Beijing Olympics 2008 Logistics information KWEPEK Branch April, 2008

Confidential 2 Content Map of Beijing Olympics Venues Beijing Olympics 2008 Schedule Beijing Paralympics 2008 Schedule Outlook For Restrictions Olympic Restrictions Impact on Logistics (1) Vehicle control KWE Contingency Measures (1) Vehicle control Olympic Restrictions Impact on Logistics (2) Traffic control KWE Contingency Measures (2) Traffic control Olympic Restrictions Impact on Logistics (3) Security Control Air Export Import and Ocean Export Import KWE Contingency Measures (3) Security Control Air Export Import and Ocean Export Import Olympic Restrictions Impact on Logistics (4) Environment Control Tailor-made Contingency Plan Related Web Sites

Confidential 3 Beijing Olympics Venue Maps

Confidential 4 1. Start date: Friday Aug 08, End date: Sunday Aug 24, Period:17 days 1) Beijing 2) Qingdao (Sailing event) 3) Hong Kong (Equestrian events) Beijing Olympics 2008 Schedule

Confidential 5 Beijing Paralympics 2008 Schedule 1. Starting: Sep. 06, Ending: Sep. 17, Duration: 12 days 1) Beijing 2 ) Qingdao (Sailing events) 3 )Hong Kong (Equestrian events)

Confidential 6 Outlook For Restrictions Restrictions Strengthened : Apr-Jun, 2008 Restrictions Implemented: Jul-Sep, 2008 Very Strict Restriction Implemented: Aug-Sep, 2008 Security Control related Restrictions strengthened Apr ～ Jul ~ Sep * Traffic Controls Start * Automobile restrictions Start * Environment and other restrictions Start Olympics Aug 08th ～ Aug,24th Paralympics Sep 06th ～ Sep,17th VehicleTraffic EnvironmentSecurity

Confidential 7 Olympic Restrictions Impact on Logistics 1) Vehicle Control Anticipated Problem: shortage of Trucks for delivery and pick-up Key Government Policy Governmental and commercial vehicle utilization reduced by 50%. (Special case controlled by 70%. ) Implementation guidance 1 ） Jul. 1st ～ Sep. 20th 2 ） Jul. 1st ～ Aug. 27th 3 ） Jul. 1st ～ Jul. 19th 4 ） Jul. 20th ～ Sep. 20th 5 ） Aug. 28th ～ Sep. 20th 1 “Yellow label” trucks (Non-Emission Control Standard) prohibited from entering Beijing 2)Trucks registered in other provinces banned from entering Beijing 3) 20% of vehicle registered to Beijing enterprises prohibited from use during Olympic 4) Daily traffic is subject to odd and even number plate controls 5) Automobiles registered in other provinces allowed to enter Beijing, but prohibited from entering into 5th ring road

Confidential 8 KWE Contingency Measures Beijing “Passport Road License” issued only to Logistics Providers who Possess a valid Transportation Business License, and Operate 10 or More “Green Label” Trucks Odd-Even plate number regulations EFFECTIVE June 15 th, KWEPEK will operate a fleet of 14 Green-label trucks KWEPEK contractors Secure additional 15~20 Green label trucks KWEPEK implements truck operation plan based upon Odd-Even plate number restrictions (effective Jun 15 th )

Confidential 9 Olympic Restrictions Impact on Logistics (2)Traffic control Anticipated Problems: Entry into Warehouse and Airport Terminal prohibited for trucks registered in other provinces Pick up and delivery in Beijing city delayed Key Government Policy Top Priority: Olympic related operations 1) Current 2) Effective July 1) Trucks over 3 tons prohibited from entering Beijing City 2) 3rd-5th ring road designated by BOCOG (Beijing Organizing Committee for Olympic Games) as “Olympic Lane” or zone * Limitations rescinded overnight (00:00~05:00)

Confidential 10 Expand KWE TSN’s warehouse （ 1,500 M2) as buffer zone Around-the-clock operation at KWEPEK domestic warehouse ( 2 locations,total12,000M2) Set up domestic warehouse in Langfang area (Hebei) or Mentougou Area (south of Beijing) as buffer zone Countermeasure A Countermeasure B Domestic cargo Delivery to KWEPEK warehouse by Beijing regesty truck or direct delivery to customers in Beijing city. Export cargo Delivery to PEK airport by Beijing registy truck or delivery to Tianjin for customs clearance and export (Air and Ocean) KWE Contingency Measures Domestic cargo Delivery to KWEPEK warehouse by Beijing registy truck or direct delivery to customers in Beijing city. Export cargo Delivery to PEK airport by Beijing registry truck or delivery to Tianjin for customs clearance and export (Air and Ocean)

