© OHL– Confidential and Proprietary. Outlook for Ocean Carriers & NVOCCs Presenter: Ed Piza 1

© OHL– Confidential and Proprietary. Small Ships/Capacity Limited Competition High Rates of Shipping Non-Agreement Past

© OHL– Confidential and Proprietary. Growth Factors 3 Vessel Size Growth Containerization Non-Vessel Operating Common Carriers (NVOCC) Large Retailers Higher Demand Emergence of New Shipping Lines (“Rust Buckets”) New Conference Systems and Agreements

© OHL– Confidential and Proprietary. Current Day

© OHL– Confidential and Proprietary. 5 Rate Conference Systems Existed as early as 1916 until about 10 years ago Established Federal Maritime Commission (FMC) Used to stabilize rates and service Limited negotiation options/Dual-rate contract Prohibition of individual service contracts Growth in global shipping led to a growing concern with conference systems

© OHL– Confidential and Proprietary. Discussion Agreements Shipping laws more relaxed Ocean shipping became differentiated/sophisticated Created specifically for different markets/commodities TACA

© OHL– Confidential and Proprietary. NVOCC & Carrier Contract Negotiation Spot market rates 52-week rolling average 13-week contracts (Asia-Europe) Volume shippers and minimum shipment charges GRI waiver and cap negotiation

© OHL– Confidential and Proprietary. General Rate Increase (GRI) Pre-May 2009 July 2009 GRI NVO’s BCO’s Current Day Status

© OHL– Confidential and Proprietary. Fuel Surcharges Service Fees Handling Charges Security Fees Delivery Area Surcharge Accessorial Charges Chassis Surcharge Additional “Add-On” Costs As of 9/1/09

© OHL– Confidential and Proprietary. Current Market Conditions & Outlook General Rate Increase (GRI) Vessel Capacity Vessel Sharing Agreements Ocean Carrier Customer Service Expansion of Panama Canal Suez Detours “Idled ocean container capacity hit a new high of 1.41 million TEUs” - JOC

© OHL– Confidential and Proprietary. Ed Piza – SVP, OHL Global Freight Management and Logistics Thank