Looking at the trends in real estate, logistics, goods movement, and supply chain and its impact on site selection and economic development strategy.

1. © Foremost Quality
Logistics Confidential
Tim Feemster
Managing Principal
Foremost Quality Logistics
469-554-9873 O
214-693-7689 C
tim@feemsters.com
fqllogistics@gmail.com
What is our 2015 experience telling us
about the future in Industrial ED?
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August 19-21, 2015

2. © Foremost Quality
Logistics Confidential
What Will We Talk About Today
• Who is Tim Feemster and Foremost Quality Logistics
• Trends impacting the US related to
Industrial/Manufacturing development & expansion
• Case Studies
• How do you tell the difference and how do you tell if you
should:
– Bid on the project with a "cut and paste" because you won't win
– Pass because you know you are not going to make the short list
– Put on a full court press to win the project because you can
• Q&A throughout
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3. © Foremost Quality
Logistics Confidential
If you use the right color,
nobody will ever know
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4. © Foremost Quality
Logistics Confidential
TIM FEEMSTER
MANAGING PRINCIPAL
Foremost Quality Logistics
6005 Calm Meadow Rd
Dallas, TX 75248
O 469-554-9873
C 214-693-7689
Tim@feemsters.com
@tsfeemster on Twitter
Follow on LinkedIn
YEARS OF EXPERIENCE
35+ Years
AREAS OF SPECIALIZATION
 Facility Master Planning
 Lean Six Sigma Process Improvement
 Project Management
 Distribution Center Consolidations and
Greenfield Design
 Economic Development Business
Planning
 Keynote Speaker
 Meeting Facilitation
 Network Design and Planning
 Operations Management
 Real Estate Portfolio Strategy
 Supply Chain and Distribution Strategy
 Supply Chain Cost Reduction
PROFESSIONAL BACKGROUND
With over 35 years of industry and consulting experience, Mr. Feemster specializes in supply chain and distribution network strategy,
operations management in manufacturing and distribution environment, supply chain cost improvement, distribution center master
planning, and economic development business planning.
Before establishing Foremost Quality Logistics, Mr. Feemster was a senior manager in three manufacturing companies, a consultant,
an executive in two third-party logistics providers, and a practice group leader in two real estate companies.
Mr. Feemster has been exposed to the economic development, manufacturing, logistics and supply chain issues facing many
industries and involving both refrigerated and dry channels. These experiences include specific assignments in over 40 project start-
ups, operations management, Lean Six Sigma quality management, project management, strategic planning, marketing, site
selection, inventory planning and deployment, as well as transportation & private fleet management. He has been responsible for
warehouse facility layout and design, logistics systems development, purchasing strategy, business planning, carrier rationalization,
warehouse network analysis, and third party qualification and selection. In addition, Mr. Feemster is quoted frequently in both
supply chain and real estate industry press and makes over 25 presentations a year to professional organizations, university students,
and economic development groups. He was honored as one of the 2010 Rainmakers by DC Velocity magazine.
Past clients include Alpo Pet Foods, Cisco Systems (US & Mexico), Coke, Disney, Federal Express, Frito Lay, Georgia Pacific, GM (US
and Mexico), HP (US & Canada), Ingersoll Rand (US & Europe), NCR (US & UK), Nike Golf (US & Europe), Nissan, Philip Morris, Ricoh,
Quaker Oats, CentrePort Canada, City of Dallas ED, Midwest Inland Port of Decatur, Regional Growth Partnership- Toledo, Team
Texas, Tulsa Chamber of Commerce, Duke Realty, AEP-SWEPCO, Colliers International, and Liberty Property Trust.
EDUCATION
Mr. Feemster holds an M.B.A. with distinction, in Marketing and Operations Research from the Ross School of Business, University of
Michigan in Ann Arbor, MI. He received his Bachelor’s degree in Mathematics from DePauw University, Greencastle, IN.
PROFESSIONAL ASSOCIATIONS
Warehouse Education Research Council (WERC) – Past President, frequent speaker
Council of Supply Chain Management Professionals (CSCMP) – Registration Committee, frequent speaker
International Economic Development Council (IEDC)- Frequent speaker
Industrial Asset Management Council (IAMC)- Frequent speaker
Intermodal Association of North America (IANA)- Member, case judge
DePauw University- National Alumni Board of Directors; North Texas Regional Alumni Board of Directors
University of North Texas Center for Logistics Education & Research Advisory Board
University of Houston Logistics & Technology Department Advisory Board
Tim Feemster Professional Profile & Qualifications
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from: Jeff Metersky

