BOARD OF DIRECTORS MEETING - March 23, 2022 Wilmington, NC
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BOARD OF DIRECTORS MEETING
March 23, 2022
Wilmington, NC
NORTH CAROLINA STATE PORTS AUTHORITY
BOARD OF DIRECTORS MEETING
WILMINGTON, NORTH CAROLINA
March 23, 2022
AGENDA
1. Call to Order
a. Pledge of Allegiance
b. Ethics Reminder
c. Safety Briefing
d. Roll Call
e. Introduction of Guests
f. Approval of January and February Meeting Minutes
g. Secretary Comments
2. Executive Director Update
3. Safety Update Mr. John Dittmar
4. Commercial Update Mr. Hans Bean
5. Operations Update Mr. Doug Vogt
6. IT Update Mr. Doug Vogt
7. Financial Results Ms. Terry Dail and Mr. Jason Barnes
8. Action Item #1 Port of Wilmington – Reefer Yard Phase 2
9. Action Item #2 Port of Morehead City – New Warehouse
10. Comments by the Chairman
ETHICS AWARENESS AND CONFLICT OF INTEREST REMINDER
(To be read by the Chairman or his designee at the beginning of each meeting)
In accordance with the State Ethics Act, N.C.G.S. §138A-1, et seq., as applicable, and N.C.G.S.
§136-14, it is the duty of every Board member to avoid both conflicts of interest and appearances
of conflict.
Does any Board member have any known conflict of interest or appearance of conflict with
respect to any matters coming before the Board today? If so, please identify the conflict or
appearance of conflict and refrain from any undue participation in the particular matter involved.
NORTH CAROLINA STATE PORTS AUTHORITY 2202 Burnett Boulevard P.O. Box 9002 Wilmington, NC 28402 www.ncports.com
NORTH CAROLINA STATE PORTS AUTHORITY
MINUTES OF THE BOARD OF DIRECTORS MEETING
Wilmington, NC
Thursday, Janaury 27, 2022
The meeting of the North Carolina State Ports Authority Board of Directors was held at the Port of
Wilmington, NC on Thursday, January 27, 2022. Chairman Robert A. Wicker presided.
Chairman Wicker called the meeting to order at 9 a.m.
Attendance:
Roll Call:
Mr. Robert A. Wicker, Chairman, Mr. Robbie Hill, Vice Chairman (absent), Mr. Jerry Cook, Mr. Adair
Graham, Mr. Patrick Joyce (virtual), Mr. Patrick Molamphy, Mr. Rajan Shamdasani (virtual), Mr. Gus
Tulloss (virtual), Ms. Susan Rabon, Mr. Gregory Washington and Secretary Eric Boyette (absent).
Management and Staff:
Mr. Brian Clark, Ms. Laura Blair, Mr. Alherd Kazura, Mr. Hans Bean, Mr. John Dittmar, Mr. Doug Vogt,
Mr. Mark Blake, Ms. Tricia Hamric, Mr. Daniel Johnson, General Counsel, Ms. Kacy Hunt with NCDOT,
and Ms. Ann Dishong with NCDOT (virtual).
Pledge of Allegiance:
Chairman Wicker led all in the Pledge of Allegiance.
Ethics Reminder:
Ms. Blair read the Ethics and Conflict of Interest Statement reminding Board Members to abstain from
participating in matters in which they have, or appear to have, a conflict of interest. She continued,
reminding members that in accordance with NC General Assembly Session Law 2020-3, the meeting was
being conducted by simultaneous communication and as such, members were advised that all chats,
instant messages, texts, or other written communications between the members of the public body
regarding the transaction of the public business during the meeting are deemed a public record.
Ms. Ann Dishing provided information regarding annual compliance requirements.
Safety Briefing:
Mr. Dittmar provided a modified safety briefing to the group to include official CDC guidance regarding
COVID-19.
Introduction of Guests:
Ms. Blair introduced guests in attendance virtually, Ms. Rachel McIntyre with Wilmington Metropolitan
Planning Organization, Ms. Hannah Nelson with Southern Environmental Law Center, Mr. Greg
Moninger with Anchor QEA of NC, Ms. Johanna Still with Greater Wilmington Business Journal, Mr. Jeff
North Carolina State Ports Authority Board of Directors Meeting
Wilmington, North Carolina
January 27, 2022 Page 1
Sheldon with Moffatt & Nichol, Ms. Susi Hamilton, Commerce Executive Liaison with NCDOT, Ms. Cheryl Hannah, Terry Edwards, Jody Greene, Mr. David Kaufman, and Mr. James Willsi. Minutes: Chairman Wicker presented for consideration the December 16, 2021, meeting minutes. Mr. Cook made a motion to approve as presented. Mr. Molamphy seconded the motion. All voted in favor. Secretary Update: Mr. Daniel Johnson, General Counsel reported NCDOT has not encountered any major issues regarding snow and ice removal. Mr. Johnson reported the Transportation Summit last week went very well. It was a well-attended event. Mr. Johnson thanked the Chairman and the Chairman thanked him for his remarks. Executive Director Update: The Chairman called on Mr. Clark for an update. Mr. Clark reported the Authority is halfway through the fiscal year. General cargo continues to be strong with some challenges on the container side. Mr. Clark stated the authority is working on the Q3 forecast and it will be shared at the next meeting. Mr. Clark reported the industry is changing by the day. The west coast is having significant challenges. Several east cost ports are having record volume years. The Authority continues to share the investments at the Port of Wilmington position it as a viable competitor to other congested ports. Mr. Clark reported that CMA CGM will initiate a call at the Port of Wilmington in March. This call, commonly referred to as an “extra loader” is an opportunity for the Port of Wilmington that should lead to CMA CGM adding the Port to its regular rotation. Mr. Clark thanked the Chairman and the Chairman thanked him for his remarks. Safety Update: The Chairman called on Mr. Dittmar to provide a safety update. Mr. Dittmar reported the number of accidents, near misses and injuries at all facilities as of December 31. The lost time injury rate is 0 for Fiscal Year 2022. Mr. Dittmar reported on how the post incident review process works. Mr. Dittmar thanked the Chairman and the Chairman thanked him for his remarks. North Carolina State Ports Authority Board of Directors Meeting Wilmington, North Carolina January 27, 2022 Page 2
