1. THE SHIPPING INDUSTRY IN A CHANGING ENVIRONMENT Jean Philippe Thenoz PROPELLER CLUB BASEL November 13th 2008 DRAFT

2. Page 2 SUMMARY 1. Change of ship size / Change of ship characteristics 2. Importance of terminal / Strategic approach 4. Impact of bunker in shipping operations 5. Change of legal environment 3. Role and importance of intermodal 6. Environment requirements I. What have been the changes affecting the shipping industry during the past decade ? II. CMA CGM snapshot

3. Page 3 1. Change of ship size / Change of ship characteristics

4. Page 4 A brief history 2001 : 6500 teu class 2004 : 8500 teu class 2006 : 9400 teu class The following vessels already ordered, are under construction : 2008 / 2009 : 11 000 TEU class and 11 400 TEU 2009 / 2010 : 12 600 TEU + class 2008: 11 000 TEU class

5. Page 5 6 500’s8 500’s9 400’s11 400’s Length overall (m) 300334349363 Width (m) 40,342,8 45,6 Depth (m) 24,124,627,329,7 Draft (m) 14,314,515,015,5 Deadweight (t) 80 000100 000115 000130 000 Nominal capacity (teu) 6 6218 4889 41511 356 Deck 3 6144 6534 7425 512 Hold 3 0073 8354 673 5 844 Rows of containers : Deck 1617 18 Hold 1415 16 Numbers of tiers : Deck 7888 Hold 991011 Main characteristics

6. Page 6

7. Page 7 Principe de propulsion

8. Page 8 Propulsion principle The easiest solution : One main engine slow speed (about 100 rpm), 2 stroke engine - A shaft line - A propeller

9. Page 9 2. Importance of terminal / Strategic approach

10. Page 10 Terminals networking  Shipping lines having a worldwide coverage were pushed to invest into terminals to secure berth windows and give a dedicated fully integrated service to customers  The shipping industry went into a vertical integration : terminals being a key element of their operation.  This strategy is especially valid in a hub port operation concept on East / West route Malta Free Port, Malta

11. Page 11 Terminals networking  Let’s take as an example what CMA CGM group has been doing the past 7 years : Terminal Link S.A. Subsidiary of CMA CGM group, incorporated in 2001 MRS development team of 15 + CMA CGM support Terminal Link holds ports interests of CMA CGM dating before 2001 and has now interests in 17 ports with an estimated total throughput in 2006 of 4.7 millions TEUs. Terminal Link’s Assignments : External growth: Invest in multi-user container terminals in appropriate locations Develop green sites or brown sites projects, buy stakes, tender for concessions Internal growth & development: Leverage on synergies with CMA CGM and market terminals world wide Optimize management of container terminals by using and developing modern state-of-the-art container handling equipment and IT systems

12. Page 12 Mobile Guadeloupe Martinique Guyane Marseille Fos Anvers Zeebrugge Le Havre Um Q’sar Montoir Lomé Dunkerque Houston Casablanca Rotterdam Xiamen Caï Mep Damiette Odessa Busan 31 DECEMBER 2006: 17 TERMINALS 31 OCTOBER 2008: 26 TERMINALS Tianjin Wenzhou Miami

13. Page 13 3. Role and importance of intermodal

14. Intermodal strategy in Europe

15. Page 15 Priority loading in the port for containers under Rail C.H Easier documentation and Customs formalities at sea port Customs clearance at destination done by customer Competitive combined tariff “door to door” Storage facility at Rail terminal with free days Empty pick up or drop off for merchant haulage from / to inland terminal without any extra cost Door to door advantages

16. Page 16 Hamburg Gdynia Warsaw Warsaw Gliwice Bucarest Constanza Budapest Milano Marseille Lyon Bordeaux Montoir Le Havre Rotterdam Livorno Basel Stuttgart Poznan Bratislava Bratislava Paris Genoa Clermont- Ferrand Strasbourg Sopron Toulouse Munchen Triestes / Koper Prague Wien Bradu De Sus Manchester Liverpool Cardiff Southampton Tilbury Felixstowe Padova Dourges Bremerhaven Fos/Mer Barge Rail Link shuttles Combined Rail/barge Service Partners’ rail services Development Rail Salzburg Duisburg Duisburg Koln Koln Antwerp Mannheim / Ludwigshafen Zeebrugge Our rail & barge product today and coming plans

