Portside Magazine - Fall/Winter 2007 by Ports of Indiana

A Ports of Indiana Publication 路 Fall/Winter 2007

www.portsofindiana.com

Dynamic Growth! Steel Dynamics adds unique services in $40M expansion at Jeffersonville port

INSIDE THIS ISSUE: Indiana Logistics Summit sets attendance record, pg. 5 Meet the new port director and commissioners, pg. 8 Indiana a leader in Foreign-Trade Zones, pg. 13 PORTS OF INDIANA 150 W. Market St., Ste. 100 Indianapolis, IN 46204

PRSRT STD US POSTAGE PD MUNCIE, IN PERMIT 860

A towboat pushes barges of coal under bridges near the Port of Indiana-Jeffersonville.

Table of Contents From the Executive Director:

Ports applaud governor’s support of ballast bill........................... 4 5th annual Logistics Summit sets attendance record.................. 5 150 W. Market St., Ste. 100, Indianapolis, IN 46204 (317) 232-9200 / fx (317) 232-0137 / info@portsofindiana.com www.portsofindiana.com www.indianalogistics.com Ports of Indiana Contact Information

Rich Cooper, Executive Director (317) 232-9200; rcooper@portsofindiana.com Brian Nutter, Port Director - Jeffersonville (812) 283-9662; bnutter@portsofindiana.com

Dynamic Growth............................................................................. 6 Steel Dynamics adds unique services in $40M expansion at Jeffersonville port

News & Notes................................................................................. 8 New Director takes helm at Port of Indiana - Burns Harbor Fagan, McCauley join Ports of Indiana board

Enviro•Focus.................................................................................. 9

Phil Wilzbacher, Port Director - Mount Vernon (812) 833-2166; pwilzbacher@portsofindiana.com

reat Lakes Commission makes ballast water top priority G Lee Botts receives Lifetime Achievement Award Peacock appointed to Great Lakes Commision

Peter Laman, Port Director - Burns Harbor (219) 787-5101; plaman@portsofindiana.com

PORT REPORTS

Jody Peacock, Director of Corporate Affairs (317) 233-6225; jpeacock@portsofindiana.com David Haniford, General Counsel (317) 232-9204; dhaniford@portsofindiana.com Tony Walker, Controller (317) 232-6227; twalker@portsofindiana.com Liz Folkerts, Communications Specialist (317) 232-9205; lfolkerts@portsofindiana.com John Hughes, Engineering Director (219) 787-8045; jhughes@portsofindiana.com Warren Fasone, Security Manager (219) 787-5056; wfasone@portsofindiana.com

Mount Vernon: Allow me to introduce…

. ......................................10 Jeffersonville: Port success attracts admirers and future growth..... 11 Burns Harbor/Portage: Our port partners: A cross section of Indiana’s finest businesses. .....................................12 Foreign Trade: Indiana ranks among nation’s leaders in FTZ use. .................................13

Ports of Indiana Directory............................................................14

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www.portsofindiana.com · Fall/Winter 2007 3

