DWCPA Draft Report Updated - Port of Detroit

Port Forward Strategic Plan 2

Prepared for: Detroit/Wayne County Port Authority Detroit, Michigan www.PortDetroit.com

Prepared by:

Bonner Advisory Group Ann Arbor, Michigan www.BonnerAG.com


ExecutiveSummary The Detroit/Wayne County Port Authority (DWCPA) has listened to its stakeholders and mapped its route to success. A new strategic plan was presented as the Port Forward initiative to a group of public and private sector representatives on Monday, June 10, 2019, and was received with overwhelming support. Now, with a strategy in hand, DWCPA can live its mission in a more visible way, bringing the Port of Detroit into the 21st century and setting it up to scale with the continued growth of its region. Timing to tackle this couldn’t be better with federal funding being specifically designated for ports. To do all of this right, DWCPA must tear down old silos and work on collective impact. Three work groups were formed and used as a platform to collect input on infrastructure, business development, and government relations. Supporting research on best practices and expert interviews rounded out the situational analysis and allowed for strategic planning to commence. An emphasis on re-building relationships was set as a priority, acknowledging the importance of communicating with other organizations to build -and maintain- DWCPA’s reputation as an agency to support and partner with others for the good of our business community. The goal of the Port Forward initiative required a shift from DWCPA thinking only of itself to a mindset of becoming an expert and collaborator; and being an asset to port-related businesses, developers, and land owners to effect change more expeditiously. Based on current Port of Detroit capabilities, the strategy will focus on building one new block at a time creating a much stronger and sustainable foundation. With this renewed focus, DWCPA will increase freight capacity of the Port of Detroit, create maritime jobs, and enhance economic opportunity in the region. Short Term Objectives

• Create a strong strategic partnership with CBP that enables growth of international cargo business for Michigan manufacturers.

• Prioritize and plan dock improvements and security enhancements that will improve service in the current state of the Port of Detroit.

• Increase channels of communication with public and private stakeholders to partner on addressing challenges and promote the Port of Detroit’s capabilities.

• Complete a business strategy to increase cargo capacity with new ocean going vessels. Mid Term Objectives

• Partner with public and private sector stakeholders to delineate a recognizable Port District that caters to multi-modal industrial developments including warehousing, assembly, manufacturing, distribution, and storage.

• Develop the Port District as site ready and market the it as the most unique industrial property in Michigan with port, rail, and freeway services.

Long Term Objectives

• Establish the DWCPA as a statewide maritime thought leader. • Develop strategic relationships with communities and economic development agencies from

Wayne County, the City of Detroit, and throughout the Downriver region to embed a port culture for jobs, investment, and recreation.


TableofContents Project Overview ......................................................................................................................................... 5

Detroit Wayne County Port Authority Mission ........................................................................................ 5 DWCPA Lives Its Mission .......................................................................................................................... 5

Methodology ............................................................................................................................................... 5 Importance of The Detroit Wayne County Port Authority ........................................................................... 6

Impact of Ports from a National Perspective ........................................................................................... 6 Impact of the Port of Detroit ................................................................................................................... 6 Great Lakes Ports Comparison ................................................................................................................. 7

Port Forward Initiative ................................................................................................................................. 8 Overview .................................................................................................................................................. 8 Business Development Working Group and Key Findings ....................................................................... 9 Infrastructure Working Group and Key Findings ................................................................................... 10 Government Relations Working Group and Key Findings ...................................................................... 11

Research .................................................................................................................................................... 12 Private Sector Interviews ....................................................................................................................... 12 Benchmarking ........................................................................................................................................ 14 Benchmarking Best Practices ................................................................................................................. 16

SWOT Analysis ........................................................................................................................................... 18 Strategic Growth for 2019 and Beyond ..................................................................................................... 20

Short Term Objectives ........................................................................................................................... 21 Mid Term Objectives .............................................................................................................................. 22 Long Term Objectives ............................................................................................................................ 23

Concluding Statement ............................................................................................................................... 24


ProjectOverviewDetroitWayneCountyPortAuthorityMission

The mission of the Detroit/Wayne County Port Authority (DWCPA) is to enhance economic and trade development of Detroit, Wayne County, and the State of Michigan by promoting and facilitating the movement of goods through the use of all transportation modes and by assisting local communities and the private sector in promoting and developing waterfront and transportation-related projects.

DWCPALivesItsMission

Methodology

Bonner Advisory Group (Bonner AG) created a program for the DWCPA to enhance its visibility with public and private stakeholders and investors to create optimal grant funding and investment opportunities to expand the DWCPA’s capability and impact on the region it serves. The program horizon was six months, from January to July 2019.

