Ports and Intermodal Development: Critical Links in the Supply Chain

Ports and Intermodal Development: Critical Links in the Supply Chain Walter Kemmsies, Managing Director, JLL Mike Mullen, Industry Veteran Gene Seroka, Executive Director, The Port of Los Angeles Cliff Pyron, Chief Commercial Officer, Georgia Ports Authority Darrell Coffey, Director Economic Development, BNSF Railway

Takeaways Debunk common myths about how the supply chain works (Ocean Carriers, Ports/Terminal Operators, Trains, 3PLs, BCOs) Discuss differences between first, middle and last mile logistics Understand differences between international and domestic intermodal traffic 5

World trade growth trends 1950-2015 CAGR Relative to GDP growth World real GDP and trade indexes 1950-2016e GDP 3.7% 1.0 China Manufactured goods 7.0% 1.9 Korea, Taiwan Fuels and mining products Agriculture goods 3.8% 1.0 3.5% 1.0 Japan, Brazil Total trade 5.8% 1.6 2017 Jones Lang LaSalle IP, Inc. All rights reserved. Source: WTO, JLL 6

US international vehicle trade trends Automobile and Light Truck Imports Automobile and Light Truck Exports Millions 5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5-2013 2014 2015 2016 Millions 5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5-2013 2014 2015 2016 West East Gulf East West Gulf Source: Census Bureau, Moffatt & Nichol Source: Census Bureau, Moffatt & Nichol 7

Container trade trends Container Volume Trends Monthly 2006 to 2016 (12 of largest 14 container ports) TEU Millions 4.0 3.5 3.0 2.5 Total Total Loaded 2.0 1.5 1.0 0.5 Import Export Empty 0.0 2005 2006 2006 2007 2007 2008 2008 2009 2009 2010 2010 2011 2011 2012 2012 2013 2013 2014 2014 2015 2015 2016 2016 Source: AAPA, JLL 2017 Jones Lang LaSalle IP, Inc. All rights reserved. 8

Ship sizes increased to accommodate global trade growth Evolution of containership size Container-carrying capacity has increased by approximately 1,200% since 1968 Source: Alphaliner, World Shipping Council 2017 Jones Lang LaSalle IP, Inc. All rights reserved. 9

Roadway congestion is getting worse and ecommerce is growing 2020 Congestion Forecasts, With Trucks Ecommerce vs Total Retail Sales 1,400 10% 1,200 9% 8% 1,000 7% $ Billions 800 600 6% 5% 4% Share of Total 400 3% 200 2% 1% 0 0% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Ecommerce Share (right axis) E commerce Total 2017 Jones Lang LaSalle IP, Inc. All rights reserved. 10

What does the U.S. export? Shares of U.S. containerized exports by volume and by value 2003 2008 2013 2016 Commodity Share Commodity Share Commodity Share Commodity Share Machinery, Parts 14% Machinery, Parts 13% Oil, Fuel, Coal 21% Oil, Fuel, Coal 16% Vehicles, not rail 8% Oil, Fuel, Coal 13% Machinery, Parts 11% Vehicles, not rail 11% Organic Chemical 7% Vehicles, not rail 10% Vehicles, not rail 9% Machinery, Parts 10% Plastics, Plastic Articles 6% Cereals 5% Organic Chemicals 5% Plastics, Plastic Articles 5% Oil, Fuel, Coal 5% Plastics, Plastic Articles 5% Plastics, Plastic Articles 5% Organic Chemicals 5% Cereals 5% Organic Chemicals 5% Oilseeds, Misc Grains, Fruits 4% Oilseeds, Misc Grains, Fruits 4% Electric Machinery; TV, Sound, Parts 4% Electric Machinery; TV, Sound, Parts 4% Electric Machinery; TV, Sound, Parts 3% Cereals 4% Oilseeds, Misc Grains, Fruits 4% Oilseeds, Misc Grains, Fruits 3% Cereals 3% Meat And Edible Offal 2% Iron And Steel 3% Miscellaneous Chemical Products 2% Electric Machinery; TV, Sound, Parts Miscellaneous Chemical Products 4% 2% Miscellaneous Chemical Products 2% Miscellaneous Chemical Products 3% Meat And Edible Offal 2% Meat And Edible Offal 2% Total Share 57% 65% 66% 62% Total Billions Of US Dollars 206 Total Billions Of US Dollars 471 Total Billions Of US Dollars 598 Total Billions Of US Dollars 390 Source: US Census Bureau 2017 Jones Lang LaSalle IP, Inc. All rights reserved. 13