FROM THE EXECUTIVE DIRECTOR

Ports applaud governor’s support of ballast bill

Rich Cooper

Executive Director, Ports of Indiana

Thank you Governor Daniels. Indiana Gov. Mitch Daniels really does “get it” when it comes to much needed ballast water regulations for the Great Lakes. He demonstrated his leadership on a very important Great Lakes issue involving shipping and the environment in a recent letter to the U.S. Senate Commerce Committee. In that letter, Gov. Daniels declared Indiana’s support for S. 1578, which would create new, more stringent ballast water regulations for Great Lakes ships. Soon after receiving his letter, the committee voted to pass S. 1578, the “Ballast Water Management Act of 2007.” The U.S. House Transportation Committee approved a similar ballast bill last June, and hopefully we will see a version before the full House in the near future. Ballast water is used by ships for balance and stability when they are not carrying a full load of cargo. Unfortunately problems arise when tiny, unwanted hitchhikers get sucked into ballast tanks and are transported from one port to another, which can cause problems in those new environments. Many new ballast treatment systems are being tested to address this problem but until federal standards are established, industry will be reluctant to invest millions of dollars into systems that may or may not meet the final regulations. It is imperative that federal regulations be established quickly so that we can address this issue as soon as possible. In his letter, Gov. Daniels said, “I am writing to reiterate Indiana’s strong support for uniform federal ballast water regulations to protect our nation’s waters from Aquatic Invasive Species...” Daniels also wrote, “Both federal and state governments have a responsibility to protect our vital resources from pollution and must provide industry with consistent regulatory framework to protect the environment while supporting reasonable economic activity.” If enacted, S. 1578 would establish ballast water treatment standards for all vessels entering U.S. ports, establish a timeline for the installation of treatment systems and provide for Coast Guard enforcement of these requirements. The legislation generally pre-empts state ballast laws, but allows states to play a role in enforcement, if they wish. States would also be allowed to enact ballast management requirements that are “consistent” with federal law. The legislation also pre-empts application of the Clean Water Act to ballast discharges. Finally, the legislation exempts any vessels operating exclusively within the five Great Lakes from the treatment requirement. The American Great Lakes Ports Assoc. and the Lake Carriers Assoc. support this legislation. Michigan has created its own state ballast regulations for international ships in hopes of motivating action by the federal government. Indiana has adamantly opposed this idea because it would create a complicated patchwork system of policies on the Great Lakes, which touch seven states and two Canadian provinces. Individual state regulations would cause shippers to take their business to other ports across state lines but on the same bodies of water, which hurts the local economy without making any environmental improvements. While there are differing opinions on the details of this issue, there is clear consensus that we need strict federal regulations immediately. But we cannot let the details get in the way of the greater good. We are very fortunate to have a governor who is willing to take action on such an important issue. The Ports of Indiana applauds the governor for his efforts to find a balance between environmental and economic issues. This bill is very important to the ecosystem and economy of the entire Great Lakes region.

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5th annual Logistics Summit sets attendance record Mineta calls Indiana “go-to model” for transportation planning INDIANAPOLIS – More than 300 representatives from industry, academia and government met in Indianapolis on Sept. 25-26 for the fifth annual Indiana Logistics Summit. Featured speakers included Gov. Mitch Daniels, former U.S. Secretary of Transportation Norman Mineta and Michael Gallis, the country’s leading expert in largescale regional development strategies. The summit also expanded to two days to include a Networking Day, which gave small logistics companies the opportunity to meet one-on-one with large shippers. Hosted by the Ports of Indiana, Purdue University and Conexus Indiana at the Indianapolis Marriott Downtown, the event brought together top officials to discuss how to make Indiana’s transportation, distribution and logistics businesses more competitive and what it will take to make Indiana a logistics leader. Attendees at the 2007 event came from 15 states and 34 Indiana counties. Sixty-one percent of the 323 registrations were from the business sector, with academia, government, economic development organizations each making up about 10 percent. Logistics, real estate, waterborne shipping and manufacturing companies made up more than half of business attendees. Mineta, who spoke on the future of the transportation industry during the luncheon keynote on Sept. 26, is the longest serving secretary in the history of the U.S. Department of Trans -portation (2001-2006), the first Asian-American Cabinet member, and the Norman Y. Mineta first Cabinet member to switch directly from a Democratic to a Republican Cabinet – appointed in 2000 by President Bill Clinton as the U.S. Secretary of Commerce and in 2001 by President George W. Bush as Secretary of Transportation. Mineta, now the vice chairman of Hill & Knowlton based in Washington, D.C., also guided the creation of the Transportation Security Administration following the Sept. 11 terrorist attacks. Mineta praised Indiana’s advancements in transportation. Citing the lease of the Indiana Toll Road and the resulting Major Moves highway plan, he commended Indiana for identifying transportation needs and bringing them to fruition. “Other states have grand plans too,” Mineta said. “They want to build roads and tunnels and airports. The problem is, they don’t have what you have – the money to pay for it all.”

Logistics Summit attendees heard panel discussions and participated in speed-networking sessions with top U.S. shippers. activity across borders is very important. Gallis, who forecasts global trade trends, said Indiana must consider how it can best position itself in those changing patterns. “Are we going where the world is going?” he asked, observing that the combined population of North and South America is only 13 percent of the total world population. “The question is what piece of the global network are we and how do we fit in?” Gallis and his firm, Michael Gallis & Associates, have received many national honors, including a National Design Award from the U.S. Department of Transportation and the National Endowment for the Arts. “Our line-up of nationally recognized speakers has Michael Gallis always been a key to making this Indiana’s premier logistics event,” said Rich Cooper, executive director of the Ports of Indiana. “This year was no exception with Secretary Mineta and Michael Gallis. Indiana’s transportation resources are second to none and we hope this summit will continue to be a valuable resource in driving future growth for Indiana companies as well as our state’s economy.” Lisa Laughner, executive vice president of Conexus Indiana, presented an update on two newly formed entities that are focused on logistics development in Indiana. Conexus Indiana has launched an initiative that combines advanced manufacturing and logistics, while the Indiana Logistics Council, a group of logistics-related officials, is targeting Indiana’s needs for logistics infrastructure, awareness and workforce development.