Under this program Bonner AG implemented a methodology that included the following aspects:

• Oversee and manage a thorough stakeholder initiative • Develop a public relations strategy that increases awareness of the effectiveness and economic

impact of DWCPA • Identify and develop appropriate federal and state delegations and federal and state

departmental relationships advantageous to DWCPA • Develop an Economic Development Strategic Plan as the backdrop supporting federal and state

funding requests • Target specific federal and state grant opportunities enhancing infrastructure to increase capacity

and impact of the DWCPA • Manage the grant application process working with applicable staff and DWCPA service providers


ImportanceofTheDetroitWayneCountyPortAuthorityImpactofPortsfromaNationalPerspective On a national level, ports are seen as delivering vital goods and services, creating jobs and supporting local and national economic growth. They require a healthy and robust infrastructure system because they connect American farmers, manufacturers, and consumers to the world marketplace. Over the last decade, port stakeholders have reported significant inefficiencies within ports that prevent capitalizing on the growth in the US trade/export market. This indicates even more opportunity available through ports. Noteworthy national metrics for ports include:

• Over 70% of US Trade comes through ports • American Association of Port Authorities estimates $1 billion in exports shipped through US ports

creates 15,000 jobs • Seaport cargo activity supports the employment of more than 23 million people in the U.S. and

its cargo activity accounts for more than a quarter of the U.S. GDP • Ports and their private sector partners are already investing $155 billion over the next five years

in their terminals including expansions, infrastructure investments and rail

Source: State of Freight III

ImpactofthePortofDetroit

Source: Economic Impact of Maritime Shipping in the Great Lakes – St. Lawrence Region by Martin Associates July 2018

• 56% of the jobs in the Great Lakes port region are created as a result of the Port of Detroit activity • Over 36% of all economic activity comes through Detroit • 51% of all federal, state, and local tax revenue is from the Port of Detroit • 58% of all income generated in the Great Lakes ports is in the Port of Detroit


GreatLakesPortsComparison

Port of Cleveland is not included in the above chart but covered in detail within the benchmark section.


PortForwardInitiativeOverview

Port Forward is an initiative based in strategically planning and funding resources beneficial to the Detroit maritime community. It is the start of a new cadence in DWCPA activities that started early in 2019, leading to building a 21st century port capable of serving and growing the community.

While the DWCPA focuses on advocacy and economic growth, it also is a stakeholder in the Port of Detroit, which is an incredible transportation asset to the region. The Port of Detroit is comprised of 25-30 commercial marine terminals to handle a variety of cargoes including iron ore, coal, aggregates, steel, and special project cargoes.

Port Forward is the catalyst for growth in southeast Michigan. Ports offer key economic development as they are a driver of jobs and investment. According to the State of Freight III, seaport cargo activity supports the employment of more than 23 million people in the U.S. and its cargo activity accounts for more than a quarter of the U.S. GDP. Of course, they do require a healthy infrastructure to connect farmers, manufacturers, and consumers to the world marketplace. Ports and their private sector partners are already investing $155 billion over the next five years in their terminals including expansions, infrastructure investments, and rail. DWCPA, together with its stakeholders, can help Detroit be part of this movement.

The Port Forward strategy is based on key findings in the 2016 Department of Commerce Paper on Best Practices for Port Authorities. The best practice implemented during this program was creation of working groups based on three specific areas. Working groups with broad public participation benefit individual


ports by providing forums for productive information sharing and collaboration. The three working groups established were focused on Business Development, Infrastructure, and Government Relations. Two meetings were held for each working group for a total of six working group sessions. Bonner AG attended and moderated each session. The goal of the Port Forward initiative is to create operational efficiencies and new opportunities through comprehensive stakeholder working groups that incorporate a full range of port community interests as well as increasing collaboration and communication. BusinessDevelopmentWorkingGroupandKeyFindings

• Jerry Attia, AECOM • Vijay Bharadwaj, General Motors • Joe Brian, WSP formerly PB (phone) • Kyle Burleson, DWCPA • Andy Doctoroff, DWCPA Board of Directors • Miyoko Foley, Ford Motor Company • Kevin Hegg, Ashley Capital • Miryka Kawashima, General Motors • Paul Opsommer, Ambassador Bridge Co. • Christine Roeder, MEDC • Patrick Sutka, Nicholson Terminal • June West, Waterfront Petroleum

