonnage moving through the St. Lawrence Seaway, cargo volumes have not returned to pre-recession levels. In fact, from 2006 through 2015, international cargo has declined from 47 million tons to 36 million representing a 23% decline. The impact of the worldwide economic recession in 2008 and 2009 resulted in a decline from the 47 million tons in 2006 to about 30 million tons in Since 2009 there has been some recovery but the international cargo volumes remain below pre-recession levels. Furthermore, the share of international cargo that is general cargo, comprised primarily of steel products, has declined from 10% to 7.5%. Exhibit 2 - International Cargo through the Saint Lawrence Seaway GRAIN IRON ORE COAL OTHER BULK GENERAL CARGO Source: St. Lawrence Seaway Development Corporation 2.2 Overview of CCCPA Existing Base Cargo Market The Cleveland Port District as defined by the U.S. Army Corps of Engineers (USACE) includes the public docks under the control of the CCCPA specifically CBT and Docks as well the private facilities along the Cuyahoga River and Old River Channel. These private faculties are driven by local industries such as steel manufacturing, salt mining, cement distribution and liquid bulk storage. The balance of this market analysis will focus on only the CCCPA-leased facilities and the Lakefront footprint these docks encompass. In terms of tonnage, steel was the dominant commodity handled at the CCCPA docks through the late 1990s, with tonnage peaking at 1.2 million tons in Since then, however, steel volumes have declined. Over time, general cargo (including steel products) diminished primarily due to the growth of containerization. Also, in the late 1990s, the CCCPA purchased an ore loader from Lorain, Ohio which enabled the Port of Cleveland to handle iron ore transshipments destined for the local Cleveland steel mill, now ArcelorMittal. The iron ore is shipped in large laker vessels and discharged at the Cleveland Bulk Terminal (CBT). The ore is then reloaded (transshipped) onto smaller vessels that can navigate the Cuyahoga River for delivery to the steel mill dock upriver. The acquisition of the ore unloader bolstered the bulk tonnage at the Port of Cleveland and bulk has remained the dominant commodity since In addition to iron ore transshipment activity, the Port also handles limestone, cement and aggregates at CBT and various other dock facilities. Specifically, from 2000 to 2006, CCCPA total tonnage increased from approximately 2 million to 4.5 million tons, which is primarily attributed to growth in iron ore shipments. The effects of the global economic recession and the reduced production of the ArcelorMittal mill are evident in 2008 and Over this period, general cargo, stone and aggregates also declined. However, CCCPA total tonnage has continued to rebound after 2009, exhibiting a 6.5% annual growth over last 5 years. This increase in total tonnage has most notably been driven by growth in iron ore shipments. Also, general cargo has also exhibited strong growth (10.5% since 2011). Exhibit 3 demonstrated the CCCPA s historical throughput while Exhibit 4 shows the distribution of CCCPA cargo and the dominance of iron ore.

30 Percent of Tons Tons Exhibit 3 - Historical CCCPA Tonnage by Commodity Type 5,000,000 4,500,000 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000, ,000 - Ore Stone General Cargo Cement Aggregates Source: CCCPA Exhibit 4 - Historical Distribution of CCCPA Tonnage by Commodity Type 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Ore Stone General Cargo Cement Aggregates Source: CCCPA As shown above, with the decline in aggregates and general cargo from early 2000s, iron ore now comprises 80% of total. General cargo share has stabilized during recovery, but is less than early 2000 s. It is important to note that while tonnage has rebounded, the CCCPA s iron ore tonnage is dependent on a single user. Therefore, continued diversification of cargo base should remain a high priority.

31 Tons 2.3 Iron Ore Market Iron ore shipments grew from about 1 million tons in 1999 to about 3.5 million tons in The growth in the iron ore handled at the CCCPA s Cleveland Bulk Terminal (CBT), has been directly attributed to the acquisition of the ore loader from the Port of Lorain in the late 1990s. Fluctuations in iron ore tonnage reflect economic conditions and the demand for durable goods such as autos and appliances. While the demand for ore dropped significantly during the recession, a rapid recovery since 2009 has been exhibited. Iron ore tonnage of 3.5 million tons in 2014 and 2015 reflects full production capacity of the ArcelorMittal plant. Exhibit 5 shows the 10-year historical throughput of iron ore at the Port of Cleveland. Exhibit 5 CCCPA Iron Ore Throughput 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000, , Iron Ore Source: CCCPA By comparison, as shown in Exhibit 6, iron ore movements on the Great Lakes recovered in 2010 and 2011, but have essentially remained flat in subsequent years. In recent years, tonnage has stabilized, albeit at volumes slightly less than pre-recession levels

32 Millions of Tons Exhibit 6 - Total Great Lakes Iron Ore Movements at U.S. Great Lakes Ports Source: USACE Waterborne Commerce Statistics The Port of Cleveland s recovery in the iron ore market is underscored in Exhibit 7, which shows the annual throughput of iron ore at the Port of Cleveland vs. other Great Lakes ports in terms of an index based on 2004 volumes. The CCCPA suffered greater impact during recession and returned to 2004 levels in at the same pace as the rest of the Great Lakes. However, since 2012, the CCCPA has clearly outperformed the other Great Lakes ports. Again, this is due to the strength of the manufacturing at the ArcelorMittal facility in Cleveland. Exhibit 7 - Iron Ore Movements - CCCPA vs Other Great Lakes Ports Index Other Great Lakes CCCPA Source: CCCPA, USACE Waterborne Commerce Statistics Market outlook: Despite severe cutbacks due to the recession, ArcelorMittal has resumed steelmaking operations to levels higher than pre-recession years. ArcelorMittal ore consumption is capped based on plant capacity which is approximately 3.5 million tons annually. In 2015, CCCPA handled 3.46 million tons of ore indicating that the plant is essentially operating at full capacity. In the near-term, these production levels are expected to continue which caps the CCCPA ore tonnage at 3.5 million tons.

