2006 Port Everglades Master Plan Update Public Participation Program 2 nd Meeting December 6, 2006

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1 2006 Port Everglades Master Plan Update Public Participation Program 2 nd Meeting December 6,

2 Where We are Today.... Public participation program, 2 nd meeting: December 6 Stakeholder meetings, 2 nd meeting: December 7 Conducted one-on-one tenant meetings Conducted facilities assessment Conducted market assessment Conducted capacity assessment subject to berth utilization refinements 2

3 Where We will be Going.... Preparation of Master Plan development with assets and constraints applied First workshop with Board of County Commissioners scheduled for February 20,

4 In Spring Refinement of Master Plan, 10- and 20-year Vision Plans Preparation of 5-year Capital Improvement Program Workshop/presentation with Board of County Commissioners 4

5 Port Everglades Mission Statement The mission of Port Everglades is to manage the county s port-related assets to maximize the economic benefits to the citizens and businesses of Broward County and the State of Florida. The port will manage the county s assets in a financially responsible, environmentally sound manner, consistent with the local, state, and federal rules and regulations which govern international and domestic trade, transportation and the port industry. 5

6 Port Everglades Assets Today 6 N

7 Existing Land Uses 7 N

8 Market Assessment Container cargo Non-container cargo; dry bulk & neo bulk cargos (i.e. cement, lumber, etc.) Liquid bulk (petroleum products) Cruise 8

9 Container Cargo Assessment Prepared by Martin & Associates Non-Container Cargo Assessment Liquid Bulk Cruise Prepared by Michael L. Sclar Associates, Inc. Prepared by Purvin & Gertz Prepared by Bermello, Ajamil & Partners, Inc. 9

10 10 Container Market Assessment - Methodology Assess historical containerized growth US port growth Southeast port growth Florida port growth Examine historical container growth of key trading partners Asia Europe Latin America/Caribbean Other world areas Examine historical and future GDP growth of Latin American and Caribbean regions International Monetary Fund Economic Commission for Latin American and the Caribbean (ECLAC) Determine Florida and South Florida population growth and projections Interview PEV terminals and carriers to determine near-term anticipated growth

11 US containerized import cargo has grown at an average annual rate of 9.8% -- driven by Asian imports 140,000, ,000, ,000,000 Tons 80,000,000 60,000,000 40,000,000 20,000, Carib/Central Am S. America Asia Europe Med/ME Australia/NZ Africa All Other 11

12 Southern Florida population growth is expected to average nearly 1.6% annually over planning horizon Florida/southern Florida population growth and estimates ,000,000 25,000,000 20,000,000 15,000,000 10,000,000 5,000, SOUTH FLA TOTAL FLA 12 Source: Demographic Estimating Conference Database, updated July 2006; South FLA counties include: Broward, Charlotte, Collier, De Soto, Glades, Hardee, Hendry, Highlands, Indian River, Lee, Manatee, Martin, Miami-Dade, Monroe, Okeechobee, Palm Beach, St. Lucie and Sarasota

13 Latin American and Caribbean GDP growth rates are expected to maintain levels between 4% and 5% in the near term 6 Percent change in GDP Source: International Monetary Fund, World Economic Outlook, September

14 Percent of Container Imports by Trade Route 2006 comparison with other ports 6% 2% PEV 16% 1% 15% 2% SAVANNAH ASIA/ISC SOUTH AMER 0% 4% ASIA/ISC SOUTH AMER 17% CARIBBEAN CARIBBEAN CENTRAL AMER CENTRAL AMER 52% 7% EUROPE/MED OTHER 78% EUROPE/MED OTHER 4% CHARLESTON 1% MIAMI 44% 40% ASIA/ISC SOUTH AMER CENTRAL AMER EUROPE/MED OTHER 27% 14% 34% ASIA/ISC SOUTH AMER CARIBBEAN CENTRAL AMER EUROPE/MED OTHER 2% 10% 10% 14% 14 Source: PIERS Database, 2006

15 Container Forecast Assumptions Developed LOW and HIGH scenarios LOW scenario assumes modest growth based on historical and projected growth South Florida population growth (import consumption) Statistically closely related to container growth Growth by trade lane Latin American and Caribbean GDP (export) ECLAC and IMF historical and near-term projections South Florida (PEV + Miami) container growth Assumes same carrier composition, NO NEW SERVICE HIGH scenario assumes more robust growth based on historical and projected growth South Florida population growth (import consumption) Growth by trade lane Latin American and Caribbean GDP Terminal and carrier near-term projections New services Latin American/Caribbean Asian/Northern European POTENTIAL 15

