Port Issues and the Port of CharlestonApril 25, 2006

Presentation Overview

Key Factors Impacting PortsCharleston’s PositionHarbor Deepening, New BridgeGrowth, Port InvestmentPort Security

Key Factors Impacting Ports, Distribution

Trade Growth, Larger VesselsTransportation InfrastructureAutomation & TechnologyTrucker ShortagesEnvironmentalPort Expansion OppositionTraditional Work RulesIndustry Consolidation

U.S. Foreign Trade Via Container

Top Importers (000s TEU) Top Exporters (000s TEU)Wal-Mart America Chung NamHome Depot WeyerhaeuserTarget DuPontSears CargillDole Mead WestvacoChiquita Dow ChemicalIKEA CellmarkLowe's Proctor & GambleHeineken BASFCostco Daimler Chrysler

Source: Journal of Commerce

Charleston’s Situation

• Strong growth• Among nation’s top container ports• 1.98 million container TEU in CY05

• Up 6% in CY05 and 14% in last fiscal year (all-time record)

• Renowned productivity• Strong financial position

• Record revenues, earnings in FY05• Operating revenues up 18%, operating

expenses up less than 1%• Able to handle capital needs internally

From Charleston:

14 Major metropolitan areas within 200 miles.

27 Major metropolitan areas within 300 miles.

91 Major metropolitan areas within 500 miles.

Intersection of I-95 and I-26 is just 47 miles from Charleston.

Bigger Container Ships… They’re Coming.

Order Book: 229 Container Ships >6,000 TEU137 of these will be delivered in 2006-2007

The Port of Charleston is ready now to handle post-Panamax containerships.

READY NOW:

Bridge Removal and Harbor Deepening

Entrance Channel: 47-feet MLW.

Main Channel: 45-feet MLW.

Air Draft: 186-feet.

Open Sea: 1.5 hours +/-.

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

2,000,000

Series1 1,078,590 1,217,544 1,277,514 1,482,990 1,632,747 1,528,034 1,592,835 1,690,846 1,863,916 1,984,887

CY96 CY97 CY98 CY99 CY00 CY01 CY02 CY03 CY04 CY05

Source: In-house SCSPA data. Loads and empties.

Port of Charleston 10-Year Growth

Port Expansion in Charleston

The Challenge: Develop a 20-year plan to handle growth by existing customers.

Improvements to Existing Terminals

Expansion at the former Charleston Naval Complex

Expansion at Charleston Naval Complex Demand Curve

Improvements to Existing Terminals

Improving Business Practices– Longer operating hours, information systems,

automationInvesting in New Equipment– $64 million ok’d in Sep 05 for new equipment,

improvements – RTGs begin arriving in JuneExpanding Incrementally at Existing Terminals– 49 acres at Wando Welch Terminal, three acres

at Columbus Street under bridge

Charleston is an Operating Port

We’re essentially the terminal operatorWe contract with the ocean carriers, not the stevedoresWe operate half the gatesAll operational levers controlled by SCSPA

Public employees (not unions) operate all container handling machines

Direct impact on productivity and utilization

Ports Must Improve…Productivity

Measures & standards, operational inputsInfrastructure

Landside and watersideCapacity

New facilities, enhanced utilization

Charleston’s New Terminal Construction

• $600 million• 288 acres• Three berths• 1.38 million TEU of new capacity• Permit expected by November 2006• 1st Phase of construction by end of 2011

BARRACKS ROAD

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16

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2023

Expansion on Savannah River in Jasper County

Port Security IssuesMTSA ImpactsTerminal Security SurchargeProject SeahawkRadiation Portal MonitorsGrant FundingTWIC/Background Checks