Project WIP Transportation Performance October 10, 2015
FOR DISCUSSION Executive Summary Trucks are the predominant mode used for domestic freight movements Shafter is well positioned for access to interstate highways Outbound: Shafter offers strong regional performance with highest accessible population at a 4-hr drive time Lowest average weighted distance to population of the Western 13 states makes Shafter very efficient for super regional distribution Inbound: Wonderful Industrial Park (WIP) has good fit with importers due to its proximity to the ports of LA and Long Beach 1
Western US population is heavily concentrated within 5 regions POPULATION (% and #) FOR SELECTED WESTERN US REGIONS 1 FOR DISCUSSION Total Population 2 70.8 mm % OF TOTAL POPULATION > 30 % 10-30% < 10 % Pacific Northwest 15% - 10.4 mm Mountain North 3% - 2.0 mm CA North 17% - 11.8 mm Mountain Central 14% - 10.0 mm Alaska & Hawaii 3% - 1.9 mm CA Central 6% - 4.6 mm Mountain South 12% - 8.2 mm CA South 31% - 22.0 mm 2 Source 1: US Census Bureau, American Community Survey, 2014 1-Year Estimate. Excludes areas not located within a metro or micropolitan statistical area. Note 2: Does not include 4,433,459 people not living in a metro or micropolitan statistical area
Outbound: Access to highways is crucial for serving the Western US FOR DISCUSSION TRUCKING IS THE DOMINANT MODE FOR SHIPPING FREIGHT WEIGHT OF DOMESTIC SHIPMENTS BY MODE 1 INTERSTATE HWYS OFFER BEST ACCESS TO WESTERN POPULATION CENTERS FREIGHT FLOWS BY HIGHWAY AND RAILROAD, 2010 1 Truck 75% 75% 78% Rail Pipeline Other 10% 10% 9% 8% 8% 6% 7% 7% 7% 2007 2010 2040 (Forecast) PLP TRUCKS CARRY 75% OF ALL DOMESTIC FREIGHT 3 Source 1: US Department of Transportation, Bureau of Transportation Statistics, 2010 & 2011
Outbound: Three distinct distribution patterns allow us to measure outbound competitiveness WE IDENTIFIED 3 DISTRIBUTION PATTERNS FOR DISCUSSION THAT ARE BEING USED BY EXISTING WONDERFUL INDUSTRIAL PARK TENANTS GEOGRPAHY ACCCESSIBLE WITHIN GIVEN DISTRIBUTION PATTERN DISTANCE DRIVE TIME CASE EXAMPLE Local 55-110 mi 1-2 hr. Baker Hughes Regional 170-230 mi 3-4 hr. Target Super Regional - Western 13 States 1000-1200 mi 18-22 hr. Formica, Hillman Group, ATD PATTERN WIP 4 EXISTING TENANTS HAVE DISTINCT OUTBOUND COVERAGE AREAS
Local & Regional: PLP has excellent fit for Regional distribution to California s main population centers REGIONAL DISTRIBUTION FITS BEST IN LOCATIONS NEAR LARGE POPULATION CENTERS FOR DISCUSSION POPULATION (MM) ACCCESSIBLE WITHIN GIVEN DRIVE TIME 1 24 22 20 18 16 14 24 17 Shafter, CA Riverside, CA Patterson, CA Stockton, CA WIP TENANTS CAN ACCESS 17-24 MM PEOPLE WITHIN A 4-HOUR DRIVE 3-4 HR DRIVE TIME MAP 12 Reno, NV Phoenix, AZ 10 Las Vegas, NV 6 4 2 0 4 hours 3 hours 2 hours 1 hour 5 REGIONAL Source 1: JLL Research team, drive time calculated using Alteryx Note: See appendix slide for raw data on accessible population by drive time LOCAL
Super Regional: Shafter has very good access to population centers over long distances FOR DISCUSSION WE MEASURED EACH LOCATION S DISTANCE TO POPULATION CENTERS Destinations include all 106 Metropolitan and Micropolitan areas within the Western 13 States AND FOUND THAT SHAFTER WAS THE MOST CENTRALLY LOCATED AVERAGE WEIGHTED DISTANCE (MILES) TO POPULATION CENTERS IN WESTERN 13 STATES 1 611 643 443 448 482 490 522 Shafter Riverside Stockton Las Vegas Reno Phoenix Salt Lake City Average Weighted Distance (AWD) provides a quantitative metric for comparing population accessibility across locations WIP benefits from its central location and proximity to major interstate highways 6 Source 1: Google Maps & US Census Bureau American Community Survey 2014. Excludes Alaska and Hawaii population centers. See appendix for explanation of calculation.