16 Low/High Container Forecast Choices will be made under analysis and implementation will be phased 3,000,000 2,500,000 2,000,000 1,500,000 1,000, , TEU LOW HIGH 2.7 M 1.8 M

17 Non-Container Cargo Market Assessment Overview The overwhelming proportion of dry bulk and neo bulk cargos are related to the Florida construction industry Dry bulk cargos are dominated by cement and aggregates for the cement industry Similarly, the largest proportion of neo bulk cargos are steel (rebar) and lumber 17

18 Other Commodities - Neo Bulk Yachts and autos for export represent the two other significant neo bulk commodities Yacht imports are projected to increase significantly with the potential to double every 5 years (until the market is saturated) Autos handled in Port Everglades are primarily used automobiles for export; new cars are routed via Jacksonville 18

19 Primary Forecast Drivers Over the long-term, the growth of the Florida construction industry will approach the growth rates for Florida population The economic cycles impacting construction growth rates will dominate the long-term trends Changes in inventory levels (e.g. resulting from steel import cycles and cement plant capacity growth) will further impact short-term trends Specific events such as court ordered limitations on crushed rock mining at the Lake Belt mines could create a significant opportunity for Port Everglades 19

20 High, Baseline, Low and Needs Assessment Forecasts Dry bulk and neo bulk tonnage for Port Everglades 20 9,000,000 8,000,000 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000, BaseForecast HighForecast LowForecast Needs Forecast

21 Conclusions Cement represents the most stable market Lumber and steel volumes are limited in growth potential Growth in yachts and a stable used car market round out the neo bulk market The dry bulk and neo bulk markets for Port Everglades are relatively flat with limited downside The addition of 2-4 million tons of aggregate represents the most significant potential upside, if feasible 21

22 Cruise Market Assessment Factors Very successful in developing new products that generate sustained interest in cruising New, larger, exciting vessels, diverse onboard products and services New regions, itineraries and on shore product offerings Products deliver a high level of passenger satisfaction, leading to repeat clientele and lower conversion costs Several lines report repeat levels of over 45% Lines have learned to adapt quickly to changing market conditions and shift business models accordingly 22

Evolution of Cruise Vessels Period Length Draft PAX Characteristics of the Period 1960 508 ft. 36 ft. 500 Vessels acquired & refurbished. Fantasy Class 1970 705 ft. 32 ft. 650 1980 803 ft. 29.5 ft. 1,500 1990 902 ft.

23 Evolution of Cruise Vessels Period Length Draft PAX Characteristics of the Period ft. 36 ft. 500 Vessels acquired & refurbished. Fantasy Class ft. 32 ft ft ft. 1, ft ft. 2, ft ft. 3, ,000 ft ft. 3,000 Standard business model used with profitable results until the fuel crisis. Change in business model; experimentation with larger ships and operating itineraries. Larger ships becoming the destination. Shallower drafts. Mega-ships that are floating cities. Focus on maximizing passenger capacity. One-region vessels not capable of Panama Canal Transit. Larger ship volume concentrating on creating efficiencies with ship design, outside cabin development, ship services and flexible deployment. Grand Class Radiance Class ,000 ft ft. 4,000 Next Generation (Genesis) 1,100 1,400 ft ft. 5,000+ Freedom class, 160,000-GT. Allows for increased onboard revenue areas, largest ship in world status (ego / marketing boost), economies of scale. Product and service led design; new innovative marine hull design to support more above water structure. Separate apartment towers, entertainment zones and amenities. Limited port deployment options. Freedom Class

24 Cruise Overview Strengths include: Access to

infrastructure demand Convenient marine access

foreseen in cruise terminal facility offerings

vessels Availability of additional berthing areas on

24 24 Cruise Overview Strengths include: Access to regional consumers; High quality tourism infrastructure demand Convenient marine access Number and length of cruise berths Improvement foreseen in cruise terminal facility offerings Capability of Terminals to receive largest cruise vessels Availability of additional berthing areas on peak days of operation Ingress/egress issues impacting cruise operations and parking

25 Cruise Target Regions Western Caribbean Eastern Caribbean Lower Southern Caribbean Grand Caribbean Bahamas Transcanal Extended Caribbean/South America Transatlantic World cruises US East Coast repositioning Daily and non-conventional cruise 25

26 Caribbean Growth Factors Cuba to provide increased port of call options, not necessarily increased regional capacity (shifting) Port infrastructure needed for next ship generation Expansion of out-islands and destinations key Larger ships on shorter sailings 26

27 27 Cruise Revenue Passenger Growth FY1996-FY2006 2,100,000 2,500,000 2,250,000 2,390,000 2,730,000 3,400,000 3,500,000 3,400,000 4,000,000 3,800,000 3,450,000 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000, , Source: B&A, 2006.