Confidential 11 Olympic Restrictions Impact on Logistics (3) Security Control: Air and Ocean Export / Import Key Government Policy Customs clearance related to Olympics top priority. Security at airport strengthened Restriction Plan Embargo dangerous good list( As of 18 th -Apr) IATA dangerous goods for both export and import embargo. 1)Class1, Explosives 2)Class2.3, Toxic Gas 3)Class6.1(Packing Group I—high danger), Toxic Substances 4)Class 6.2, Infectious Substances 5)Class7. Radioactive Material (Category III - Yellow) Air Export 1) Increased cargo security inspection (X-Ray machine) Effective 18 th Apr If security officer can not see the contents of cargo clearly, the skid must be broken down and carton opened. 2) Begin operations at New Airport Terminal (T3) With the launch of BJS New Terminal 3 from Mar. 26, Cargo Terminal’s tender and retrieval cut off times extended by approximately1.5 hours. 3) Cargo Freighter services are expected to put on hold during Olympics ANA will cancel cargo freighter on the Japan lane and other cargo freighters are expected to be put on hold. Increase expected in passenger flights,,but cargo freighter space will be decreased.

Confidential 12 Continued Anticipated Problem (Air Export) : Limited Space Capacity, especially for North America, Europe and HKG Transport Restrictions may cause original flight schedules to be missed The Increased cargo inspections may result in higher incidence of damaged cargo General recommendation: Beijing customers consider changes in supply-chain planning and scheduling for procurement, manufacture and shipping Olympic Restrictions and Impact on Logistics (3)Security Control: Air and Ocean Export / Import

Confidential 13 Continuation Anticipated Problems: Priority given to Olympic-related cargo customs clearance and CIQ inspection, non-Olympic related cargo expected to require longer processing time Longer pick-up times due to vehicle restrictions and traffic control Air Import 1)Customs Clearance and CIQ inspection related to the Olympics assume top priority. 2) Cargo Freighter services are expected to put on hold during Olympics 3) Longer delivery times due to vehicle restrictions and traffic controls Ocean Export and Import TSN Xingang Gateway port trucking to/from PEK may be impacted by traffic control Olympic Restrictions Impact on Logistics (3)Security Control: Air and Ocean Export / Import ANA will cancel cargo freighter on the Japan lane and other cargo freighters are expected to be put on hold. Increase in passenger flights, but cargo freighter space to decrease.

Confidential 14 Air Export KWE will work proactively and closely partner airlines to protect space capacity Especially for Japan lane, Europe (transit cargo for Germany, Netherlands and UK), North America, HKG and Southeast Asia and other KWE network destinations Utilize TSN as alternative airport cooperated with KWETSN branch Coordination with airlines and customers to avoid cargo damage Prepare buffer warehouse capacity at KWE Beijing domestic warehouse to accommodate customer’s production planning KWE Contingency Measures

Confidential 15 Air Import ・ Ocean Import and Export Provide warehouse buffer capacity at KWE Beijing domestic number 2 warehouse Special accommodations for delivery, vanning, de-vanning (24 hr operations) Provide warehouse buffer capacity (Bonded) at Beijing Bonded Logistics Center KWE Beijing branch will make customer-specific delivery routing and scheduling Plans (4) Environmental Controls As an environmental control measure power stations and some factories may be required To reduce production or shut down to minimize smog-producing emissions during the Olympics and Paralympics. KWE Contingency Measures Organize special team for customs and CIQ to support customer’s requirements. (KWE is nominated as recommended customs broker by BOCOG)

Confidential 16 KWE Beijing system for Olympic Customer-specific Contingency Planning KWE sales and operations teams will meet with customers to discuss customer-specific issues for the period of the Olympic games Based upon customer-specific issues, KWE teams will formulate and implement proposals to optimize customer’s supply-chain strategies during the period of the Olympic games Thank You!

Confidential Beijing 2008 Olympic Games 2. Beijing 2008 Paralympics Games 3.BOCOG website 4. BOCOG Customs & Freight Manual website 5. Equestrian Freight Manual BOCOG:Beijing Organizing Committee for the Olympic Games Related Web Sites