17. Intermodal strategy in China

18. Page 18 Office of China Direct ports of call in China Ports Xian Chongqing Changsha Kunming Zhongshan Guangzhou Shunde Dongguan Yantian Hong KongMacau Shenzhen Kaohsiung Huizhou Keelung Xiamen Shantou Quanzhou Fuzhou Yiwu Hangzhou Ningbo Lianyungang Suzhou Shanghai Nantong Zhengzhou Wuhan Heifei Nanjing Zhenjiang Jinan Qingdao Zhangjiagang Xingang Shijiazhuang Tianjin Beijing Shenyang Harbin Yantai Dalian A strategic lay out in China 2 nd largest carrier from China to North Europe 1 st from China to Mediterranean sea Every 6 hours, a CMA CGM ship leaves China. 13 Ports of call in China. 64 agencies throughout China (staff: 1515)

19. Page 19 Location of 18 terminals and double-deck block trains planned network

20. Page 20 Compared market share of rail container transport  As of total railway freight traffic percentage

21. Page 21 4. Impact of bunker in shipping operations

22. Page 22 Bunker impact on a voyage September 2006August 2008 Voyage cost% Hire31,1 %18,0% Bunkers 313 USD / t62,6 %706 USD / t78,5% Canal costs0,0 % Port costs6,3 %3,5% Misc.0,0 % Total100,0 % September 2006August 2008 Voyage cost% Hire24,1 %16,8% Bunkers 314 USD / t51,9 %673 USD / t68,4% Canal costs18,3 %11,3% Port costs5,7 %3,5% Misc.0,0 % Total100,0 % 8100 TEUS VESSEL – ASIA / USWC at 22.5 knots (35 days voyage) 5100 TEUS VESSEL – ASIA / USEC at 23.1 knots (56 days voyage)

23. Page 23 Bunker prices evolutions YTD 2008

24. Page 24 5. Change of legal environment

25. Page 25 The process 1986 – Regulation 4056/86 passed by European Council March 2003 – repeal process initiated, ELAA set up October 2006 – formal abolition of Regulation 4056/86 by European Council September 2007 – publication of draft Guidelines Summer 2008 – publication of final Guidelines October 2008 – implementation of the new law – Guidelines in force

26. Page 26 Impact of repeal of regulation 4056/86 Liner conferences to and from Europe will become illegal Liner conferences outside European trades remain legal However, European solution will heavily impact the thought processes of other jurisdictions Others may follow over time

27. Page 27 Impact of repeal of regulation 4056/86 on conference lines No more : conference tariffs conference THCs conference surcharges such as CAF and BAF conference business plans No : individual capacity discussion immediate publication of individual market shares

28. Page 28 What is the new lines environment ? How will they act ? All lines must have their own tariff and/or pricing policy Individual negotiations with customers All elements of the charge are potentially negotiable unless a line decides that certain charges are non-negotiable Structure of charges, i.e. origin THC, ocean freight, destination THC, CAF, BAF is up to individual lines Lines will have to decide their individual policies on THC’s BAF and CAF Charges need not be related to costs – lines are free to charge what they like taking advantage of the market Increases in charges will be subject to lines own discretion and subject to individual contracts – no need, unless the contract says, to give notice

29. Page 29 6. Environment requirements

30. Page 30 Prevent any risk of pollution and continuously improve the environmental performance of our operations Develop eco-friendly services and solutions i.e. rail and barge transportation, eco-containers Reinforce our environmental management system and corporate culture for our employees Advanced Shipping, Environment Minded CMA CGM is member of the Clean Cargo Group and adheres to « Charte Bleue » from Armateurs de France. Our policy relies on 3 key axis :

31. Page 31 Our new buildings are equipped with the latest proven environmental technologies i.e. electronic injection, fast oil recovery, alternative maritime power, waste heat recovery, non toxic paints…. Reducing vessel’s ecological footprint Ecospeed policy on major lines, weather and fuel routing, optimal trim, are additional operational measures to reduce vessels’ environmental impacts. CMA CGM Fleet Navigation Center New Buildings Green Technologies Overview