28 Regional Homeport Passenger Throughput 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, , Port Canaveral Port Everglades Port of Miami Port of Palm Beach Port of Tampa 28 Source: B&A, 2006.

29 29 Attractiveness of Port Everglades to Cruise Market Marine Access Terminal Location(s) Pier / Berthing Apron Gangways Terminal Operations Criteria Ground Transportation Areas (GTA) Parking Provisioning Security Landside Access Airport and Airlift Lodging Attractions and Venues Access to Consumers General Appeal Marketing / Communications Key: Strong ( ), Fair ( ), Weak ( ) Assessment (short channel for large ships) / (length of berths) / (new systems installed) / / (proximity to terminals) / (gate and roadway access) / (proximity and capacity) / / Source: B&A, 2006.

30 Range of Revenue Total Passenger Projections 10,000,000 9,000,000 8,000,000 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000, Historical A B LOW B HIGH B MID C1 C2 C3 Source: B&A, 2006.

31 Monthly Passenger Traffic 500, , , , , , , , ,000 OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP Source: B&A, 2006.

32 Daily Passenger Traffic Comparison 40% 38% 36% 34% 32% 30% 28% 26% 24% 22% 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% MON TUE WED THU FRI SAT SUN Source: B&A, 2006.

33 Berths vs. Volumes Mid Projection Projection B MID 15 8,000, ,000, ,000,000 Number of berths ,000,000 4,000,000 3,000,000 2,000,000 1,000,000 TOTAL BERTHS DEMANDED TOTAL +/- 1,100 LOA DEMANDED PASSENGERS 0 Passengers Source: B&A, 2006.

34 Conclusions Its all about the berths More passengers, longer berths New terminals/berths are needed in the next 2 to 5 years to support larger ships more passengers Landside infrastructure must be modified to meet demand of more passengers, baggage, vehicles Expansion through planning, technology, partnerships 34

35 Port Everglades Petroleum Industry serves a 12-County Region Primary Market: Broward, Miami-Dade, Palm Beach, Martin Counties Secondary Market: Collier, Glades, Hendry, Indian

35 35 Port Everglades Petroleum Industry serves a 12-County Region Primary Market: Broward, Miami-Dade, Palm Beach, Martin Counties Secondary Market: Collier, Glades, Hendry, Indian River, Lee, Monroe, Okeechobee, and St. Lucie Port supplies 87 percent of gasoline demand in region and 37 percent of Florida s gasoline requirements Port supplies jet fuel to FLL and MIA

36 Petroleum Product Diversity Regional petroleum product demand is growing at about 2.7 percent annually Gasoline predominates, but Port also supplies diesel, asphalt, jet fuel, fuel oil for the power plants, propane, and some biodiesel fuels Industry services include Selling gasoline to retail gas stations in the region supplying the region s international airports Fueling the Port s cargo and cruise ships Serving military needs Providing emergency storage 36

37 Market Characteristics Percentage of vessel calls is shifting from barge to tanker, with more product coming from international sources Tankers coming from international markets are larger than those from domestic sources Existing petroleum berths are utilized to capacity. Fully loaded larger tankers can experience constraints (berth length, slip width, water depth) Emergency situations such as hurricanes during peak seasonal demand can stress tenants storage and distribution capabilities 37

38 What is Needed to meet Market Forecasts.... Container Cargo Increase berth and yard utilization Add Berths/Terminal Yards Increase Efficiencies Increase berth occupancy Increase lifts per call Use higher density stacking equipment Deepen and widen channel Non-Container Cargo Determine feasibility of aggregate as major import commodity Cruise Have 9 berths to handle foot LOA ships Increase cruise season/weekday use Continue dual use of berths for cargo and cruise Petroleum Increase receiving system efficiencies Add berth capacity 38

39 Conclusion Berth Capacity is the primary limiting factor to Port growth NEXT STEPS Balance capital improvements with operational efficiencies and environmental stewardship to achieve optimum Master Plan 39

MAXIMIZING INVESTMENT AND UTILIZATION

MAXIMIZING INVESTMENT AND UTILIZATION November 2013 Luis Ajamil Bermello, Ajamil & Partners Two perspectives How to increase use of the facility OPTIMIZATION How to improve the capacity of the facility