33 Tons 2.4 Cement, Aggregates and Limestone Market In addition to iron ore, the other dry bulk commodities handled at the CCCPA docks are cement, aggregates and limestone. Terminals handling these commodities include: Dock 20S: Essroc Cement Used in local and regional construction activity; CBT: Limestone Used in utility operations at a Southern Ohio utility plant; Dock 20 N: Kenmore Aggregates Used in local and regional construction activity (lease was terminated in 2015). Cement tonnage was impacted during the recession due to the decrease in regional construction activity. Cement volume rebounded in the immediate subsequent years and slumped with sluggish recovery. In 2015, tonnage again reached 100,000 tons. Aggregate exhibited a sharp decline in period and has discontinued with the termination of the Kenmore lease in Limestone through CBT used in utility operations, has resumed sporadically after 2009 decline and has remained 225, ,000 range. Exhibit 8 shows the recent throughput of all three of these commodities. Exhibit 8 - CCCPA Cement, Aggregate and Limestone Throughput 400, , , , , , ,000 Cement Aggregate Stone 50,000 0 Source: CCCPA As shown in Exhibit 9, cement, aggregate and limestone movements on the Great Lakes demonstrated a decline leading up to the recession and have demonstrated no growth during the recovery period. In fact, 2014 reported tonnage was the lowest since 2009, which emphasized the fact that these bulk commodities are not a growth market.

34 Index (2004 Base) Millions of Tons Exhibit 9 U.S. Great Lakes Movements of Cement, Aggregate and Limestone Imports Source: USACE Waterborne Commerce Statistics Although limestone tonnage has recovered sporadically and cement is showing an upward trend over the past two years, based on a 2004 index, the CCCPA is not performing as well as other ports on the Great Lakes (Exhibit 10). While other Great lakes ports are operating well below 2004 volumes. the decline and ultimate loss of Kenmore s aggregate tonnage has contributed to recent bulk performance in Cleveland. It is important to note that these commodities only comprise a small portion of total CCCPA tons 9.3% in Exhibit 10 - Cement, Aggregate and Limestone - CCCPA vs U.S. Great Lakes Ports Index Other US Great Lakes Cleveland Source: CCCPA, USACE Waterborne Commerce Statistics Market Outlook: Cement is driven by local construction activity, which is tied to health of the economy. Construction markets are still recovering and future tonnage will reflect this. The cement terminal is in the process of a corporate buyout which may lead to increase in tonnage through Cleveland facility to serve other regional markets. In fact, the plant is currently serving markets via rail. The aggregate market will cease due to the fact that the Kenmore lease was not renewed. Limestone throughput will be tied to the demand and production of the utility pant. In the near-term it is anticipated that 250, ,000 tons annually will move over CCCPA docks.

35 Tons 2.5 General Cargo and Steel Market The CCCPA s general cargo market is essentially comprised of steel products. In fact, non-steel general cargo commodities accounts for less than 1% of the total handled at the port s general cargo terminal. The majority of the steel is coil and wire rod products. Although, in 2015, pipe was brought in as part of an energy sector project in the region. The recession severely impacted general cargo and steel throughput at the CCCPA. Exhibit 11 demonstrates the sharp decline and recovery in general cargo since Over the period, general cargo at the CCCPA has increased at 10.5% per annum. In 2014, tonnage reached 500,000 tons and continues to approach pre-recession levels. Exhibit 11 - CCCPA General Cargo Throughput 700, , , , ,000 General Cargo/Steel 200, ,000 - Source: CCCPA Imported steel is tied to economic conditions and the demand for consumer goods such as automobiles and appliances. Continued recovery from the global recession and value of currency markets contributes to the volatility of the U.S. and Great Lakes steel imports markets. Exhibits 12 shows that U.S. steel imports recovered steadily from 2010 through 2012 and 2014 volumes returned to pre-recession levels. The decline demonstrates continued volatility in the market. The Great Lakes steel import market was unstable prior to the recession. While steel imports in the Great Lakes improved after the recession, tonnage remained flat during initial recovery in Significant growth on the Great Lakes was recorded between 2013 and 2014However, the decline in Great Lakes steel imports in 2015 points toward continued volatility as shown in pre-recession years.

36 Millions of Tons Millions of Tons Exhibit 12 - Steel Imports at All U.S. Ports Source: U.S. Bureau of Census Exhibit 13 - Steel Imports at All U.S. Great Lakes Ports Source: U.S. Bureau of Census The slower recovery within the Great Lakes steel market is underscored by the fact that the Great Lakes average share of total U.S. general cargo imports was 5.3%. In years , that share fell to 4.3%. However, based on a 2006 index, the CCCPA has outperformed other Great Lakes ports in terms of international general cargo tonnage through the St. Lawrence Seaway as presented in Exhibit 14. It is to be emphasized that 99% of this international general cargo consists of steel products.

37 Tons Index (2006 base) Exhibit 14 Steel Cargo through St. Lawrence Seaway CCCPA vs U.S. Great Lakes Ports Index Cleveland Other US Great Lakes Source: St. Lawrence Seaway Management Corporation (SLSMC) Despite sporadic activity in the international general cargo market, Cleveland has gradually increased share among key Great Lakes competitors since However, in the last two years, CCCPA has lost market share to competitors, despite the introduction of the CEE Service. Detroit and Chicago have been key competitors gaining share in 2014 and Exhibit 15 Share of International General Cargo through St. Lawrence Seaway 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% All Other Milwaukee Detroit Burns Harbor Chicago Cleveland Source: St Lawrence Seaway Development Corporation