Inbound: Shafter offers good access to the US main source for imports FOR DISCUSSION LA & LONG BEACH DOMINATE WESTERN PORT TRAFFIC 1 IMPORTS BY PORT (2014, MM TEU) 4.4 PROXIMITY TO PORT GREATLY REDUCES DRAY RATES 2 TRUCK RATES FROM THE PORT OF LOS ANGELES $1,560 3.6-55% $1,170 1.1 $840 $860-37% $700 Los Angeles Long Beach Oakland $530 $300 Oakland Inland Empire Shafter Las Vegas Stockton Phoenix Reno Salt Lake City Los Angeles Long Beach SHAFTER HAS VERY COMPETITIVE DRAY RATES FROM THE PORT 7 Source 1: Port statistics from for Oakland (portofoakland.com), Long Beach (polb.com), and Los Angeles (portoflosangeles.org) Source 2: JLL, 2015 Inbound drayage cost per container
8 Appendix
Super Regional: Shafter has very good access to population centers over long distances WE MEASURED EACH LOCATION S DISTANCE TO POPULATION CENTERS Destinations include all 106 Metropolitan and Micropolitan areas within the Western 11 States AND FOUND THAT SHAFTER WAS THE MOST CENTRALLY LOCATED AVERAGE WEIGHTED DISTANCE (MILES) TO POPULATION CENTERS IN WESTERN 11 STATES 1 EXCLUDING LOS ANGELES AND INLAND EMPIRE MSAs 522 394 396 407 425 437 473 Stockton Reno / Shafter Las Sparks Vegas Inland Empire Salt Lake City Phoenix / Mesa Average Weighted Distance (AWD) provides a quantitative metric for comparing population accessibility across locations WIP benefits from its central location and proximity to major interstate highways AWD CALCULATION EXCLUDING LA & INLAND EMPIRE 9 Source 1: Google Maps & US Census Bureau American Community Survey 2014. See appendix for explanation of calculation.
LA outbound freight travels by truck to short-distance destinations TONNAGE (MM) OF CARGO LEAVING LA, GROUPED BY MODE & DISTANCE 1 TRUCKS COVER SHORT DISTANCE WHILE RAIL FOCUSED ON LONG DISTANCE Truck 292 211 MODE AVG. DISTANCE TRUCK 193 mi. RAIL BOTH 1100 mi. 218 mi. Rail 22 16 16 18 9 Distance Range All Distances <50 mi. 50 99 mi. 100 249 mi. 250 499 mi. 500 999 mi. >1,000 mi. % by Truck 97% 99% 100% 94% 97% 91% 83% % by Rail 3% 1% 0% 6% 3% 9% 17% Accessible Cities Los Angeles, West IE East IE Bakersfield Las Vegas, Phoenix, Stockton Salt Lake City Denver, Kansas City, Chicago 10 Source 1: US Department of Transportation, Bureau of Transportation Statistics, 2012 Commodity Flow Survey. Data excludes cargo traveling by air and pipeline.