5. © Foremost Quality
Logistics Confidential
What Does Foremost Quality Logistics do?
• Site Selection for Users of Industrial
and/or Manufacturing Space
• Economic Development Strategy
Consulting
• Supply Chain Optimization- Freight,
Network Design, & Facility Master
Planning
• Project Management of Start-Ups
• Training/Speaking- How the Supply Chain
Impacts the Real Estate Location Decision
• Meeting Facilitation
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6. © Foremost Quality
Logistics Confidential
Trends in Logistics
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Source: Tim Feemster, Foremost Quality Logistics
Impact / Response
• Energy independence
• Build lots of ecommerce facilities
• Redefine networks for
transportation optimization
• Reduce transportation costs- Mode
shift to less expensive water, rail
intermodal, and/or truckload,
driverless trucks
• Maximize supply chain efficiency
and mitigate interruption risk
• Optimize warehouse operations
• Green initiatives- LEED, Lighting,
Solar, CNG/LNG, & other green
options
• Communicate & Collaborate
Supply Chain Challenges
• Transport driver capacity
• Rising transportation costs, #1
• Supply chain disruption, risk
• eCommerce, mCommerce, sCommerce
• Winter shuts down massive
Geographies
• Nearshoring/Reshoring
• Infrastructure funding
• Energy boom
• Sustainability- buildings & SC
© Foremost Quality Logistics Confidential

7. © Foremost Quality
Logistics Confidential
Newer Intermodal Hubs
• CSX- Cordele (150 miles S of Atlanta), 2011
• BNSF- Kansas City, 2013
• NS- Greer SC (212 miles to Port of Charleston), 2013
• CSX- N Baltimore OH (S of Toledo), 2013
• UP- Santa Terisa NM (16 miles NW of El Paso TX), 2014
• KCS- Wylie TX (NE of Dallas), July 2015
• NS- Fort Wayne IN, conversion of TripleCrown, 2016
• CSX- Chatsworth (100 miles NW of Atlanta), 2018
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8. © Foremost Quality
Logistics Confidential
Port of Tianjin Explosion on August 12, 2015
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Logistics Confidential
Port of Tianjin Explosion on August 12, 2015
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10. © Foremost Quality
Logistics Confidential
Port of Tianjin Explosion on August 12, 2015
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Logistics Confidential
Port of Tianjin Explosion on August 12, 2015
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Logistics Confidential
Port of Tianjin Explosion on August 12, 2015
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13. © Foremost Quality
Logistics Confidential
Port of Tianjin Explosion on August 12, 2015
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14. © Foremost Quality
Logistics Confidential
Port of Tianjin Explosion on August 12, 2015
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15. © Foremost Quality
Logistics Confidential
Port of Tianjin Explosion on August 12, 2015
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16. © Foremost Quality
Logistics Confidential
Port of Tianjin Explosion on August 12, 2015
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Blast site 8/15/2015

17. © Foremost Quality
Logistics Confidential
Port of Tianjin Explosion on August 12, 2015
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Buildings damaged over 2 miles away from the blast site

18. © Foremost Quality
Logistics Confidential
Loaded Container Traffic E vs W Coast
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19. © Foremost Quality
Logistics Confidential
Panama and Suez Canal Throughput
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Source: Transpacific Stabilization Agreement & JOC

20. © Foremost Quality
Logistics Confidential
New Lock Roller Gate for the Panama Canal
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Source: Rafael Ibarra / Reuters