38 Market Outlook: Import steel market is volatile and tied to economic conditions and the demand for primary metals manufacturing, particularly in the U.S auto and appliance industries. In addition, competition from domestic sources and the value of the U.S. Dollar further impact import volumes. In the near-term, volume is expected to continue to increase as the economy continues to strengthen. 2.6 Cleveland-Europe Express The Cleveland-Europe Express (CEE) began in 2014 with 9 guaranteed calls to Antwerp. In 2014, the CEE handled 5,000 tons; in 2015 total tonnage increased to 32,500 tons, of which approximately 75% was containerized cargo. The service has now expanded to 20 calls per year, or essentially 2 calls per month during open sailing season of the St Lawrence Seaway. This strategic plan update focuses on key market issues critical to growth of the service. Martin Associates conducted interviews with current and potential users of the CEE to determine key factors driving logistics routing decisions. In addition, the breakeven operating cost for operator was also analyzed. Interviews were conducted with: Regional manufacturers; Regional shippers; Freight forwarders; and Current and potential users of Port of Cleveland and CEE. Purpose was to identify: Current shipping/logistics patterns; Key factors in determining international routings for imports and exports; and Benefits and issues with using Port of Cleveland and CEE in comparison to other U.S. East Coast (USEC) ports. The results of the interviews yielded a number of benefits and strengths of the CEE, including: CEE is cost competitive with U.S. East Coast (USEC) ports. The rate structure for both imports and exports is extremely competitive with USEC ports. Congestion issues, especially with respect to Lessthan-Container Load (LCL) shipments at the Port of NYNJ can exacerbate costly terminal and warehousing charges. In addition, customs exams and truck tolls transporting the container to a coastal port also impact landed costs. CEE is competitive with USEC ports on transit time. CEE allows for longer visibility of the shipment. By using the CEE, the proximity from production facilities in Northeast Ohio to Port Cleveland allows for shortened lead time scheduling, typically up to 48 hours prior to sailing rather than 4-5 additional days for truck or rail routing through USEC ports. In terms of challenges of the CEE, interviewees indicated: Seasonality/winter closure of the Seaway. The three-month closure of the St. Lawrence Seaway for maintenance requires alternative routings during that time, which can potentially tack on additional costs. Also, the change in mode of shipping can interrupt rhythm of production schedule and overall delivery logistics during that time.

39 Reliability and frequency of sailing schedule. Early sailings or sailing departure delays threaten delivery deadlines. In these instances, where a shipment is missed, the shippers or forwarders are forced to find alternative routings which are typically costly. Due to the Lubrizol commitment, the resulting guaranteed bi-weekly service calling on set days will most likely mitigate these occurrences. While biweekly sailings are an improvement, shippers claim that weekly sailings are preferred since USEC ports have multiple sailings daily to similar destinations (volume of service). Need for increased communication. Better communication between carrier and shipper is needed, especially with sailing schedule changes. This was more prevalent in the first year of the service. Freight forwarders have contracts with carriers calling USEC ports. Large forwarding companies hold contracts with numerous carriers that are calling coastal ports. These contract rates to European destinations through USEC ports are competitive and frequency and availability of service options at USEC ports are also attractive. Equipment availability. Given the network critical mass surrounding USEC ports, equipment such as empty containers and specialty equipment are typically readily available. Potential Market Opportunities As described in the 2010 Strategic Plan, polymer manufacturing is a leading industry in Ohio, with a concentration in the Cleveland-Akron and Columbus regions. Exhibit 18 Key Polymer Locations in Ohio The Lubrizol commitment to ship containers on CEE may lead to opportunities to attract other polymer manufacturers on the service. In 2016, Lubrizol agreed to ship an estimated additional containers per year to CEE from their Painesville, OH plant. In addition to containerized traffic, there appears to be a potential market for moving liquid bulk via specially designed ISO-containers. The current ISO-

40 container market in Northeast Ohio market is export to Europe currently via East Coast ports as well as Montreal. In order to balance the trade, backhauls into the Cleveland area are required. Furthermore, complimentary services including ISO-container cleaning need further investigation. Currently, the tank cleaning facilities are located in Detroit and equipment availability and drayage costs are critical pieces of the logistics value chain of the ISO-container market. It is recommended that the CCCPA keep open discussions with key polymer manufacturers to stay abreast of developments within the industry. Market Outlook: Key elements of the future success of the CEE are as follows: Dependability. Which includes regularly scheduled service without delays. This would also mean the minimization of port calls, particularly west of Cleveland; Frequency. Bi-monthly service is an improvement, however weekly service would be ideal to sell to shippers and forwarders; Solution to Seaway closure. Alternative service routings and associated rates must be compatible with CEE service (to date, carrier has been working with shippers on this issue); Must be cognizant of potential competition in Detroit. Particularly with respect to the ISOcontainer market as described above, as well as other regional cargoes from Michigan and Western Ohio. Under existing bi-weekly service, assuming a 375 one-way box capacity per ship, at 80% utilization, equates to 600 round-trip boxes. At the current 20 calls per season, 12,000 annual boxes or 24,000 TEUs annually would be realized. Assuming a weekly service, which would be put in place to try to accommodate shippers needs, the same capacity assumptions would result in 24,000 boxes or 48,000 TEUs annually. In addition, continued development of break bulk business on a spot market basis would also occur simultaneously. 2.7 Offshore Wind Energy Components The current opportunity facing the CCCPA is the staging and deployment of offshore windmills in Lake Erie, a pilot program which is currently moving forward. Initially, six windmills will be placed in Lake Erie as part of the program, which is slated to begin in Pieces to be potentially staged and deployed from CCCPA docks: Turbines; Blades; Tower sections; and Foundations. Due to size, manufacturing and some assembly would most likely occur at the deployment site. Advantages for CCCPA in handling this cargo include the proximity to the designated farm site and suitable lay-down area. In order to capture this opportunity however, key issues and unknowns such as crane capacity to lift pieces, dock floor strength and potential competition from other regional ports and shipyards will need to be considered. Preliminary estimates suggest that about 10 acres should be set aside for lay-down area.

41 2.8 Base Cargo and Opportunities Forecast Summary A forecast summary of each base cargo and opportunity is as follows: General Cargo Steel: Volatile and declining historical performance; Market outlook dependent on economic conditions or capturing new markets; Low: Current level, growing at 2% annually High: Current level, growing at 4.5% annually Iron Ore: Iron ore tied to performance of ArcelorMittal; Driven by demand for steel products automotive and appliance industries; Long- term outlook is capped at 3.5 million tons per annum; Low: Flat High: Flat, at plant capacity Limestone: Tied to local utilities, driven by demand in energy sector; Low: 8-year average, flat growth High: Current level, flat growth Cement: Dependent on return of construction activity; Potential for bagged cement operations. Low: current level, 1.5% growth High: current level, 1.5% growth + additional 50,000 tons at 1.5% growth CEE Container Low: current level + Lubrizol, 3% growth Moderate: maximum capacity of bi-weekly service level 12,000 containers/year High: maximum capacity of weekly service level 24,000 containers/year CEE Break Bulk Low/High: Potentially sporadic growth (spot market) Wind Energy Pilot program expected date of start Low: N/A High: unknown, assume acres for laydown area Other bulk Take advantage of available capacity at CBT Low: N/A High: Attract new bulk product 1,500,000 tons, flat growth. Given these assumptions, Exhibit 19 presents the high and low forecast scenarios for each commodity.

