The World Of Ocean Freight In Ten Minutes February 13, 2013

Agenda Recap 2012 Major Events Carrier Challenges as 2013 Begins Rate Rollercoaster What to Expect

2012 Major Events Jan Ocean carrier Financials- Ocean carriers suffered record losses in Financial performance rallied in the second quarter through GRI’s on every major trade route in the world

2012 Major Events

Jan Ocean carrier Financials- Ocean carriers suffered record losses in Financial performance rallied in the second quarter through GRI’s on every major trade route in the world March 2012 – Rate increases on the Asia - Europe trade took the rate levels up by $2300 per 40ft, from $1300 to $3600 per 40ft by Mid Summer

2012 Major Events Jan Ocean carrier Financials- Ocean carriers suffered record losses in Financial performance rallied in the second quarter through GRI’s on every major trade route in the world March Rate increases on the Asia - Europe trade took the rate levels up by $2300 per 40ft, from $1300 to $3600 per 40ft by Mid Summer March 2012 – ILA President H. Daggett announces at the TPM conference that the ILA members will go on strike if no new contract is in place by September.

2012 Major Events Jan Ocean carrier Financials- Ocean carriers suffered record losses in Financial performance rallied in the second quarter through GRI’s on every major trade route in the world March Rate increases on the Asia - Europe trade took the rate levels up by $2300 per 40ft, from $1300 to $3600 per 40ft by Mid Summer March 2012 – ILA President H. Daggett announces at the TPM conference that the ILA members will go on strike if no new contract is in place by September. June OCU talks for a new contract had broken off. Perfect Storm on both USA coasts.

2012 Major Events July Idle containership capacity drops as carriers reactivate ships, ready for a forecasted …‘peak season’.

2012 Major Events July Idle containership capacity drops as carriers reactivate ships, ready for a forecasted …‘peak season’. August 2012 – Bunker prices at $ 645 per ton and Global rate levels reach $2600 per 40ft, an increase of $700 per 40ft since the start of the year

2012 Major Events

July Idle containership capacity drops as carriers reactivate ships, ready for a forecasted …‘peak season’. August 2012 – Bunker prices at $ 645 per ton and Global rate levels reach $2600 per 40ft, an increase of $700 per 40ft since the start of the year September 2012 – ILA/USMX extend contract talks. Negotiations extended 90 days through December 29.

2012 Major Events July Idle containership capacity drops as carriers reactivate ships, ready for a forecasted …‘peak season’. August 2012 – Bunker prices at $ 645 per ton and Global rate levels reach $2600 per 40ft, an increase of $700 per 40ft since the start of the year September 2012 – ILA/USMX extend contract talks. Negotiations extended 90 days through December 29. October TPEB rate levels at record highs. Shanghai- LA/LGB at $3,000 /40. October 2012 Super storm Sandy.

2012 Major Events November 2012 – 27th, OCU WALK OFF THE JOB. ILWU will not cross the OCU picket lines. 10 LA/LGB terminals shut down through 5th December – vessels diverted to PNW and AW strings. Govt. appointed mediator and LA mayor join the talks ILA Pledges Full Support To ILWU”

2012 Major Events November 2012 – 27th, OCWU WALK OFF THE JOB. ILWU will not cross the OCU picket lines. 10 LA/LGB terminals shut down through 5th December – vessels diverted to PNW and AW strings Govt. appointed mediator and LA mayor join the talks ILA Pledges Full Support To ILWU December 2012 – 10th, ILA and USMX return to contract talks. ILA authorizes possible strike when contract expires.

2012 Major Events November 2012 – 27th, OCWU WALK OFF THE JOB. ILWU will not cross the OCU picket lines. 10 LA/LGB terminals shut down through 5th December – vessels diverted to PNW and AW strings. Govt. appointed mediator and LA mayor join the ‘talks’’ ILA Pledges Full Support To ILWU” December 2012 – 10th, ILA and USMX return to contract talks. ILA authorizes possible strike when contract expires. December 2012 – Strike deadline extended to 2/6/13.

Carrier Challenges as 2013 Begins USMX and ILA reach tentative agreement. Strike threat averted. Contract details not public.

Carrier Challenges as 2013 Begins USMX and ILA reach tentative agreement. Strike threat averted. Contract details not public. Record new capacity coming on. Up 9% or 1.75 Million TEU’s after potential scrapping. (Alphaliner).

