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John Terrell, Vice President
John Brookby, Assistant Vice President Commercial Development
Dallas/Fort Worth International Airport
August 26, 2015
DFW Airport
Freight Forwarder Partnership
COMMERCIAL DEVELOPMENT – 2014 MASTER
2
Discussion Topics:
DFW Airport Overview
Commercial Development and Land Use
International Partnerships and Trade Alliances
Foreign Trade Zone
Cargo Development Strategy
Cargo Business Sectors and Opportunities
Freight Forwarder Engagement and Feedback
DFW International Airport
• $31.6 billion economic impact
• Cargo activity accounting for $16.7 billion
• Unifier of the region
• 4th busiest in operations
• Only airport to land 4 aircraft
• 61 million passengers annually
• Home to the worlds largest airline
• 7 runways
COMMERCIAL DEVELOPMENT – 2014 MASTER
Major corporations mention DFW Airport among the top reasons
they chose to relocate their headquarters to the region
Fastest growing region in the U.S. and home to more than 20
Fortune 500 headquarters
Today, DFW has grown to be one of only seven airports in the
world with direct flights to more than 200 destinations – 148
domestic and 56 international
Major corporations mention DFW Airport among the top reasons
they chose to relocate their headquarters to the region
Fastest growing region in the U.S. and home to more than 20
Fortune 500 headquarters
Today, DFW has grown to be one of only seven airports in the
world with direct flights to more than 200 destinations – 148
domestic and 56 international
Major corporations mention DFW Airport among the top reasons
they chose to relocate their headquarters to the region
Fastest growing region in the U.S. and home to more than 20
Fortune 500 headquarters
Today, DFW has grown to be one of only seven airports in the
world with direct flights to more than 200 destinations – 148
domestic and 58 international
COMMERCIAL DEVELOPMENT – 2014 MASTER Each new daily international route brings in about $200 million
dollars to the local economy – annually.
COMMERCIAL DEVELOPMENT – 2014 MASTER
International Service
DFW is recognized as the premier inland cargo hub, with international cargo
service to 17 major cargo hubs around the world.
COMMERCIAL DEVELOPMENT – 2014 MASTER
Approximately 6,000 acres of
developable land
More than 5,200 gross acres of
property will emerge into multiple
centers of development
Over 1,200 acres leased
Strategic location between Dallas and
Fort Worth and proximity to a network
of highways provide commercial
developers with numerous key
advantages
DFW Land Use Plan Supports goal to be more competitive in the global travel market by developing a
multifaceted center of commerce.
7
COMMERCIAL DEVELOPMENT – 2014 MASTER
Southgate Plaza Mixed-Use
Founders’ Plaza
Freeway Commercial – Coppell
Northwest Logistics Industrial
Southwest Cargo Logistics / Industrial
Redevelopment
Beltline TOD Mixed-Use
North Entertainment – Grapevine
Industrial Use – Coppell
East Air Cargo
Passport Park
West Grapevine
Bear Creek
Walnut Hill Industrial
8
Business Model Analysis Development Districts Map
COMMERCIAL DEVELOPMENT – 2014 MASTER
9
RUNWAYS
TAXIWAYS
AVIATION RELATED USES
CARGO DEVELOPMENT
AVIATION MAINTENANCE
FACILITIES 12,000 acres
maintained for
core business
operations
DFW Land Use Plan Core Business Operations
COMMERCIAL DEVELOPMENT – 2014 MASTER
Industrial and Warehouse Developments
10
Global Logistics I & II
DFW Trade Center 6, 7, 8, 9
Logistics Center I & II Fresenius
COMMERCIAL DEVELOPMENT – 2014 MASTER
Freight Forwarding Facilities: Global Logistics I & II
Phase One: Under
construction
Total 263 K sq. ft.
5% Office
Phase Two
Total 327 K sq. ft.
10% office
11
COMMERCIAL DEVELOPMENT – 2014 MASTER
DFW Trade Center 6, 7, 8, 9
Trade 6
500K sq. ft.
