1. T YING F REIGHT TO E CONOMIC D EVELOPMENT: AIR CARGO T YING F REIGHT TO E CONOMIC D EVELOPMENT: AIR CARGO TALKING FREIGHT SEMINAR SERIES February 18, 2004

2. AIR CARGO DEVELOPMENT POTENTIAL Air Cargo Markets: Demonstrated unmet Demand Existing Airports are Capacity Constrained Regional Growth Driven Demand Speculative Development to Drive Regional Growth Air Cargo Airports: Existing Underutilized Facilities Regional or Municipal Airports (G.A.) Military Base Conversion New Construction Air Cargo Markets: Demonstrated unmet Demand Existing Airports are Capacity Constrained Regional Growth Driven Demand Speculative Development to Drive Regional Growth Air Cargo Airports: Existing Underutilized Facilities Regional or Municipal Airports (G.A.) Military Base Conversion New Construction

3. HOW DOES AIR CARGO CREATE ECONOMIC ACTIVITY? Direct Impacts: Air Cargo Carriers, Forwarders, Truckers Support and Ancillary Services Indirect Impacts: Shippers Manufacturing and Suppliers Third-Party Logistics Distribution (Retail and Wholesale) Enhance FTZ Utilization Direct Impacts: Air Cargo Carriers, Forwarders, Truckers Support and Ancillary Services Indirect Impacts: Shippers Manufacturing and Suppliers Third-Party Logistics Distribution (Retail and Wholesale) Enhance FTZ Utilization

4. THE MULTIPLIER EFFECT Greater Economic Benefit is derived from the Secondary Impacts. Manufacturing and Distribution Operations will locate and/or expand to take advantage of new multi-modal services. Air Cargo intensive Manufacturers and Distributors produce and transport high-value goods. Greater Economic Benefit is derived from the Secondary Impacts. Manufacturing and Distribution Operations will locate and/or expand to take advantage of new multi-modal services. Air Cargo intensive Manufacturers and Distributors produce and transport high-value goods.

5. PRIMARY PLANNING CONSIDERATIONS Market Understanding – Service Demand Cargo Carrier Understanding – Service Supply Anchor Tenant Concept Critical Mass Market Understanding – Service Demand Cargo Carrier Understanding – Service Supply Anchor Tenant Concept Critical Mass

6. LOCAL/REGIONAL AIR CARGO MARKET Demand Analysis: Geographic Region to be Served – Catchment Area Core Market Grouping(s) Population and Industrial Centers Identifies Competing Facilities within Region Identifies the Region that will Benefit* Demand Analysis: Geographic Region to be Served – Catchment Area Core Market Grouping(s) Population and Industrial Centers Identifies Competing Facilities within Region Identifies the Region that will Benefit*

7. WHAT THE DEMAND ANALYSIS TELLS US Is this Project Feasible in light of: Current and Projected Volume of Air Cargo Capacity Constraints at Competing Airports Achievable Levels of Cargo Diversion Market Growth Potential Ideal Airport Location Types of Shippers and Freight within Region (Wholesale, Retail or Combination) Is this Project Feasible in light of: Current and Projected Volume of Air Cargo Capacity Constraints at Competing Airports Achievable Levels of Cargo Diversion Market Growth Potential Ideal Airport Location Types of Shippers and Freight within Region (Wholesale, Retail or Combination)

8. SUPPLY ANALYSIS What Air Cargo Market will this Facility Serve? Air Cargo is NOT Generic Air Cargo Service is NOT Generic Wholesale – Industrial/Manufacturing Shippers High Volume per Customer, High Frequency Heavy reliance on Forwarders and All-Cargo Charters Manufacturing Centers, Industrial Park Concentrations Retail – Consumer and Business Shippers Low Volume, Sporadic Frequency Heavy Reliance on Integrated Express Carriers Large population and Urban Centers What Air Cargo Market will this Facility Serve? Air Cargo is NOT Generic Air Cargo Service is NOT Generic Wholesale – Industrial/Manufacturing Shippers High Volume per Customer, High Frequency Heavy reliance on Forwarders and All-Cargo Charters Manufacturing Centers, Industrial Park Concentrations Retail – Consumer and Business Shippers Low Volume, Sporadic Frequency Heavy Reliance on Integrated Express Carriers Large population and Urban Centers

