Portside Magazine - Spring 2009 by Ports of Indiana

A Ports of Indiana Publication 路 Spring 2009

STEEL POWER leeco, novolipetsk join steel family at Port of Indiana-burns harbor

insiDe THis issUe: Ports increase shipments in 2008 despite downturn in economy, pg. 4 mount Vernon transfer terminal breaks record, pg. 5 hybrid locomotives reduce emissions, pg. 13

www.portsofindiana.com

Port of Indiana-Burns Harbor

Table of Contents From the CEO Ports increase shipments in 2008 despite downturn in economy................................ 4

150 W. Market St., Suite 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, CEO (317) 232-9200; rcooper@portsofindiana.com Brian Sieg, Operations Manager - Jeffersonville (812) 283-9662; bsieg@portsofindiana.com Phil Wilzbacher, Port Director - Mount Vernon (812) 833-2166; pwilzbacher@portsofindiana.com Peter Laman, Port Director - Burns Harbor (219) 787-5101; plaman@portsofindiana.com 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

NEWS & NOTES .......................................................................................................... 5 Mount Vernon Transfer Terminal breaks record CGB invests $5 million in four Jeffersonville facilities Emergency crews react to simulated terrorist attack at Burns Harbor feature story Steel Power Leeco, Novolipetsk join steel family at Burns Harbor . .............................................. 6 From the board room Ports commission wraps up productive year, kicks off 2009....................................... 8 PORT REPORTS Burns Harbor: Hitting a milestone .............................................................................. 9 Mount Vernon: 2008 delivers second highest tonnage since 1998 ............................. 10 Jeffersonville: Challenging times but bright future................................................... 11 Enviro•Focus Hybrid locomotives reduce emissions at Jeffersonville port........................................ 12

Warren Fasone, Security Manager (219) 787-5056; wfasone@portsofindiana.com

Foreign Trade Zones Where to begin with FTZs.......................................................................................... 13

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

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www.portsofindiana.com · Spring 2009 3

FROM THE CEO

Rising to the challenge

Ports increase shipments in 2008 despite downturn in economy The state of the logistics industry and the health of the economy go hand-in-hand. When consumers are spending, we see consistent, high-volume movements of goods and services. Unfortunately, we are currently facing economic challenges unlike any we’ve ever seen. Despite the sour economy, 2008 was filled with bright spots for our Indiana ports thanks to our hard-working port companies. Overall, 2008 tonnage was up 8 percent over 2007’s numbers and more than 6.7 million tons passed through our three ports. It was a very good year for bulk shipments. Thanks to increased demand, coal was up a whopping 47 percent. Fueled by anticipation of a snowy winter, salt shipments increased by 35 percent. Grain and limestone shipments also held steady.

Rich Cooper

Chief Executive Oﬃcer, Ports of Indiana

If you took a quick look at the Port of Indiana-Mount Vernon’s overall tonnage, you would have no idea the economy was sluggish. It was up 21 percent. The record-breaking crew at Mount Vernon Transfer Terminal was responsible for shipping 43 percent more coal in 2008 versus 2007. There were also increases in grain, salt, cement, shingles and project cargo at the port. The Port of Indiana-Burns Harbor saw the 60-millionth ton of cargo cross its docks in 2008. Coke was on the move here – up 82 percent over 2007. Limestone remained the port’s biggest volume cargo, making up 37 percent of the port’s shipments. Historically, steel has always been our bread and butter at Burns Harbor and this year we saw scrap steel being exported for the first time in quite awhile. Miscellaneous cargo and salt also saw tonnage increases while fertilizer remained steady. Port of Indiana-Jeffersonville shipments were down slightly but grain was up 3 percent and salt increased 77 percent. Jeffersonville handled the most salt of all three ports and more fertilizer than the other two ports combined. This year looks to be another diﬃcult year for the logistics industry, but we remain optimistic. Waterborne shipping remains the most cost-effective method of shipping. We will see two more milestones in 2009 as the youngest of our ports, the Port of IndianaJeffersonville, will handle its 30 millionth ton and the Port of Indiana-Mount Vernon should become our first port to reach 100 million tons. We welcomed new companies to Burns Harbor in 2008 with Leeco Steel and Beta Steel’s new parent company Novolipetsk Steel. Aventine Renewable Energy is also expected to open the state’s largest ethanol plant in Mount Vernon late this year. We recognize the unprecedented challenges our customers are facing and pledge our commitment to continue to invest the resources needed to keep our facilities well-positioned for future growth. Despite the economic situation, exciting things are happening at our ports!