32’ Clear
Height
28 acre site
Trade 7
297 K sq. ft.
32’ Clear
Height
18 acre site
Trade 9
202 K sq. ft.
30’ Clear
Height
18 acre site
12
COMMERCIAL DEVELOPMENT – 2014 MASTER
International Commerce Park
Developable Land Area 432 acres
DFW Investment $37M
Developer Improvement $300M
Jobs 3,219
Salaries $131M
Annual Revenue to
DFW Airport
COMMERCIAL DEVELOPMENT – 2014 MASTER
Expansion Benefits
Increase its taxable business personal property value between $25.5 million and $60
million
Increase Freeport inventory value between $225 million and $580 million
Additional $20.6 million payroll annually
Between 200 and 500 hotel room nights annually 14
Commercial Development Aviall, Inc. at International Commerce Park (ICP)
Grown its business exponentially:
Increasing sales from $506 million in 2001 to $3.22 billion in 2010
Facility expansion from 239,000 square feet to 564,000 square feet, with 630,800
square feet of additional space
Employees increased from 340 to 800, adding an additional 300 jobs
Largest independent provider of new aviation parts and related aftermarket services
Wholly owned subsidiary of The Boeing Company
Relocated to ICP in November 2001
245,000 square foot corporate headquarters and global distribution center
The move to ICP doubled the size of its previous space
COMMERCIAL DEVELOPMENT – 2014 MASTER
DFW Global Business Ventures
International Airport Partnerships
Foreign Trade Zone Program
International Trade Alliances
15
COMMERCIAL DEVELOPMENT – 2014 MASTER
International Airport Partnerships
Shanghai Airport Authority
(China) – Oct. 2008
Taoyuan International Airport
(Taiwan) – Dec. 2011
Seoul Incheon International Airport
(S. Korea) – Sep. 2012
Singapore Changi Airport Group
(Singapore) – Sep. 2013
Beijing Capital International Airport
(China) – Sep. 2014
Moroccan Airports Authority
(Morocco) – Oct. 2014
16
COMMERCIAL DEVELOPMENT – 2014 MASTER
International Trade Alliances Trade Alliance with Aeropuerto Internacional de Monterrey (OMA MTY)
Agreement signed on February 27, 2014
Purpose: To increase air cargo flow between the airports, around the world
OMA comprises thirteen airports, of which Monterrey is the largest
Strategic location – industrial heartland of Mexico
Creates opportunities for increased cargo traffic between Central and South
America and Asia through DFW
17
Capitalize on synergies resulting from air
and truck service between DFW and
Monterrey
Stimulate commercial development
opportunities by identifying new developers
and companies with cargo needs
COMMERCIAL DEVELOPMENT – 2014 MASTER
International Partnership: Foreign/Free Trade Zones
18
Dubai Free Trade Zone, United Arab Emirates
DFW Airport’s website updated with information on Dubai Free Trade
Zone and link to their website. Cooperative marketing programs.
Farglory Free Trade Zone, Taiwan
Memorandum of Understanding signed on December 5, 2011
establishing an airport alliance between DFW Airport and Taoyuan
International Airport, Taiwan.
Memorandum of Understanding between DFW and the Taiwan Farglory
Free Trade Zone signed on May 17, 2013.
Incheon International Airport, South Korea
Study on Tax Benefits of Incheon Free Trade Zone completed.
COMMERCIAL DEVELOPMENT – 2014 MASTER U.S. Foreign Trade Zones Economic Benefits of FTZs
No duty on imports until they leave the FTZ for a domestic destination
No duty on items brought into FTZ and exported, as these items never enter Customs territory
Manufacturing FTZs can elect the lower of component part or finished product duty rate
No state and local personal property tax on imported inventory or domestic inventory held for export
Other logistical and process savings
INTERNATIONAL AIR CARGO CENTRE
PHASE I AND II
COMMERCIAL DEVELOPMENT – 2014 MASTER
20
DFW Airport’s Foreign Trade Zone
DFW sponsors FTZs in three ways:
On-Airport – Pre-designated FTZ
boundaries
Railhead, Fort Worth – Pre-
designated geographical FTZ area
Throughout Metro Area- Company
specific locations
COMMERCIAL DEVELOPMENT – 2014 MASTER
DFW Airport’s Foreign Trade Zone On-Airport FTZ
2,400 acres/971 hectares on-Airport
Pre-designated as FTZ
Companies can simply activate with
Customs
56 buildings, 12 million sq. ft. of
warehouse space is FTZ-designated
New industrial development underway
FTZ acreage can easily be moved to
accommodate companies
COMMERCIAL DEVELOPMENT – 2014 MASTER
22 22
DFW Airport’s Foreign Trade Zone On-Airport FTZ
Airbus Helicopters
Alliance Operating Services
CEVA International
Dallas Cowboys Merchandising, Ltd.
DHL Global Forwarding
Ergo Distribution, Inc.
Hitachi High Technologies America
Menzies Aviation
Mountain Plumbing Products
NEC Corporation of America
Network Logistics
Panalpina, Inc.
