LQ Symposium April 20, 2006 Where is the Logistics Service Provider (LSP) Industry Going?

Global Logistics Market Trends

Source: Datamonitor D A T A M O N I T O R 2005 Logistics market continues to expand rapidly

Source: Datamonitor D A T A M O N I T O R 2005

Market Shared between Key regions

Key Drivers for LSPs Changes in sourcing behavior – pursuing lower costs with adequate quality –This ‘globalization’ creates logistics complexity Changes in outsourcing behavior – –This increase in complexity drives the desire for simplicity More and more companies are pursuing business strategies to outsource more and more bundled business processes

Future Industry Trends Evolution towards broad supply chain solutions Increased outsourcing of transaction based activities Enhanced 3PL provider technology capabilities Deeper client industry focus and expertise by 3PL providers Continued expansion, acquisition and consolidation of 3PL industry Expansion into global markets Further clarity and usage of 4PL(LLP) solutions Enhanced long term relationship management capabilities Source: CAP Gemini - Findings from the 2004 Ninth Annual Study

Source IDC The New Face of BPO: Customer Adoption Patterns for Logistics BPO

Source IDC The New Face of BPO: Customer Adoption Patterns for Logistics BPO

Service Provider Rationalization Professional Services Single Logistics Service Supply Chain Solutions Multiple Logistics Products No. of Services Complexity of Solution Bundling SC Integration Evolution

Integration and Alignment Integration – the linking of business processes from previously independent activities Collaboration – the ongoing effort of sharing pertinent information to continuously align expectations Process 1 Process 2 Process 3 Process 1 Process 2 Process 3

Transactional Commodity Price Interchangeable Product Highly specified deliverables Shared risks & investment Deeply integrated Mutually dependent Some customization Flexibility/levels of service Special knowledge Customized/ individualized Process & data integration Solutions oriented Shared rewards Collaborative Partnership Enhanced Both want the progression but don’t have a framework to manage the journey Low Value High Value Source: Mike Nevin Consulting - 5 year cross industry study Collaboration Trends

Summarizing... Globalization means more complex supply chains Manufacturing costs down but …Logistics complexity & costs up Global logistics integration is the challenge Maintaining Relationship Alignment is key to successful collaboration which leads to strong partnerships

DB Logistics has four strong business units Land Operations Transport & Logistics Air & Sea Freight Contract Logistics Rail Freight Transport

UPS 17.8% FedEx 16.1% BAX/Schenker 9.8% DHL/Exel 2.5% DHL/Exel 4.7% TNT 2.4% KN 1.3% Ryder 1.0% Wincanton 0.9% BAX/Schenker 0.8% BAX/Schenker 7.0% DHL/Exel 12.6% UPS 4.6% Panalpina 4.5% KN 3.6% EGL 3.0% USA Integrated Heavy Weight Freight No. 3 Combined, we hold excellent market positions in global air, sea freight and logistics Global Contract Logistics No. 6 Global Air Freight No. 2 KN 5.5% DHL/Exel 5.4% BAX/Schenker 3.2% Panalpina 2.9% SDV 1.9% Expeditors 1.9% Global Sea Freight No. 3 BAX/Schenker 2.1% DHL/Exel 2.0% DFDS Transport 1.1% Dachser 1.0% Geodis 1.0% ABX 0.7% European Land Transport No. 1 BAX and Schenker