“Now it seems to me that when it comes to transportation, Indiana is the go-to model. You’re showing everyone else how it’s done.”

Other summit speakers included leadership from UPS, Duke Realty Corp., Rolls-Royce, Wal-Mart, Cummins Inc., Purdue University, Ports of Indiana, Indiana Economic Corp., the Indiana Department of Transportation and more.

While cities, states and regions often compete for such jobs and dollars, Gallis, the morning keynote speaker, called for a wider perspective. He suggested ignoring all such political boundaries and looking at global trade routes from a historic perspective.

“Indiana is in perfect position to become a leader in the world of logistics,” said Cooper. “A key focus of this summit was how the state and its companies can utilize these resources to gain an even greater competitive economic advantage.”

“There’s political space and there’s urban economic space and the two are very different,” he said, explaining that tracking economic

To get more information about Indiana logistics or see presentations from the Indiana Logistics Summit, visit www.indianalogistics.com. www.portsofindiana.com · Fall/Winter 2007 5

Dynamic Growth Steel Dynamics adds unique services in $40M expansion at Jeffersonville port

New paint line, Galvalume treatment designed to grow business JEFFERSONVILLE, Ind. – When customers of New Process Steel asked for painted steel, the Houston service center faced a Texassized hassle. Few North American companies paint their own steel, so Vice President Jim Mahoney and his team had to buy steel from a mill, ship it elsewhere to be painted, and then ship it to the customer. But today they have a ‘dynamic’ solution. Steel Dynamics Inc. (SDI) began painting steel at its Butler, Ind., steel mill in 2003, and now the company is launching a new and improved painting service in its facility at the Port of IndianaJeffersonville. SDI ships coils of cold-rolled steel produced at its Butler mill to Jeffersonville by rail, where they are galvanized and, in the near future, can be painted as well. SDI is putting the finishing touches on a $40 million expansion that includes a new paint line and an aluminum-zinc alloy coating called Galvalume®. These new facilities, which will be fully operational by the end of the year, should allow Steel Dynamics to increase its Jeffersonville product mix and add about 35 new jobs. “We’ll be able to serve new markets with high-quality steel products that we don’t currently make,” said Fred Warner, SDI’s manager of investor relations. “Each of these new products allows us to serve new customers and adds value, such as higher corrosion resistance.” Jeffersonville Port Director Brian Nutter said the expansion will increase business for other port companies and provide new services that do not currently exist at the port. “It will allow us to market a broader range of services in attracting additional business opportunities to the port,” Nutter said. “We have been fortunate to attract many businesses to the port that are complementary to one another. We work proactively with our existing business-partners to identify companies that will create synergies with the port’s current activities.” 6 · Fall/Winter 2007 PORTSIDE MAGAZINE

By Arundi Venkayya

The ‘Port Advantage’ SDI officials are eager to add new services in Jeffersonville because of the port advantage. “This location is good for several reasons,” said Jeff Baumann, Jeffersonville plant manager. “It’s further south than our Butler facility, and being located by the river is a huge advantage for shipping and receiving materials.” Customers like Mahoney also see tremendous value. “Having a line closer to customers will help reduce freight costs and ultimately total cost,” Mahoney said. “Being located at the Jeffersonville port helps with transportation costs because it’s possible to barge products to the southwest inexpensively. SDI will have a terrific advantage by adding onto that plant. By being located at the port and offering a broader range of products there, the company will be able to cost effectively deliver products to Texas and even Mexico.”

More growth ahead

SDI is the nation’s fifth largest producer of carbon steel products with 2006 annual revenues of $3.2 billion and annual shipments of 4.7 million tons. “2006 was an excellent year for Steel Dynamics,” said Keith Busse, president and CEO, in his year-end release. “During 2006 we were able to take advantage of numerous marketplace opportunities as a result of the production capabilities we’ve put into place over the past several years. “We are optimistic,” he added, “about our ability to continue our growth in sales and earnings, continuing to take advantage of our production assets and our capabilities to provide our customers with quality steel products tailored to meet their needs. The capital spending projects now underway in 2007 should increase our production capacity to nearly 6.5 million tons by the end of 2008.” The Jeffersonville plant galvanized 297,000 tons of steel in 2006, Baumann said. The expansion now underway will allow the plant to paint about 190,000 tons of light-gauge steel per year. Most of the steel that is painted will first be coated with galvanize or Galvalume alloy.