Carrier Challenges as 2013 Begins USMX and ILA reach tentative agreement. Strike threat averted. Contract details not public. Record new capacity coming on. Up 9% or 1.75 Million TEU’s after potential scrapping. (Alphaliner). Weaker demand ended with Asia/Europe demand down 5% Trans Pacific demand down 0.4%. (JOC)

Carrier Challenges as 2013 Begins USMX and ILA reach tentative agreement. Strike threat averted. Contract details not public. Record new capacity coming on. Up 9% or 1.75 Million TEU’s after potential scrapping. (Alphaliner). Weaker demand ended with Asia/Europe demand down 5% Trans Pacific demand down 0.4%. (JOC) Economic growth expected at 1% and 1.6% respectively. (JOC)

Carrier Challenges as 2013 Begins

Rate Rollercoaster (January 2013) 2013 started with higher spot rates and lower bunker costs.

Rate Rollercoaster (January 2013) 2013 started with higher spot rates and lower bunker costs. Shanghai Containerized Freight Index showed spot rates +26% 2012/2013. (JOC).

Rate Rollercoaster January 2013) 2013 started with higher spot rates and lower bunker costs. Shanghai Containerized Freight Index showed spot rates +26% 2012/2013. (JOC). Bunker costs -8% 2012/2013. (JOC).

Rate Rollercoaster (January 2013) 2013 started with higher spot rates and lower bunker costs. Shanghai Containerized Freight Index showed spot rates +26% 2012/2013. (JOC). Bunker costs -8% 2012/2013. (JOC). Liner companies shares up 18% (Dec 12) among Alphaliner index of 17 main publically listed carriers.

Rate Rollercoaster (January 2013) 2013 started with higher spot rates and lower bunker costs. Shanghai Containerized Freight Index showed spot rates +26% 2012/2013. (JOC). Bunker costs -8% 2012/2013. (JOC). Liner companies shares up 18% (Dec 12) among Alphaliner index of 17 main publically listed carriers. TPEB GRI implemented Jan 15. Wanted $600. Achieved $300.

Rate Rollercoaster January 2013) 2013 started with higher spot rates and lower bunker costs. Shanghai Containerized Freight Index showed spot rates +26% 2012/2013. (JOC). Bunker costs -8% 2012/2013. (JOC). Liner companies shares up 18% (Dec 12) among Alphaliner index of 17 main publically listed carriers. TPEB GRI implemented Jan 15. Wanted $600. Achieved $300. Subsequent weeks showed gradual rate erosion.

Rate Rollercoaster (January 2013) TP Spot Rates Weakened End January After Gains From GRI Continuing The Pattern Of Rate Erosion.

Rate Rollercoaster (January 2013)

Click to edit the outline text format  Second Outline Level Third Outline Level  Fourth Outline Level Fifth Outline Level Sixth Outline Level Seventh Outline Level Eighth Outline Level Ninth Outline LevelClick to edit Master text styles Second level Third level Fourth level Fifth level Rate Rollercoaster (February 2013) Drewry HK/LA benchmark up 4% per FEU to $2,536. Unexpected Increase not tied to a GRI

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Click to edit the outline text format  Second Outline Level Third Outline Level  Fourth Outline Level Fifth Outline Level Sixth Outline Level Seventh Outline Level Eighth Outline Level Ninth Outline LevelClick to edit Master text styles Second level Third level Fourth level Fifth level Rate Rollercoaster (February 2013) TP Westbound rates up 9.4% to $921/FEU Europe to Asia rates up 6.5% to $1,051/FEU.

Rate Rollercoaster (February 2013) SHA Composite Index shows rates overall lower.

What to Expect Carriers will attempt to hold on to rate increases. April 1 GRI announced.

What to Expect Carriers will attempt to hold on to rate increases. April 1 GRI announced. Major efforts to manage excess capacity.

What to Expect Carriers will attempt to hold on to rate increases. April 1 GRI announced. Major efforts to manage excess capacity. Slow steaming is here to stay.

What to Expect Carriers will attempt to hold on to rate increases. April 1 GRI announced. Major efforts to manage excess capacity. Slow steaming is here to stay. Maintenance related dry docking.

What to Expect Carriers will attempt to hold on to rate increases. April 1 GRI announced. Major efforts to manage excess capacity. Slow steaming is here to stay. Maintenance related dry docking. Service cuts due to weak demand. Elimination of sailings, port calls, or entire vessel strings.

What to Expect Carriers will attempt to hold on to rate increases. April 1 GRI announced. Major efforts to manage excess capacity. Slow steaming is here to stay. Maintenance related dry docking. Service cuts due to weak demand. Elimination of sailings, port calls, or entire vessel strings. Cancellations = Equipment Shortages.

What to Expect Carriers have become adept at managing excess capacity.

What to Expect Carriers have become adept at managing excess capacity. Message: Excess capacity does not mean rates will collapse in 2013.