42 Exhibit 19 CCCPA Cargo Forecasts Year Steel LOW 500, , , , , , ,922 Iron Ore LOW 3,457,391 3,457,391 3,457,391 3,457,391 3,457,391 3,457,391 3,457,391 Limestone LOW 262, , , , , , ,264 Cement LOW 100, , , , , , ,998 CEE (Containers) LOW 2,022 2,276 2,638 3,058 3,545 4,110 4,764 Year Steel HIGH 513, , , ,016 1,185,139 1,476,899 1,840,485 Iron Ore HIGH 3,500,000 3,500,000 3,500,000 3,500,000 3,500,000 3,500,000 3,500,000 Limestone HIGH 308, , , , , , ,434 New Bulk Commodity HIGH 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 Cement HIGH 100, , , , , , ,859 CEE (Containers) MODERATE 12,000 12,000 12,000 12,000 12,000 12,000 12,000 CEE (Containers) HIGH 24,000 24,000 24,000 24,000 24,000 24,000 24,000 Wind Energy HIGH: Given the uncertanity of the logistics of the construction and installaton of the footers and wind units themselves, it is difficult to forecast tons or pieces at present time. However, for capacity analysis, 5 acres should be set aside. Again, this will be a short-term space requirement. Source: Martin Associates

43 Facilities Analysis of the Cleveland Harbor Final Report Prepared for: PORT OF CLEVELAND 110 W. 9 th Street Suite 300 Cleveland, OH Prepared by: MARTIN ASSOCIATES 941 Wheatland Avenue, Suite 203 Lancaster, PA December 5, 2016

44 I. Operating Profiles of Current CCCPA Marine Terminal Operations The Port of Cleveland is a major gateway for waterborne trade on the Great Lakes - St. Lawrence Seaway system, and it is a vital connection between the global economy and the United States' heartland. The Port of Cleveland manages general and bulk cargo operations along Lake Erie, giving port customers easy access to the multimodal transportation network that reaches a vast consumer market in North America. The Port s current facilities will form the baseline for pursuing new opportunities and achieving overall cargo growth. The Port of Cleveland consists of approximately 64 acres owned and leased property immediately east of the mouth of the river, along Lake Erie s waterfront, (Cleveland-Cuyahoga County Port Facility East) and the 46 acre Cleveland Bulk Terminal, west of the Cuyahoga River (Cleveland-Cuyahoga County Port Facility West). The key facilities at the Port include: Seven (7) General cargo berths berths Over 4,300-ft of General Cargo Cargo berth length 37 Acres of Open/Break Bulk Storage 283,300 ft 2 of Break Bulk Warehouses 23 Acre Container Terminal Operations 21,000 ft 2 CFS (Container Freight Station) Warehouse Two (2) new Liebherr 280 Mobile Harbour Cranes direct rail access and warehousing ability Dedicated Bulk Cargo Complex In recent years, the Port has already started to restructure their facility footprint by returning several underused facilities to the City of Cleveland and by so doing have been able to streamline their operations, enabling the Port to capture new cargo opportunities such as the Cleveland-Europe Express a dedicated container liner service. The purpose of this Operational and Capacity Analysis is to provide a baseline assessment for each of the Ports marine facilities. The operating characteristics of each terminal are discussed and theoretical annual capacity based on current operational procedures is presented. Additionally, any observed constraints to operations are identified and possible methods to increase capacity are identified. Existing Terminals Cleveland-Cuyahoga County Port Facility West (Cleveland Bulk Terminals (CBT)) Cleveland Bulk Terminal (CBT), is located on 46 acres and includes 1,850 linear feet of dock space. The CBT Carmeuse Lime and Stone, N.A. operates the terminal under a long-term lease with the Port Authority, with the current lease scheduled to expire in The lakefront facility can accommodate 1,000 feet (300 m) vessels and reload rail cars. The automated CBT iron ore loader system on Whiskey Island on the west side of the Cuyahoga River loads materials onto boats from the terminal and transfers materials at a rate of 5,200 tons per hour. Limited handling of materials greatly improves the quality of pellets delivered to the mill. CBT has Class 1 railroad and the capacity for 1,000- foot vessels. The large vessels that berth at the site are self unloaders that unload at a rate of 4,000 tons per hour.

45 Carmeuse NA is the operator at CBT. Material may be unloaded to bare ground and later moved with pay loaders or it may be unloaded on the above ground tunnel with feeds to the conveyor. All structures and fixed equipment (ship loader) is owned by the Port Authority, and Carmeuse owns all of the operations equipment. Arcelor Mittal is the iron ore client. Large self-unloading vessels unload iron ore at CBT. Then Carmeuse loads smaller river boats to transport the iron ore approximately 5 miles (3 hours) up the Cuyahoga River to the Arcelor Mittal facility. Vehicular access to CBT is limited. Currently, there is no truck access to CBT, which limits cargo transport at this terminal to either ship to ship or ship to rail. A project to bring roadway access to the site by using the public right-of-way at the Willow Avenue Bridge has not progressed and appears to be dead as the grant funds that were previously available have expired and the City of Cleveland has not approved the project. Based on the assumptions below the existing facility has the capacity to handle 5,270,000 tons per year. Note that Capacity of a Bulk terminal is based on the amount of material that can be stockpiled at the site and the number of times that the cargo is turned- over. At CBT the amount of monthly inbound cargo is just a bit higher than the amount of monthly outbound cargo. Only the inbound cargo is considered in comparison with the storage capacity. The cargo throughput for 2015 was 3, tons inbound and 3,765,825 outbound. Average monthly throughput during 2015 was approximately 369,000 tons inbound per month and 342,000 outbound per month.