Commercial Update: The Chairman recognized Mr. Bean to update the Board on recent commercial activities. Mr. Bean reported General Cargo continued to have strong performance to budget at both ports. The December performance is 19 percent above budget. January trending is net positive to plan with combined finish projected to be 25 percent over budget. Mr. Bean reported the container segment performance was two percent below budget. January is projected to be four percent below budget. Mr. Bean reported the Transpacific volumes in December were 16 percent below budget as schedule integrity remains a major issue. Mr. Graham asked why the Authority is under budget when there is a backup in Savannah and Charleston. Mr. Bean responded there is a CMA trial call coming up as well as potential others which are in discussion. Mr. Bean reported that it is a significant undertaking for carriers to make a change because services are designed around distribution centers. The Authority is making progress with trial calls and the goal is to be inserted into the regular network. Mr. Graham asked if the distribution sites at other ports are on terminal. Mr. Bean stated they are primarily offsite. Mr. Clark stated the importance of intermodal network is critical and the opening of the Rocky Mount Facility is key to attracting additional services. Chairman Wicker stated NC Ports needs to go to manufacturers within North Carolina and advise they need to use Port of Wilmington if other ports cannot meet their needs. Mr. Bean stated his team does do this. Mr. Bean also stated contracting season is underway and he anticipates network adjustments. Mr. Graham asked if the rates of the containers fluctuate or it hey are negotiated annually in the contract. Mr. Bean stated they are set annually. Mr. Bean also reported major beneficial cargo owners are looking at two- and three-year contracts. Mr. Washington stated he has heard it takes nine months to make a schedule change. He feels the carriers are gambling to see if it makes sense to make schedule changes now or wait. Mr. Bean stated that is correct and that there are very integrated networks, and one does not just move a vessel because it is an entire global network. Mr. Bean reported on future developments and key initiatives. Mr. Bean thanked the Chairman and the Chairman thanked him for his remarks. Operations and IT Update: The Chairman then recognized Mr. Vogt for an Operations and IT update. Mr. Vogt reported on the Operational Key Performance Indicators. Mr. Vogt reported the impact of COVID was seen in December with several employees absent. Mr. Cook asked if the Authority has the same crane productivity metric at the Port of Morehead City. Mr. Vogt responded no because the industry in general does not measure general cargo as they do containers. Mr. Cook asked if the crane at the Port of Morehead City is working better since the repairs. Mr. Vogt responded yes. North Carolina State Ports Authority Board of Directors Meeting Wilmington, North Carolina January 27, 2022 Page 3
Mr. Washington stated the industry benchmark is 30 container moves per hour and the Authority is greatly surpassing this number. Mr. Washington stated that he brags about the Port of Wilmington productivity. Mr. Vogt provided an update on the ongoing capital projects at Port of Wilmington and Port of Morehead City. Mr. Vogt reported the new gate at the Container Complex at the Port of Wilmington is scheduled to open on February 14. The Port of Wilmington chassis yard will be resurfaced in three phases and due to be complete by April. Area F East at Port of Wilmington will be complete by April 30. Mr. Vogt reported the Scoular Transfer Facility is now operating daily with Authority and Schouler personnel. Parking lot resurfacing at Port of Wilmington has begun and will be completed in two phases. Mr. Cook asked if the new Scoular conveyor system can handle product other than soybeans. Mr. Vogt stated it is a grain transload facility. Mr. Bean stated Scoular may look to handle a different product during off season. Mr. Vogt reported the T-4 Chiller Food Safety Certification internal audit with Dole participation was completed in December. A final walk though of identified actions is scheduled for January 28. Certification audit with certification body Control Union is scheduled for February 3 through 4. Mr. Cook asked the frequency on being recertified. Mr. Vogt stated there is an annual process to remain active and will check how often recertification is required. Mr. Vogt reported on upcoming projects at Port of Wilmington and Port of Morehead City. Mr. Cook asked about the status of the large conveyor system at the Port of Morehead City. Mr. Vogt stated it is still under analysis. Mr. Vogt thanked the Chairman and the Chairman thanked them for their remarks. Financial Update: The Chairman then recognized Mr. Kazura for a Financial update. Mr. Kazura reported on the December year-to-date financial results. Through December, ordinary net income is $.8M against a budget of $.9M. Mr. Kazura reported a long term “Financial Stability” initiative is underway. Mr. Molamphy asked how many payments are left on the gate project. Mr. Blake responded about $400,000. Mr. Kazura stated he can get an exact answer and stated the project is almost complete. Mr. Kazura reported the Edgewater property sale closed in December for $1M. Mr. Kazura reported USDOT Port Infrastructure Development Grant awarded $1.7M toward $2.1M rail improvement on Radio Island. Mr. Kazura provided a Hurricane Florence, Dorian, and Isaias recap. Mr. Kazura also reported a recap of Port of Morehead City major property damage as well as an overall insurance claim review. Mr. Kazura thanked the Chairman and the Chairman thanked him for his remarks. North Carolina State Ports Authority Board of Directors Meeting Wilmington, North Carolina January 27, 2022 Page 4
Action Item #1 Mr. Molamphy made a motion to approve a contract award to perform the Roof and Structural Repairs for Warehouse 8, Section B, at a total cost of $587,157 and authorize the Executive Director to execute a construction contract not to exceed $497,870. Mr. Cook seconded the motion, all voted in favor. Chairman Wicker stated the next Board of Directors meeting will be February 24 at the Port of Wilmington. Chairman Wicker will delay further discussion regarding the North Carolina State Ports Authority Foundation, Inc. until all members are together in person. Mr. Cook made a motion to adjourn. Ms. Rabon seconded the motion, all voted in favor. Approved this ____ day of _____________, 2022 ______________________________ ________________________ Robert A. Wicker Laura G. Blair Chairman, Board of Directors Secretary North Carolina State Ports Authority Board of Directors Meeting Wilmington, North Carolina January 27, 2022 Page 5
NORTH CAROLINA STATE PORTS AUTHORITY
MINUTES OF THE BOARD OF DIRECTORS MEETING
Wilmington, NC
Thursday, February 24, 2022
The meeting of the North Carolina State Ports Authority Board of Directors was held at the Port of
Wilmington, NC on Thursday, February 24, 2022. Chairman Robert A. Wicker presided.