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neWs & noTes CGB invests $5 million in four Jeffersonville facilities

JEFFERSONVILLE, Ind. – The first tenant at the Port of IndianaJeffersonville when it opened in 1985 is still building its business there. CGB Enterprises invested more than $5 million in new facilities at the port in 2008. CGB’s operations at Jeffersonville now include approximately 70 employees handling more than 3 million tons per year and four different companies: CGB, CTLC, Jeffersonville River Terminal and MG Rail. In 2008, CGB replaced an old wooden fertilizer storage building with a new concrete building that could hold 14,000 tons of product, roughly 2.3 times larger than the old building. As workmen were putting the roof on the new fertilizer building, CGB had the foundation crews placing the footings and ﬂoor for a new rail maintenance shed for its MG Rail subsidiary. The crew then moved on to work on the foundation for an additional grain silo. The grain silo, 90 feet in diameter with a peak height of 118 feet, is capable of storing 540,000 bushels of grain. This increased on-site grain storage to 1.9 million bushels, about a 40 percent increase in total capacity. CGB also expanded its oﬃce building and made upgrades to the truck, rail and barge loading systems, which will improve loading speed by about 20 percent. CGB’s Jeffersonville facility serves the farming community within about a 150-mile radius in Indiana, Kentucky and Ohio. “CGB has been an anchor for the agricultural business sector at both of our river ports,” said Rich Cooper, CEO of Ports of Indiana. “Farmers in Indiana and surrounding states are the beneficiaries of their continued investments.”

Emergency crews react to simulated terrorist attack at Port of Indiana – Burns Harbor PORTAGE, Ind. – There was a shocking scene at the Port of Indiana-Burns Harbor one morning in October. The port was swarming with police, ﬁre trucks and other tell-tale signs of an emergency situation. Fortunately, this wasn’t the real thing. The Porter County Local Emergency Planning Commission (LEPC) was holding a drill simulating an intentional chemical release to test emergency response agencies on their ability to respond to a chemical emergency. Mandated by federal guidelines to hold an annual drill, this is the second time in recent years the Porter County LEPC held a drill at the port.

Mount Vernon Transfer Terminal breaks record

MOUNT VERNON, Ind. – The staff of Mount Vernon Transfer Terminal set a new all-time barge loading record at the Port of Indiana-Mount Vernon on Nov. 25, 2008. The crew of 11 employees loaded 22 barges in 21 hours. The previous record of 20 barges in 24 hours was set in November 2006. “This is the result of hard work and dedication by the Mount Vernon Transfer Terminal employees,” said Phil Wilzbacher, port director at Port of Indiana-Mount Vernon. “This could not have happened without such well-orchestrated teamwork between Mount Vernon Transfer Terminal, Mount Vernon Barge Service and Evansville Western Railway.” Mount Vernon Transfer Terminal is a coal loading terminal with a handling capacity of eight million tons per year. The coal comes in by rail and truck and is transferred to barge for shipment to utility companies. The Evansville Western Railway delivered the coal. The record was set while coordinating the movement of two unit coal trains and the movement of barges to and from the coal terminal. The approximate coal tonnage on the 22 barges was 36,000 tons. Mount Vernon Transfer Terminal’s conveyor is 2,650-feet long and 6-feet wide. It has the capacity to transload coal directly from railcars at a rate of 4,200 tons an hour or more than one ton per second.

A construction crew ﬁnishes the roof on CGB’s new 14,000-ton capacity fertilizer storage facility at the Port of Indiana-Jeﬀersonville.