46 Existing 5,270,000 tons/year Capacity Assumptions: Operate 10 months per year 60 day cycle time Stock pile height: 45 ft. & Angle of Repose: 380 Material density limestone: 90 pcf & iron ore: 150 pcf 2015 Cargo: 3,875,831 tons Cleveland-Cuyahoga County Port Facility East Docks East of the Cuyahoga River The General Cargo operations for the Port of Cleveland are located east of the Cuyahoga River. This 64-acre terminal area contains facilities that are owned by the Cleveland-Cuyahoga County Port Authority (CCCPA), with some of the facilities leased to private tenants/operators. This terminal has approximately 4,300 linear feet of dock space along Lake Erie and the mouth of the Cuyahoga River, 37 acres of open storage break bulk storage, 23-acre container terminal operational area and approximately 304,300 ft2 of covered storage is provided among four different warehouses An analysis of the various terminals within this complex follows.

47 Dock 20 South: Essroc Cargo: Cement Essroc operates a cement storage and transfer facility on Dock 20S. Cement arrives by ship and leaves by either truck or rail. Water access to the Essroc facility is from Berth 20S, a 630-foot berth located along the mouth of the Cuyahoga River. Essroc handles cement at the facility, with two silos, each with a capacity of 7,000 tons. Vessels arrive approximately once a week. Trucks enter the loop for loading at the silos and then exit the loop. The access loop, vessel unloading activities, and silo storage are focused within the 4.2 acre property. A new rail loop has been added that serves the terminal and allows for cement to be loaded onto rail cars. Capacity. With a 14-day dwell time and 14,000 tons of storage capacity, the existing facility has the capacity to handle 240,000 tons per year, assuming average flow of cement through the facility. In 2015 Essroc handled over 104,000 metric tons of cement. Cargo projections indicate a potential to increase to over 160,000 tons per year by In addition to its current cement operations, Essroc is considering the addition of a bagging facility and a possible additional storage silo. Existing Capacity 240,000 tons/year 2015 Cargo: 104,000 tons Assumptions: Two silos in operation Each silo has a capacity of 7,000 tons 2 week dwell time 8 month per year operation

48 Containerized Cargo Area: Docks 20N, Docks 22N and 22S, and RTA Rail Loop Cargo: Containers and General Cargo In 2014, the Port of Cleveland started the Cleveland-Europe Express (CEE) Liner Service offering direct container liner service to and from Cleveland and Europe (Antwerp). To provide an operational area for the CEE Service, a 22-acre area was designated as the Container operational area. The service has since grown and in April 2015, a second vessel was added to the service. CEE currently offers two sailings a month from both Cleveland and the Port of Antwerp. The Cleveland- Europe Express is estimated to carry anywhere from 250,000 to 400,000 tons of cargo per year. If this projected tonnage is shipped all in containers, this amount of tonnage would represent 17,850 to 28,570 TEUs, at an average of 14 tons per TEU. The new Containerized Storage Area has been designated that consists of Docks 22N, 22S, 20N and the RTA Loop areas. The total size of this container operational area is approximately 22 acres. The Container berth is at Dock 22, a 780-foot long berth. This berth has the capacity to dock a 630-foot-long vessel. The current Spliethoff vessel being used in this service is a 12,500 DWT F Class ship, with 375 Containers and Break-Bulk capacity. These vessels are approximately 445-ft long. The largest vessels in Spliethoff fleet being approximately 603 feet in length. The Port of Cleveland has contracted with C-Port Marine as the stevedore for the CEE operations. C-Port Marine is a sister operation to Valport, the operator of the Port of Valleyfield on the Saint Lawrence River in Quebec.

49 A new 21,000 ft 2 warehouse has recently been constructed on Lot 22S as part of the container operation. The new facility will serve as a CFS (Container Freight Station) can easily facilitate trans-load or less-than container load (LCL) cargo while also providing additional inside storage for heavy machinery or capital equipment. The Port also is adding plugs to enable the movement and storage of refrigerated containers inside the new warehouse Capacity. The overall capacity of the Container Cargo area was calculated to be approximately 55,250 TEUs per year. This capacity was developed assuming that the current use of Reach Stacker/Top- Pick for cargo handling would continue and that empties (MTs) would be handled using small Folk-lifts or Side-Picks. The model also assumed that several operational areas would not be available for container storage. These include the operational area along the berth, the area that the operational area for the new warehouse and that the RTA Loop area would not be available for container storage. If the RTA Loop area was available, maybe as an area for MT storage, the annual capacity would increase to approximately 74,000 TEUs per year. Existing Yard Storage Capacity (w/o RTA Loop Area) TEU s/year 55,250 (TEUs) Current and Projected Cargo: ,465 tons (estimated at 2,320 TEUs Future 250, ,000 Tons (estimated at 17,850 28,750 TEUs Loads) Assumptions: Reach Stackers used for Terminal Operations (2W x 3 H), MTs w/ Side Picks Total CY Storage area available 13.6 ac, o 2/3rds of 22 S is taken up by New CFS/Warehouse Ops o RTA Loop is not available for storage o Berth Operational Area = 100 wide Average Dwell times in days: Exports-7, Imports -5, MTs 21 Maximum Storage TEU s/year Capacity 73,930 (TEUs) (w/ RTA Loop Area) Assumptions: Same as previous, but with RTA Loop Area available for container storage

