1. O CEAN C ARRIER O UTLOOK 2010/2011 November 18, 2010

2. 2008 I NCREASED C ARRIER C OSTS Carrier Fuel Costs Up 75% New ILWU Contract Inland Transport and Repositioning Costs Panama Canal Fees Rising Environmental and Security Initiatives Source: TPM 2008

3. 2008 C ARRIER R ESPONSE Demand & Utilization Levels High Levels Still High. Rate Increases Sought. Vessels Re-Deployed New Vessel Sharing Arrangements “Slow Steaming” Source: TPM 2008

4. 2009 E CONOMIC D OWNTURN Inventories Slashed Decreased Demand Excess Capacity Rates Slashed In Most Lanes Top 10 Carriers Reported Losses of $11 Billion

5. 2010 R ATE N EGOTIATIONS Revenue Recovery Above Customer Relations Carriers Uniquely Unified In Negotiation Strategy Rate Increases Capacity Reduced/The Singapore Parking Lot Increased “Slow Steaming” Inventory Rebuild The “New Economics ” (Drewry Shipping)

6. 2010/2011 “N EW E CONOMICS ” 2010 Rate/Volume Boom In Spite Of, Not Because Of, The Economy. Housing Market Stalled Unemployment High Retail Sales Unexciting Boom Over? Inventory Rebuild Over Carriers Return To Profitability (JOC, Nov. 2010) Spot Rates Moving Down. (Drewry, Nov. 2010)

7. 2011 R ATE E NVIRONMENT Driving Rates Up Trade Growth Capacity Management Carrier Revenue Strategy Fuel Prices “New Economics” Driving Rates Down Weak Macro Economics Early Peak Season End Added Capacity Trans Pac and Asia/Europe Carrier Vessel Order Book New/Niche Players Government Regulation? Can The Carriers Continue To Manage The Supply-Demand Balancing Act??