“I would like to thank the employees of Mount Vernon Transfer Terminal for their work in this great accomplishment,” said Taylor Kanipe, general manager of Mount Vernon Transfer Terminal. “The guys did a great job. They could have loaded even more if more barges would have been available.” www.portsofindiana.com · Spring 2009 5

STEEL POWER Leeco, Novolipetsk join steel family at Port of Indiana-Burns Harbor

PORTAGE, Ind. – Northwest Indiana has a long-standing history in the steel industry which is closely tied to the Port of IndianaBurns Harbor. Beginning with the 1962 opening of Bethlehem Steel, known today as ArcelorMittal, steel has been a part of the port since its earliest days. Following this long-standing tradition, two new steel companies are joining the port – Leeco Steel and Novolipetsk Steel. “We are pleased to welcome Leeco and Novolipetsk to the port,” said Peter Laman, port director at the Port of IndianaBurns Harbor. “These companies join a multitude of other world-class steel companies here including ADS Logistics, Central Coil Processing, Indiana Pickling, Feralloy Midwest, Feralloy Processing and Steel Warehouse.”

and its products are sold in 60 countries. Novolipetsk Steel has the In October, long-time port company Beta Steel largest share of Russia’s cold-rolled and pre-painted markets and is one Corp. was acquired by Novolipetsk Steel in of Europe’s largest producers of steel with magnetic properties for the a $350 million transaction. Based out of electrical and electronic industry. Lipetsk, Russia, Novolipetsk Steel is one of the world’s largest steel producers With locations in Russia, Europe and North America, Novolipetsk Steel with facilities that handle mining, produces a variety of steel products, including pig iron, slabs and hot-rolled steel. steelmaking and rolling. Started The company is focused on expanding the range of value-added steel products, in 1931, it employs more which includes cold-rolled, electrical steel and other specialty ﬂat products. than 70,000 worldwide, “Since the acquisition is relatively new, we are still in the transition stages, but Beta views the acquisition as a very positive move for the future of the company,” said Joe Gazarkiewicz, senior manager of human resources at Beta Steel Corp. “The fact that Beta is now part of the world’s fourth largest steel producer places Beta in a new and positive position.”

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Spring 2009

PORTSIDE MAGAZINE

Beta Steel, a producer of hot-rolled coils, will be importing steel slabs and pig iron from Russia. The new owner’s goals are to improve productivity and maximize the facility’s potential for growth. Beta Steel will not be changing their name. There is a possibility of expansion in the future. In the acquisition, Beta Steel also gained a sister company in Duferco Farrell Corp. located in Farrell, Pa. “Beta and Duferco have already begun working together to create positive synergies between the two companies,” said Gazarkiewicz. Originally known as Leopold Cohen Iron & Metal, Leeco Steel was founded in Chicago in 1882. Now headquartered in Darien, Ill., it stayed in its original location until 1975. It currently has locations in Pennsylvania, Texas, Wisconsin and Monterrey, Mexico. In 2005, Leeco became a subsidiary of O’Neal Steel, the nation’s largest family-owned, full-lined metals service center. Leeco Steel is moving operations from a location in Chicago to the port. It looks to begin basic production in April and then expand from there. “The building Leeco Steel is moving to has been idle for quite some time,” said Laman. “It is wonderful to see that building brought back into use.” Leeco Steel specializes in the distribution and processing of carbon, high-strength low-alloy plate and heat-treated alloy plate. It is known

for its specialty items – extra high-strength and abrasion-resistant steels – and can offer them in nonstandard lengths and thicknesses. The port facility is approximately 175,000 square-feet with twice as much warehouse space as its previous Chicago location, multiple drive-through bays and increased crane capacity. This will allow the company to move more volume and process steel in longer lengths. “The move to Portage opens up endless opportunities for production and business growth,” said Denton Nordhues, president and CEO of Leeco Steel. “The facility offers numerous benefits that will allow us to operate with greater eﬃciencies previously not available due to space restrictions.” According to Jennifer Browning, marketing coordinator at Leeco Steel, one of those benefits is the many modes of transportation available at the port. “The facility is very exciting because it is about one mile from the I-80/94 expressway and the additional benefit of the port location is the on-site barge terminal access,” Browning said. “Having access to truck, rail and water made this a great location for Leeco Steel.” Laman expects both companies will take full advantage of the transportation infrastructure and the opportunity for collaboration at the port. “More than 75 percent of the companies located at the port are engaged in some aspect of the steel manufacturing supplychain,” Laman said. “Locating at the port gives these companies a competitive advantage in the marketplace and an opportunity to build alliances with other port companies.”

