1. 2010 International Food Aid & Development Conference August 2-4, 2010 Kansas City, Missouri Sponsored by the USDA and USAID Vessel Loading Observation Break-Out Session Presentation by H. Keith Powell

2. Potomac Maritime LLC - Ship Broker with offices in Washington DC and Houston, Texas - Represents US flag and Non US Flag Ship Owners participating in the US Government food AID Programs - Major Clients: Maersk Line, Maersk Line Limited and Sealift, Inc

3. What does a Ship Broker Do? > Market Analysis > Contract Administration > Prepare and Submit Freight Bids > Keep various parties informed of Vessel positions > Collect Freight Monies due to Carriers > Logistical Support > Problem Solve

4. Other Ship Brokers Participating in the Program:  Phoenix Chartering  Euro America  International Navigation  Next Wave  Potomac Shipping

5. Potomac Maritime Broker at Work!

6. Other Ship Brokers at Work!

7. Problem Solving : Load Port Challenges Delayed Cargo Arrival / Off Grade Cargo: Action Required: > Swap Out Cargo Between Vessels or Programs > Expedite Deliveries > Flexibility from Cooperating Sponsors > Quick Decisions from Decision Makers

8. Problem Solving : Load Port Challenges Infestation of Cargo at Load Port: - Current Contract Terms Place Burden on Carrier - Infestation Either Latent and in Cargo at Time of Delivery to Port or - Cargo Becomes Infested While in the Load Port Warehouse - Carrier is Responsible for Fumigating Cargo in Warehouse, on Board Vessel or in Containers

9. Problem Solving : Load Port Challenges Infestation of Cargo at Load Port: New Approach: US Government pays for any fumigation required at load port (in warehouse or on board vessel or in container) Rational: > Cheaper... ? Perhaps. USG already paying cost to Carriers > USG can possibly negotiate better fumigation cost than individual Carriers > More Proactive Approach to Issue > Focus is on Delivering Cargo Free of Infestation > Commercially Shipper Responsible for Fumigation of Cargo

10. Public Enemy Number 1

11. Problem Solving : Load Port Challenges Rodent Infestation of Cargo at Load Port: - Clear Understanding of Various Parties Responsibilities: Port AuthorityStevedores SuppliersOcean Carrier ShipperUS Government - Contractually Cargo is in the care and custody of the Ocean Carrier - Physically cargo in the Possession of the Stevedores - Ocean Carrier does not have direct control of the Cargo - must work through Stevedores as it’s subcontractor

12. Problem Solving : Load Port Challenges Rodent Infestation of Cargo at Load Port: Ocean Carrier’s Main Concerns: - Important that only clean cargo being loaded on vessel - If a higher level inspection procedure is to be used - establish well in advance of vessel loading - Any delay in handling the cargo and loading the vessel is minimized or eliminated altogether

13. Problem Solving : Load Port Challenges Rodent Infestation of Cargo at Load Port: Suggestions: > USDA to establish standards for cleanliness and rodent remediation procedures for all terminals handling US Government Food Aid > USDA to conduct regular terminal inspections to ensure compliance > If there is a higher level of inspection required prior to loading – clearly spell out the procedure / protocol in the freight tender > This should help avoid problems developing at time of vessel loading which can result in expensive equipment and vessel delays

14. Problem Solving : Load Port Challenges Cargo Claims at Load Port: Current Contract Terms holds Ocean Carrier responsible for cargo damage that occurs at the load port with zero tolerance for loss Result: > Carriers must increase their rates to cover potential for cargo claims yet they have no direct physical control over cargo Cargo is in the possession of the stevedore / terminal operator who is subcontractor to cargo Suppliers for rail car unloading and Ocean Carrier for loading vessel or stuffing containers

15. Problem Solving : Load Port Challenges Cargo Claims at Load Port: Suggestion: Make Terminal Operator directly responsible for any load port damage Rational: > Direct accountability > No free lunch – Freight rates currently include provisions for potential claims and if suggestion adopted stevedores rates will include provision for potential claims > BUT... Holding the party responsible that is in direct control of the cargo, should promote more effective methods for minimizing cargo damage and loss > For Stevedores – Minimizing cargo claims can become a competitive advantage versus just a cost of doing business

16. Potomac Maritime LLC Thank you for listening and enjoy the Conference