Chairman Wicker called the meeting to order at 9:10 a.m.
Attendance:
Roll Call:
Mr. Robert A. Wicker, Chairman, Mr. Robbie Hill, Vice Chairman (virtual), Mr. Jerry Cook, Mr. Adair
Graham, Mr. Patrick Joyce (virtual), Mr. Patrick Molamphy (virtual), Mr. Rajan Shamdasani, Mr. Gus
Tulloss (virtual), Ms. Susan Rabon, Mr. Gregory Washington and Secretary Eric Boyette (absent).
Management and Staff:
Mr. Brian Clark, Ms. Laura Blair, Mr. Alherd Kazura, Mr. Hans Bean, Mr. John Dittmar, Mr. Doug Vogt,
Ms. Tricia Hamric, Mr. Fred Pearson, Ms. Donna Jones, Mr. Justin Moore, Ms. Christina Hallingse, Mr.
Daniel Johnson, General Counsel, Ms. Kacy Hunt with NCDOT, and Ms. Ann Dishong with NCDOT.
Pledge of Allegiance:
Chairman Wicker led all in the Pledge of Allegiance.
Ethics Reminder:
Ms. Blair read the Ethics and Conflict of Interest Statement reminding Board Members to abstain from
participating in matters in which they have, or appear to have, a conflict of interest. She continued,
reminding members that in accordance with NC General Assembly Session Law 2020-3, the meeting was
being conducted by simultaneous communication and as such, members were advised that all chats,
instant messages, texts, or other written communications between the members of the public body
regarding the transaction of the public business during the meeting are deemed a public record.
Safety Briefing:
Mr. Dittmar provided a modified safety briefing to the group to include official CDC guidance regarding
COVID-19.
Introduction of Guests:
Ms. Blair introduced guests in attendance virtually, Ms. Rachel McIntyre with Wilmington Metropolitan
Planning Organization, Mr. Abdiel Tate, Ms. Johanna Still with Greater Wilmington Business Journal, Mr.
Ralph Petereit, Mr. Chappel Greene with S-IDA-G Security, Mr. Alan Faviccio with Ocean2Ocean
International, Ms. Tonya Lamb with Efficient Escort, Mr. Michael Gregory with Moving Forward, Mr.
John Adams, Mr. Adam Balderson, and Mr. Jim Girouard.
North Carolina State Ports Authority Board of Directors Meeting
Wilmington, North Carolina
February 24, 2022 Page 1
Minutes: Chairman Wicker presented for consideration the January 27, 2021, meeting minutes. Mr. Wicker stated Mr. Graham had an issue with the January minutes not reflecting his questions. Chairman Wicker stated he would like all questions posed by board members to be reflected in minutes going forward along with staff responses. Chairman Wicker asked the minutes to be revised to reflect Mr. Graham’s question and the Board will vote on approval of January minutes at the March 23, 2022 meeting. Secretary Update: Mr. Daniel Johnson, General Counsel reported Secretary Boyette is unable to make the meeting because he was attending a conference. Mr. Johnson reported NCDOT cash balance remains strong and projects continue to move along steadily. Mr. Johnson stated Secretary Boyette and NCDOT continues to remain pleased with keeping transportation integrated in North Carolina. Mr. Johnson thanked the Chairman and the Chairman thanked him for his remarks. Executive Director Update: The Chairman and Mr. Clark recognized two employees upon the occasion of their retirement. Mr. Clark stated these events are bittersweet and thanked Mr. Pearson and Ms. Jones for their years of service. Mr. Clark introduced Mr. Vogt to recognize each. Mr. Vogt and Mr. Moore recognized Mr. Fred Pearson on his retirement and 16 years of service. Mr. Vogt then recognized Ms. Donna Jones on her retirement and 27 years of service. Mr. Clark reported the Authority is halfway through the fiscal year. General cargo continues to be strong with some challenges on the container side. Mr. Clark stated the March board meeting will take place in the new container building. Mr. Clark stated the new gate went live on Monday, February 14. The gate opening went very well. The team did a tremendous job allowing NC Ports to deliver great service. Mr. Clark recognized Mr. Vogt for his leadership on both the IT and Operations side. Chairman Wicker thanked Mr. Vogt for his leadership and work on the project. Mr. Clark stated the previously discussed CMA CGM vessel call timeline is slipping to April 5. CMA has added two additional vessel calls to the rotation for a total of three calls. The Authority is hoping this will lead to a full-time position of the Chesapeake Bay Express service. Mr. Clark thanked the Chairman and the Chairman thanked him for his remarks. Safety Update: The Chairman called on Mr. Dittmar to provide a safety update. North Carolina State Ports Authority Board of Directors Meeting Wilmington, North Carolina February 24, 2022 Page 2