SDI is the nation’s fifth largest producer of carbon steel products with 2006 annual revenues of $3.2 billion and annual shipments of 4.7 million tons.

A new ‘line’ of business

There are many steel producers in North America but SDI is the only one that paints its own steel, said Baumann. “That means no more middlemen for the customer,” he said. “They can buy painted steel directly from us.” In Europe, most of the paint lines are run by the steel producers. Not so in the U.S. “SDI was looking for a way to add more value to our products,” Baumann said. “Painting steel can be a very profitable business. Integrating our services ends up being a huge advantage for our customers. It shortens lead time and helps to reduce inventory cost because they can get the steel much quicker.” Painted steel has many uses including roofing and sheeting for industrial buildings. The Jeffersonville expansion will augment the existing paint line at SDI’s Butler, Ind., flat roll mill, Baumann said. “SDI has established a really good reputation with their paint line in Butler,” Mahoney said. “Their new paint line should provide an attractive option for customers.” Jeffersonville’s ability to offer thinner-gauge painted steel is a key advantage for customers like Mahoney. “Offering lighter steel is good because it can serve a broader range of end uses,” he said. “Each durable good has an appropriate thickness of steel so it can achieve the strength needed. For example, the steel needed for the roof of a building can be lighter than the wrapper on a washer or dryer. Since SDI will be able to go lighter with their new line, they will be more attractive to customers.” “Demand for pre-painted steel is growing,” Mahoney said. “SDI recognized that unsatisfied demand and is working to fulfill it. Their new line offers more variety and broader applications. There was a degree of caution when they opened their Butler paint line but now they have proven themselves. They have built an excellent reputation.”

Adding Galvalume to SDI’s anti-corrosion menu

SDI recently added the capability at Jeffersonville to provide Galvalume coating, a product offering greater corrosion resistance and longer life than typical steel coating. Galvalume® is a trademark of BIEC International Inc.

“There are a limited number of Galvalume suppliers in the country,” said Don Switzer, SDI product manager. “It’s a rapidly growing market—a new market for us.” Traditional galvanizing applies a zinc alloy coating to the steel after it is cleaned and heat-treated for strength and hardness. Once the steel receives the zinc alloy coating, it also may receive surface treatments—either oil or chromate to protect the alloy coating from oxidation. The current expansion includes adding a second pot for a molten aluminum-zinc alloy, used in the Galvalume process. Customers will have the choice of which type of coating is used. SDI can apply Galvalume to wider coils as well. The standard width for such steel is 30 inches, Baumann added. The new Galvalume steel line at SDI’s Jeffersonville plant permits coating sheet up to 61 inches wide, which could prove to be an advantage in construction markets. “This is another way that SDI is working to add value to our products to make them more attractive for our customers,” Switzer said.

Future expansions at Jeffersonville port SDI is one of several businesses planning growth projects at the Jeffersonville port, according to Nutter. While there is land available for development at the port, there are no vacant buildings. “All of our business-partners are long-term operations with stable markets,” Nutter said. “Not only does this provide a sense of stability for the port but it also bodes well for the economic health of the community and region.” There are 29 different businesses operating at the port and Nutter said a majority of them are considering some form of growth or expansion with new markets, minor facility expansions or major new construction, such as SDI. “Regardless of the size of the expansion, we always are willing to work with our business-partners to help them grow their operations,” Nutter said, “and in turn, they have all been excellent in supporting our efforts to grow the port.” www.portsofindiana.com · Fall/Winter 2007 7

news & notes New director takes helm at Port of Indiana-Burns Harbor Peter Laman became the new port director at the Port of IndianaBurns Harbor on Dec. 3. Laman, a New Orleans resident for the last eight years, has 25 years of management experience in port operations along the Gulf of Mexico and West Coast. Laman held numerous positions within Continental Grain Co. and its successor Cargill at some of the largest port facilities in the country. His recent duties with Cargill included management of maritime activities in Westwego and Reserve, La., as well as Tacoma, Wash., including management for ship, rail, barge and truck logistics, and oversight of $750 million in export facility assets. Laman previously worked in Indiana at the Continental Grain Co.’s Ohio River facility in Mount Vernon during the early 1980s.