9. SUPPLY ANALYSIS Who will Provide the Service? Integrated Express Carrier All-Cargo Carrier Freight Forwarder Commercial Passenger Carriers Develop the Facility Based on the Anticipated Service Provider – They are Your Customer. Who will Provide the Service? Integrated Express Carrier All-Cargo Carrier Freight Forwarder Commercial Passenger Carriers Develop the Facility Based on the Anticipated Service Provider – They are Your Customer.

10. Three Types of Air Cargo Airports: Local Market Station – Offers Service to Surrounding Market Area or Catchment AreaLocal Market Station – Offers Service to Surrounding Market Area or Catchment Area Hub (Regional and National) – Consolidates and Distributes Network FlowsHub (Regional and National) – Consolidates and Distributes Network Flows International Gateway – Consolidates and Processes International MaterialInternational Gateway – Consolidates and Processes International Material Three Types of Air Cargo Airports: Local Market Station – Offers Service to Surrounding Market Area or Catchment AreaLocal Market Station – Offers Service to Surrounding Market Area or Catchment Area Hub (Regional and National) – Consolidates and Distributes Network FlowsHub (Regional and National) – Consolidates and Distributes Network Flows International Gateway – Consolidates and Processes International MaterialInternational Gateway – Consolidates and Processes International Material AIR CARGO AIRPORT TYPES

11. AIRPORT LOCATION FACTORS Integrated Express Carriers Catchment Area is Small – Up to 100 Miles Markets are Tightly Defined Airport Must Be Located Near the Largest Concentration of Customers Catchment Area is Small – Up to 100 Miles Markets are Tightly Defined Airport Must Be Located Near the Largest Concentration of Customers

12. AIRPORT LOCATION FACTORS Freight Forwarders and All-Cargo Carriers Catchment Area is Large – Up to 600 miles Willing to Truck Greater Distances – Loosely Defined Market Areas Multiple Competing Airports Can Serve a Single Catchment Area Local Market Stations are Customer Locations Flexibility - Networks are Fluid Catchment Area is Large – Up to 600 miles Willing to Truck Greater Distances – Loosely Defined Market Areas Multiple Competing Airports Can Serve a Single Catchment Area Local Market Stations are Customer Locations Flexibility - Networks are Fluid

13. DEVELOPING “CRITICAL MASS ” Necessary Ancillary Support to Facilitate Air Cargo Operations Include: Interstate/Highway AccessInterstate/Highway Access Distribution/Intermodal FacilitiesDistribution/Intermodal Facilities Warehouse SpaceWarehouse Space LTL TruckingLTL Trucking Ground HandlingGround Handling CustomsCustoms Typically an Evolutionary Process An Anchor Tennant Will Jump-Start Necessary “Critical Mass”An Anchor Tennant Will Jump-Start Necessary “Critical Mass” Necessary Ancillary Support to Facilitate Air Cargo Operations Include: Interstate/Highway AccessInterstate/Highway Access Distribution/Intermodal FacilitiesDistribution/Intermodal Facilities Warehouse SpaceWarehouse Space LTL TruckingLTL Trucking Ground HandlingGround Handling CustomsCustoms Typically an Evolutionary Process An Anchor Tennant Will Jump-Start Necessary “Critical Mass”An Anchor Tennant Will Jump-Start Necessary “Critical Mass”

14. ANCHOR TENNANT A Single Airport User that Can Initiate and Drive Facility Usage. User Can be Either an Air Cargo Carrier or a Large Volume Shipper Air Cargo Hub, Local Market Station or Gateway National Distribution Center International Manufacturer-FTZ Tennant A Single Airport User that Can Initiate and Drive Facility Usage. User Can be Either an Air Cargo Carrier or a Large Volume Shipper Air Cargo Hub, Local Market Station or Gateway National Distribution Center International Manufacturer-FTZ Tennant