Mr. Dittmar reported the number of accidents, near misses and injuries at all facilities as of January 31st. The lost time injury rate is 0 for Fiscal Year 2022. Mr. Graham asked how involved NC Ports is in the safety training of non-port employees. Mr. Dittmar stated each company has a full-time safety person who provides training but there is no direct safety training of nonemployees. Operations and IT Update: The Chairman then recognized Mr. Vogt for an Operations and IT update. Mr. Vogt reported on the opening of the new South Gate. Mr. Vogt provided pictures and explained the process a truck driver experiences as they transit through the new gate. Mr. Vogt stated the go live was successful. Mr. Vogt reported the Authority maintained turn times through week one. Ms. Vogt stated the previous gate has been closed which provides more space for containers. Mr. Clark stated the team did an overall great job and again congratulated Mr. Vogt. Mr. Vogt reported on operational Key Performance Indicators through January. Mr. Vogt reported the T-4 Chiller Food Safety Certification internal audit was a success. The Authority received immediate certification with a passing score of 96 percent and zero deficiencies. Mr. Vogt stated this will be an annual audit. Mr. Vogt provided an update on the first year of the Osprey Water Injection Dredge. Mr. Vogt stated the Osprey outperformed design specs and expectations. The dredge moved more than 270,000 cubic yards of material in year one. Mr. Vogt reported on upcoming major projects to include Port of Wilmington Reefer Phase 2, Port of Wilmington Intermodal Radiation Portal Monitors, Port of Morehead City log yard, Port of Morehead City new warehouse, and Port of Morehead City Berths 5 and 6. Mr. Cook congratulated Mr. Vogt on the gate opening and chiller certification. Mr. Vogt thanked the Chairman and the Chairman thanked him for his remarks. Commercial Update: The Chairman recognized Mr. Bean to update the Board on recent commercial activities. Mr. Bean reported the January results were mixed. General cargo continues to over perform. The container segment continues to face issues surrounding congestion at other ports. Mr. Bean reported the second half of the fiscal year is trending positive. January container volume had challenges with services and trade lanes, but February is improving and the outlook with additional vessels will help the remainder of the year. North Carolina State Ports Authority Board of Directors Meeting Wilmington, North Carolina February 24, 2022 Page 3
Mr. Bean reported general cargo January performance was 50 percent over budget. Mr. Bean reported the January container performance was 14 percent below budget. Only six of nine vessels were received in the transpacific trade. Mr. Bean reported there will be three CMA-CGM transpacific vessels in April through May. Mr. Bean reported on future developments and key initiatives. Mr. Shamdasani noted container utilization is at 100 percent and that his company cannot obtain containers to move product out of India. Mr. Cook asked Mr. Bean to explain how chassis pools work. Mr. Bean reported on the different pool models and which pools neighboring pools are members. NC Ports is part of the South Atlantic Chassis Pool. Mr. Clark stated this is the best option for NC Ports. Mr. Graham asked for more information on the backlog of empty containers. Mr. Bean reported that the empty containers the Authority has are being used for exports. Full containers are scheduled for upcoming vessels. Mr. Cook asked if the Authority is putting more containers directly on the rail or the container on a chassis being moved intermodal. Mr. Vogt stated the Authority only moves containers directly on the rail- no chassis to rail. Mr. Bean thanked the Chairman and the Chairman thanked him for his remarks. Financial Update: The Chairman then recognized Mr. Kazura for a Financial update. Mr. Kazura reported on the January year-to-date financial results. Through January, ordinary net income is $.3M against a budget of $1.3M. Mr. Kazura stated the Authority is doing very well in general cargo and lagging in containers. Operating income is tracking favorably to budget targets and expects that to continue through the remainder of the fiscal year. Mr. Kazura reported on unrealized losses in investments with rising yields as well as timing for capital grant projects. Mr. Kazura reported the Authority closed on the property located at 1650 South Front Street in Wilmington. Mr. Kazura reported the cash on hand and quarterly State Capital Appropriation will cover near term capital and debt payments. Mr. Kazura thanked the Chairman and the Chairman thanked him for his remarks. Chairman Wicker provided a Resolution recognizing Mr. Adams for his service on the NC Ports Authority Board of Directors. Mr. Graham made a motion to approve the Resolution. Mr. Cook seconded the Motion. All voted in favor. A copy of the Resolution will be attached to the Minutes. Chairman Wicker stated at the March meeting, he would like North Carolina State Ports Foundation to meet. Several members have been invited to the Economic Development meeting in Raleigh on North Carolina State Ports Authority Board of Directors Meeting Wilmington, North Carolina February 24, 2022 Page 4