21. © Foremost Quality
Logistics Confidential
Panama Canal Lock Design Using Roller Gates
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22. © Foremost Quality
Logistics Confidential
Panama Canal New Lock Design Saves Fresh Water
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23. © Foremost Quality
Logistics Confidential
Capacity Comparison for 19,224 TEU MSC Oscar
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130 miles nose to tail

24. © Foremost Quality
Logistics Confidential
Nearshoring/Reshoring
• Cost of manufacturing in Asia is rising
• Supply chain interruption risk
– Port congestion/disaster
– Weather- Tornados, Floods, Hurricanes, Typhoons, etc.
– Natural disasters- Volcanos, Earthquakes, Tsunamis, etc.
• Speed to market
– Reduce inventory
– React to market changes faster
– Existing buildings and/or certified sites
– Auto companies are moving a lot of production to Mexico and some to
the US
• Energy costs moderate & less volatile
– Lower energy costs makes US more competitive
– Natural gas powered electricity generation
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Source: Tim Feemster, Foremost Quality Logistics

25. © Foremost Quality
Logistics Confidential
B2C ecommerce Sales Worldwide- 2013- 2018 est.
trillions and % Change, eMarketer
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26. © Foremost Quality
Logistics Confidential
US Retail ecommerce sales- 2013-2018, $billions
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Source: http://www.statista.com

27. © Foremost Quality
Logistics Confidential
“Rapid and Surprising” Things in the Retail Space in June ‘15
The top 5 “Rapid and Surprising” events for Walmart, Amazon, and Alibaba:
WALMART:
• Neighborhood Market opened with fresh, deli, pizza, bakery, etc
• Both Sam’s Club and Walmart debuted new grocery “click & collect”
• ShippingPass mimics Amazon Prime
• Increased salaries of store associates
• Announced a new Chairman, the first since 1992
AMAZON:
• Expanded Prime, 2 hour free delivery in Manhattan, NY
• The debut of Canadian online clothing and shoe store
• Closed Amazon Supply and integrates offering into Amazon Business
• Announced FBA Small & Light for non-Prime free delivery
• Announced plans for private label milk, cereal, baby food, coffee, etc
ALIBABA:
• Announced a major expansion of Alibaba Pictures
• Made aggressive move via Ilium with US cloud outreach
• Explained cross-border commerce thrust is global entrepreneurship
• Presented 5-8 year Cainiao delivery goals
• Presented an additional partnership to pursue wholesale business
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Source: Jim Tompkins, Tompkins International

28. © Foremost Quality
Logistics Confidential
Now Let’s Discuss ecommerce Deliveries
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29. © Foremost Quality
Logistics Confidential
OmniChannel Distribution- Walmart/Macy’s Chasing
Amazon
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Mega Import
DCs/Manufacturer
Retail
Stores
Customers
Product Flow Information Flow
Regional
DCs
Retailer
Website
Source: Tim Feemster, Foremost Quality Logistics

30. © Foremost Quality
Logistics Confidential
UPS & FedEx Ground Delivery Maps- Toledo, 43604
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Source: UPS Ground Maps- http://www.ups.com/maps?loc=en_US http://www.fedex.com/grd/maps/ShowMapEntry.do

31. © Foremost Quality
Logistics Confidential
UPS & FedEx Ground Delivery Maps- Columbus, 43215
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Source: UPS Ground Maps- http://www.ups.com/maps?loc=en_US http://www.fedex.com/grd/maps/ShowMapEntry.do

32. © Foremost Quality
Logistics Confidential
UPS & FedEx Ground Delivery Maps- Indianapolis, 46204
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Source: UPS Ground Maps- http://www.ups.com/maps?loc=en_US http://www.fedex.com/grd/maps/ShowMapEntry.do

33. © Foremost Quality
Logistics Confidential
UPS & FedEx Ground Delivery Maps- Grand Rapids, 49503
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Source: UPS Ground Maps- http://www.ups.com/maps?loc=en_US http://www.fedex.com/grd/maps/ShowMapEntry.do

