1. South Carolina International Trade Conference Carrier Cost Changes & Changing Market Outlook Rick Wen V.P. Business Development OOCL (USA) Inc May 29 th 2008

2. Agenda Trade Outlook ILWU Negotiation Progress Changing Market Dynamics Carrier Supply-Demand & Cost Structure Issues Market Conditions Outlook & Conclusions

3. TRANS-ATLANTIC 6.3 million Teu 4% growth ASIA-EUROPE 20.47 million Teu 15% growth TRANS-PACIFIC 22.19 million Teu 4.2% growth INTRA-ASIA 48.3 million Teu 9% growth Major Containerized Tradelanes 2007 Drewry

4. Container Growth & LA-LB 2007: 15.7M TEU’s 60% Trans-Pacific Imports & 25% Exports via LA-LB 25% via USEC 15% Other Ports Forecast: Despite flat growth in 2007 volumes expected to triple by 2020

5. ILWU Negotiation 2008 Longshore Issues 1.Employment levels 2.Pension and Health 3.Jurisdiction 4.Safety 5.Environment PMA Issues 1.Productivity- technology 2.2 x 10 hour shifts vs. HOOT+2 x8 hour shifts 3.Safety 4.Environment

6. Market Conditions Dollar impact reverses Trade balance Surging export demand (+15%) Imports soften (-5%) 1 st QTR 2008 Overall Trade capacity declines Outbound Vessels full - space at a premium Freight rates taking quantum increases Export no longer a repositioning cost recovery model OUTLOOK – MORE OF THE SAME

7. Round Trip unit income under pressure Source: Drewry

8. Liner Shipping is Import Driven Source: Drewry

9. Trans-Pacific Export as % Import Market Trade Balance Improving

10. Trans Atlantic Imbalance (‘000 TEUS/Quarter) JOC

11. Export TPT Market Timeline In 2007, the market shifted from 65% to 120% industrial load factor Why… –Dollar Impact –Global Market growth –Bulk Market maxed out Supply & Demand balance affecting relationship between Carriers and Customers –Export no longer the stepchild of E/B repositioning –Subsidy of exports is not an option or requirement for carriers

12. Carrier Cost Challenges Bunker costs at historical highs Rail contract rates increased over 30% Inland fuel factors –Rail approaching 40% –Truck requesting 52% Weak dollar impact on all cost segments Stagnant US import market Panama Canal tolls and restrictions Vessel deployment and capacity management Viability of Trans-Pacific all-water service

13. Liner Shipping Cost Components Three years ago: 1.Terminals 2.Transportation 3.Voyage 4.Equipment & Repositioning Today: 1.Voyage 2.Transportation 3.Terminals 4.Vessel – slot cost

14. Bunker Recovery through Surcharge Asia-Europe Transpacific Bunker $ Asia-Europe Transpacific Bunker $

15. Bunker Fuel Cost Calculation Bunker Fuel Cost : $986 per Feu (weighted @ 75%/25% WC/EC)

16. Top Ten Trans-Pacific Exports Feb 08Feb 07TEUTEUChg in TEUs% of MktTEUs% of MktChangePct ChgShr Pts Waste Paper 87,70016.7%68,50516.9%19,19528.0%-0.2 Metal Scrap53,64310.2%31,1987.7%22,44571.9%2.5 Grain30,5685.8%10,3782.6%20,190194.5%3.3 Soybeans27,9895.3%13,1963.3%14,793112.1%2.1 Resin19,1243.7%22,5415.6%-3,417-15.2%-1.9 Hay16,1243.1%16,8234.2%-699-4.2%-1.1 Cotton16,6293.2%13,3743.3%3,25524.3%-0.1 Lumber Logs 20,5603.9%16,2694.0%4,29126.4%-0.1 Plastic Scrap15,0142.9%10,2822.5%4,73246.0%0.3 Wood Pulp 13,6942.6%8,8512.2%4,84354.7%0.4 Top Ten 301,04557.5%211,41752.2%89,62842.4%5.3 Smaller222,58442.5%193,62747.8%28,95715.0%-5.3 Market Total523,629100.0%405,044100.0%118,585 +29% 0

17. Top Ten Trans-Pacific Imports Mar 08 Mar 07TEUTEU TEUs % of Mkt TEUs % of Mkt Change Pct Chg Furniture 97,019 16.7%117,10616.9%-20,087-17.2% Apparel 55,386 10.2%67,5657.7%-12,179-18.0% E-GDS, Ex Wh GDS 59,572 5.8%63,8232.6%-4,251-6.7% Toys 25,948 5.3%29,7633.3%-3,815-12.8% Misc. Genl CGO-Dry 33,698 3.7%38,5675.6%-4,869-12.6% Auto Parts 39,750 3.1%41,8714.2%-2,121-5.1% Footwear 29,675 3.2%33,4813.3%-3,806-11.4% Auto &Tr Tires 26,912 3.9%26,5854.0% 327 1.2% Comp &REL Eqp 23,598 2.9%24,7632.5%-1,165-4.7% Plas Mfg GDS 19,974 2.6%21,2522.2%-1,278-6.0% Top Ten 411,532 57.5%464,77652.2%-53,244-11.5% Smaller468,646 42.5%514,38247.8%-45,736-8.9% Market Total880,178100.0%979,158100.0%-98,980 -10%

18. Top Ten North Atlantic Exports JOC

19. Top Ten North Atlantic Imports JOC

20. Challenges in 2008 EU decision to repeal anti trust rules North Atlantic Conference ends Oct 18, 2008 Bunker recovery Rising costs Infrastructure funding Security & Environmental mandates Trans-Atlantic trade imbalance 5000 TEU import = 3000 TEU export capacity Equipment and space shortages

21. Conclusions: Carriers & Customers - A New Relationship Export pricing will increase during 2008 Understand the capabilities from both sides Commitments by carrier and customer must be planned and actioned together Partner with as many lines as you can Plan and know the fight is for Equipment and Space Negotiations will be tough