Thursday, March 24. Chairman Wicker stated therefore the next meeting of the Board would be Wednesday, March 23. Mr. Cook made a motion to go into closed session pursuant to NC General Statute 143-318.11(a)(3) and 143-318.11(a)(4). Ms. Rabon seconded the motion, and all voted in favor. The board returned to public session at 12:06 pm and the Chairman advised that during closed session, no votes were taken. Mr. Cook made a motion to adjourn. Ms. Rabon seconded the motion, all voted in favor. Approved this ____ day of _____________, 2022 ______________________________ ________________________ Robert A. Wicker Laura G. Blair Chairman, Board of Directors Secretary North Carolina State Ports Authority Board of Directors Meeting Wilmington, North Carolina February 24, 2022 Page 5
Board of Directors Meeting
March 23, 2022Safety Update
March 2022 Board of Directors MeetingSafety Incident Reporting
Port of Morehead City
Near Misses Incidents Injuries
July 1 5 1 (port employee)
August 0 5 1 (port employee)
September 0 7 1 (non-port)
October 1 5 0
November 3 6 0
December 2 6 0
January 4 3 0
February 1 4 3 (2 port, 1 non-port)
March 2022 Board of Directors Meeting
3Safety Incident Reporting
Port of Wilmington
Near Misses Incidents Injuries
July 4 14 2 (1 port, 1 non-port)
August 1 24 1 (non-port)
September 0 24 3 (port employees)
October 8 16 4 (3 port, 1 non-port)
November 5 10 1 (non-port)
December 2 13 0
January 7 10 0
February 10 12 0
March 2022 Board of Directors Meeting
4NC Ports Lost Time Injury Rate FY22
Number of lost time injuries = 0
Employee hours worked in FY22 = 277,968.785
Temp employee hours worked in FY22 = 7990.5
Total employee hours worked in FY22 = 285,959.25
FY 2022 LTI = 0
FY 2022 goal = not to exceed .9
FY 2021 LTI = .9
FY 2020 LTI = .9
FY 2019 LTI = 1.4
(number of lost time injuries) x 200,000
---------------------------------------------------- = Lost Time Injury rate
(total hours worked)
March 2022 Board of Directors Meeting
5Port Employee Safety Index
March 2022 Board of Directors Meeting
6North Carolina Ports
Employee Incident Classification System
Port of Wilmington
January February
-Very Minor 5 9
-Minor 1 0
-Moderate 0 0
-Severe 0 0
-Catastrophic 0 0
March 2022 Board of Directors Meeting
7North Carolina Ports
Employee Incident Classification System
Port of Morehead City
January February
-Very Minor 3 2
-Minor 0 0
-Moderate 0 0
-Severe 0 0
-Catastrophic 0 0
March 2022 Board of Directors Meeting
8Port Employee Safety Index
Incident Average Month
1.29 July
1.24 August
1.10 September
1.13 October
0.50 November
1.0 December
1.08 January
1.00 February
Port Safety Index Average = 1.04
FY 2022 Safety Goal is Port Employee Safety Index not to exceed 1.3
FY 2021 Employee Safety Index = 1.23
FY 2020 Employee Safety Index = 1.6
FY 2019 Employee Safety Index = 1.8
March 2022 Board of Directors Meeting
9TWIC Professional Services
Standardized service for customers
Professional representative conducting business at
both port locations
Standardized pricing for customers
March 2022 Board of Directors Meeting
10Wind Event
March 2022 Board of Directors Meeting
11Commercial Update
March 2022 Board of Directors MeetingCommercial Update – February
OVERVIEW - All Segments
• February results mixed, primarily due program and vessel timing – go forward trending positive to plan
• H2 revenue & volume projections positive to plan against ongoing major transpacific (TP) schedule disruptions
• Ukraine related dynamics and risks - sector impacts; fuel costs; carrier activities
• China Covid resurgence - disruptions; lockdowns, omissions – congestion + service and network steering impacts
General Cargo
• +19% YTD to plan and +32% YOY; ROY outlook projecting combined finish 10-12% over plan
• FEB performance mixed by port – POW 38% under budget; 39% over budget for MHC)
• MAR trending net positive to plan with combined finish projected 15% over budget
• Incremental YTD Upsides / Growth – BBK (breakbulk) conversions / congestion diversions
• 12 vessels / 60,000 tons / $1.2M REV in FY22
• Risks / Concerns - Ukraine/Russia impacts – AG & metal / steel sectors
Containers
• FEB performance below budget as transpacific (TP) continues to lag due vessel bunching and slipping into March
• Projections across March, April and May are currently trending above budget
• Except for TP, all other market segments (transatlantic & north-south) continue performing above budget and YOY
• Received confirmation of a 4th CMA-CGM vessel in May, prior to start of official CBX service
Key Initiatives & Developments
• Industry engagement & leadership – RILA & TPM – Retail; Furniture, Apparel & Textiles, AG, Cold Chain
• Cold Chain - 5th Annual Cold Chain Summit - April 12 – Max Capacity / Strong response from Industry
• New & Existing Customer Program Expansions – progress updates
• Intermodal – WME (Wilmington Midwest Express) Progress; QCE adjustments; Rail, Carrier & BCO Contracts
• Economic Development Progress – NC Ports & Collective NC efforts
March 2022 Board of Directors Meeting
13Commercial Update - General Cargo
YTD % YTD YTD % YTD
North Carolina State Ports Authority YTD Prior vs. vs vs. vs.
