U S Export Challenges Presented by Donna Lemm

U. S. Export Challenges Presented by: Donna Lemm, Director of Global Client Services 1

Top Three Export Challenges Ø Vessel Capacity Ø Equipment Shortages and Imbalances Ø Volatility of Export Rates 2

US Export Capacity Crisis Equipment Shortage Equipment Availability Source: IANA Rail Intermodal Terminal Directory 3

Import/Export Equipment Imbalance Source: Brian Conrad - WTSA 4

Vessel Capacity Shortages Ø Booking 5 -8 weeks forward Ø Bookings cancelled without warning Ø As of fall of 2009, 1. 3 M TEU’s, or approx 10% of global world fleet is idle. Ø As of last week, we understand there are carriers still reducing capacity, with no intention to redeploy until mid-March 2010. Source: JOC 1/28/09 5

Volatility in Rates Ø General Rate Increases Ø Accessorial Charges WTSA Avg Revenue Index Through November 2009 (excl bunker) $120. 00 $115. 00 $110. 00 January, February, & March 2010 Projected Increases $105. 00 $100. 00 $95. 00 -0 Se 8 p 0 O 8 ct -0 N 8 ov -0 D 8 ec -0 8 Ja n 0 Fe 9 b 0 M 9 ar -0 A 9 pr -0 M 9 ay -0 9 Ju n 09 Ju l-0 A 9 ug -0 Se 9 p 0 O 9 ct -0 N 9 ov -0 D 9 ec -0 9 Ja n 1 Fe 0 b 1 M 0 ar -1 0 ug A Ju l-0 8 $90. 00 6

Export Forecast 2010 Ø Ø Strong sales Weak dollar Bottleneck at ports Inland struggle for equipment 7

US Exports to Asia 2008 Source: PIERS Actual data for 2008 & 2009, Forecast data for 2010 2009 2010 Forecast 8

Changing Our Paradigm Ø Pricing and contracting Ø Guaranteed pricing for guaranteed space? Ø Penalties for no-show? Ø Simplification of charges Ø Known exposure Ø Carrier shift in business model to include balanced trade priorities Ø Continued work by the exporter in terms of visibility of the supply chain from mill/production to port to destination 9

Voice of the US Exporter? Ø Ø FMC President’s state of the Union Address Ø Ø Export Promotion Cabinet – direct report to the President Government Export Strategy to promote U. S. exports Support 2 million American jobs Shipping Act of 1984 Sec 2. 4 states that one of the purposes of the act is “to promote the growth and development of United States exports through competitive and efficient ocean transportation and by placing a greater reliance on the marketplace. ” 10

Will There be Capacity to Carry These U. S. Goods? 11

Q&A Thank You! 12