Peter Laman

Laman graduated from Michigan State University with a degree in agricultural engineering and served as a sergeant in the United States Marine Corps, earning a National Defense Medal and Good Conduct Medal. Peter and his wife Kristi have three grown children.

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Fagan, McCauley join Ports of Indiana board

David Fagan and Philip McCauley, Jr., are the newest members of the Indiana Port Commission after their recent appointments by Gov. Mitch Daniels. McCauley, a Jeffersonville resident, is a former managing partner of the accounting firm, McCauley Nicolas and Co., CPAs. McCauley has served his community in several capacities including deputy mayor, director of redevelopment and city councilman. Recognized as one of Jeffersonville’s most influential people of the past 50 years, McCauley has received the career achievement Philip McCauley award from the Archdiocese of Indianapolis, and several distinguished and community service awards. He and his wife Sandy have four children and nine grandchildren. Fagan is the Financial Secretary for the International Union of Operating Engineers, Local 150, which represents heavy equipment operators. He is a chairman on the Illinois, Indiana, and Iowa Federation for Fair Contracting Board and a trustee on the Railroad Health & Welfare Board and is on a variety of Local 150 boards. Fagan served on the Portage Common David Fagan Council for two terms. He and his wife Sandra have been married for 24 years and their son, Ryan, is attending Valparaiso University.

Enviro•Focus

Environmental issues are very important to the Ports of Indiana. As a port authority, the Ports of Indiana has the dual responsibility of protecting and enhancing our environment while building infrastructure that facilitates economic development.

Great Lakes Commission makes ballast water top priority By Liz Folkerts

The Great Lakes Commission is making sure Congress knows that ballast water is its No. 1 priority. At its May and October meetings in Indianapolis and Chicago, the commission discussed options for regulating the discharge of ships’ ballast tanks which can introduce harmful non-native species to Great Lakes waters. The commission unanimously adopted a resolution at its May semiannual meeting calling for immediate federal legislation to protect the Great Lakes-St. Lawrence Seaway from invasive species. The resolution urged the region’s congressional delegation to make this issue a top priority and stated that the commission prefers federal ballast water treatment regulations that would be applied in a consistent fashion throughout the region, as compared to a jurisdiction-by-jurisdiction approach, provided that a federal program sufficiently protects the unique economic and ecological interests of the Great Lakes states. This binational commission is dedicated to the use, management and protection of the water, land and other natural resources of the Great Lakes-St. Lawrence Seaway. Its members include the eight Great Lakes states and two Canadian provinces. The commission also approved a new five-year strategic plan, “Vision for the Region—2012,” which states: “We, the state and provincial Members of the Great Lakes Commission, envision a healthy, vibrant Great Lakes - St. Lawrence River region that exemplifies our shared ideals of environmental quality, economic growth and stewardship for current and future generations.”

During the October annual meeting in Chicago, the commission adopted a resolution urging the International Joint Commission to complete their investigation of the St. Clair River by the end of next year. The river is suspected of causing lakes Huron and Michigan to drain too rapidly. The study will examine whether the erosion of the river bed is causing the increased drainage and possible solutions.

Lee Botts receives Lifetime Achievement Award

Indiana environmental leader Lee Botts, who played a crucial role in the establishment of one of the nation’s first urban national parks in the Indiana Dunes National Lakeshore, was honored for her contributions to the dunes and the Great Lakes by the commission with the Great Lakes Commission Lifetime Achievement Award. Botts was also presented with a $500 donation for the Indiana Dunes Education Center, which she helped establish and is based at the National Lakeshore.

Peacock appointed to Great Lakes Commission Jody Peacock, director of corporate affairs for the Ports of Indiana, was appointed by Gov. Mitch Daniels to serve as a Great Lakes Commissioner. During the semiannual meeting, Peacock made a presentation to Jody Peacock the commission about the importance of balancing environmental and economic issues, as well as new programs designed to combat aquatic nuisance species being supported by the Ports of Indiana. The commission is made up of senior agency officials, legislators and/or appointees of the governor or premier for each jurisdiction.

5146 Maritime Road, Jeffersonville, IN 47130

Founded in 2004, a joint venture by the Kasle family involved in Steel Processing in Michigan and Automatic Feed a family owned business based in Napoleon Ohio, and the fabricators of integrated coil feed systems. Kasle Metal Processing, LLC is located on 14.5 acres in the Port of Indiana – Jeffersonville; just north of Louisville, Kentucky. We produce first operation blanks for the Ford Super Duty, Ford Explorer, GM Malibu and other fine vehicles. We are proud to be a part of the success of our community and that of our customers.

www.portsofindiana.com · Fall/Winter 2007 9

PORT REPORT

More than $220,000 of construction work was completed on port infrastructure this summer, including re-grading and stabilizing approximately 950 feet of the port’s riverfront.