FY21 Vessel Tonnage vs. FY21 Budget FEB YTD Budget YTD Budget Budget Prior YTD Prior YTD
POW BB and Bulk Total (S/T) 127,989 1,759,518 1,549,248 1,411,401 210,270 14% 348,117 25%
MHC BB and Bulk Total (S/T) 119,563 819,698 643,084 583,039 176,614 27% 236,660 41%
TOTAL 247,552 2,579,216 2,192,332 1,994,439 386,884 18% 584,777 29%
BHF and RADIO ISLAND Bulk (S/T) 2,304 142,317 100,000 74,056 42,317 42% 68,261 92%
GRAND TOTAL TONNAGE PORTWIDE 249,856 2,721,533 2,292,332 2,068,495 429,201 19% 653,038 32%
GC Performance & Outlook:
• FEB fiscal YTD performance tracking 19% above budget (excl. Nutrien)
• FEB monthly performance combined (15%) to plan; variation due vessel and program timing
• POW: (38%) under budget (Chemicals and Fertilizer timing)
• MHC: 39% over budget (Forest Products and Steel upsides)
• MAR combined forecast 15% above budget (excl. Nutrien)
• ROY fiscal FY22 projecting +10% combined finish
Highlights:
• Captured 4x breakbulk vessels (steel) diverted as alternative to planned gateways (congestion)
• Breakbulk (BBK) mode conversions - expected to continue in select commodities for calendar 2022
• POW handling monthly fluff pulp BBK vessels
• Nutrien dry bulk vessel (Fertilizer - MAP) for export in March (46,000 MT); testing potash export
• Ukraine/Russia risks: imported fertilizer, Nucor pig iron, organic grain imports
March 2022 Board of Directors Meeting
14Commercial Update - Containers
North Carolina State Ports Authority YTD % % YTD YTD % YTD
Container (Moves) vs. FY22 Budget February YTD Prior vs vs vs vs vs
February Budget YTD Budget YTD Budget Feb Budget Budget Prior YTD Prior YTD
THE Alliance - EC2 2,428 3,950 27,772 40,900 40,027 (13,128) -39% -32% (12,255) -31%
2M/ZIM - ZCP 2,419 2,775 18,068 29,325 25,376 (11,257) -13% -38% (7,308) -29%
ICL 3,685 3,525 34,728 30,050 28,223 4,678 5% 16% 6,505 23%
Maersk/Sealand - SAE 731 1,000 7,937 8,125 7,375 (188) -27% -2% 562 8%
Maersk/Sealand - NAE 495 200 3,260 1,600 0 1,660 148% 104% 3,260 -
Crowley 1,216 1,250 10,736 9,650 7,484 1,086 -3% 11% 3,252 43%
Other 279 200 1,636 1,750 1,918 (114) 40% -7% (282) -15%
TOTAL 11,253 12,900 104,137 121,400 110,403 (17,263) -13% -14% (6,266) -6%
Asia 4,847 6,725 45,840 70,225 65,403 (24,385) -28% -35% (19,563) -30%
Europe 3,685 3,525 34,728 30,050 28,223 4,678 5% 16% 6,505 23%
Central & South America 2,442 2,450 21,933 19,375 14,859 2,558 0% 13% 7,074 48%
Other 279 200 1,636 1,750 1,918 (114) 40% -7% (282) -15%
February Performance + March & ROY Outlook
• February: 13% below plan
• Transpacific: Volumes 28% below plan. 1 THEA vessel slipped into March
Schedule integrity remains a major issue (e.g. 3 “weekly” vessels in 4 days)
• Europe: Volumes 4% above plan. 1 ICL vessel slip into March. POW utilization strong
Delays due to COVID and cyber attack on Antwerp terminal
• Central America: Volumes were at budget. 1 vessel omission due to schedule challenges.
• March forecast: 1% above plan (as of writing) – multiple end month vessel calls
• Transpacific: Projected below budget due schedule integrity challenges
COVID South China & East Coast congestion impacts
• Europe: Volumes tracking above budget with continued strong market
• Central America: Volumes to be above budget as overall trade and allocation volumes remain strong
March 2022 Board of Directors Meeting
15Operations Update
March 2022 Board of Directors MeetingOperational KPI through February
Feb-22 FY22 Targets
Crane Down Time 0.5% 0.7% 1.0%
Net Crane Productivity 38.7 38.7 40.0
Truck Turn Times
Container
Single Move 19.5 19.8 19.0
Double Move 29.7 32 31.0
General Cargo
Wilmington
Steel 67.6 72.6 70.0
Lumber 50.8 56.1 70.0
Morehead City
Dimensional Lumber 100 91.9 70.0
Rubber 41.6 36.1 50.0
March 2022 Board of Directors Meeting
17Chassis Yard Update
• Phase 1 & 2 complete.
• Phase 3 paving
underway.
• Inspections on returning
chassis began in
February.
• Chassis Yard
interchanges began in
March.
• Full Chassis Yard
solution completed in
April.