34. © Foremost Quality
Logistics Confidential
UPS & FedEx Ground Delivery Maps- Bolingbrook, 60490
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Source: UPS Ground Maps- http://www.ups.com/maps?loc=en_US http://www.fedex.com/grd/maps/ShowMapEntry.do

35. © Foremost Quality
Logistics Confidential
UPS & FedEx Ground Delivery Maps- Louisville, 40202
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Source: UPS Ground Maps- http://www.ups.com/maps?loc=en_US http://www.fedex.com/grd/maps/ShowMapEntry.do

36. © Foremost Quality
Logistics Confidential
UPS & FedEx Ground Delivery Maps- Memphis, 38103
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Source: UPS Ground Maps- http://www.ups.com/maps?loc=en_US http://www.fedex.com/grd/maps/ShowMapEntry.do

37. © Foremost Quality
Logistics Confidential
UPS Delivery Optimization- 10 DCs
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Source: UPS; Uses US Census data and UPS’s Ground Network, & 10 DCs
Site selection assumes 10 DCs:
• Albany, NY 12202
• Austin, TX 78701
•Birmingham, AL 35203
• Des Moines, IA 50316
• Fresno, CA 93728
• Grand Rapids, MI 49503
• Indianapolis, IN 46268
• Orlando, FL 32824
• Portland, OR 97217
• Richmond, VA 23173
Average Transit Time- 1.16
days
Transit Days:
1 Day 84.7%
2 Day 14.5%
3 Day 0.7%
4 Day Plus 0.0%

38. © Foremost Quality
Logistics Confidential
Transportation Costs Continue to Rise
• Shortage of drivers
– New hours of service
– Driver safety records
– Demographics
• Equipment costs going up- EPA standards
• Port congestion driving up transit times & lowering the
option for multiple trips
• Air Freight coming back
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39. © Foremost Quality
Logistics Confidential
Total Logistics Cost Breakdown- 2014
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Source: Tim Feemster, FQL Consulting & CSCMP.org
14.4%

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Logistics Confidential
Fuel Consumption by Freight Mode
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FREIGHT MODE
Source: Global Insights & Tompkins Associates
Less Than
Truckload
Small
Package

41. © Foremost Quality
Logistics Confidential
Transportation Cost Impact 2015
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42. © Foremost Quality
Logistics Confidential
US Spot Market Rates: 4 Week Trendlines- DAT
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$1.90 $1.88 $1.87 $1.89
$2.20 $2.19 $2.19 $2.18
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$2.23 $2.22 $2.21 $2.22

43. © Foremost Quality
Logistics Confidential
Estimated Average Daily Truck Traffic- 2020
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Source: U.S. Department of Transportation, Federal Highway Administration, Office of Freight Management and Operations, Freight Analysis Framework.

44. © Foremost Quality
Logistics Confidential
Highway Funding is in Trouble
• Federal highway trust fund model is not sustainable
– Structural revenue stream change
– Disallow funds transfer to other departments
• Issues to deal with
– Deteriorating bridges and interstates
– Population growth
– Increased traffic
– Funding methods
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45. © Foremost Quality
Logistics Confidential
American Business Act on Climate Pledge-
White House announcement 7/27/2015
• $140 billion in new low-carbon investments
• More than 1,600 megawatts of new renewable energy
• 13 Leading Companies
– Alcoa, Apple, Bank of America, Berkshire Hathaway Energy, Cargill, Coca-Cola,
General Motors, Goldman Sachs, Google, Microsoft, PepsiCo, UPS, and
Walmart
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https://www.whitehouse.gov/the-press-office/2015/07/27/fact-sheet-white-house-launches-american-business-act-climate-pledge
http://www.supplychain247.com/article/13_top_us_companies_pledge_140_billion_to_slash_carbon_emissions

46. © Foremost Quality
Logistics Confidential
Greening the Supply Chain
• Facility- Industrial and manufacturing properties
– Construction
– Energy
– Water
– Waste
• Material Handling Equipment- Forklifts and trucks
– CNG/LNG trucks
– Walmart WAVE Truck
– Hydrogen fork lifts
• Operations- Changing the way things are done
– Hybrid network
– Transportation mode shift
– Network optimization
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Source: Tim Feemster, Foremost Quality Logistics