50 Note that if the Port s projection of 250,000 to 400,000 tons per year of cargo that might use the CEE service and if all that cargo is converted to loaded containers (at 14 tons per TEU, industry average), the projected demand would be from 17,850 to 28,750 loaded TEUs. Adding 25% empty containers in the overall throughput, the future demand for containerized operations might range from 22,300 to 36,000 TEUs/yr. The Port has recently purchased two Liebherr 280 Mobile Harbour Cranes (MHC). These cranes are expected to increase berth operational efficiency and capacity. The new MHCs are anticipated to be able to average moving 20 to 25 containers per hour between the vessel and the dock. The berth operational area has been strengthened to have adequate strength to support the full operations of the new cranes. The new cranes also increase the Port s berth capacity at Berth 22. Assuming that both MHCs are available, the single berth has the capacity to service more vessel calls than the currently scheduled 2 per month. Assuming an increase to 4-5 vessel F-Class (Capacity of 375 containers) calls per month (or 1 per week), and that 50% of the container capacity of the vessel was moved each call, the berth capacity would be 26,325 TEUs (14,625 Containers) and the berth utilization only about 11%, well in under the 36%, considered the limit for a single berth operation. Under this scenario, and with the vessel having the capacity of 375 containers, assumed to be 1.8 TEUs per container, the berth would have the capacity to handle over 26,000 TEUs per year. Capacity of Berth 22 w/1 call/week Annual TEUs Annual Moves Annual Crane Hrs. Annual Berth Hrs. 26,325 16, (Containers Moves) (Break Bulk Moves) 26, Assumptions: 1 F-Class vessel call per week 50% of vessel load is handled each port call - on & off (375 Container Moves per call); 80% 40-foot Units 20 Break Bulk moves per call

51 East Terminal General Cargo Terminal Docks 24, 26, The Billet Yard (24 South) and Warehouse A: Cargo: Steel and Project Cargo A private terminal operator (Federal Marine Terminals (FMT)) currently leases Docks 24, 26, and the Billet yard Dock 24 S), plus Warehouse A and operates the Port of Cleveland s general cargo terminal. FMT is a subsidiary of Montreal-based Fednav Limited, and operates other port terminals in the United States and Canada. The total area that is leased to FMT is approximately 27 acres. Of this total area, approximately 14.5 acres are available for cargo storage, 8 acres for open storage and 6.5 acres of covered warehouse storage. Warehouse space within the General Cargo terminal includes transit sheds/warehouses on Docks 26 and 24E, plus Warehouse A, for a total of 284,300 ft 2 of warehouse space with a static storage capacity of 184,585 tons. Warehouse A has a 30-ton overhead crane. The General Cargo terminal is used predominantly for the import of steel products, including steel coil (hot and cold rolled), steel sheets and wire rod. The cold rolled coils must be stored inside, under cover. The other coils are also stored inside when possible, but may be stored outside. FMT currently operates several older Manitowoc Cranes at the site for unloading cargo, plus will have the use of the new Liebherr cranes, when needed. The steel products are transported from the site via trucks and railcar.

52 General Cargo Warehouse Space Static Storage Capacity 1 Warehouses 26 24E A Total 76,300 ft 2 64,000 ft 2 144,000 ft 2 284,300 ft 2 46,930 tons 41,895 tons 95,760 tons 184,585 tons 1 Assumes 30% of space for columns and internal circulation and 1.0 tons capacity per sq. ft. of storage area General Cargo Open Storage Space Static Storage Capacity 2 Open Areas Dock ,000 ft 2 57,292 tons Dock 26 34,000 ft 2 15,583 tons Dock 24 S (Billet Yard) Total 142,500 ft 2 349,000 ft 2 87,083 tons 159,958 tons 2 Assumes 25% of space internal circulation and 0.6 tons capacity per sq. ft. of storage area Capacity. The total Static Capacity of the general cargo terminal is 344,543 tons of cargo. Assuming an average of 30-day dwell times, and 8 months of operations per year, the annual capacity would be approximately 2,500,000 tons per year. In 2015, FMT handled approximately 511,000 tons of steel. Existing FMT Capacity 344,543 tons Static Capacity; 2,500,000 tons/year Annual Assumptions: 1.0 tons/ft 2 storage density-inside 0.6 tons/ft 2 storage density-outside 8 month per year operation 30 day average dwell time 2015 Cargo: 511,000 Tons

53 Open Storage Area, Dock 28 and Lot 26 South (The West 3 rd Street Lot) Cargo: Special Cargo Loads of Steel Products, Project Cargo and other Break-Bulk Cargo Dock 28 and Lot 26 (the West 3 rd Street Lot) provide the Port with a 15-acre open storage area. Dock 28 is a 2.9 area operational area with a 710-foot long berth at Berth 28W and an existing 150-ton heavy-lift crane. Lot 26S (or West 3 rd Street Lot) is a 12-acre parcel that is not normally used for regular cargo storage, but is utilized when required to store special cargo loads for such items as steel pipes, project cargo and other breakbulk cargoes. Most of this unique cargo is one time loads that are stored on the site prior to being trucked from the Port. Lot 28- S also includes some small non-cargo support functions of the port that includes miscellaneous buildings. Currently several union functions occur in these buildings, including a Union rest building, a Hiring Hall, ILA training and other Union functions. These facilities could be located to other areas within the Port to free up more open storage space for special project cargo or other port needs. Open Storage Area: Do cks 28A 2.9 Ac Op en Lot 26S or W 3rd Lot Total Ac Ac. Ber ths 28 W 710 Ft

54 Capacity. The Storage Capacity of this Open Storage area is estimated at 2 million tons per year, assuming a 30-day dwell time for any special cargo stored on the site. Existing Capacity (lot 26) 2,000,000 tons/year Assumptions: 65% of area available for Cargo Storage 0.6 tons/ft 2 storage density-outside 8 month per year operation 30 day dwell time Gate and Transportation Faculties Gate Truck traffic through the Port is dependent on tenant cargo handling activities. Peak handling periods can see up to 4,000 trucks per month among the existing tenants. Currently, all truck traffic is routed through the main gate and along the main traffic corridor separating the North and South portions of the docks. During peak cargo handling periods, there are over a hundred trucks in and out of the Port each day. The traffic volume can cause backups along this single corridor during these peak handling months. The primary access to the port is through the main gate just west of the stadium. The gate has a single entry lane and a single exit lane, each 19-7 wide. Port access is provided to and from State Route 2, requiring passage under two bridges. The minimum clearance under the W. 3 rd Street tunnel is 21-4½ and the minimum clearance under Eastbound Cleveland Memorial Shoreway is High and Heavy cargo being trucked from the Port must use an alternate routing in order to by-pass this bridge. An average daily gate transactions (based on Truck data collected by the Port on April 21, 2016) would be: 122 Daily Trucks In 244 Gate Transactions (assuming 2 per Truck) 24.4 Avg per hr. (Assuming 10 hr Gate ops ( )) 30.5 Peak Transactions (Assuming 25% Peaking Factor) Say per peak hour (2 directions) One Direction, peak period Minutes per transaction 2-3 Minutes Industry Average

