Supply Chain and Security 17 November 2009

Cubic ©2009 All Rights Reserved 2 Security Challenges – Supply Chain 9/11 heightened fear of terrorist attacks – cargo containers likely delivery vehicle Intercept suspicious cargo before it reaches U.S. shores – 100% scanning by 2012 Regulation abounds –Implementing the 9/11 Commission Recommendations Act of 2007 (9/11 Act) –Customer-Trade Partnership Against Terrorism –Container Security Initiative/Secure Freight Initiative –SAFE Port Act

Cubic ©2009 All Rights Reserved 3 Addressing a Global Problem 11 million containers enter the US annually Container security market is expected to grow from $70M in 2008 to over $4B by 2015 Theft in the global supply chain accounts for loss of billions per year Customers are interested in solutions that provides physical security, breach notification and global tracking capability Defense companies are leaders with security solutions

Cubic ©2009 All Rights Reserved 4 The Dilemma Dilemma – increase security but don’t impact legitimate trade Many stand-alone products exist but very few integrated solutions –Many focused on security are door-centric –Sensing technology not standardized Many players in the supply chain –Shippers –Ports –Trucking & Rail –Customs

Cubic ©2009 All Rights Reserved 5 Opportunities? The container security market is growing. Industry trends toward reduction in theft, counterfeit, spoilage and mishandling Potential customer base is mature but fractured No integrated, environmentally and technologically interoperable container security solutions exist

Cubic ©2009 All Rights Reserved 6 Transshipments Fastest growing segment of the container port market –Examples: Dubai, Hamburg, Trinidad & Tobago

Cubic ©2009 All Rights Reserved 7 Transshipment (cont) Commonly used by smugglers and terrorists seeking to disguise the point of origin of their goods from Customs officials Keys to maintaining strong security: –Good Tracking Currently available: RFID, GPS, Satellite, WiFi, Cellular –Accessible Real-Time Data Customs 10+2 requirement Sensor data; entry logs –Solid Chain of Custody

Cubic ©2009 All Rights Reserved 8 Cubic Security Services, Inc. (CSi) Enhance safety and security within the public transit and maritime markets for people, cargo and equipment

Cubic ©2009 All Rights Reserved 9 Technology Integration Cubic identifies technologies of interest and potential sources of applied research –Sensor technologies, with focus on CBRNE and imaging –Processing technologies to analyze and associate data Cubic participates in forums where technology firms are presenting and access is facilitated Cubic seeks a relationship with identified technology firms that are mutually beneficial and offer competitive advantages Cubic works with “partners” to define served markets of interest and formulate strategies

Cubic ©2009 All Rights Reserved 10 CSi Innovation & Technology Integrated radiation detection with mass transit fare collection systems Explosive detection for transit Sensor technology development Global Asset Tracking Enterprise System (GATES) –Increase container security, tracking and improve supply chain visibility

Cubic ©2009 All Rights Reserved 11 Container Security Solutions Maritime “smart lock” used as a delivery platform –“Tamper proof“ –Keyless entry –Electronic log of access –Validation of who has access –Electronic Manifest & Data –History of container movement –Near real-time tracking Integrate threat detection technology Global coverage

Cubic ©2009 All Rights Reserved 12 THANK YOU