Time-critical logistics opportunities in air cargo Frederik Luz CSO, Marketing & Sales time:matters Holding GmbH, Frankfurt, Germany

The experts for Courier-, Sameday- and Emergency Logistics. Company Profile Specialist for time-critical logistics. Founded in ‘02 by Lufthansa Cargo, since ’07 owned by Mgmt / Buchanan Capital (51%) & Lufthansa Cargo (49%) Revenue CAGR >25% since foundation. USPs 100% focus on speed & special customer solutions Exclusive & preferred access to carrier networks (Lufthansa, Swiss World Cargo, >300 partners worldwide) International top customers, including big four integrators and many major logistics players / 3PLs Proprietary IT-solution developed for time-critical solutions Ownership structure enables high flexibility, customer orientation & focus on growth

Courier, Sameday & Emergency Logistics time:matters is the expert for international time-critical logistics solutions servicing logistics companies and selected industries Linehaul Services B2L - Integrators / Wholesaler Courier, Sameday & Emergency Logistics B2B – Industries (Automotive, Aviation, High-Tech etc.) Transport Services Logistics Solutions Critical Spare Parts Logistics Courier, Sameday & Emergency Logistics Critical Spare Parts Logistics Industry Specific Emergency Logistics Industry Specific Emergency Logistics Linehaul Services Emergency Logistics Courier Terminal Sameday & International Courier Emergency Transports (OBCs / Charter) Commercial Linehaul Transports on LH FLEXIBILITY Planned / Standardized Ad-Hoc / Individualized Cargo / Express SPEED Courier / OBC / Charter

Time-critical logistics is a growing niche market with attractive business potentials and sustainable competitive advantages. Market Potential >2.500 mln EUR Market Growth >15 % Fragmented & emerging market. Industry trends as drivers of growth: Shorter cycles, lead & service times = demand for speed. Lean production & centralization of warehouses = exposure to shortage risks. Outsourcing of niche services / spare parts logistics & search for one-stop-sourcing. Differentiation through after-sales-services; integration of sameday into distribution. Emerging markets (Eastern EU, China, India).

Spare parts criteria Equipment/Facility criteria Especially time-critical Spare-Parts Logistics drive the need for sophisticated air cargo solutions. Spare parts criteria Equipment/Facility criteria High costs incur due to downtimes Transportable International / decentralized production Storable Not too heavy (< 50 kg) “Vulnerability”—constant need for servicing Delivery Not too large Expensive/capital intensive to keep on stock in large numbers After-Sales-Service as competitive advantage Replacement parts and incidents erratic and unpredictable

The market for time-citical logistics is growing at more than 10% per year, thus at a higher rate than the air cargo market.

Time-critical special services Who can do it? Time-critical logistics services require a high degree of flexibility & individuality as they often disturb standardized processes. Standard Air Cargo Time-critical special services Everyday business. 97% volume driven. Regular & predictable. Requires consolidation, standardized handling processes & networks. USPs: Network coverage Standardization Primary focus on cost structures. Exception business 3% of the orders … often require 30% of the capacities. (Often) unpredictable. Need for special solutions and ad-hoc processes; no consol. USPs: Verified experience Reliability / trust Primary focus on solutions (service)

How. Speed, service, competence How? Speed, service, competence. It’s the people, the network and the processes that make the difference! Point-to-point transportation & individualized pick-up / delivery: No consolidation, no hub & spoke Immediate, direct, customized No delays, no waiting, no complexity for customers NFO with special capacity guarantees and separate loading Worldwide destinations to all major industrial centers Last in – first out; no mixture with freight / luggage Tailored processes & complete monitoring Transportation & routing based on customers‘ problems / needs Continuous pro-active progress & interface checks Personal responsibility, reachability & commitment Highly skilled & motivated service team Extensive know-how & experience in doing specials 24/7/365 - any time <30 minutes reaction time Fact-Sheet

Example: Less than 20 hours to ship fashion samples from Delhi to a show-room in Long-Island, incl. pick-up, customs & delivery.

Example: InteraDent Zahntechnik AG Lübeck, Germany to Manila and return Part of InteraDent´s production of 60.000 dental impressions is manufactured in Manila / Phillipines. Between pickup and delivery of the impressions is only a time range of 7 to 10 days – 4 days are needed for production. To reduce the cycle time, InteraDent trusts in time:matters. Hamburg – Manila in less than 15 hrs, 5 times a week. 07:00 pm: Shipment is delivered at Hamburg Airport 08:05 pm: Flight to Frankfurt with LH027 09:15 pm: Arrival in Frankfurt 10:45 pm: Flight to Manila with LH788 Next day: 08:05 pm: Arrival in Manila 09:05 pm: Shipment is available for the customer Transportation time: approx. 15 hrs. Time advantage: 2-3 days! Fact-Sheet

Strategic positioning Strategy for cargo airlines: outsourcing time-critical logistics services & focusing on the core (volume) business. Revenues Costs Optimized usage of available capacities. Meet basic & specific customer needs. Service offer & competence for standard & special services. Premium services leverage existing customer base. Improvement of customer retention. Transfer risk & fixed costs (no own system, labor, mgmt. & admin). Organizational streamlining & reduction of complexity = greater efficiency. Optimize (internal) service layers. Bargaining power & production flexibility. Strategic positioning Increase competitive advantage through service line extension. Focus on core business, partner for niches.

Summary: Demand for High-Speed will not slow down … 3 Things to Remember: Market trends lead to a growing demand for specialized time-critical logistics services. The use of available capacity for time-critical spare-parts logistics offers a competitive advantage in customer service. Increased flexibility & individualization  increased complexity … option for air cargo carriers = outsourcing service offer to a specialist.

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