The DWCPA needs to better communicate what the Port of Detroit handles, as this allows industrial developers to speculate more efficiently on the types of projects that can be invested in. Specifically, identify the largest users at the Port of Detroit and what materials are brought in. Identify pent up demand for Port of Detroit use and create a strategy around eliminating barriers to accommodating that pent-up demand for new investment opportunities. The Parsons Brinkerhoff report suggests there is major capital under investment at the Port of Detroit. Further, Detroit has the best opportunity for multi-modal growth and the DWCPA has an opportunity to take an initiative to expand that specific opportunity for investment. Furthermore, the DWCPA needs to identify competitive industries to serve and understanding what facility requirements and infrastructure investments need to happen to expand business. For the DWCPA to become competitive for new investments an analysis of ROI needs to take place. Detroit needs to prove more efficient versus Montreal, and the DWCPA will compete against rail for additional business. Ocean liners are the best customer to target regarding what type of return is needed to create a business case to attract more cargo operations to DWCPA. Developing a new business case for the DWCPA is a complex scenario. Not only does an ocean liner have to “pencil” out its business case, new customers need to be identified with long-term contracts in order substantiate a major investment by both the ocean liner and the DWCPA itself at the Nicholson Terminal. To further complicate the situation, the DWCPA has been historically hampered by U.S. Customs Border Patrol (CBP) regulations. The CBP is grossly understaffed in the region and requires a significant

Business Development

Working Group


investment in screening equipment the DWCPA is required to purchase to handle additional capacity and containerized cargoes. A formula for business expansion at the DWCPA is:

InfrastructureWorkingGroupandKeyFindings

• Jerry Attia, AECOM • Bob Audy, World Shipping • Kyle Burleson, DWCPA • Beth Colosimo, MEDC • Dan Deane, Nicholson • Elisha DeFrain, MDOT • John James, James Group International • Larry Karnes, MDOT • Jason Saghy, Norfolk Southern Rail • Dayne Tate, Norfolk Southern • June West, Waterfront Petroleum

A recurring theme amongst the Infrastructure Working Group was the need to establish a more focused dialogue with Customs Border Patrol. An improved relationship can help create viable solutions for inspections, equipment, and expectations, so the Port of Detroit can continue to grow business. DWCPA has been operating on a small parcel of land and doesn’t have the land capacity right now to take on large projects. 25-30 acres is too limiting. As mentioned in the previous section, a Port District would help create site ready projects. Rail, waterfrontage, and an appetite for community growth makes a competitive case. Given there is only small land expansion capacity today, it limits growth opportunities. This would be limited to project cargo and smaller bulk quantities. Adding to the land component would open opportunities. The former Boblo building is an opportunity to expand, however the site is only three acres. The cost benefit of demolition versus new construction for new business needs to be better understood. The dock infrastructure is very old throughout the Port of Detroit area. Attending to deteriorating cargo docks should be the highest priority for infrastructure improvements and expansion.

CBP Readiness

Infrastructure Investment

Ocean Liner Business New Business

Infrastructure Working

Group


Rail can be an interesting asset at the DWCPA, however there is some skepticism that there is multi-modality benefit. The differing working groups seem split on the opportunity. Rail is very competitive in pricing, and the DWCPA would have to create a better business case to increase cargo business, not to mention issues with CBP.

GovernmentRelationsWorkingGroupandKeyFindings

• Kyle Burleson, DWCPA • Terry Campbell, Office of Senator Stabenow • Matt Chasnis, MEDC (on behalf of Stacy Bowerman) • Tom Kelly, Wayne County • Representative Leslie Love • Janlynn Miller, Office of Senator Chang • Paul Opsommer, Ambassador Bridge Co. • Jim Perry, Downriver Community • Shannon Price, DWCPA Chairman of the Board of Directors • Jim Wagner, Downriver Brownfield Consortium • Cory Wilford, Office of Senator Peters

Michigan’s ballast water law will go into effect 2022-2024. This plays a role in exporting specifically, especially for our two strongest industries, manufactured goods and agricultural related products. Preparing for this new law to go into effect will assist the Port of Detroit in new business opportunities ahead of time.

The former McClouth Steel site in Riverview/Trenton is being redeveloped by Crown Enterprises. The site is 275 acres and includes dockage and rail, access to roadway. DWCPA’s services and expertise would be very helpful in getting this project off the ground. The Downriver communities would appreciate much stronger engagement by the DWCPA. It is important that the DWCPA communicate its economic impact. Nicholson has full-time union jobs with benefits; training to keep people employed through winter season. There is constituent concern in keeping riverfront recreation/community use included in development efforts. This requires tremendous balance and consistent stakeholder engagement. The City and the County are high priority funders to the DWCPA. It’s critical to maintain consistent communication regarding Port of Detroit activities with both parties. A more proactive relationship with SEMCOG is also critical. SEMCOG organizes the Transformation Improvement Plan for its region and has developed the Comprehensive Economic Development Strategy (CEDS) for application to any Economic Development Administration Grants. It would be helpful if the DWCPA was recognized in the CEDS.