Valeo Compressor North America
COMMERCIAL DEVELOPMENT – 2014 MASTER
DFW Airport’s Foreign Trade Zone Free Trade Zone Alliances
23
Dubai Airport Freezone Authority (UAE) – Mar. 2012
Farglory Free Trade Zone (Taiwan) – May 2013
COMMERCIAL DEVELOPMENT – 2014 MASTER
• 21 air cargo buildings with just under 3M SF of space
• 29 aircraft parking positions (6 wide body vs 23 narrow body)
• 13 freight forwarding buildings (on airport) with 1,236,200 SF of space
• The facilities were built and are managed and controlled by third parties
• 650,000+ Metric tons / year
DFW Airport Cargo Facilities (Including Integrators)
24
COMMERCIAL DEVELOPMENT – 2014 MASTER
25
AA Cargo
COMMERCIAL DEVELOPMENT – 2014 MASTER
Comprehensive alignment of freighter facility development that is sequenced by demand triggers, phased for just-in-time delivery and needs no empty chair for construction.
• Accommodate 18 – 20 ramp positions for 747-800Fs or smaller (aligns operational excellence with carriers)
• Coterminous facilities proximate to logistics chain partners’ access routes (increases cost competitiveness)
• Redevelop the west-side where there is proximity to fueling infrastructure (limits cost impacts)
• CDS Study indicates 30-50,000 square foot of warehouse per aircraft parking position
• Industry proposals/discussions indicate 60-70,000 square foot of warehouse per aircraft parking position
Cargo Development Strategy (CDS)
26
COMMERCIAL DEVELOPMENT – 2014 MASTER
27
COMMERCIAL DEVELOPMENT – 2014 MASTER
28
95,910 SF
132,800 SF 96,800 SF
154,600 SF
380,000 SF
340,000 SF
115,600 SF
COMMERCIAL DEVELOPMENT – 2014 MASTER
Commercial Development Website: www.dfwairport.com/landhere
Translated into 80 Languages
29
COMMERCIAL DEVELOPMENT – 2014 MASTER
31
Our Vision:
Establish DFW as the Cross Roads of the Americas for relevant global air cargo trade lanes
32
Our Mission
Create the hemisphere’s best environment for the transport, handling and transit of air cargo
Our Primary Business Goal
Strengthen DFW’s global competitiveness and brand in the logistics industry, by creating an
Americas-best combination of operational efficiency, facilities, and customer service
Key Objectives FY15
• Complete the DFW cargo strategy by end of September 2015
• Identify any subsequent phases of the DFW cargo strategy (if needed) by the end of CY 2015
• Complete global trade lane outreach plan for FY 2016-2017 by the end of CY 2015
• Complete global freight forwarder outreach plan for FY 2016-2017 by the end of CY 2015
Key Results
Market the DFW
business model so
that All Trade Lanes
Lead to or through
DFW
Define and
Disseminate the DFW
Logistics Vision and
Brand
Conceive the Vision
of what DFW can
become
Cargo and Logistics Business Development Overview
Conceive and
Executive a new
business model to
match the vision and
brand
Freighter Services at DFW Provide Forwarders with Lift to Nearly
Every Region of the World
33
Scheduled International Freighter Services at DFW
May 2014
DFW’s over-arching cargo and logistics goal is to stimulate
demand and supply growth simultaneously
3
4
CARGO DEMAND CARGO SUPPLY
Freight
forwarders
Shippers
Customers
brokers
Airlines and
handlers
Facilities
developers
New business development opportunities at DFW
35
Freight Forwarders
Facilities
Developers /
Operators
Trade Lanes
Shippers
Customs Brokers
Commodity Types 3PLs
Key Growth Sectors Targeted by DFW
36
Texas Trade Growth: during each of the past two years, Texas has surpassed
California as the USA’s largest generator of international trade
2013: Texas generated 18.8% of U.S. global trade; California 15.3%
Mexico-Origin Cargo Growth: DFW has replaced LAX as the most efficient air
cargo gateway from the Central Mexico maquiladora region
Cross-border, in-bond FTL and LTL trucking services – 40% growth in past year
Perishables & Growth at DFW: Traffic of pharmaceuticals, fish, fruit,
flowers, etc. has more than doubled at DFW during the past year
Development of 5,000 sq. ft. of cool chain facilities on airport by SCL Cold
Chain, with plans to expand by another 13,000+ sq. ft. during 2015
AA’s rapid expansion of South America-to-Asia belly cargo connectivity
AA’s construction of a 1,800 sq. ft. cooler; plans for another 4,000 sq. ft.
