3. Container shipping has become a commodity, where customers require low prices and high on-time delivery, but are getting neither. Customer requirements:What they get: 3. Short Transit times 4. Personal relationships 5. Easy documentation 6. Large port coverage 7. Credit 8. Accessible customer service 9. Electronic Data Interchage (EDI) 10. Tracking of containers 11. Adaptability to local conditions Low utilization High unit cost The best carrier delivers 60% on time High prices 1. Low prices 2. On-time delivery

4. Today’s liner networks are no longer adequate Direct string This network design was invented TO: leverage large vessels to reduce unit cost maximize coverage with few vessels Hub & Spoke This network design was invented WHEN: carriers had few strings terminal capacity was abundant. Today’s carriers have many strings and therefore a very complex system. Port congestion only amplifies the problem

5. Today’s liner network: Direct String The complexity leads to lower performance on the most important criteria

6. The complexity leads to lower performance on the most important criteria Today’s liner network: Hub&Spoke

7. Point-to-point services have higher vesselcost… but the savedcost of complexity outweighs this disadvantage

8. The commercial standards drive the same problems as the network Today’s commercial standards

9. The airline model turns the problems into significant benefits

10. Once the commercial benefits are added, the smaller vessels become very competitive

11. These principles favor the small forwarders

12. Thank you for your time