Currently, ports throughout Michigan lack economic development tools and resources because the legislature historically has prevented that from happening. A Port Finance Bill may enable ports to use tax increment financing, in addition to much broader bonding capacity benefitting the region’s facility investments greatly. The Port of Cleveland is often touted as a benchmark for successfully bonded projects having significant economic impacts. The Port of Cleveland is benchmarked later in this report.

Government Relations Working

Group


Maritime commerce is an untapped economic development tool from Detroit to Downriver. Public perception is currently negative towards Port of Detroit activities. As in many cases across the country, port areas are also heavily traveled tourist destinations. Port developments have an opportunity to unite quality of life, environmental preservation, and industrial development into a vibrant economic opportunity. Major stakeholder engagement must take place for the general public to understand this opportunity and support it.

ResearchPrivateSectorInterviews Bonner AG scheduled three separate interviews with global freight companies. The interviews were confidential in nature so that specific business information was not shared and therefore creating a potential competitive disadvantage. The general questioning in these interviews were based on the following: 1) Is the Port of Detroit a viable business opportunity? 2) What would need to take place for new business to occur at the Port of Detroit? 3) What is the main obstacle for doing business at the Port of Detroit? Interview#1-ConfidentialGlobalShippingandLogisticsCompanyBusinessCaseConsiderations

Bringing ocean going vessels into Detroit via the St. Lawrence Seaway System is a challenge due to the locks system and maximum ship dimensions allowed (740 ft. long x 78 ft. wide / 26.6 draft ft. below and 116.9 ft. draft feet above) which is determined by the size of the locks in the seaway. There are three locks and dams in the International Rapids Section, and the Welland Canal Section has eight locks. Frozen lakes and closed locks are also a detriment – seasonality of shipping would require short term alternatives.

Company has 15 ships in its fleet that could get into Detroit based on the locks dictated ship sizes.

• Could load 500-800 TEU’s per ship (A TEU is a 20 Foot Equivalent Unit) • 600 TEU’s is the optimal freight for a strong business case

600 TEU’s still has high freight cost and the following needs consideration

• Guaranteed contracts a must • 1,500 miles from Europe to Detroit – A European vessel would need to stop multiple times in non-

U.S. ports. • Competing with rail is cost sensitive • Union labor adds to costs • An annual commitment would need to result in thousands of containers in service

Interview 1


• Need a facility (Nicholson Terminal) to unload and load – likely upgrades needed at the Port of Detroit if that were to happen

ShortTermNextSteps

• The Port of Detroit must discuss this business opportunity confidentially with several potential customers

• Establish Detroit as a gateway to Europe and the Mediterranean – business could be 1,200 TEU’s per week or 60,000 per year (equivalent to 30,00 containers)

• Support from the State of Michigan is also likely needed to still help with costs of shipping to Detroit.

Interview#2–ConfidentialGlobalShippingandLogisticsCompany

There is a great deal of business to be had in Michigan and in Detroit specifically. However, the biggest obstacle getting into the Detroit market is the size of the company’s ships, they do not fit based on the Welland Canal lock system criteria and limitation on ship draft size. For this company, and many like it, doing business in Detroit would require the acquisition of smaller vessels. With Detroit business uncertain, the investment required for a new fleet does not meet a cost benefit analysis.

There could be a business case for moving cargo via a barge system. The barge would go from Montreal to Detroit, therefore passing Cleveland, which is a major competition for Detroit so cost savings would have to be significant to invest in barge service.

A case could be made for Detroit to be a strong inland port system:

• Barge system would need to be developed • Strong rail linkage established • Link rail in Toronto, Montreal, and Buffalo • Significant investment would still be required at Nicholson Terminal • Rail and truck still might be faster versus a rail and barge system

Overall this company was not too optimistic on servicing clients through the Port of Detroit mainly due to the size of their ships in the current fleet which could not navigate into Detroit.

Interview#3–ConfidentialInternationalCargoDockOperator

At the current time the company does not operate any docks inside the Great Lakes and St. Lawrence Seaway System. The company itself services multiple docks around the world in which Michigan-based companies are serviced. There is enough business in Michigan, however the costs generally seem too high to enter into the Port of Detroit/Michigan market.

