Key Issues in Trade Logistics June 7, 2010

2 2 Customs Holds are the Key Challenge 20% of Destination Countries Hold Over 50% of All Imported Shipments 50% of Destination Countries Hold Over 25% of All imported Shipments On an average month, Over 1.5 million Express Carrier Shipments Are Held by Customs Administrations and Lose Service to Customers

3 3 Global Customs Priorities to Improve Flow of Products Balance Between Security, Trade Facilitation, (and in Some Cases Revenue Collection) Simplification of Border Regulations and Procedures Leverage Use of Automation and Technology Capabilities Reduction in Use of Paperwork Increase Exemptions for Low Value Shipments and Entry Limits Global Consistency

4 4 Barriers to Eliminating Use of Paper General Acceptance of Electronic Formats Definition of Pro Forma Invoice Acceptance of Imaged Documents What Constitutes Original Signature Limited Number of Countries Accept Paperless Documents Export/Import Requirements Not in Sync

5 5 II Tier Issues And Opportunities Impacting Global Trade Logistics Other Government Agency Clearances (As Applicable) Intellectual Property Rights Enforcement (IPR) Consumer Product Safety Account Based Management Program Trusted Importer Programs

6 6 Challenges to Improve and Comply With New Security Standards Data Elements Required for the Advance Transmission of Shipment Data Time Requirements for the Advanced Transmission of Data Mutual recognition of security programs (AEO, PIP, C-TPAT) Expansion of Security Programs to Other Modes of Transportation Considerations for Service Providers/Companies Who do More Than Required

7 7 Sustainability – Going Green Global Strategy Social Responsibility Environmental Stewardship Economic Prosperity Help Improve the Human Condition Help Protect the Environment Help Strengthen the Enterprise Act Responsibly Deliver “Green” Services Operate Efficiently Reduce, Reuse, Recycle Lead by Example Conserve Energy Protect Natural Resources Promote Wellness and Safety Embrace Diversity and Human Rights Grow Business Profitably Develop People Build the Brand Provide Competitive Compensation Support Communities Support Global Trade Provide Value- Added Solutions Focus on Customers

8 8 (Source: World Resource Institute GHG Protocol) * Metric Tonne-Kilometer is equal to one (1) metric tonne of freight moving the distance of one (1) kilometer Intermodal Strategy Benefits AIR 0.570* TRACTOR TRAILER 0.072* RAIL 0.020* SHIP 0.010* kg of CO 2 per Metric Tonne-Kilometer *

9 9 Act Responsibly: Reduce, Reuse, Recycle Reducing our environmental impact and increasing our efficiency Solid waste recycling — metals, plastics, paper, cardboard and pallets Electronics and battery recycling Strategic use of remanufactured parts and products containing recycled materials Extensive use of retreaded tires Paperless DIAD used in 49 countries Use of Hybrid, Natural gas, and Electric Vehicles