Heartland Port Project Comprehensive market study 2020 May 2020 Title 0 Contents Executive summary ............................................................................................................................1 1. Introduction ...................................................................................................................................7 1.1 Objective ............................................................................................................................................. 8 1.2 Structure of the report ........................................................................................................................ 8 1.3 The Heartland Port—project location and study area ........................................................................ 9 2. Freight transportation system in Central Missouri ......................................................................... 10 2.1 Missouri’s freight network ................................................................................................................ 10 2.2 Highways ........................................................................................................................................... 10 2.2 Railroads............................................................................................................................................ 13 2.3 Waterways and public and private ports, marine terminals, and docks .......................................... 13 2.3.1 Marine Highways ....................................................................................................................... 13 2.3.2 Public Port Authorities ............................................................................................................... 15 2.3.3 Private river terminals and docks .............................................................................................. 17 2.3.4 Regional highway connectivity and planned improvements ..................................................... 20 3. Market analysis ............................................................................................................................ 21 3.1 Industry analysis ................................................................................................................................ 21 3.1.1 Market survey—key findings ..................................................................................................... 21 3.1.2 Industries with higher potential to generate traffic for the port .............................................. 25 3.2 State level market trends .................................................................................................................. 25 3.2.1 Non-containerized cargoes ........................................................................................................ 25 3.2.2 Containerized cargoes ................................................................................................................ 27 3.3 Location of freight generators/attractors ......................................................................................... 27 3.3.1 On-farm and commercial grain storage sites ............................................................................. 28 3.3.2 Grain/soybean processors ......................................................................................................... 32 3.3.3 Local livestock and poultry production sites.............................................................................. 33 3.3.4 Ethanol/biodiesel plants ............................................................................................................ 40 3.3.5 Mining sites: metals/nonmetals ................................................................................................ 41 3.3.6 Forestry and lumber ................................................................................................................... 42 3.4 Commodity port flow analysis .......................................................................................................... 44 3.4.1 Soybeans .................................................................................................................................... 45 3.4.2 Corn ............................................................................................................................................ 50 3.4.3 Grain Sorghum ........................................................................................................................... 55 3.4.4 Wheat ......................................................................................................................................... 58 Heartland Port Project—Comprehensive market study 2020 i 3.5 Market 30-year forecast of non-containerized cargoes ................................................................... 59 3.5.1 Potential non-containerized volumes from the Heartland Port Project study area .................. 59 4. Heartland Port: route economics and key target markets .............................................................. 62 4.1 General Assumptions ........................................................................................................................ 62 4.2 Non-containerized cargoes ............................................................................................................... 64 4.2.1 Incumbent routes ....................................................................................................................... 64 4.2.2 Route costs via incumbent routes (non-containerized)............................................................. 66 4.2.3 Route costs via the Heartland Port Project ................................................................................ 69 4.2.4 Route cost savings offered by the heartland port Project for non-containerized cargo ........... 70 4.2.5 Available non-container volume from the 24-county area ....................................................... 71 4.2.6 Potential market share captured by the Heartland Port ........................................................... 72 4.3 Containerized cargoes ....................................................................................................................... 74 4.3.1 Incumbent routes ....................................................................................................................... 74 4.3.2 Route costs via incumbent routes (containerized) .................................................................... 76 4.3.3 Route costs via the Heartland Port Project ................................................................................ 76 4.3.4 Route cost savings offered by the Heartland Port Project for containerized cargo .................. 77 4.3.5 Containerized cargo market shares and available volume for the 24-county area ................... 79 4.3.6 Potentially divertible intact intermodal imports to the 24-county study area.......................... 82 4.4 Base case volume forecast summary ................................................................................................ 90 5. Conceptual structure of the Heartland Port concession and operational model .............................. 92 5.1 Potential structure of the Heartland Port concession ...................................................................... 92 5.2 Conceptual organizational structure ................................................................................................ 93 5.2.1 Professional staff ........................................................................................................................ 94 5.2.2 Laborers ..................................................................................................................................... 95 5.2.3 Outsourced functions................................................................................................................. 96 5.3 Conceptual operational layout and project site ............................................................................... 96 5.3.1 Berth, facility, and equipment ................................................................................................... 96 5.3.2 Development opportunity A: South Site only ............................................................................ 99 6. Financial analysis ....................................................................................................................... 103 6.1 Description of the financial model .................................................................................................. 103 6.2 Base Case volumes .......................................................................................................................... 105 6.3 Combination of business segments analyzed ................................................................................. 106 6.3.1 Indicative capex ....................................................................................................................... 106 6.3.2 Indicative opex ......................................................................................................................... 109 Heartland Port Project—Comprehensive market study 2020 ii 6.3.3 Handling rates .......................................................................................................................... 111 6.4 Financial analysis ............................................................................................................................