Several factors influencing a Great Lakes business case:

Interview 2

Interview 3


• Difficult to navigate the locks systems and the size restrictions on vessels is significant • Smaller ships may do much better, therefore companies with smaller fleets may benefit • Great Lakes are notorious for damaging ships and therefore such things as insurance premiums

are much higher on lakes vessels • Locks closing during winter, and general freezing of waters disrupts a business model and makes

it more complicated to determine how to service customers in those off months • Stockpiling bulk commodities doesn’t necessarily match up with just-in-time delivery

requirements • Rail is a major competitor for time and cost – gaining new customers would be heavily cost

sensitive • A business case that could work would include a capture of 30,000 containers annually

o This would still require up to a $20 million investment for new cranes, reach stackers, and tractors, and 8-10 acres just for stackable container storage

• Insurance premiums are 35% to 40% higher for shipping in the Great Lakes • Conversion charges and tolls going through the lock system adds cost • Pilots that navigate the Great Lakes are required to be hired by shipping companies add significant

cost to Great Lakes shipping.

Overall, there are a lot of costs to consider when shipping to the Great Lakes. The number influencing effect is having customers that are willing to commit on multi-year contracts. There also must be enough cargo to bring back after emptying a vessel at the Port of Detroit.

BenchmarkingPortofCleveland

The Port of Cleveland is considering the best of class in the Great Lakes. Cleveland has significant financing capacity; acreage to accommodate growth; and direct shipping ties with Montreal. While they are very successful today, that wasn’t always the case. As much as the Port of Detroit has battled political turmoil over the years, the Port of Cleveland was nearly put out of business as a result of bitter political relationships.

Mid1990’s

The City of Cleveland was not a partner to the Port of Cleveland. In fact, the city was intent on essentially putting the Port of Cleveland out of business to reclaim the waterfront for civic minded and recreational development. National developers were pushing the City to make more waterfront development property available and the same time the city was touting the Port of Cleveland as an environmental hazard and bad for the public good.

City of Cleveland was working with Eaton Steel Corporation to relocate their corporate headquarters. Without any prior communication or commitments from the Port of Cleveland, Eaton Steel announced they were moving their headquarters to the lakefront, essentially in the middle of the Port of Cleveland’s property.


FederalGovernmentNeed

The federal government was quite possibly the savior of the Port of Cleveland. As the need to ensure safe passage of federal ships into the Great Lakes, a major dredging project was required in Lake Erie, specifically near the Port of Cleveland. The dredging project was paid for by the federal government and the project went beyond the capacity required. The Port of Cleveland was now a mini-port, and new opportunities for cargo arose out of this project, creating cash for the Port of Cleveland’s longer-term sustainability.

NewOpportunities

A new need for interconnected ports by ocean carriers arose. Montreal to Cleveland was now a desired route. The Port of Cleveland gained 200 acres from the federal governments dredging project; the property that was the “dredge complex” was eventually turned over. Historically the Port of Cleveland had been a major financier of many downtown Cleveland projects, however, new cargo business started to present itself more regularly. During the 2008-2009 economic downturn, seaports were struggling for business. The Port of Cleveland, as a small inland port, now seized an opportunity to aggressively pursue containerized cargo.

The Port of Cleveland sought a bigger push to diversifying its cargo. Business was generally steel into the port, and cargo ships left empty. The Port of Cleveland was looking ways to find new business to fill these empty slots. In 2014, it started shipping 100-300 bulk cargo containers. Today that has grown to 17,000 containers annually.

Today the Port of Cleveland consists of:

• 30 acres of bulk storage • 8 warehouses for international cargo • 11 slips and 11 docks • 2 – 200-ton cranes • Short line rail connectivity

EnvironmentalStewardship

The Port of Cleveland is committed to conducting its operations in a sustainable manner and has been a Green Marine participant since 2007. Green Marine is an environmental certification program for the North American marine industry dedicated to advancing environmental excellence. The program stems from a voluntary initiative by the maritime industry to exceed regulatory requirements.

Dredging

The Port of Cleveland has developed and implemented a plan to manage the sediments annually dredged from the 5.9-mile shipping channel on the Cuyahoga River. The plan ensures that the shipping channel is maintained at an adequate depth needed for commercial shipping traffic. The plan relies on harnessing natural physical properties of water, sediments, and energy-sediment choreography.


SedimentRenewal

The Port of Cleveland planned, designed, and built a pair of custom vessels – Flotsam and Jetsam – to capture and remove plastic and organic floating debris from Cleveland Harbor. Commissioned into service in late 2012, the Port of Cleveland operates both vessels from mid-May through mid-October. In the three full seasons of operation, the crew and vessels have removed 1.2 million pounds of small floating debris, and over 1,000 large logs. While this type of program may not necessarily be relevant to the DWCPA, it suggests an effort to be resourceful and entrepreneurial.