55 There are two additional entrances north of the stadium that are available to the port when there are constraints at the main gate. The old main gate provides access to wider loads, with a 20-6 inbound access lane and a 24 wide exit lane. There is also a 64 section of fence along Dock 28 that is removable, if even wider access is required. Although these gates provide wider access lanes and do not require traveling under the two overpasses, they also have access constraints. Both access gates require difficult 90 0 turns and S-turns to access the main highway, making navigation a bit tedious. While the number of transactions occurring at the Gate are within Industry Standards, the Gate facilities appears to be less than ideal and a new, higher tech gate complex could improve gate operations. Rail Rail access to the port runs parallel to the main gate entrance, and then under the W. 3 rd Street bridge. The rail height restrictions are 22-6 at the Cleveland Regional Transit Authority (RTA) wires at the 3 rd Street bridge and 23-6 at the Essroc bridge. The existing rail provides access to the Dock 20 South/Essroc site, with sidings to Docks 24 and 22. River Related Facilities: The Port of Cleveland is also taking over responsibility for the maintenance of some related non-port infrastructure needs, as they are critical for maritime needs even though they are not part of the Port s infrastructure. Under this program, the Port of Cleveland is involved in several river projects to help achieve the Strategic Action Plan goals. These include: putting sediments dredged to maintain ship channel width and depth to beneficial use in the community, stabilizing the slow but continuous slide of the Irishtown Bend hillside to safeguard the river banks and increase public access to the riverfront, replace or repair Cuyahoga River ship channel bulkheads, and remove floating debris from the ship channel and lakefront. Dredge Material Management Program The Goal is to have a DMMP finished. Dredging assumptions include: CCCPA will operate the CDF CCCPA will get tipping fees from Corps No alternative use for the CDF, material will be removed for re-sale to maintain capacity; 2015, approx. 45,000 yd3 to Site 12 Ohio passed as law banning in-lake disposal by 2020 The Port s Dredged Material Management Program (DMMP). Each year the Cuyahoga River s federal navigation channel and other areas around the Port needs to be dredged of new sediments in order to maintain the approved navigational depth required for the various commercial and recreational vessels that utilize the various waterways. Historically, this dredging as resulted in 200,000 to 250,000 cubic yards of dredged material that requires disposal. Traditionally, this disposal has been by filling the confined disposal facilities (CDFs) built into Lake Erie, adjacent to Burke Lakefront Airport that are used to store this material. As the current CDFs reached their storage capacity the Port s attention turned to developing a plan for the disposal of future sediments. Based on recent Ohio Environmental Protection Agency determinations, the Port was able to develop a Dredged Material Management Program (DMMP) that allows the dredged sediment to be used on industrial and commercial sites.

56 The Port currently acts as the local sponsor for the dredging program and works with the US Army Corps of Engineers, the City of Cleveland, and other key stakeholders to develop a sustainable sediment management plan focused on two key components: o o Adding capacity to the existing CDFs. Treating sediment as a commodity that has value to the community, and selling the material to such industrial uses as brownfield restoration, landfill cover, highway construction, and even creation of aquatic habitat areas or beach nourishment. The Port is also an active member of the Cleveland Harbor Dredge Task Force, and meets regularly with other stakeholders to discuss sustainable sediment options. The key to the Port s successful DMMP is to treat the dredged sediment not as a waste product, but as a resource that can benefit the community. Irish Town Bend Stabilization Project: Irish Town Bend Stabilization Project (Franklin Hill Stabilization) calls for the installation of approximately 3,200 linear feet of sheet steel bulkheads along the shoreline of Cuyahoga Ship channel along the section know as Irish Town Bend. Due to wear and tear and lack of existing functional bulkheads, this hillside section along the Cuyahoga ship channel is at risk for catastrophic failure. Such collapse would block movement by freighters that deliver bulk commodity cargos to upstream industrial users. The Port of Cleveland is leading this project because of their strategic commitment to maritime commerce, both in the great lakes and internationally. A total of 13 million tons of cargo, consisting mostly of Iron Ore, limestone, cement, aggregate, and salt, transit the ship channel yearly. Any cessation of shipping could have serious economic implications to the region. The Port has identified the remedial actions needed to restore functionality to this section of the River. The total estimated cost projected costs is $48 Million, most of which is being addressed by the vested stakeholder or asset owner. Bulkhead Assessment and Repair Program: As part of the Port s goal to promote maritime commerce in the region is a program to assist water front land owners with sustainable bulkhead maintenance. As part of this program the Port of Cleveland conducted an underwater digital assessment of the entire Cayuga River Ship Channel using state-of-the art technology. Using both above-water and below-water visual imagery, each bulkhead section was evaluated for overall condition, with the following conditional assessment used: - Good / Satisfactory- new or restored in the past few years - Fair/ Serviceable- with no readily observable weak areas which might pose a need for near term action - Poor- Needs monitoring and regular revaluation - Serious / Critical- presents an imminent risk to safe maritime passage Of the 73,590 feet of bulkhead inspected, 48.9% was considered to be in Good condition, with 10,680 feet of bulkhead (14.51%) considered to be in serious condition and in immediate risk to safe

57 passage of vessels along the river. Repair costs were estimated to be from $2,500 to $4,000 per lineal foot of bulkhead. Condition Linear feet Percent # of Parcels Good- recent new or rebuilt 36, Fair- serviceable 11, Poor- w/ damaged or weak areas Serious Imminent risk to safe passage 15, ,