Asia Accounts for 64% of DFW’s Total Trade with the World
37
Source: World City trade statistics, derived from U.S. Census Bureau data, for period noted, www.worldcityweb.com
$0.62
$0.74
$0.80
$0.88
$1.01
$1.20
$1.25
$1.65
$3.53
$9.11
$0.0 $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 $7.0 $8.0 $9.0 $10.0
France
Thailand
Singapore
Germany
UK
Japan
Malaysia
Taiwan
South Korea
China
China Accounts for 35% of
DFW’s Global Trade
January - June 2014 DFW International Air Cargo Trade
Top 10 Trading Partners in $US Billions
Asia Accounts for More Than 75% of the Weight of DFW’s
Air Cargo Traded with the World
China 36.4%
Japan 9.8% Singapore
9.8%
South Korea 6.8%
UAE 5.2%
India 4.6%
Saudi Arabia 4.3%
Taiwan 3.9%
Malaysia 3.8%
Thailand 3.2%
Others 12.2%
38 Note: DFW Catchment Area includes DFW, HOU, ELP, LRD, STL, MCI, BPT
Source: U.S. Department of Commerce, Bureau of the Census
2013 DFW Air Cargo Traffic, by Weight
Top Global Trade Partners
Re-Shoring of Manufacturing to Mexico is being Driven by
Total Production Costs that are Lower Than Those in China
39 Source: Mexico Now, www.mexico-now.com , December 4, 2014
2013 Indexed Total Landed Cost of U.S. Imports
Approximately Half of Mexico’s Maquiladoras Manufacture
Products that are Typically Shipped by Air
40 Source: Jesus Canas, author: “Maquiladora Industry: Past, Present and Future”
The Mexican States with the Largest Manufacturing
Presence Fall Within DFW ‘s Air Cargo Catchment Area
41
Source: Mexico Now, September-October 2014, pg. 116
The Manufacturing Sector Attracted 73.5% of all Foreign
Direct Investment in Mexico During 2013
42 Source: Mexico Now, September-October 2014, pg. 120
Automotive Sector
43
9 Automobile Companies Currently Manufacture Cars and/or
Parts in Nearly 20 Cities in 11 Mexican States
44 Source: Mexico Now, www.mexico-now.com , December 4, 2014
10 Automobile Manufacturers have Announced US$9.7
Billion in New Maquila Plants Since 2012
45
Source: Mexico Now, www.mexico-now.com , December 4, 2014
Case Study: Japanese Automobile Companies are Ramping
up Production in Mexico
46 Source: Mexico Now, September-October 2014, pg. 118
Case Study: the Japanese Automotive Sector has
Diversified Manufacturing Presence Throughout Mexico
47
Aerospace Sector
48
Mexico’s Aerospace Manufacturing Output has More Than
Quadrupled During the Past 10 Years
49 Source: Mexico Now, September-October 2014, pg. 120
Mexico’s Aerospace Sector is Projected to Shift Toward
Activities that Will Likely Generate Growth in Air Cargo…
50 Source: Mexico Now, September-October 2014, pg. 26
… and is Projected to Become More Globally-Diversified by
the Start of the Next Decade
51 Source: Mexico Now, September-October 2014, pg. 26
Pharmaceutical/Perishables Sector
52
Establishing DFW as a Viable Perishables Gateway is the Key to
DFW Seizing This Growth Opportunity
53
2013 Latin America-US Northbound Air Cargo Traffic Flows, by Commodity Type
Flowers 29%
Fish 25%
Fruits/ Vegetables 15%
Cereals 6%
Apparel 3%
Electrical Machinery 2% Other
20%
Source: U.S. Department of Commerce
MIA: 90.2%
LAX: 4.6%
JFK: 2.6%
Others: 2.5%
MIA: 57.5%
JFK: 17.3%
LAX: 11.3%
Others: 13.9%
MIA: 72.7%
JFK: 11.8%
LAX: 5.9%
Others: 9.6%
“Back Haul” Belly and Freighter Capacity Can Create Growth
Opportunities for DFW
54
Source: U.S. Department of Commerce
2013 US-Asia and US-Latin America Air Cargo Traffic Flows
in Metric Tonnes
1.66M tonnes
1.22M tonnes
Result: 440K tonnes of “back haul”
capacity in U.S.-Asia mkt.; and
280K tonnes in U.S.-Latin America
mkt.
Perishable Air Cargo Traffic is Growing Rapidly in Mexico
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2008 2009 2010 2011 2012
Valu
e (M
illio
ns U
S D
ollars
)
2008-2012 Perishable Exports: Mexico
South/CentralAmericas
Asia
Europe
Africa
Source: World Trade Organization
2008-2012 CAGR
Mexico - Asia: 11.0%
Mexico – South/Central
Americas: 11.1%
Mexico – Europe: 8.1%
55
Mexico’s US$13.5B Pharmaceuticals Industry (12th in the World)
Offers Growth and Diversification Opportunities…
56
Mexico Traded US$275M in
Pharmaceuticals with China during
2013
John Terrell Vice President, Commercial Development
Dallas/Fort Worth International Airport
August 26, 2015
Conclusion
Cargo-Freight Forwarder Initiative
Mission: Increase cargo traffic and related commercial development by
understanding the unique needs of the cargo community at DFW International
Airport.
Foster relationships through increased outreach
Research industry trends and our competitive advantages
Discover and present new opportunities
Plan for future cargo needs
Develop properties to increase efficiencies
58
THANK YOU