KeyPortofClevelandMeasurements-Source:PortofClevelandStrategicPlan

2,441 $300 M $364 M $5.6 M Total Additional Jobs

(Direct, Indirect, Induced, Related)

Annual Increase in Business Revenue

Annual Increase in Total Personal Income

Annual Increase in State & Local Tax

Receipts

• $3.8 billion secured for 125 projects dating back to 1993 • Cleveland has increased market share within GL/SLS (Great Lakes/St. Lawrence Seaway) and had

10.5% growth of general cargo over last 5 years

StrategicFocusAreasforPortofClevelandOverNext5Years-Source:PortofClevelandStrategicPlan

1 Maritime Line of Business (LOB) including general and bulk cargo terminals and river sediment operations

2 Development Finance & Real Estate LOB

3 Community and Environmental Assets and Programs

4 Port Administration

BenchmarkingBestPractices-Source:BenchmarkingBestPractices–USDepartmentofCommerce

• Working groups with broad port community participation benefit individual ports by providing forums for productive information sharing and collaboration.

• Customized information technologies based on a standard set of maritime cargo data elements can improve operational efficiency and cargo status data flow throughout the port community.

• Workforce development investment is needed to equip workers to adjust to changing vessel sizes, cargo flow demands, and innovative technologies.

• Public-private investment should be expanded to improve port operations, infrastructure, and information technology.


• Maintaining reliable, predictable operations and financial stability within the ports community creates a more attractive environment for public-private investment in operational, infrastructure, and technology improvement.

• Benchmarks, if used, need to be measurable, voluntarily agreed to by community members, and focused on identifying efficiency problems and evaluation the impacts of improvements.

PortofHamburg

Hamburg has used digitization, inland road sensors, a port community information-sharing platform, and other technologies to improve the waterway navigation, reduce truck congestion, and facilitate cargo movement. These technologies have helped Hamburg to improve its ability to handle “megavessels” and attract global trade.

PortsofLosAngelesandLongBeach

The Ports of Los Angeles and Long Beach jointly established the San Pedro Bay Supply Chain Optimization Working Group. The group was created to faciliate work with stakeholders to devise cargo conveyance solutions that enhance velocity and efficiency throuhout the Ports of Los Angeles and Long Beach and the supply chains that use them. These solutions include measures that improve the efficiency of marine terminal, trucking, rail and vessel operations. The group provides a framework through which the Ports of Los Angeles and Long Beach have improved their ability to collaborte and communicate with stakeholders and supply chains.

PortofNewYorkandNewJersey

In late 2013, the landlord Port of New York and New Jersey (DWPCA is a landlord port model) established the Port Performance Task Force. The task force served as a mechanism for port stakeholders to discuss areas of common interest; identify challenges to Port of New York and New Jersey efficiency and service reliablity; and recommend potential solutions and key performance indidcators to measure implementation status and impacts.

NorthwestSeaportAlliance(PortsofSeattleandTacoma)

Together these Ports of Seattle and Tacoma collaborated with local industry partners on the following key initiatives:

• Implementing additonal gate hours at terminals, which as helped ease gate congestion. • Developed key performance indicators that have helped identify efficiency improvements. • Established a partnership with the Ports of Seattle and Tacoma’s longshore labor union to create

a training program to increase the number of available crane oeprators and boost productivity of vessel operations.


SWOTAnalysis

The DWCPA has an incredible opportunity to become a major factor economic development factor in the State of Michigan. With an international border at its doorstep, the opportunity for trade is limitless. Unfortunately, the DWCPA lacks the credibility and financial strength to make an impact with both public and private sector stakeholders. Historically, the DWCPA has created apathy based on poor performance, lack of direction, and contentious relationships. This can stand to change however. With an emphasis on educating public and private stakeholders and creating strong relationships, the DWCPA can overcome these obstacles to become a rich economic development resource creating jobs and investment while serving the Michigan manufacturing community in a much more cost effective and efficient way.

Strengths Strong, well-connected board of directors

Only port in Detroit - maritime expertise

Long-standing relationship with Nicholson Terminal

Strategically located at international crossings

Shares international waters with Canada

Track record of success with EPA Brownfield Grants

Successful Port of Detroit management for tourism

Weaknesses Historically poor performance cause for skepticism

Inability to finance non-port projects as well as projects not owned by DWCPA

Land expansion is currently restricted

Limitations on cargo size and type

Government partners (City and County) do not take advantage of the DWCPA’s full potential as an economic development resource.