32. Page 32 Pioneer and leader in Eco-Containers with bamboo flooring with more than 72 000 TEUs, which represents so far average 10 % of our owned fleet. Development of alternative and eco-friendly transports : Rail and Barge. Investment in Rail Development in China, India, North Africa notably. Developing eco-products and services

33. Page 33 Green Flag Award compliant for 100 % of our vessels for the 2nd consecutive year, for vessels speed reduction. Clean Fuel Program participation since July 2008, using ultra-low sulphur fuel in main and aux engines Developing environmental partnerships Exhibition at Long Beach Green Port Fest : hundreds of people visited our eco-bamboo container as well as the Group environmental initiatives. From the beginning, CMA CGM is actively participating to the Ports of Los Angeles and Long Beach environmental programs and initiatives, considered as the most leading and aggressive ports environmental policies worldwide.

34. Page 34 CMA CGM MEDEA – 9400 evp II. CMA CGM snapshot

35. Page 35 Source: CMA CGM Data CMA CGM: Number of containers carried (thousand of TEUs) 7000 6000 5000 4000 3000 2000 1000 0 1615 1900 2300 2800 3900 5200 6000 2000 2001 2002 2003 2004 2005 2006 2007 7700

36. Page 36 CMA CGM GROUP – EAST / WEST SERVICES  10 services  17 420 TEUs weekly  6 services  4 480 TEUs weekly  9 services  20 660 TEUs weekly NB : Asia is including Indian Subcontinent  8 services  16 060 TEUs weekly  6 services  6 860 TEUs weekly Europe Africa Asia South America North America Oceania

37. Page 37 CMA CGM GROUP – NORTH / SOUTH SERVICES NB : Asia is including Indian Subcontinent Europe Africa Asia South America North America Oceania  12 services  6 210 TEUs weekly  8 services  4 290 TEUs weekly  8 services  6 750 TEUs weekly  10 services  6 940 TEUs weekly  13 services  8 320 TEUs weekly  20 services  9 830 TEUs weekly

38. Page 38 CMA CGM368 ships (280 chartered + 88 owned) for 972 393 TEUs CHENG LIE19 ships (15 chartered + 4 owned) for 25 934 TEUs COMANAV10 ships (1 chartered + 9 owned) for 2 923 TEUs Fleet volume GROUP TOTAL 397 ships for 1 001 250 TEUs (296 chartered and 101 owned) (396 ships for 986 196 on 02/10/08) (17/10/2008) TODAY

39. Page 39 78 ships on order for a total capacity of 648 679 TEUs (out of which 55 owned) + 2 cruise ships for CIP 20082009201020112012 Ships7 (3 owned)32 (22 owned)26 (21 owned)11 (7 owned)2 owned Teu54 989259 906239 57190 8133 400 Fleet volume SHIPS TO BE DELIVERED

40. Page 40 TOP 10: Global carriers 1. Maersk Line – Denmark 2 034 00015.8 % 2. MSC – Switzerland 1 421 600 11.0 % 3. CMA CGM – France 970 300 7.5 % 4. Evergreen – Taïwan 634 100 4.9 % 5. Hapag Lloyd – Germany 501 000 3.9 % 6. COSCO – China 497 300 3.9 % 7. APL – Singapore 482 300 3.7 % 8. CSCL – China 430 100 3.3 % 9. NYK – Japan 416 900 3.2 % 10. MOL – Japan 376 100 2.9 % Source: AXS-Alphaliner dtd October 08

41. Page 41 Turnover 07 Teus carried 07 Vessels Slots available Services Staff Worldwide Staff France Offices Worldwide Ports of call 11.8 billion US Dollars 7,7 million TEUs 394 966,900 TEUs more than 150 16 000 4 200 600 400 CMA CGM Group Key Figures

42. Page 42 Norfolk, USA CMA CGM Real Estate Investments A testimonial of the group’s soaring growth Architect: Zaha Hadid FEATURES 147 meters tall / 33 stories high 75 meters in its widest point Total capacity: 2,700 people 15 elevators / 5 parking levels 53,000 m² of total exterior glass surface area Gross floor area: 64,000 sq meters Start of construction: July 2006 Building delivery : 3 rd quarter of 2009

43. Page 43 CMA CGM Orfeo – 9700 TEUs passing by Los Angeles break water