What does the U.S. export? Shares of U.S. bulk exports by volume and by value 2003 2008 2013 2016 Commodity Share Commodity Share Commodity Share Commodity Share Oil, Fuel, Coal 29% Oil, Fuel, Coal 35% Oil, Fuel, Coal 46% Oil, Fuel, Coal 43% Cereals 21% Cereals 17% Cereals 10% Cereals 14% Oilseeds, Misc. Grains, Fruits 10% Oilseeds, Misc. Grains, Fruits 7% Oilseeds, Misc. Grains, Fruits 8% Organic Chemicals 5% Iron and Steel 5% Wood Pulp, Scrap, Paper, Paperboard 4% Wood Pulp, Scrap, Paper, Paperboard Oilseeds, Misc. Grains, Fruits Wood Pulp, Scrap, Paper, Paperboard 4% Wood Pulp, Scrap, Paper, Paperboard 4% Wood, Wood Articles, Charcoal 3% Organic Chemicals 4% Food Residue & Waste, Feed 4% Organic Chemicals 3% Organic Chemicals 3% Iron and Steel 3% Food Residue & Waste, Feed Iron and Steel 3% Iron and Steel 3% Wood, Wood Articles, Charcoal Food Residue & Waste, Feed 9% 4% 3% 3% Inorg Chemicals, Rare/precious metals 3% Inorg Chemicals, Rare/precious metals 2% Food Residue & Waste, Feed 3% Inorg Chemicals, Rare/precious metals 3% Wood, Wood Articles, Charcoal 3% Ores, Slag And Ash 2% Inorg Chemicals, Rare/precious metals 3% Iron and Steel 2% Ores, Slag And Ash 2% Plastics, Plastic Articles 2% Plastics, Plastic Articles 2% Plastics, Plastic Articles 2% Total Share 83% 80% 84% 86% Total Million Metric Tons 330 Total Million Metric Tons 484 Total Million Metric Tons 585 Total Million Metric Tons 595 2017 Jones Lang LaSalle IP, Inc. All rights reserved. Source: US Census Bureau 14

International comparison of logistics performance indexes RANK COUNTRIES LPI CUSTOMS INFRASTRUCTURE INTERNAT. SHIPMENTS LOGISTIC COMPETENCE TRACKING TRACiNG TIMELINESS 1 Germany 4.1 4.0 4.3 3.7 4.1 4.2 4.5 2 Sweden 4.1 3.9 4.0 3.8 4.2 4.2 4.3 3 Netherlands 4.1 4.0 4.3 3.6 4.2 4.1 4.4 4 Japan 4.0 3.8 4.2 3.6 4.0 4.1 4.3 6 United Kingdom 4.0 3.7 4.0 3.7 3.9 4.1 4.4 8 Canada 3.9 3.7 4.0 3.2 4.0 4.0 4.4 9 U.S.A. 3.9 3.7 4.2 3.2 3.9 4.2 4.2 11 France 3.8 3.6 4.0 3.3 3.9 4.0 4.4 12 Australia 3.8 3.7 3.8 3.8 3.8 3.9 4.2 15 Italy 3.6 3.4 3.7 3.2 3.7 3.8 4.1 17 China 3.5 3.2 3.5 3.3 3.5 3.6 3.9 18 South Africa 3.5 3.2 3.4 3.3 3.6 3.7 3.6 19 Malaysia 3.4 3.1 3.5 3.5 3.3 3.3 3.9 20 Poland 3.4 3.1 3.0 3.2 3.3 3.5 4.5 23 Kuwait 3.3 3.0 3.3 3.1 3.1 3.4 3.7 24 Saudi Arabia 3.2 2.9 3.3 2.8 3.3 3.3 3.8 25 Turkey 3.2 2.8 3.1 3.2 3.2 3.1 3.9 26 Brazil 3.2 2.4 3.1 2.9 3.3 3.4 4.1 27 India 3.1 2.7 2.9 3.1 3.2 3.1 3.6 30 Mexico 3.1 2.6 3.0 2.8 3.0 3.3 3.7 31 Vietnam 3.0 2.7 2.6 3.0 2.9 3.1 3.4 34 Colombia 2.8 2.5 2.6 2.5 2.8 2.8 3.5 35 Indonesia 2.8 2.4 2.5 2.8 2.5 2.8 3.5 38 Russia 2.6 2.2 2.4 2.7 2.5 2.6 3.2 39 Ukraine 2.6 2.0 2.4 2.8 2.6 2.5 3.1 Customs Efficiency of the clearance process by customs and other border agencies Infrastructure Quality of transport and information technology infrastructure for logistics Logistics quality and competence Competence of the local logistics industry Tracking and tracing Ability to track and trace international shipments Timeliness Timeliness of shipments in reaching destination International shipments Ease and affordability of arranging international shipments 15

