1. February 4, 2016 David Arsenault President & CEO
Hyundai Merchant Marine America
Hyundai America Shipping Agency
February 4, 2016

2. Hyundai Merchant Marine
Founded: March 25, 1976
Global Transportation & Logistics
Employees: 4,000
Headquarters: Seoul, South Korea
America: Dallas, TX
Fleet: 127 Vessels
Container, Bulker, Tanker
120 Offices Covering 103 Ports
Alliance: G6
16th Largest Container Carrier
Terminals: WUT (WA) & CUT (CA)
Disclaimer: This presentation material and accompanying comments are those of the presenter and not necessarily indicative of the views of HMM.

3. 2015 Top 10 Key Industry Events
Mega Ships => 30% Global Overcapacity
Intermodal Complexity =>On Dock & Blocks
Cargo Volumes Pre-Rec => Infrastructure
Truck Capacity Shortages => Velocity
Chassis Model Change => IEP Control

4. 2015 Top 10 Key Industry Events
WCO Labor Disruption => Congestion
Fuel Prices Down => Pos. & Neg.
Chinese Economic Slow Down
Trans-Pacific Partnership Agreement
Logistics Mergers & Acquisitions

5. Mega Ships => Mega Alliances
16 Carriers – 93%
4 Mega Alliances
Same Departures Day
Same Arrival Day
Same Transit Times
Commoditization
Maersk & MSC
CMA, China Shipping & UASC
HMM, APL, MOL, NYK, OOCL & Hapag
How To Differentiate?
Rate Reductions – 1st
Redefine Service - Next
COSCO, K-Line, Yang Ming, Hanjin & Evergreen
Alphaliner

6. U.S. Port Congestion – No Surprise
20+ Years Ago the U.S. Had the Most Advanced Transportation Network in the World (Ports, Terminals, Roads, Rail, Bridges, etc.)
Industry Headlines Warning about U.S. Infrastructure Not Keeping Pace With Growth “China Can Pitch More Than U.S. Can Catch”
Congestion Would Have Happened Sooner if Not for the Great Recession ’08 -’09 Reduced Cargo Volumes
Cargo Volumes Have Now Returned to Pre-Recession Levels & Same Infrastructure Problems Are Re-surfacing

7. Are Mega Ships To Blame? Short Answer is “No” – Not Entirely!
Increased Cargo Volume Is the Primary Driver
Container Vessel Capacity Had to Increase
More Smaller Vessels vs. Fewer Larger Vessels
Similar Impact on Marine Terminals
Cargo Volume Burden has Been Shifted to Landside Operations and Infrastructure
Grounded Terminal Operations
Increased Densification
Appointment Systems

8. What Is Ahead In 2016?

9. 2016 Top 10 Key Industry Events
Panama Canal Expansion => April?
IMO SOLAS Container Weights => July
Mergers & Acquisitions => Alliance Impact
Automated Commercial Environment => Feb
Grounded Ops => Terminal Automation

10. 2016 Top 10 Key Industry Events
Reduced Overcapacity Trend
ILWU OCU Contract Expires – 6/30/16
Moderate Ocean Rate Recovery
Continued Carrier Financial Stress
Improve Booking Discipline

11. Emerging Trends – Vessel Utilizations
‘14 vs. ‘15 YOY Import Growth of +3.9%
Overcapacity Expected to Continue

12. Emerging Trends 2016 - Idle Fleet Trend
Idle Containership Fleet Rising
Similar Level With Great Recession in ’09
Align Supply with Demand

13. Q & A Thank You February 4, 2016 David Arsenault President & CEO
Hyundai Merchant Marine America
Hyundai America Shipping Agency
February 4, 2016