David Arsenault President CEO Hyundai Merchant Marine America

David Arsenault President & CEO Hyundai Merchant Marine America Hyundai America Shipping Agency February 4, 2016 1

Hyundai Merchant Marine • • Founded: March 25, 1976 Global Transportation & Logistics Employees: 4, 000 Headquarters: Seoul, South Korea America: Dallas, TX • Fleet: 127 Vessels – Container, Bulker, Tanker • • 120 Offices Covering 103 Ports Alliance: G 6 16 th Largest Container Carrier Terminals: WUT (WA) & CUT (CA) Disclaimer: This presentation material and accompanying comments are those of 2 the presenter and not necessarily indicative of the views of HMM.

2015 Top 10 Key Industry Events 1. Mega Ships => 30% Global Overcapacity 2. Intermodal Complexity =>On Dock & Blocks 3. Cargo Volumes Pre-Rec => Infrastructure 4. Truck Capacity Shortages => Velocity 5. Chassis Model Change => IEP Control 3

2015 Top 10 Key Industry Events 6. WCO Labor Disruption => Congestion 7. Fuel Prices Down => Pos. & Neg. 8. Chinese Economic Slow Down 9. Trans-Pacific Partnership Agreement 10. Logistics Mergers & Acquisitions 4

Mega Ships => Mega Alliances § 16 Carriers – 93% Maersk & MSC § 4 Mega Alliances CMA, China Shipping & UASC HMM, APL, MOL, NYK, OOCL & Hapag • • Same Departures Day Same Arrival Day Same Transit Times Commoditization § How To Differentiate? • Rate Reductions – 1 st COSCO, K-Line, Yang Ming, Hanjin & Evergreen • Redefine Service - Next Alphaliner 5

U. S. Port Congestion – No Surprise Ø 20+ Years Ago the U. S. Had the Most Advanced Transportation Network in the World (Ports, Terminals, Roads, Rail, Bridges, etc. ) Ø 2002 -2006 Industry Headlines Warning about U. S. Infrastructure Not Keeping Pace With Growth “China Can Pitch More Than U. S. Can Catch” Ø Congestion Would Have Happened Sooner if Not for the Great Recession ’ 08 -’ 09 Reduced Cargo Volumes Ø Cargo Volumes Have Now Returned to Pre-Recession Levels & Same Infrastructure Problems Are Re-surfacing 6

Are Mega Ships To Blame? Ø Short Answer is “No” – Not Entirely! Ø Increased Cargo Volume Is the Primary Driver Ø Container Vessel Capacity Had to Increase § More Smaller Vessels vs. Fewer Larger Vessels § Similar Impact on Marine Terminals Ø Cargo Volume Burden has Been Shifted to Landside Operations and Infrastructure § Grounded Terminal Operations § Increased Densification § Appointment Systems 7

What Is Ahead In 2016? 8

2016 Top 10 Key Industry Events 1. Panama Canal Expansion => April? 2. IMO SOLAS Container Weights => July 3. Mergers & Acquisitions => Alliance Impact 4. Automated Commercial Environment => Feb 5. Grounded Ops => Terminal Automation 9

2016 Top 10 Key Industry Events 6. Reduced Overcapacity Trend 7. ILWU OCU Contract Expires – 6/30/16 8. Moderate Ocean Rate Recovery 9. Continued Carrier Financial Stress 10. Improve Booking Discipline 10

Emerging Trends – Vessel Utilizations ‘ 14 vs. ‘ 15 YOY Import Growth of +3. 9% Overcapacity Expected to Continue 11

Emerging Trends 2016 - Idle Fleet Trend Idle Containership Fleet Rising Similar Level With Great Recession in ’ 09 Align Supply with Demand 12

Q&A Thank You David Arsenault President & CEO Hyundai Merchant Marine America Hyundai America Shipping Agency February 4, 2016 13