Gene Seroka Executive Director Port of Los Angeles Port of Los Angeles America s Port 16

Port of Los Angeles Overview Founded in 1907 Non taxpayer supported Municipal, landlord port State Tidelands Trust 4,300 acres land/ 3,200 acres water 270 berths and 27 cargo terminals 8 container terminals 91 cranes Los Angeles Harbor Department Downtown Los Angeles City Hall 17

Lines of Business -.5% Containers 8,856,782 TEUs +8.5 % Autos (WWL) 199,027 units +21 % Liquid Bulk (Petroleum) 93,223,412 barrels -18% -15% -12% Steel (PASHA) 2,215,390 metric tons Scrap Metal 635,856 metric tons Fruit (SSA) 79,386 metric tons +1.7 % Cruise 602,464 passengers in 2016 +21 % LA Waterfront Customers/Visitors 2.3 million in 2016 A Full Service Port 18

SPEED FREQUENCY - RELIABILITY Superior Access to US Markets Mega-region of 22 million consumers Good weather year-round 14,000-strong longshore workforce $1.8 Billion square feet of warehouse/dc space $2.4 Billion Alameda Corridor 100 trains daily through LA basin 2 Class-1 Railroads: Union Pacific & BNSF Access to Major Freight Hubs, including: Chicago Memphis San Antonio Kansas City New York Atlanta Houston Denver Dallas Gateway of Connectivity 19

Big Ship Infrastructure CMA CGM Benjamin Franklin 18,000 TEUs 9 cranes, 11,200 moves Maersk Edmonton 14,000+ TEUs 10 cranes, 11,500 moves 20

Major Factors Impacting Ports Larger Ships Substantial infrastructure costs wharfs, terminals, rail lines and roadways Cargo surges overwhelm terminals and transportation infrastructure More pressure on positioning of land-side assets (e.g. chassis, locomotives) and truck gate operations Dominance of Carrier Alliances Over-capacity will continue to erode bottom-line profitability Three Major alliances among 13 carriers puts more pressure on ports, terminals Technology-Deficient Operations Digital infrastructure investment is not top-of-mind Too many online systems make cargo tracking and upstream conveyance a painstaking process for BCOs, Freight Forwarders and trucking companies The 48-hour line-of-site on arriving cargo is too short for effective planning Limited Space Requires ongoing terminal modernization projects Re-purposing surplus land to support short- and mid-term needs Ports must engage, facilitate the best solutions for terminals & carriers 21

Our Priority Areas of Focus Strategic Land Use Ongoing terminal modernization projects Re-purposing surplus land to support short- and mid-term cargo needs Terminal Alliances Process Management Supply Chain Optimization efforts -- 100+ stakeholders Continuing strong engagement with State & Federal Policymakers, including FMC and Departments of Commerce, Labor & Transportation Technology Increase development and application of Blue & Green technology 22