Beta Steel Corp. was purchased in October by Novolipetsk Steel, the world’s fourth largest steel producer.

www.portsofindiana.com · Spring 2009 7

Ken Kaczmarek

Marvin Ferguson Ramon Arredondo

David Fagan

H.C. “Bud” Farmer

Greg Gibson

Phil McCauley

Jay Potesta

Ports commission wraps up productive year, kicks off 2009 INDIANAPOLIS – During its first meeting of 2009 held on Feb. 12 at the Indianapolis International Airport, the Ports of Indiana commission approved a new Foreign-Trade Zone agreement with Katoen Natie Mid West. Katoen, a leader in value-added logistics and high-tech services, was granted approval from the FTZ Board for a Temporary Minor Boundary Modification to include the company’s location in Gary, Ind. Other items approved included a right of first refusal to lease 65 acres for Steel Dynamics Inc. at the Port of Indiana-Jeffersonville, an option to lease real estate for White Oak Resources at the Port of Indiana-Mount Vernon and a lease amendment for the Aventine Renewable Energy facility currently under construction at the Port of Indiana-Mount Vernon. The commission also approved the termination of a lease agreement with UAP Distribution at the Port of Indiana-Mount Vernon and the amended Zone Schedules for Foreign-Trade Zones 152, 170 and 177. Looking back at 2008, the commission awarded more than $2.4 million in infrastructure improvements at the three ports. Major projects approved in 2008 included:

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• $589,999 to T & C Contracting Inc. of Louisville, Ky., to encapsulate a dock structure at the Port of Indiana-Jeffersonville. • $374,868 for design and construction of new rail storage tracks at the Port of Indiana- Mount Vernon. • $261,300 to Blankenberger Brothers Inc. of Cynthiana, Ind., for improving the dock area behind Cargo Pier 2 at the Port of IndianaMount Vernon. • $458,900 to Gohmann Asphalt and Construction Co. Inc. of Clarksville, Ind., to improve 4,900 lineal feet of existing roadway within the Port of Indiana-Jeffersonville. • $254,661 to Larson Danielson Construction Co. Inc. of LaPorte, Ind., to replace 600 lineal feet of existing structural steel channel that also acted as curbing on a dock wall with new material at the Port of Indiana-Burns Harbor. The commission’s 2009 leadership will remain the same as in 2008 as the following oﬃcers were re-elected in December: Ken Kaczmarek, Chairman; Marvin Ferguson, Vice-Chairman; Jay Potesta, Secretary/Treasurer and Tony Walker, Assistant Secretary.

PORT REPORT Peter Laman Port Director

PORT OF INDIANA – BURNS HARBOR

Hitting a milestone The 60-millionth ton of cargo passed through the Port of Indiana-Burns Harbor in 2008. It took 25 years of port operations to hit our 30 millionth ton back in 1995. Just 13 years later, we’ve doubled it. Overall, 2008 was another solid year for the Port of Indiana-Burns Harbor. While overall tonnage decreased slightly, the total value of shipments was up 8 percent to $571 million. There were volume increases in limestone, coke, salt, magnesite, oil and project cargo. The Army Corps of Engineers did major dredging in 2008 on the port’s north end and the west harbor arm. The last round of dredging was done in 1995. After the work was complete, the corps determined that the port would not need dredging for at least 10 years.

New faces around the port

I’d like to welcome Jorge Ruano, operations manager of Leeco Steel, to our port family. He has been with Leeco Steel since May and handles all the plant operations and logistics for an estimated 80,000 tons of steel annually. A Hammond native, Jorge has recently lived in northern California and is ecstatic to be back home in Northwest Indiana.