Phil Wilzbacher Port Director

Port of Indiana – Mount Vernon

Allow me to introduce...

Over the course of the past five years that I have been with the Ports of Indiana, it has been my privilege to work with many wellrespected people from the industries that make up the tenant base at Port of Indiana-Mount Vernon. As is the case at most businesses, names and faces change as people take on new positions as a result of promotions, transfers, mergers or changing employment with a new company. The same holds true at our port. Please allow me to introduce some of the “new” faces: Jason May, Terminal Manager, Consolidated Terminal & Logistics Co. (CTLC): Jason began his current position as terminal manager one year ago with responsibility for overseeing the operations and business development for CTLC and the port’s general cargo services partnership. A 1998 graduate of Purdue University, Jason was previously employed with Cargill in Minnesota and southwest Indiana. Doug VanMeter, Plant Manager, Consolidated Grain & Barge (CGB): Doug assumed the plant manager position with CGB in September 2006, overseeing the operations of the soybean processing plant including safety, compliance, production and quality. Doug is a 2002 graduate of Purdue University and previously worked with ADM as a project engineer. Taylor Kanipe, General Manager, Mount Vernon Transfer Terminal/Alliance Coal: Coming from a family with a long background in the operations of Ohio River terminals, Taylor assumed the general manager position with Alliance Coal in May 2006. Taylor, a 2005 graduate of Murray State University, oversees

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Jason May

Doug VanMeter

Taylor Kanipe

Wayne McDonald

CLTC

CGB

Mount Vernon Transfer

Mount Vernon Barge Service

the operations of Mount Vernon terminal, receiving inbound coal by rail and truck for transloading to barge. Wayne McDonald, General Manager, Mount Vernon Barge Service: With extensive experience in the barge industry, Wayne joined Mount Vernon Barge as general manager in January 2007, overseeing the day-to-day operations of the company’s harbor service, bulk stevedoring and barge repair business. Before joining Mount Vernon Barge, Wayne was employed with Ohio Valley Marine in operations and with American Commercial Lines coordinating barge repair on the lower Ohio River. Join me in extending a warm welcome to these new members of our port family. On behalf of the Ports of Indiana, we appreciate the high caliber of professionals working for our business-partners and the expertise they bring that helps continue to grow business at the port.

Construction projects completed on waterfront More than $220,000 of construction work was completed at the port this summer. The major project was riverbank reconstruction, which involved re-grading and stabilizing approximately 950 feet of the port’s riverfront. The site received new riprap rocks and had live willow stakes installed to further stabilize the area. Construction was also completed on a new high mast for lighting at Pier 3. The project provides lighting to the entire pier area and is part of the port’s comprehensive security plan. Contact Phil Wilzbacher at (812) 833-2166; pwilzbacher@portsofindiana.com

PORT REPORT Brian Nutter Port Director

Port Road paving project was completed this year. Top right photo: Ports of Indiana Project Coordinator Rodney Gross (left) inspects road work.

Port of Indiana – JEFFERSONVILLE

Port success attracts admirers and future growth The Port of Indiana-Jeffersonville is successful for a variety of reasons, and that success has not gone unnoticed. We provided a tour of the port for Susheel Kumar, vice chairman of the Inland Waterways Authority of India and Sumitra Chowdhury, Ph.D., Secretary of Economics from the Embassy of India in Washington, D.C. This tour was arranged by the U.S. State Department, through the U.S. Army Corps of Engineers.

Susheel Kumar (third from left), vice chairman of the Inland Waterways Authority of India and Sumitra Chowdhury, Ph.D. (third from right), Secretary of Economics from the Embassy of India in Washington D.C. toured the Port of Indiana-Jeffersonville, along with representatives of the U.S. Army Corps of Engineers and American Commercial Lines.

The objective was to allow Mr. Kumar to gain information to help India with the development of their inland waterway system. Mr. Kumar was very impressed with the developments that had taken place here and the fact that a port operation that was so expansive could look so pleasing. Previous to their tour of the port, the group attended a briefing at American Commercial Lines and a barge launching at Jeff Boat.