Private sector funding towards operations and marketing

Support from public and private sector to make an impact


Opportunities Expand Port of Detroit operations via rail and storage expansion

Create public-private partnerships previously untapped

Work with Michigan manufacturing companies

Develop Port District real estate strategy

Effective engagement with stakeholders

Establish relationships with state and federal officials

Develop metrics to measure Port of Detroit performance

Diversify cargo

Develop ocean liner business case for more cargo/establish Detroit-Montreal connectionWork with the Port of Monroe and Downriver Communities to lay the ground work for a broader maritime economic development vision.

Threats DWCPA is government funded - lack of stability

Debt burden from past improvement project

St. Lawrence Seaway business going to Cleveland

Michigan manufacturing firms don’t use the Port of Detroit

Increased costs to ocean liners to move to Detroit

No direct rail access limits cargo opportunity

Ongoing apathy for the Port of Detroit based on history

New water ballast law slow to evolve and go into effect – preventing export opportunities

CBP definition of cargo sizes for Michigan conflicts with other ports around the country

Overall lack of support and understanding of Port of Detroit opportunities


StrategicGrowthfor2019andBeyond To attract more business to the area, DWCPA will prioritize infrastructure and government relations. Through several sub-committees around these priorities, DWCPA has created a unified vision for jobs and investment in the Port of Detroit. To be successful, it requires active participation from stakeholders in both the public and private sector as well as elected officials.

•Create a strong strategic partnership with CBP that enables growth of international cargo business for Michigan manufacturers.

•Prioritize and plan dock improvements and security enhancements that will improve service in the current state of the Port of Detroit.

•Increase channels of communication with public and private stakeholders to partner on addressing challenges and promote the Port of Detroit’s capabilities.

•Complete a business strategy to increase cargo capacity with new ocean going vessels.

Short Term

•Partner with public and private sector stakeholders to delineate a recognizable Port District that caters to multi-modal industrial developments including warehousing, assembly, manufacturing, distribution, and storage.

•Develop the Port District as site ready and market the it as the most unique industrial property in Michigan with port, rail, and freeway services.

Mid Term

•Establish the DWCPA as a statewide maritime thought leader.•Develop strategic relationships with communities and economic development agencies from Wayne County, the City of Detroit, and throughout the Downriver region to embed a port culture for jobs, investment, and recreation.

Long Term


ShortTermObjectivesStrategicCBPPartnership U.S. Customs & Border Patrol (CBP) has a significant impact on cargo business at the Port of Detroit as a terminal so heavily reliant on imported cargoes. The impact is felt by manufacturing firms in the State of Michigan. It is imperative to have a strong working pact with CBP that helps broker new opportunities for Michigan based manufacturing firms to utilize the Port of Detroit as a resource.

Objective: Create a strong strategic partnership with CBP that enables growth of international cargo business for Michigan manufacturers.

Metric: Finalize statement of understanding with CBP on allowable cargo at the Port of Detroit that fulfills DWCPA’s intent to grow cargo business.

Suggested tactics: Set standing meeting schedule for bi-monthly engagements evolving to quarterly. Develop a Port of Detroit/CBP relationship best practices white paper.

PrioritizedInfrastructureImprovements The DWCPA has a major limitation on its financing capabilities for port specific improvements. Until the Port of Detroit can create enough business, it must rely on federal programs as a lifeblood for major infrastructure investment dollars.

Objective: Prioritize and plan dock improvements and security enhancements that will improve service in the current state of the Port of Detroit.

Metric: Secure federal funding for improvements.

Suggested tactics: Readily apply for federal infrastructure grant programs such as BUILD, INFRA, and port grants.

IncreaseCommunications There are countless case studies and best practice research papers that acknowledge consistent and cooperative stakeholder engagement leads to a successful port.

Objective: Increase channels of communication with public and private stakeholders to partner on addressing challenges and promote the Port of Detroit’s capabilities.

Metric: Establish permanent working groups in business, infrastructure, and government relations

Suggested tactics: Amend DWCPA by-laws to include working groups. Develop working group by-laws and obtain commitments from working group members for consistent participation.


BuildanOceanLinerBusinessStrategy In order to create new business development opportunities, it is imperative to understand the model for success required by new customers. Ocean liners, after understanding if there is a business opportunity, will secure said customers to use the Port of Detroit.

Objective: Complete a business strategy to increase cargo capacity with new ocean going vessels.

Metric: Develop a business brief inclusive of required information for ocean liners to base their business decision.

Suggested tactics: Discuss using the Port of Detroit with potential ocean liner customer to develop a demand model that will allow the ocean liners to input potential customer demand into a business study.