Jorge Ruano Leeco Steel

Stacey Koselke Port of Indiana - Burns Harbor

assistant in July. She came to us from DMI, a fundraising distributor, where she was the office manager. A Hobart native, Stacey is an animal lover and dedicated athlete, participating over the years in tennis, kickboxing and equestrianism, where she has won awards in English dressage and show jumping. And recently, she’s even taken up polo. She brings a good understanding of technology and organization to our office, but most of all a strong commitment to provide uncompromised customer service to our port companies. Contact Peter Laman at (219)787-5101; plaman@portsofindiana.com

We’d also like to welcome two new faces to Beta Steel. Alexander Tseitline is vice president of business development. He holds a master’s degree and doctorate in metallurgy from the Moscow Steel and Alloy Institute and a MBA from Babson College. He has more than 15 years experience at Russian steel mills. Before coming to Beta Steel, he was with Duferco Farrell Corp. in Pennsylvania. Peter Zasowski is Beta Steel’s new chief operating oﬃcer. Peter is not an entirely new face to the port; he was with Beta Steel from 1998 to 2002 as director of manufacturing. Prior to Peter’s return to Beta Steel in 2008, he was with Indiana Harbor Coke Co. – Sunoco Corp. as vice president/general manager. He holds a master’s degree from the Mining and Metallurgical Academy in Krakow, Poland. While she’s not exactly a new face to those around Burns Harbor, I’d like to introduce Stacey Koselke. Stacey joined our staff as an administrative

New faces to the port Alexander Tseitline (left) and Peter Zasowski (middle) take Port Director Peter Laman on a tour of the Beta Steel facilities at the Port of Indiana-Burns Harbor.

www.portsofindiana.com · Spring 2009 9

PORT REPORT Phil Wilzbacher Port Director

PORT OF INDIANA – MOUNT VERNON

2008 delivers second highest tonnage since 1998 By just about all accounts, 2008 was a great year at the Port of Indiana-Mount Vernon. Total tonnage through the port broke the 3.8-million ton mark, a 21 percent increase over 2007. This was the second highest tonnage volume for the port since 1998. Coal, grain products, fertilizer, shingles, cement and salt all hit or surpassed 2007 levels. The port also set a new record with $732 million in 2008 shipments.

Farm Bureau sees port’s huge impact on ag business

Indiana Farm Bureau held its 2008 annual meeting in Evansville during December – the first time the organization’s annual meeting has been held outside of Indianapolis. On Dec. 4, 44 Farm Bureau members toured the Port of Indiana-Mount Vernon as part of the annual meeting’s activities. Given that agricultural products make up 30 percent of our shipments, it was my privilege to give the group a tour and provide an overview of the significant volume of agricultural products that move through the port. Highlights of the tour included Consolidated Grain & Barge’s grain elevator and soybean processing plant, Agrium’s fertilizer distribution facilities, Tri-County Agronomics fertilizer-pesticide-herbicide operation and Aventine Renewable Energy’s ethanol plant currently under construction.

Terminal coordinated the arrival and unloading of two unit trains (200 railcars) with the Evansville Western Railway. In addition to the coal arriving by train, employees of the coal terminal moved a stockpile of coal onto the conveyor. On the waterside, coordination with Mount Vernon Barge Service to switch empty and loaded barges to and from the coal terminal all had to happen at the same time. For me, it’s like watching a ballet – locomotives moving railcars – bulldozers pushing coal – and tow boats shoving barges. My hat is off to everyone who was involved. Contact Phil Wilzbacher at (812) 833-2166; pwilzbacher@portsoﬁndiana.com

Shipping out the kudos

For the third-straight year, one of our port companies achieved a record annual volume. CEMEX/Kosmos Cement brings cement inbound by barge that is hauled out by truck to area concrete plants. The hard-working staff makes CEMEX/Kosmos Cement a great asset to our port. Congratulations on another strong year! You may have read earlier about Mount Vernon Transfer Terminal’s new barge loading record – loading 22 barges of coal in a 21 hour period. As a self-proclaimed “transportation fool,” the part of their feat I find most amazing and impressive is the coordination that it took to make this happen. On the landside, Mount Vernon Transfer 10 · Spring 2009 PORTSIDE MAGAZINE

For the third-straight year, CEMEX/Kosmos Cement set a record for annual volume shipped through the port.