PORT OF SAVANNAH Garden City Terminal: The Southeast Gateway for the U.S. 23

Chatham ICTF served by CSX Transportation Mason ICTF served by Norfolk Southern Railroad GARDEN CITY TERMINAL TODAY LARGEST SINGLE TERMINAL IN NORTH AMERICA 9 Container berths 9,693 ft (2,955 m) of contiguous berthing space 26 Container cranes 146 Rubber-tired gantries 1,200 acres (485.6 ha) terminal area 24

SAVANNAH: #4 AND FASTEST GROWING PORT FY2007 TEUs FY2017 TEUs 10-YEAR CAGR 1. LOS ANGELES 8,649,751 9,205,753 2. LONG BEACH 7,275,162 6,941,381 3. NY/NJ 5,280,658 6,440,341 4. SAVANNAH 2,338,281 3,851,741 5. SEA/TAC 3,120,938 2,998,582 6. VIRGINIA 2,039,293 2,762,410 7. OAKLAND 2,357,027 2,399,785 8. HOUSTON 1,614,901 2,332,803 9. CHARLESTON 1,883,673 2,137,709 10. PT. EV 931,063 1,080,077 TOP TEN TOTAL 35,490,747 40,150,584-0.5% -0.4% 0.6% 2.0% 5.1% 3.1% 0.2% 3.7% 1.3% 1.5% 1.2% Source: AAPA; throughput excluding domestic 25

SAVANNAH: A GLOBAL COMMERCE HUB 36 WEEKLY SERVICES COVERING THE WORLD 33 NY/NJ 7 PHIL 8 BAL 30 NFK 6 WIL 25 CHA 36 8 SAVANNAH JAX 23 PEV 15 MIA THE MOST ON THE U.S. EAST COAST EVERY MAJOR CARRIER CALLS SAVANNAH Key Savannah Service Features: Offers 8 Services via Panama Offers 8 Services via Suez First in = 10; Last out = 12 (All Trades) Source: American Shipper BlueWater Reporting & Carrier Websites October 2017 26

Garden City Terminal The Home Depot Gulfstream Fedex Shaw Industries IKEA OA Logistics Schneider Logistics ABRO ATG Target Damco Icon H&F Walmart Floor & Decor The Home Depot Heineken Lowes Dollar Tree Pier 1 Imports Huffy Bed Bath & Beyond SAVANNAH NEAR PORT MAJOR CUSTOMERS Near Port Total Warehouse Space = 50.9 million ft 2 (4.7 million m 2 ) Near Port Total Bulk Warehouse Space (over 100K ft 2 / 9,300 m 2 ) = 33.2 million ft 2 (3.1 million m 2 ) 27

INLAND TERMINALS Appalachian Regional Port Cordele Appalachian Port Intermodal Atlanta Regional Services Port Port Atlanta Cordele Intermodal Services SAVANNAH 4,700 MILES OF RAIL AND COUNTING REQUIRING UP TO 100,000 FEWER TRUCKS 28

PORT OF SAVANNAH MULTIMODAL CONNECTOR Garden City Terminal 4 5 SR 25 3 1 2 Mason ICTF 1 Mason ICTF track expansion with RMG equipment 2 Multi-rail connection between Mason and Chatham 3 SR 25 Overpass 4 Rail crossings over Pipemakers Canal 5 Chatham ICTF track expansion 29

BNSF Railway Darrell Coffey DIRECTOR ECONOMIC DEVELOPMENT

BNSF Railway BNSF Railway is committed to serving our customers today and investing to accommodate their growth tomorrow. 31

Our Network 32

What We Carried in 2016 In thousands 33

We re On Your Side Count on BNSF Railway s Economic Development Team to Help You: Select a site for a new facility Expand an existing site Evaluate transportation options Improve transportation infrastructure Establish rail service Navigate the process 34

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