March 2022 Board of Directors Meeting
18Area F East Update
March 2022 Board of Directors Meeting
19Upcoming Major Projects
• POW Reefer Phase 2
• Bids received on 3/10. (6 qualified bids received)
• Plan is to start construction upon completion of F East
• Action Item for approval today
• POW Intermodal RPM’s
• Design started in January and expected to be completed in May
• Construction expected to start in July and completed in November
• MHC Log Yard
• Construction started end of January and expect to complete by May
• MHC New Warehouse
• Selected contractor for pre-construction services based on initial bids
• Pre-construction services (project final design/scoping) completed
• Action Item for approval today
• MHC Berth 4 & 5
• Design being completed. Bid for this project planned for late April
• Conditional project. Requires Board approval (May) w/ planned construction start in June
March 2022 Board of Directors Meeting
20IT Update
March 2022 Board of Directors MeetingIT Capital Projects Update
• TOS (N4) project is closed; Live across General Cargo & Containers; No more spending
• Disaster Recovery is closed; Redundant connectivity in place; No more spending
• Network project work being finished up before end of FY22
• GOS (Southgate/CAP) work to be finished by end of FY22
• Working on remaining non-critical go-live functionality
• Business Intelligence (Power BI) roll-out before end of FY22; No more spending
• Will highlight functionality at April Board Meeting
• Warehouse Automation will be primary IT focus into FY23
• GC EDI, Warehouse Inventory Management and Point of work App. functionality
March 2022 Board of Directors Meeting
22Financial Update
March 2022 Board of Directors MeetingFebruary Year to Date Financial Results
Variance
(Volume in Thousands) Feb ‘22 Budget Feb ’21 Bud PY
Container Moves 104.1 121.4 110.4 (17.3) (6.3)
General Cargo Tons 2,579.2 2,192.3 1,994.4 386.9 584.8
(Financials in Millions)
Operating Revenue $41.4 $42.2 $38.1 ($0.8) $3.3
Operating Expense 38.7 39.9 34.7 1.2 (4.0)
Operating Income $2.7 $2.3 $3.4 0.4 (0.7)
Non-Operating Items (1.9) (0.8) (1.4) (1.1) (0.5)
Ordinary Net Income $0.8 $1.5 $2.0 ($0.7) ($1.2)
March 2022 Board of Directors Meeting
24Change in Net Position After
Extraordinary Items
Variance
(Financials in Millions) Feb ‘22 Budget Feb ’21 Bud PY
Ordinary Net Income $0.8 $1.5 $2.0 ($0.7) ($1.2)
Extraordinary/Special Items
Gain (Loss) on Disposal $1.0 $0.0 $0.0 $1.0 $1.0
Asset Impairments 0.0 0.0 0.0 0.0 0.0
Capital Appropriation 22.5 22.5 28.0 0.0 (5.5)
Extraordinary Rev (Loss) 0.0 (0.2) (0.3) 0.2 0.3
Other Expense (0.7) 0.0 (4.2) (0.7) 3.5
Subtotal 22.8 22.3 23.5 0.5 (0.7)
Change in Net Position $23.6 $23.8 $25.5 ($0.2) ($1.9)
March 2022 Board of Directors Meeting
25YTD Budget to Actual
$s Thousands
March 2022 Board of Directors Meeting
26FY22 Cargo Movement
Container
20 140
Moves (thousands)
120
15 100
80
14.3
10
121.4
110.4
60
104.1
14.3
12.5
14.2
13.0
12.8
11.8
11.3
5 40
20
0 0
Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun YTD
General Terminal Breakbulk FY22 Budget FY21
125 600
Tons (thousands)
110.5
100
400
75
541.1
457.6
60.0
50 79.3
351.7
200
66.7
64.2
62.5
50.3
25
47.6
0 0
Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun YTD
General Terminal Bulk
400 2,400
Tons (thousands)
300 1,800
324.5
259.8
2,038.1
200 1,200
321.2
1,734.7
1,642.7
265.9
262.1
260.4
180.9
100 600
163.3
0 0
March 2022 Board of Directors Meeting
27FY22 Financial Statistics
Operating Revenue
$40.0
$6.0
$30.0
Millions
$42.19
$41.40
$4.0
$38.10
$20.0
$5.37
$5.23
$5.27
$5.52
$5.10
$5.06
$4.84
$5.01
$2.0 $10.0
$- $-
Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun YTD
Adj. EBIDA (FY21 excludes DEP net reimbursement) FY23 Budget FY22
$3.0
$12.0
Millions
$2.0
$8.0
$13.64
$13.08
$13.81
$1.69
$2.35
$1.99
$1.78
$1.0
$1.69
$1.58
$1.41
$4.0
$1.33
$- $-
Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun YTD
Ordinary Net Income
$2,000 $2.0
Thousands
$1,500 $1.5
$1,104.4
$42.5
$(211.5)
$(264.7)
$132.9
$1.99
$(57.3)
$1,000 $1.0
$7.6
$1.48
$61.2
$0.81
$500 $0.5
$- $-
$(500) $(0.5)
March 2022 Board of Directors Meeting
28Capital Spending Overview
in thousands Year to Date Full Year
Actual Budget Variance Forecast Budget Variance
Expansion $12,626 $23,893 $11,267 $27,875 $39,124 $11,250
Core $3,766 $7,958 $4,192 $11,765 $13,047 $1,282
Total $16,391 $31,851 $15,459 $39,639 $52,171 $12,532
Summary of Cash Flows
Cash and Cash Equivalents at July 1, 2021 $82.2 Cash Balance - February
Total Cash Provided From Operating Activities $4.6 Operating Cash $21.0
Total Cash Provided From (Used For) Investing Activities (14.8) Board & Bond Reserves 10.0
Total Cash Provided From (Used For) Financial Activities 19.6 Special Reserves 35.8
Net Increase (Decrease) in Cash and Cash Equivalents $9.4 Excess Reserves 24.8
Cash and Cash Equivalents at February 28, 2022 $91.6 Total Cash Balance $91.6
March 2022 Board of Directors Meeting
29Expansion Capital Commitments Commitments
FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 from FY22
Projects Total
Wilmington
Turning Basin & Berth Improvements $ 15,768 $ 26,386 $ 21,565 $ 21,698 $ 30,634 $ 123 $ 450 $ 50 $ 116,673
New Cranes & Yard Equipment - 7,247 15,125 10,666 5,608 739 2,106 - 41,491
Terminal Improvements - 19 1,533 6,685 13,980 20,030 16,855 21,921 81,022
Navigation Contributions - - 4,000 294 7,199 4,899 995 - 17,387
Subtotal Wilmington Expansion Outflows $ 15,768 $ 33,651 $ 42,223 $ 39,343 $ 57,421 $ 25,791 $ 20,406 $ 21,971 $ 256,573
Morehead City
Turning Basin & Berth Improvements $ - $ - $ - $ - $ - $ 611 $ 1,351 $ - $ 1,963
New Cranes & Yard Equipment - - 1,499 379 4,921 780 - - 7,578