MidTermObjectivesDevelopaPortDistrict The DWCPA, along with its public and private sector partners, want to develop a cohesive industrial “Port District” that best articulates development along the Detroit River. In order to do this, the DWCPA will need to be more strategic with its adjacent properties that are both publicly and privately owned. Currently, the DWCPA is working with the Ambassador Bridge company to receive industrial property via donation in order to expand its footprint by almost 25% but more cargo capacity is integral to realizing new freight opportunities. This property needs to be planned for a new rail spur that will create increased multi-modal capacity near the general cargo terminal which is the only terminal of its kind in metropolitan Detroit and is operated by the Nicholson Terminal & Dock Company.

Objective: Partner with public and private sector stakeholders to delineate a recognizable Port District that caters to multi-modal industrial developments including warehousing, assembly, manufacturing, distribution, and storage.

Metric: Create a Port District Development Agreement with adjacent property owners that identifies the DWCPA initiative to create said district.

Suggested tactics: Host a planning meeting with neighboring property owners and relevant stakeholders to describe the need to collaboratively think about a Port District and how their properties could be impacted.

MarketthePortDistrict The Port District development is the first step toward creating an identifiable real estate location that has access to a port, rail, and freeway, potentially making it the most unique offering in the Midwest. It’s important to spread the word and real estate brokerage firms are the most well equipped to carry that message to a robust network of users and developers.


Objective: Develop the Port District as site ready and market the it as the most unique industrial property in Michigan with port, rail, and freeway services.

Metric: Market the Port District to developers, users, and government officials.

Suggested tactics: Consider working with an international brokerage firm to collectively market the Port District and all of its properties to an international and domestic audience.

LongTermObjectivesEstablishThoughtLeadership For the DWCPA to increase its relevancy, it is important to establish itself as an expert in all things maritime. Carving out a niche expertise increases the opportunities for success in a very non-competitive manner with other regional economic development agencies.

Objective: Establish the DWCPA as a statewide maritime thought leader.

Metric: Publish white papers on maritime economic development and host an annual event.

Suggested tactics: Create a research partnership with a university that has a maritime focus. Conduct regular interviews with stakeholders and potential customers to understand their needs.

StrategicPartnerRelationships The DWCPA is funded by the State, County, and City. It is vitally important to engage regularly with funders. Moreover, those funders and their economic development agencies require consistent engagement on Port of Detroit successes and new projects to deploying in the region.

Objective: Develop strategic relationships with communities and economic development agencies from Wayne County, the City of Detroit, and throughout the Downriver region to embed a port culture for jobs, investment, and recreation.

Metric: Quarterly meetings with partners and one collaborative project per year.

Suggested tactics: Quarterly meetings allow teams to brainstorm and develop new opportunities to work together. DWCPA should use these as an opportunity to advance its mission as a maritime expert and determine ways it can help other organizations be successful.


ConcludingStatement Ports constitute an important economic resource for regional and statewide strategies. The higher the throughput of activities, the more infrastructure, goods, and associated services are required. Ports are the vital connection; supporting economic activities inland since they act as a crucial connection between sea and land transport for goods and services. Thus far, it’s been a good year for the U.S. in terms of container imports. With nearly every major container port experiencing a significant surge in year-over-year gains, job opportunities are appearing left and right in the fastest-growing port cities. Martin Associates, often cited in this report, has conducted economic impact statements for the Great Lakes Ports, including the Port of Detroit. In 2014, Martin released a report comparing the growth in port activity from 2007-2014:

• Federal, state and local tax revenues generated by port-sector and importer/exporter revenues rose 51 percent to $321.1 billion;

• Jobs generated by port-related activity jumped 74 percent to 23.1 million; and, • Personal wages and local consumption related to the port-sector increased to $1.1 trillion, with

the average annual salary of those directly employed by port-related businesses equating to $53,723.

• From 2007 to 2014, the total economic value that U.S. coastal ports provide in terms of revenue to businesses, personal income and economic output by exporters and importers rose 43 percent to $4.6 trillion.

• This accounted for 26 percent of the nation’s $17.4 trillion economy in 2014, up from 20 percent of its $16.1 trillion economy in 2007.

The Port of Detroit poses a significant economic development opportunity for state manufacturing and agricultural companies. Today, the Port of Detroit is heavily underutilized and misunderstood as an economic development catalyst. Through proper planning, communications, and relationship building, the DWCPA can play a vital roll positioning the State of Michigan and Detroit Region as a major hub for maritime related economic growth.

DWCPA Draft Report Updated - Port of Detroit

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Transcript of DWCPA Draft Report Updated - Port of Detroit