PORT REPORT Brian Sieg Operations Manager

Kinder Morgan oﬄoads coils of wire rod at the Port of Indiana-Jeﬀersonville.

PORT OF INDIANA – JEFFERSONVILLE

Challenging times but bright future There is no doubt that 2008 was a challenging year for all of us. Nonetheless, port companies still moved about 1.4 million tons of product on the Ohio River and handled more than 14,000 rail cars. While 2009 will bring its own challenges, there are positive developments ahead and opportunities for all of us to continue working together for a bright future. Efforts to keep the port infrastructure in top condition will continue in 2009. We have budgeted more than $1.25 million on a variety of projects including repaving Loop Road and mooring cell work along the waterfront.

Simulated asphalt spill at port provides training

On Sept. 24, Tanco Clark Maritime, our liquid products stevedore, held a training exercise to simulate an asphalt spill in the Ohio River and a corresponding security drill that included an elevation of the MARSEC security level. Working in cooperation with the Louisville Area Industrial Mutual Aid Association, this was a multiagency program including the U.S. Coast Guard, first responders from Jeffersonville, Louisville, Utica and New Albany, as well as environmental clean-up companies. The exercise involved testing communication protocols and the actual placement of booming equipment in the Ohio River. A boom is a ﬂoating curtain that is used when an oil product is spilled on water that keeps oil together making clean-up easier. Tanco Clark Maritime is required to hold this drill annually and was kind enough to invite our oﬃce to participate. Thank you to Kim Moran, Tanco Clark Maritime’s terminal manager, for organizing this successful drill.

New faces in new places

We would like to introduce two new general managers at port companies. Denis Beckman is general manager at Chemtrusion. Denis has worked with Chemtrusion since 1996, where he started

Denis Beckman Chemtrusion

Jeff Hoback Interstate Structures

Bonnie Underwood Port of Indiana Jeffersonville

as a line operator. His number one goal for his facility is to have a safe workplace where all the employees can prosper. Married for 17 years and dad to a teenage daughter, Denis enjoys hunting, fishing and camping. We would also like to welcome Jeff Hoback back to the port. Jeff is general manager at Interstate Structures, where he has been for one year. He originally came to the port in 1998 with Edward Vogt Valve Co. He is a Purdue graduate with 21 years of experience in the manufacturing and fabrication industry.

Meet our staff

One of the brightest spots in the port is walking into our office and getting that warm and friendly greeting from Bonnie Underwood. Bonnie has been with the port as our administrative assistant for nearly five years. During that time she has been instrumental in working with our new accounting system, insuring that the office runs smoothly and basically making sure everyone who contacts the port has a positive experience. I’d like to thank Bonnie for setting the standard for friendly service. Contact Brian Sieg at (812) 283-9668; bsieg@portsofindiana.com

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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.

Hybrid locomotives reduce emissions at Jeffersonville port When thinking of locomotives, an image from yesteryear typically springs to mind: an old train chugging across the open prairie leaving a trail of thick black smoke behind the smokestack. Not exactly “green.” At the Port of Indiana-Jeffersonville, two new hybrid locomotives are changing that reputation and helping to reduce rail diesel emissions at the port by 25 percent. MG Rail, the Ports of Indiana and the Indiana Department of Environmental Management partnered to secure a $200,000 grant through the U.S. Environmental Protection Agency’s Midwest Clean Diesel Initiative to purchase new rail equipment.

“The slugs have met expectations and work great,” said Chuck Long, operations manager of MG Rail. “We are very happy with their performance and have seen a decline in our fuel bill.” During a six-month trial period, MG Rail found the equipment reduced fuel consumption by more than 16,000 gallons – a 23 percent drop in fuel usage. IDEM calculated that the diesel emissions from MG Rail’s switching operations at the port have been reduced by 24.8 percent.