Continuing to Grow

We are pleased to see the new development at Steel Dynamics making the cover of this issue of Portside. The continuing developments at the port, both small and large, are key to the overall health and wellbeing of our operation and the regional economy. Another recent development is Tanco Terminals’ construction of two new liquid fertilizer tanks. This has helped Tanco grow their business significantly versus last year. The facility provides costeffective liquid fertilizer products to serve the needs of local farmers. FedEx may not hold any records for waterborne cargo moved through the port (since their packages move by road), but their trucks can be seen daily at almost every business in the port. FedEx has begun an expansion here at the port, adding about 25,000 square feet to its existing building. The new operation will allow FedEx to improve volume and efficiency at its facility.

Amid the important details of our day-to-day work environment, we all understand the importance of enjoying what we do and life around us. Therefore, I cannot let this issue go by without expressing my appreciation to the employees at Eagle Steel for putting on such a marvelous and fun activity for the annual Steamboat Race. To be able to say – ‘stop the machines, turn off the computers and let’s have a little fun’ – speaks well for the character of everyone at Eagle Steel.

Paving ‘old’ Roads

It took about two and a half weeks in May to complete the repaving project on Port Road. The project included the removal of three inches of old asphalt and the placement of six inches of new material. The material was placed in layers with an engineered fabric membrane between the layers that is designed to reduce cracking and extend the life of the pavement. This not only means overall reduced costs but also longer cycles between paving jobs which will reduce the interruptions and challenges that these major types of projects entail. While these projects present some traffic hassles, we tried to minimize impacts to our business-partners and the general public using our roads. This paving project, like many other major construction activities we undertake, would not be so successful without dedicated people like our project coordinator, Rodney Gross. Rodney gets some of the best and worst duties. While Rodney gets his share of teasing about his great tan, it must be remembered that it comes at the price of standing beside a hot asphalt machine all day long. And when he is inspecting work along the waterfront on those great summer days, he is also down on the water in January when the wind-chill along the river is far from pleasant. As anyone who has worked with Rodney knows, he is a key part of what makes things run smoothly around the port. Contact Brian Nutter at (812) 282-2096; bnutter@portsofindiana.com

www.portsofindiana.com · Fall/Winter 2007 11

PORT REPORT

Rich Cooper Executive Director, Ports of Indiana

Port of Indiana - Burns harbor

Our port partners:

A cross section of Indiana’s finest businesses

I made a special trip to the Port of Indiana-Burns Harbor in June to meet with a handful of port businesses. Now, no matter how many times I meet and speak with our tenant companies, it never fails to amaze me at the high quality of professionalism and wealth of industry knowledge that can be found in their management teams. On this trip, I met with some of our biggest waterborne shippers at the port: ADS Logistics, Cargill, Beta Steel, Federal Marine Terminals, Feralloy Corp., Frick Services, Levy Co., O-N Minerals and Steel Warehouse. I would like to thank them for taking time out of their busy schedules to share valuable insights with me. One of our key objectives here at the Ports of Indiana is to help our port companies grow. We obviously grow our port business by helping them grow their business. We want to do everything we can to create the optimum environment for businesses to flourish and grow at our three ports. Whenever our team gets the chance, we try to pose that very question to our customers, “What can we do to help you grow your business?” Sometimes there are big things, sometimes little things, sometimes nothing, but there’s always an appreciation of being asked. We really view our port operations as a partnership. We want to work together with our port tenants to bring in new cargoes and other businesses that provide synergies with our existing customer base so that everyone benefits when possible. There are some excellent business minds and a wealth of knowledge employed within our port companies, and I always appreciate picking their brains and gaining further insight into their specific markets and business cycles.

The M.V. Julietta left the Port of Indiana-Burns Harbor June 13 with 11,000 tons of Indiana-made steel bound for Spain. The hotrolled steel coils from Mittal Steel in East Chicago, Ind., were the first export shipment of steel through the port since 2005. This port handles about 15 percent of all U.S. steel trade with Europe.