58 A summary of current capacity and 2015 cargo volumes show that the Port s current operations are well within the annual capacity of the Port Cargo Volumes vs Annual Capacity Terminal Area Bulk Capacity (Tons/Yr.) Break Bulk Capacity (Tons/Yr.) Container Capacity 2015 Tonnage % of Capacity Utilized in 2015 CBT 5,270,000 3,875, % Essroc 240, , % Container Operations - Yard Yard - 55,250 (TEUs) (580,125 tons) (assumes 25% MTs) 33,465 Tons (2,390 TEUs ) 5.7% Container Operations Berth 26,325 TEUs) 2,390 TEUs 9.1% General Cargo/Break Bulk 2,500, , % Open Storage Area 2,000,000 2,080 (project Cargo) 1.0% 1- Includes Steel Pipe That was stored on the West 3 rd Lot

59 Future Cargo Projections Summary: Based on Martin Associates Cargo projects, it appears that the Port s current cargo handling facilities have adequate capacity for even the future High Forecast. Terminal - Cargo Type 2016 Volumes Cargo Forecasts vs Annual Capacity (In Annual Tons) Future Forecast Low/Base Future Forecast - High Calculated Annual Capacity 1 CBT 3,380,000 3,719,655 5,265,825 5,270,000 ESSROC 100, , , ,000 FMT 500, ,922 1,840,485 2,500,000 Containers (TEUs) 2,022 4,764 12,000 55,250 Yard 26,325 - Berth 1- Based on an Average of 30-day dwell times

60 II. Future Improvements and Master Plan projects Port Master Plan Based on the cargo forecasts and acreage requirements, it appears that the Port of Cleveland basically has adequate facilities and size to handle the forecasted 2045 cargo forecasts. That said, there are some improvements that would allow the port to to improve overall port operations and efficiency and to provide the Port with special operational areas, if needed. These projects include; Improving Open Area Lay-down Areas to support special Heavy Lift Project Cargo. The Port of Cleveland will likely have various opportunities over the coming years to handle specialized project cargo, such as special steel products, elements required to develop Wind Energy generation, and other opportunities that might required identifying special laydown areas and strengthening various docks at the port. It is assumed that the infrastructure improvements required by most of these opportunities will be funded by the project proponent, or be incorporated into the rate charged by the Port for handling the specific cargo. An example of one possible opportunity is the current discussion on supporting a possible Wind Energy project planned for Lake Erie. With such an opportunity, there would be a need to handle and storage such elements as the Turbines, (most likely to be built in Europe and shipped all-water to Cleveland), Blades and the fabrication of the foundation structures. If such an opportunity would come to fruition, then approximately acres would be required be for lay-down and storage. The Port currently has space available for such a business line, but some infrastructure up-grades and strengthening would be required. The estimated cost of any required site improvements would be approximately $11-$12 million. Improvements for Heavy Left Cargo SITE PAVEMENT IMPROVEMENTS $7,947,810 Contractor Mark-Ups $675,564 Total Estimated Cost $8,623,374 Contengency (at 20%) $1,589,562 ENGINEERING $1,226,294 Total $11,439,229 Gate and Internal Circulation Improvements: Currently, the Port has a single entry and a single exit lane, which creates a bottleneck during busy hours. Therefore, the Port Plan includes the construction of a new gate to provide 3 entry lanes and two exit lanes. In addition to the Gate improvements, the project includes some pavement repair for Lot 26.

61 Existing Gate Plan Future Gate Plan

62 The Gate Relocation Project would also include improving the main Port Roadway Arterial (Erieside Ave.) through the Port, plus relocation of several buildings that are currently located along Erieside, including the Union Hiring Hall, a new warehouse A maintenance building, improved lighting and other features. Estimated Cost. The estimated cost for this proposed improvement project is approximately $12 million: GATE/ROADWAY IMPROVEMENT PROJECT GENERAL SITE PREPARATION & DEMOLITION $571,255 STORMWATER COLLECTION $248,750 SECURITY & ELECTRICAL $422,250 SITE PAVEMENT IMPROVEMENTS $4,459,500 BUILDING RELOCATION $1,485,000 ENTRY & EGRESS ROADWAY $903,400 Contractor Mark-Ups $687,663 Total Estimated Cost $8,777,818 Contingency (at 20%) $1,618,031 ENGINEERING $1,269,585 Total $11,665,434 Pavement Repair for Dock 20 (includes drainage improvements The Dock 20 project will consist of installation of a pile supported cast in place concrete cap that will be independent of the bulkhead to allow/permit waterside crane access along Dock 20 to offload container ships without installing a completely new bulkhead. At this time, as result of grade changes, our cranes cannot access ships along this bulkhead resulting in underutilized bulkhead and wharf along the river. The structural improvements will likely be done in a manner to support high/concentrated loads to allow load out of specialized heavy lift cargo over and above that of our other existing dock capacity. In addition to the improvements along the wharf, we will also perform electrical, drainage, and pavement upgrades inside the rail loop on Dock 20. It is our vision that this will permit concurrent offloading of ships on Docks 20/22 with the staging and truck load out areas centered inside the rail loop

63 in a common processing area. Improvements for Dock 20 Improvements Pile Supported Cap plus Improvements $8,250,000 Contractor Mark-Ups $701,250 Total Estimated Cost $8,951,250 Contingency (at 20%) $1,650,000 ENGINEERING $1,265,125 Total $11,866,375 Other Miscellaneous Projects There are several other miscellaneous and long term projects that should be considered over the next few years. These include the following. Cleveland Bulk terminal some minor maintenance required to bulkhead/dock Container Operations Area improvements could include adding additional power to install new Reefer Plugs and possibly extending the current 21S Warehouse 400-ft to east. Long Term Projects: Filling Slip Between Dock 28-26E. Long Term Projects could include the conversion of Berths 26E and 28 into a cargo storage facility, as the berths are not being utilized as much as previously because the new MHCs will be able to function more as the heavy left cranes in the future, eliminating the need for Berth 28. At berth 26E, the operating area alongside the berth is not wide enough to support efficient cargo operations. By filling in the slip, a new berth could be created along 26N and the cargo operating and storage area behind this berth would be improvement. The total cost of such a project would be approximately $8million, depending on permitting costs Fill Slip 28W-26E Fill Slip $5,243,769 Contractor Mark-Ups $445,720 Total Estimated Cost $5,689,490 Contingency (at 20%) $1,048,754 ENGINEERING $1,048,824 Total $7,787,068