Average weighted distance calculation (Western 11 States) Formula: Variables De`ined: Locations Included: Data Sources: AWD=Average Weighted Distance Locn=Location n All Metropolitan and Micropolitan Statistical Areas located within the Western 11 States (AZ,CA,CO,ID,MT,NM,NV,OR,UT,WA,WY) Distances: Google Maps Driving Distance Matrix API Query, October 7, 2015 Population: US Census, American Community Survey, 2014, Table B01003 Raw Distance Data (Sample showing 10 largest locations by population): Destination Distance (miles) Location (Single City) Shafter, CA Los Angeles, CA Riverside, CA Stockton, CA Las Vegas, NV Reno, NV Phoenix, AZ Salt Lake City, UT Los Angeles, CA 128-59 337 269 518 372 688 San Francisco, CA 265 383 437 83 569 218 753 736 Phoenix, AZ 499 372 322 708 297 744-659 Riverside, CA 183 59-392 238 466 322 656 Seattle, WA 1,018 1,137 1,190 800 1,117 706 1,413 832 San Diego, CA 248 120 101 457 331 559 354 750 Denver, CO 1,051 1,017 985 1,215 750 1,037 862 520 Portland, OR 846 964 1,018 627 970 534 1,334 766 Sacramento, CA 267 386 440 49 562 132 756 649 Las Vegas, NV 305 270 239 519-448 297 420 11 +94 addi(onal Metropolitan and Micropolitan Sta(s(cal Areas
Population accessible within a specified drive time 1 Population accessible within given drive time 1 hour 2 hours 3 hours 4 hours 8 hours 12 hours 16 hours Reno, NV 555,707 1,152,250 3,704,140 9,405,131 17,833,715 49,627,435 63,202,609 Shafter, CA 783,125 3,371,971 16,767,331 23,512,001 41,239,597 48,959,168 59,596,414 Patterson, CA 1,442,747 10,200,491 13,788,833 15,904,966 39,048,822 51,228,111 62,245,469 Las Vegas, NV 2,006,244 2,114,240 2,427,529 5,188,770 35,121,897 54,314,538 62,336,319 Stockton, CA 2,111,333 10,724,877 13,502,460 15,842,626 38,629,927 51,250,818 62,473,600 Riverside, CA 3,991,968 18,651,869 21,429,510 23,474,728 44,100,966 50,927,129 58,174,596 Phoenix, AZ 4,071,589 4,874,882 5,871,872 6,397,716 32,617,397 40,229,709 64,649,855 Long Beach, CA 8,388,418 16,917,923 22,137,009 22,925,629 44,217,732 50,010,539 56,527,624 Average 2,918,891 8,501,063 12,453,586 15,331,446 36,601,257 49,568,431 61,150,811 Max 8,388,418 18,651,869 22,137,009 23,512,001 44,217,732 54,314,538 64,649,855 Min 555,707 1,152,250 2,427,529 5,188,770 17,833,715 40,229,709 56,527,624 Stdev 2,569,217 6,718,515 7,711,039 7,646,689 8,587,007 4,101,192 2,763,397 RSD 88% 79% 62% 50% 23% 8% 5% Distance range and population levels by distribution pattern Pattern Local Regional Super regional National Drive Time 1 hr. 3 hr. 8 hr. 16 hr. Distance 20-60 mi. 100-200 mi. 400-550 mi. 900-1100 mi. Med Fit Minimum Pop. 1 mm 10 mm 20 mm N/A High Fit Minimum Pop. 4 mm 20 mm 38 mm 55 mm 12 Source 1: JLL Research team, drive time calculated using Arcteryx
Access to logistics infrastructure and services is key for reducing transportation costs ACCESS TO CROSS DOCK, RAIL, AND CARRIERS BY LOCATION LOCATION RAIL ACCESS - CROSS DOCK ACCESS 1 DOMESTIC INTERMODAL 2 PACKAGE CARRIERS Bakersfield / Delano LOW NO FEDEX, UPS Los Angeles / Long Beach HIGH YES FEDEX, UPS Inland Empire HIGH YES FEDEX, UPS Stockton AVERAGE YES FEDEX, UPS Patterson LOW NO NONE Las Vegas AVERAGE YES FEDEX, UPS Reno / Sparks AVERAGE YES FEDEX, UPS These services are key indicators of the presence of important logistics infrastructure. Lack of these services increases both inbound and outbound transportation costs. Phoenix / Mesa AVERAGE YES FEDEX, UPS Shafter and Patterson have lower levels of logistics infrastructure Source 1: 3PLfinder.com Cross Dock location directory, listed business are not exhaustive but were used as a proxy for accessibility Source 2: Intermodal Association of North America, Intermodal facilities directory, http://www.intermodal.org/ 13
14 Population density for US
Metropolitan and micropolitan statistical areas of the US 15
16 Tonnage on highways, railroads, and inland waterways
Shafter drive time map 1 17 Source 1: JLL Research team, drive time calculated using Arcteryx