During my most recent trip to Burns Harbor, it was interesting to hear the perspective on steel shipments in 2007. We are currently in a down cycle coming off of a record-year. With a strong euro compared to a weak U.S. dollar and high inventory volumes at most local companies, this means that there is no spot-market steel moving into the U.S. right now. These one-time orders of steel coils or other steel products can account for a large percentage of the port’s steel imports. One of the major strengths of our three ports is that we have a diverse mix of cargoes. Often we will see that while steel shipments are down, another area such as agricultural products or bulk mineral shipments will be up. This helps balance out overall port tonnage trends even with significant fluctuations in specific markets. That is certainly the case this year. According to our customers, dry bulk shippers are looking at potential record years. This will likely offset decreases in steel cargoes moving through the port. The customer visits on Lake Michigan in June were invaluable to me as a manager. I plan to make similar visits to more port companies in the future. Thanks to each of you who took the time to explain your opportunities, obstacles and business cycles. It helps us plan for the future and better understand the needs of our customers. 12 · Fall/Winter 2007 PORTSIDE MAGAZINE

Ian Hirt, general manager of Federal Marine Terminals (FMT) received the Robert J. Lewis Pacesetter Award from Collister (“Terry”) Johnson, Jr., administrator of the St. Lawrence Seaway Development Corporation (SLSDC) at the Indiana Logistics Summit. The Port of Indiana-Burns Harbor and FMT, the port’s general cargo stevedore, received the Pacesetter Award in recognition of major increases in international freight tonnage at the port in 2006.

David Haniford General Counsel

Jody Peacock Director of Corporate Affairs

Foreign Trade:

According to the U.S. Foreign-Trade Zones Board’s 2005 Annual Report, FTZ use for steel dropped 53 percent between 2003 and 2005

Indiana ranks among nation’s leaders in FTZ use Indiana’s seven Foreign-Trade Zones (FTZs) put the state in the top 10 for receipts with an annual volume of $13.84 billion according to the National Association of Foreign-Trade Zones (NAFTZ). Indiana also ranked as one of the top 15 states in exports, employment numbers and firms engaged. In 2005, FTZs across the United States received $410 billion in goods and supported over 343,000 jobs. Despite these numbers, the public perception of FTZs remains a challenge. Some feel that FTZs are too complicated to use and involve excessive paperwork. FTZs do require multi-party agreements and additional reporting requirements with the U.S. Customs Service, but the significant benefits of the program to a company far outweigh any inconvenience required to form or operate an FTZ. The Ports of Indiana administers FTZs throughout the state and can assist companies seeking to locate within or expand a general purpose zone or create a site-specific subzone. FTZs are an important way to encourage participation by Indiana firms in the increasingly global economy. Since the FTZs are treated as if they are outside the U.S. territory in regards to customs and tariffs, companies importing and exporting goods benefit greatly. Items that will be re-exported do not have duties or quota charges. Imports have customs duties and federal excise tax deferred. Goods held for export are exempt from state and local inventory taxes. FTZ companies may also have access to more efficient customs procedures. Products with high duty rates can certainly benefit from FTZ exemptions and deferrals. These include many foods and beverages. Gin, brandy, white wine, cheese, carrots, pork ham and olives have some of the highest duty rates. Other high duty items include automatic data processing machines, TV receivers, rotary drills, as well as goods from France, Europe or the Ukraine. On the ForeignTrade Zone Board’s website (http://ia.ita.doc.gov/ftzpage), there is a worksheet for calculating the estimated duty savings.

In the Foreign-Trade Zones Board’s 2005 Annual Report, the following products showed great increases in FTZ use from 2003 to 2005. • Crude oil and petroleum products • Bearings • Jewelry and watches • Ship parts • Electrical equipment • Computer equipment • Plastic • Home furnishings • AV equipment • Chemicals On the other hand, FTZ use is down for medical equipment and supplies, photo and optical equipment, toiletries and cosmetics, sporting goods and steel. Some of the most common types of businesses using FTZs are: • Shipyards and offshore drilling • Oil refineries • Motor vehicle parts and rig production • Information technology production • Toner cartridges • Engine production • Footwear • Pharmaceuticals and • London Metal Exchange medical equipment warehouses • Chemical production Companies often see significant benefits from using FTZs to handle foreign-sourced products, especially packaging or “kitting” foreign and domestic products together – such as cell phones, dishware and stereo components – or as a way to eliminate duties on scrap, waste or damaged products. For more information about FTZs, contact the Ports of Indiana.

Ports of Indiana Foreign-Trade Zone Contacts:

Jody Peacock, Directory of Corporate Affairs (317) 233-6225; jpeacock@portsofindiana.com

David Haniford, General Counsel (317) 232-9204; dhaniford@portsofindiana.com www.portsofindiana.com · Fall/Winter 2007 13

150 W. Market St., Ste. 100, Indianapolis, IN 46204 (317) 232-9200 / fx (317) 232-0137 / info@portsofindiana.com www.portsofindiana.com www.indianalogistics.com