47. © Foremost Quality
Logistics Confidential
Environmental Impacts of Industrial/MFG Facilities
• Energy Consumption
– Lighting
– Heating/Cooling/Refrigeration
– Power for Processing, Automation Equipment, Forklift Charging
– Transportation for Inbound and Outbound shipments
• Water Consumption/Conservation
– Irrigation
– Process
– Occupant Use
– Reclamation
• Waste Generation
– Packaging, Pallet, and Process waste
– Paperwork
– New Construction Waste
• Operations
– Chemical Use in Cleaning and Maintenance
– Transportation mode shift
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Source: Tim Feemster, Foremost Quality Logistics

48. © Foremost Quality
Logistics Confidential
Green/$$ Transportation Mode Shift Examples
• Freight Optimization Software- 3PL Outsource
– Combine orders delivering on the same day using technology
• Small Package to LTL (Less than Truckload) if possible
• LTL to TL (Truckload), “Pool Points”
– Move TL on major volume lanes and then drop off for LTL delivery
• Truckload to Domestic Rail Intermodal Container, long haul
– Shipments over 400 miles with on/off ramps in close proximity
• Air Freight to Small Package or LTL, short haul
– Shipments less than 400 miles, maybe longer
• International Air Freight to Container via Ship
– Ship “generic” product and customize in the DC for orders
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49. © Foremost Quality
Logistics Confidential
Walmart & Daimler Focus on New Truck Concepts
• http://www.ttnews.com/articles/basetemplate.aspx?storyid=38980&utm_source=express&utm_medium=newslet
ter&utm_campaign=newsletter
• http://news.walmart.com/news-archive/2014/03/26/walmart-debuts-futuristic-truck
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50. © Foremost Quality
Logistics Confidential
Hydrogen Fork Lift Equipment
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51. © Foremost Quality
Logistics Confidential
Companies are Switching to CNG Trucks/Buses
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52. © Foremost Quality
Logistics Confidential
America’s Natural Gas Highway of CNG/LNG Fueling
Stations
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Source: DOE Alternative Fuels Data Center
845 CNG + 73 LNG stations in the United States Excluding private stations

53. © Foremost Quality
Logistics Confidential
Make Sure to Plan for the Unexpected
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54. © Foremost Quality
Logistics Confidential
Top 10 Site Selection Criteria Warehouse/Distribution
1. Transportation costs – both inbound and outbound
2. Logistics infrastructure – highways, intermodal, rail, FTZ
3. Available buildings/Certified sites
4. Labor costs & availability
5. Supply Chain interruption risk
6. Business climate- is there love
7. Green buildings
8. Taxes & incentives
9. Utility rates
10. Access to public Transportation- Have you done a drive time
study for your workforce?
Source: Tim Feemster Foremost Quality Logistics
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55. © Foremost Quality
Logistics Confidential
Top 10 Site Selection Criteria- Manufacturing
1. Labor costs & availability
2. Available buildings/Certified sites
3. Transportation costs – both inbound and outbound
4. Utility rates
5. Logistics infrastructure – highways, intermodal, rail, FTZ
6. Supply Chain interruption risk
7. Business climate- is there love
8. Taxes & incentives
9. Green buildings
10. Access to public Transportation- Have you done a drive time
study for your workforce?
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Source: Tim Feemster Foremost Quality Logistics

56. © Foremost Quality
Logistics Confidential
Do You Have a Better Answer to This Question?
• How do you respond to your next Industrial/MFG RFP?
– Bid on the project with a "cut and paste" because you won't win
– Pass because you know you are not going to make the short list
– Put on a full court press to win the project because you can
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57. © Foremost Quality
Logistics Confidential
Are You Prepared for When Branding Goes Wrong?
What questions do you have?????
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Tim Feemster
Managing Principal
Foremost Quality Logistics
469-554-9873 O
214-693-7689 C
tim@feemsters.com
fqllogistics@gmail.com