“This project fit perfectly under the rail component of the grant opportunity and was definitely one of the more innovative approaches to clean air,” said Shawn Seals, senior environmental manager at IDEM. “Not only does this project result in improved air quality in and around the Port of Indiana-Jeffersonville, but it also conserves fossil fuels in the process.” MG Rail, the port’s shortline rail operator, began using the new equipment last summer. It includes two locomotive “slugs” and five auxiliary power units (APUs). A slug is an electric locomotive with no engine or cab that acts as an accessory to a regular dieselelectric locomotive. It works with the regular locomotive to increase both pulling and breaking power in situations where power is more important than speed. An APU is an electrical device installed on locomotives that can be plugged in to keep the engine warm when it is shutdown. APUs keep ﬂuids heated and circulating in the engine overnight and when it is not in use, allowing quick startup and reducing engine warming and idling times.

Congressman Baron Hill (center, red tie) participates in a dedication of the new slugs at the Port of Indiana-Jeﬀersonville.

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.

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David Haniford General Counsel

Jody Peacock Director of Corporate Affairs The auto industry is one of the main users of Foreign-Trade Zones.

Foreign Trade: Where to begin with FTZs Let’s say Widget Inc. has made a business decision that it would be beneficial to operate within a Foreign-Trade Zone (FTZ). This decision followed a thorough examination of the company’s business plan and the financial and accounting benefits available as a qualified corporation. Initially, the FTZ process looks daunting. Where to begin and what steps are needed?

Things can get confusing because each type of application requires different information. The FTZ board’s website, www.trade.gov/ftz, has a chart that describes the required information for the various applications. This is a great website and should be one of the first stops when exploring the benefits of operating within a FTZ.

Let’s break things down a bit. The FTZ application process has two steps. The first is the submittal of an application with the U.S. Foreign-Trade Zone Board, its approval and authorization of authority to operate as a qualified corporation. The second is the activation of the zone by the U.S. Customs and Border Protection Agency.

In order to discover problems early and keep things running smoothly, the board recommends the submittal of a draft application. The draft application will be reviewed with recommendations made prior to the application’s formal submission. There are required filing fees payable when the application is filed with the board. Fees are based upon the type of application and range from no initial fee to $6,500 for a new subzone.

Applications are sponsored and submitted by a local grantee to the FTZ board. Ports of Indiana is a zone grantee for the state of Indiana and for general purpose zones 152, 170 and 177. The type of application Widget Inc. will submit depends on its business and current goals. The types of application include: •

New General Purpose Zone: This is typically for warehousing and distribution and must be open to multiple companies. General-Purpose Zones are usually located at seaports, airports or industrial parks.

• Major/Minor Boundary Modification: This is for a change in the current zone and includes actions like substituting similar types of space, shifting space within a facility and expanding the zone. • New Subzone: This is for one company and one activity, usually manufacturing. It is used when a company is unable to move to a general-purpose zone. • Manufacturing Authority within a General Purpose Zone: This is so companies located in an already established general-purpose zone can gain manufacturing authority.

Once Widget Inc.’s application is filed, it is assigned a docket number and a FTZ board staff member is appointed as the application examiner. A notice is published in the Federal Register and a 60-day public comment period commences. During this public comment time, the examiner reviews the application and issues a recommendation. The application is then sent to the U.S. Customs and Border Protection headquarters and the U.S. Department of the Treasury. If both of these organizations agree with the recommendation, the application moves to the U.S. Department of Commerce. A designated FTZ board member performs the final review. Once accepted, a board order is signed. The board order is sent to the applicant and published in the Federal Register. Start to finish, it will likely take Widget Inc. about one year for a new zone application to be processed. If you have any questions, give us a call at the Ports of Indiana.

Ports of Indiana Foreign-Trade Zone Contacts:

• Manufacturing Authority Expansion: This is to expand a zone’s or subzone’s manufacturing authority.

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

• Temporary/Interim Manufacturing Authority: This grants companies located within an existing zone manufacturing authority for up to two years.

David Haniford, General Counsel (317) 232-9204; dhaniford@portsofindiana.com

www.portsofindiana.com · Spring 2009 13

150 W. Market St., Suite 100, Indianapolis, IN 46204 (317) 232-9200 / fx (317) 232-0137 / info@portsofindiana.com www.portsofindiana.com www.indianalogistics.com PORT OF INDIANA BURNS HARBOR 6625 S. Boundary Drive Portage, IN 46368 219-787-8638