Terminal Improvements - - - - - - 2,466 9,750 12,216
Navigation Contributions - - 2,500 - - - - - 2,500
Subtotal Morehead City Expansion Outflows $ - $ - $ 3,999 $ 379 $ 4,921 $ 1,391 $ 3,817 $ 9,750 $ 24,256
General Admin
System Upgrades $ - $ - $ 191 $ 3,294 $ 4,360 $ 5,402 $ 3,652 $ - $ 16,898
Subtotal Administration Expansion Outflows $ - $ - $ 191 $ 3,294 $ 4,360 $ 5,402 $ 3,652 $ - $ 16,898
Total Expansion Outflows $ 15,768 $ 33,651 $ 46,413 $ 43,015 $ 66,702 $ 32,584 $ 27,875 $ 31,721 $ 297,728
Annual Cash Outflows 15,768 33,651 46,413 43,015 66,702 32,584 27,875 31,721 $ 297,728
Annual Appropriation Inflows 35,000 35,000 45,000 45,000 50,500 50,500 50,000 0 $ 311,000
Annual Surplus / (Deficit) 19,232 1,349 (1,413) 1,985 (16,202) 17,916 22,125 (31,721)
Cumulative Cash Outflow 15,768 49,419 95,832 138,847 205,548 238,133 266,007 297,728
Cumulative Appropriations Inflow 35,000 70,000 115,000 160,000 210,500 261,000 311,000 311,000
Cumulative Cash Surplus / (Deficit) 19,232 20,581 19,168 21,153 4,952 22,867 44,993 13,272
March 2022 Board of Directors Meeting
30Summary
• February YTD financial results on track for Ports Activity Income but lagging
Budget in non-Operating areas
• Unrealized losses in Investments with rising yields
• Timing for Capital Grants projects
• Reefer Yard Phase 2 & MHC New Warehouse Capital approvals
• Financial Sustainability initiative & FY2023 Budget process underway
• Cash on Hand and quarterly State Capital Appropriation will cover near term
capital and debt payments
March 2022 Board of Directors Meeting
31ACTION ITEM # 1 Board of Directors Meeting March 23, 2022 Contract Award: Reefer Capacity Expansion- Phase 2, Port of Wilmington Management Recommendation Management requests authorization for funding in the amount of $22,578,526 to perform the Reefer Capacity Expansion- Phase 2, and authorize the Executive Director enter agreements for the construction, engineering services, and equipment for up to $22,578,526. Background Reefer Capacity Expansion- Phase 1 was completed in May 2020. The new facility immediately experienced high volumes, and today it is not uncommon to have periods when all 540 plugs are utilized. The Reefer Phase 2 project provides 704 new plugs in a similar footprint to the Phase 1 yard, with 4-high reefer racks and outlets instead of the 3-high at Phase 1. In addition, the Phase 2 project area (Area B) is larger than the Phase 1 area (Area C), therefore the Phase 2 project will provide space for two (2) unrefrigerated container stacks to the south of the three (3) refrigerated stacks. Conduit pathways will be installed under the pavement below the unrefrigerated stacks, to facilitate future conversion to refrigerated. The future conversion (Phase 3) will allow two (2) more stacks at 8-wide, 4-high, 9 racks each, or 576 plugs. The Authority received six qualified bids for the construction work on this project which had a range of $6.5M with the lowest bid being selected. Financial Overview Construction $20,074,786 Contingency 5% $1,003,740 Engineering Services (Const Admin) $500,000 Backup Power Generators $1,000,000 TOTAL $22,578,526 The Finance Department has reviewed the scope and associated costs of the project and has been determined that the Authority has sufficient funds to fund the work through Expansion capital. This determination is based on current approved capital and equipment projects and their anticipated cash flow timing requirements. Based on this determination, the Executive Director concurs with the Staff recommendation for Board of Directors’ approval.
ACTION ITEM # 2 Board of Directors Meeting March 23, 2022 Funding Authorization: Design-Build Services for the New Warehouse, Port of Morehead City Management Recommendation Management requests authorization for funding in the amount of $12,411,500 to design and construct the New Warehouse, and authorize the Executive Director enter agreements for the engineering services and construction for up to $12,411,500. Background With increasing volumes in the past several years for grains, fertilizers, rubber, cement, steel, lumber, and other products, the utilization rate is very high for all warehouse space at Morehead City. The New Warehouse, on the north side of the general terminal facility, north of the existing A-Frame Building, will provide 75,000 square feet of open space, without columns or internal firewalls. The design accommodates bulk products. The basis of design is 36,000 tons of fertilizer storage. However, the warehouse could serve to store of a variety of cargo, as needs may change in the future. The NCSPA has entered an agreement for pre-construction services, for $160,000. Per the State process for design-build bridging, the initial design-build agreement for pre- construction services is the same agreement that carries forward into full engineering and construction. Once the parties agree to the full cost of all work, the agreement for pre-construction services is amended by change order. Financial Overview Preconstruction Services $160,000 Design-Build Agreement $11,430,000 Contingency 5% $571,500 Engineering Services (Design Criteria) $250,000 TOTAL $12,411,500 The Finance Department has reviewed the scope and associated costs of the project and has been determined that the Authority has sufficient funds to fund the work through Expansion capital. This determination is based on current approved capital and equipment projects and their anticipated cash flow timing requirements. Based on this determination, the Executive Director concurs with the Staff recommendation for Board of Directors’ approval.
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