15. Successful All-Cargo or Cargo Focus Airports Alliance – Dallas, Texas Rickenbacker – Columbus, Ohio Huntsville – Huntsville, Alabama Airborne Airpark – Wilmington, Ohio So. Cal. Logistics Airport – Victorville, CA Alliance – Dallas, Texas Rickenbacker – Columbus, Ohio Huntsville – Huntsville, Alabama Airborne Airpark – Wilmington, Ohio So. Cal. Logistics Airport – Victorville, CA

16. ATTRACTING AIR CARGO SERVICE Market the Location! Air Cargo Carriers Must Operate from Airports Near Customers (Catchment Area) – Highlight Local and Regional Customer BaseAir Cargo Carriers Must Operate from Airports Near Customers (Catchment Area) – Highlight Local and Regional Customer Base Proximity Criteria is Dependant on Type of Carrier and Airport Function – Understand Target Carrier Networks and OperationsProximity Criteria is Dependant on Type of Carrier and Airport Function – Understand Target Carrier Networks and Operations Airport Facility Quality is Secondary to Location – Sell the Location not the AirportAirport Facility Quality is Secondary to Location – Sell the Location not the Airport Market the Location! Air Cargo Carriers Must Operate from Airports Near Customers (Catchment Area) – Highlight Local and Regional Customer BaseAir Cargo Carriers Must Operate from Airports Near Customers (Catchment Area) – Highlight Local and Regional Customer Base Proximity Criteria is Dependant on Type of Carrier and Airport Function – Understand Target Carrier Networks and OperationsProximity Criteria is Dependant on Type of Carrier and Airport Function – Understand Target Carrier Networks and Operations Airport Facility Quality is Secondary to Location – Sell the Location not the AirportAirport Facility Quality is Secondary to Location – Sell the Location not the Airport

17. ATTRACTING AIR CARGO USERS What Are the Marketable Benefits? Cost, Time and Reliability Increased Freight Connectivity Reduced Drayage Costs Access to New Markets J.I.T. Manufacturing Capability Enhanced Distribution Efficiency/Options What Are the Marketable Benefits? Cost, Time and Reliability Increased Freight Connectivity Reduced Drayage Costs Access to New Markets J.I.T. Manufacturing Capability Enhanced Distribution Efficiency/Options

18. TARGET INDUSTRIES High-value products, short life cycle products, time-critical J.I.T. and spare part goods. Aeronautics - Equipment & Parts Automotive - Equipment & Parts Pharmaceuticals Computers & Computer Components Diagnostic and Medical Equipment Software Textiles - Garments Perishables - Flowers, Fruit, Vegetables & Fish Economic perishables - Printed material Telecommunications Equipment - Cell Phones, Pagers High-value products, short life cycle products, time-critical J.I.T. and spare part goods. Aeronautics - Equipment & Parts Automotive - Equipment & Parts Pharmaceuticals Computers & Computer Components Diagnostic and Medical Equipment Software Textiles - Garments Perishables - Flowers, Fruit, Vegetables & Fish Economic perishables - Printed material Telecommunications Equipment - Cell Phones, Pagers

19. ULTIMATE GOAL Increase Regional Competitiveness via Increased Freight Connectivity, Efficiency and Access to Markets Air Cargo Operations Can Provide a Competitive Advantage to Regional Economic Development Efforts. Efficient Air Cargo Access can Provide a Tangible Marketing Tool for Attracting New Businesses. Most Air Cargo Intensive Target Industries Exhibit Desirable Economic Characteristics. Increase Regional Competitiveness via Increased Freight Connectivity, Efficiency and Access to Markets Air Cargo Operations Can Provide a Competitive Advantage to Regional Economic Development Efforts. Efficient Air Cargo Access can Provide a Tangible Marketing Tool for Attracting New Businesses. Most Air Cargo Intensive Target Industries Exhibit Desirable Economic Characteristics.