1. California Marine Transportation System: Challenges and Potential Solutions Presented to: Western Cargo Conference San Diego, CA October 16, 2004 Gill V. Hicks, President Gill V. Hicks and Associates, Inc. Chairman, California Marine and Intermodal Transportation System Advisory Council

2. “The Perfect Storm” Cargo growth Population growth Air and noise pollution Traffic congestion Community concerns (“How much is enough?) Safety and security Capacity constraints Funding limitations Equipment/labor shortages

3. I-710 Under Normal Conditions and During Shut Down of West Coast Ports Lockout disrupted $6.28 billion in trade at POLA/POLB

4. Managing Growth: A Major Challenge Ports of Los Angeles/Long Beach -- 11.8 million TEUs in 2003 -- 11.8 million TEUs in 2003 -- 36 million TEUs by 2020 -- 36 million TEUs by 2020 Nearly a tripling of truck traffic by 2020. Port of Oakland -- 1.9 million TEUs in 2003 -- 1.9 million TEUs in 2003 -- 4.8 million TEUs in 2020 -- 4.8 million TEUs in 2020

5. Atlantic Seaboard Trade value: $34.3B Jobs: 265,600 Southwest Trade value: $97.9B Jobs: 1,003,600 South Central Trade value: $12.1B Jobs: 141,000 Southeast Trade value: $15.9B Jobs: 191,500 Great Lakes Trade value: $25.0B Jobs: 283,500 Great Plains Trade value: $8.6B Jobs: 111,300 Northwest Trade value: $2.2B Jobs: 24,000 Source: OnTrac Trade Impact Study © 2001 OnTrac All Rights Reserved. Impact of International Trade Through San Pedro Bay Ports

6. Deficiencies Hurt Economy as well as National Security. Congestion, delays, accidents, and freight transportation costs are increasing. Goods movement facilities have not kept up with growth. Communities increasingly calling for slow growth or no growth.

7. Initiatives to Reduce Truck Traffic from Ports of LA/LB Extended Gate Hours (“PierPass”) Virtual Container Yard (Internet matching service for empty containers) Increased Use of On-Dock Yards Local Shuttle Trains (containers shipped by rail to Inland Empire, then by truck to warehouses) Agile Port (“no-sort” or “block-swap” movements to inland facilities)

8. Increased Collaboration and Coalition Building California Marine and Intermodal Transportation System Advisory Council (CALMITSAC) (AB2043) – Identified $24 billion infrastructure needs in California West Coast Corridor Coalition - Alaska, Yukon, British Columbia, Washington, Oregon, California, Baja California. WCCC modeled after I-95 Corridor Coalition on the East Coast.

9. Major Funding Policy Options Rely on existing funding programs. Establish new revenue at state or federal level. Adopt region, port or project-specific revenue streams.

10. Goods Movement Coalition Coalition must seek additional funding and press for greater efficiencies in goods movement. Joint public/private partnership projects need to be pursued and funded when they are in the best interest of the MTS. California must form multi-state coalitions; e.g., West Coast Corridor Coalition

11. Core Messages The California Marine Transportation System is an enormous economic benefit to the nation. Congress must establish viable funding sources that will allow the goods movement infrastructure to keep pace with the steadily increasing growth of this sector. The funding needs of the MTS in California are great and cover a broad range of modes and facilities. The total funding need for the recommended MTS projects in California is $23.7 billion ($7.2 billion in Northern California and $16.5 billion in Southern California.)

12. Call to Action Marine Transportation System stakeholders should take an aggressive role in promoting additional funding for goods-movement transportation system. CALMITSAC and WCCC look forward to strong partnerships with state, federal and local governments, shippers, carriers and other segments of the goods movement industry.