1. EDGE Meeting
June 29th 2016

2. Global carrier Landscape Today
The Big Three US National Lines
International Freight Skills transitioned offshore.
Reduced US Merchant Marine.
US has abandoned all direct participation as a global carrier.
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3. Major ocean carriers
Carrier
Ownership
Founded
Vessels
TEU
Share
Factoid 1
Maersk
Denmark
1928
600
3.0m
14.7%
Makes up 14% of Denmarks GDP 2
MSC
Swiss
1970
480
2.6m
13.3%
Italian founder moved to Switzerland for tax reasons 3
CMA-CGM
France
1978
470
1.8m
8.8%
In December 2015 purchased Singapore based NOL/APL (500k ctrs) 4
Hapag-Lloyd
Germany
175
940k
4.6%
Recently acquired Chilean CSAV, in merger talks with UASC 5
Evergreen
Taiwan
1968
150
930k
More vessels on order, will soon pass Hapag-Lloyd 6
COSCO
PR China
1961
130
850k
4.2%
Merger with China Shipping will catapult to them to #4 carrier 7
China Shipping
1997
148
700k
3.4%
Owned by Chinese government, as is #6 COSCO 8
Hamburg Sud
1871
112
650k
3.2% 9
Hanjin Shipping
Korea
1977
101
630k
Seoul-based chaebol that also operates Korean Air and Czech Airlines
Current Top 5 carriers are all either private or family-owned (Maersk, though public, is majority family owned)
Lack of discipline and accountability
Chaotic pricing environment.
Illogical business decisions based on ego, national pride and force of habit
US is now completely reliant on this global network of foreign entities, many of which receive bailouts, preferred status and subsidies from their national governments.

4. Unstable Global Market
Carriers continue to struggle and lose money globally
Stagnant or falling rates in and out of USA
GRI’s (General Rate Increases) continue to be announced and then are postponed or delayed
Likely no traction for a PSS (Peak Season Surcharge) this year

5. Carrier alliances
13 of the 20 largest global carriers are now a part of an alliance encompassing the three major East-West trade lanes, the trans-Atlantic, the trans-Pacific and Asia-Europe and control 94% of global container capacity.
Ocean Alliance (39%) CMA CGM, COSCO, China Shipping, Evergreen Line, OOCL
THE Alliance (39%) Hanjin, Hapag-Lloyd, “K” Line, MOL, NYK Line, Yang Ming Line
2M (16%) Maersk & MSC
Through the alliances, carriers gain access to the economies of scale achieved through larger ships and a more controlled environment.
The pacts are operational, forbidding joint marketing and sales.
If small players are driven out of the market, a small number of mega-carriers will achieve the power to exert price leadership in the market.

6. Possibilities What can turn the tide?
A huge increase in demand (unlikely)
Carriers can cut capacity (more likely, but still questionable)
Increase in vessel orders (capacity) would counter any efforts to shrink market players and would keep rates low in long-term.
It doesn’t appear that we’ll have any large swings in freight rates in the near to mid-term
Rumors that the big boys are intentionally keeping rates low in order to drive bankruptcies or consolidations.
Seems we’re very close to a highly commoditized market with fewer providers and lower service levels and options.
This would play out in the carriers’ favor
Long-term market where carriers can demand very high rates with little-to-no competition to keep rates in check.

7. discussion
Carrier consolidation within countries; Governments increasingly unwilling to support multiple “quasi-national” carriers.
Germany
Japan
China (just happened)
Korea (underway)
Consolidation across borders (happening already)
December 2015: CMA purchases Singapore NOL/APL
Hapag-Lloyd: Recently acquired CSAV, merger approved with UASC.
Smaller and less attractive carriers will be allowed to go bankrupt.
The handful of carriers left standing will drive rates to unprecedented levels.
No nation or private entity will be left with the resources or motivation to re-enter the carrier market.
Could higher rates drive more re-shoring of manufacturing closer to their global markets?

8. World Shipping Group

9. Local Service - Global Reach
World Shipping Group
The company dates back to 1960 and the opening of the St. Lawrence Seaway - handling vessels in the Great Lakes.
Company playing a lead role through the evolution of containerization in the Mid-West, from liner agency to now - a global organization.
We have grown to become one of the largest international logistics companies in the Cleveland area, revenues of $500m and 1150 staff.
Local Service - Global Reach

10. World Shipping Group - evolution

11. Container Port Group: In-house Drayage 44 years of service 650 Trucks
Strategic network of Terminals
Heavy container trucking throughout our port locations
Full service Terminal and Transportation Operations
Advanced central computer systems – fully EDI capable
Extensive Resources – People, Equipment and Facilities
Quality Focus
16 Cities
East Coast
South Atlantic
Ohio Valley
Midwest
19 Locations
Transportation
Depot

12. Our Landscape Global Tank Operations NVOCC Operator for Bulk Liquid
Bulk Chemical Expertise
Food Grade Fleet
Reporting & Tracking
Fleet Management
M&R Services
Growing USA Trucking company with 20 terminals in 16 markets nationwide
Container Trucking – 650 Trucks
Depot Operations
M&R Services
Container Sales
Logistics – 11 warehouses
Hi-Speed Crossdocking
Consolidation & De-consolidation
OTR / LTL Trucking
Heavy Lift Capabilities
Bulk Transloading
Order Fulfillment
NVOCC Operator
Freight Forwarding
Customs Broker
Supply Chain Solutions
Delivery Tracking
Live Customer Service
Integration with air, truck, rail, and warehouse logistics

13. Customs House Brokerage
ASSET BASED LOGISTICS COMPANY
Full 3PL Service
Warehousing
Cross Dock
Intermodal
Truck / Rail
Customs House Brokerage
NVOCC &
Freight Forwarding
Air Freight &
Expedited Services
Information
Technology
Services
Truck
Brokerage
UWL is a one stop shop for all the World Group companies providing Global 3PL services.
Current offerings touch all major service segments identified.
Services globally using our own offices in Europe, Brazil, USA and agent networks.
Many major fortune 2000 businesses use UWL’s 3PL services today.
Financially stable parent, and robust shipper base feeding new business.

14. UWL global COVERAGE

15. World Distribution Services
We have In-house Dedicated Warehouse & Distribution Teams
11 markets nationally
Over 2 million square feet
High Volume Distribution
Cross-dock / Transload
De-Consol / Consol Programs
Racked Facilities
Order Fulfillment
Value Added Services
Hazmat certified
FDA certified
USDA certified
US Customs Bonded
C-TPAT Compliant
Norfolk, VA
Newark, NJ
Charleston, SC
Savannah, GA
Chicago, IL
Baltimore, MD
Columbus, OH
Cincinnati, OH
Cleveland, OH
Houston, TX
Los Angeles, CA

16. Commercial issue Topic

17. Commercial alignment challenge

18. Commercial alignment challenge

19. Commercial alignment challenge
Current Scenario:
We have four companies:
Newport
WDS and UWL – (one now)
CPG
All need independence due to the commercial complexity of our divisions all selling into our competitors.
Likely to be many years before this can be aligned differently.
Yet we also sell to the same companies and have relationships with clients that could use multiple services.
Longer term goal not to sell to competitors of the 3PL.

20. Not to overly incent, as conflicts with divisions core goals?
Commercial alignment challenge
Who owns the customer?
Reward systems?
Not to overly incent, as conflicts with divisions core goals?

21. Thank you for your time!