DHL Global Forwarding Global Ocean Freight

Introduction to DHL OCEAN SECURE

Customer Presentation Feb 2010

Agenda

Key Challenges faced by Higher Value Customers DHL OCEAN SECURE - The Premium Value Proposition CSD Technology by Savi Networks 5 Building Blocks for the Solution & Operational Execution Conclusion

DHL OCEAN SECURE: Customer Presentation | Feb 2010

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Key Challenges faced by many Higher Value Customers transporting their products via Ocean Freight

Making sure higher value products are secure, both from theft & the elements Products in transit for longer period of time Not under as much direct supervision Greater value per container shipment

Making sure you have visibility of the container within your supply chain Due to longer transit and larger quantities knowing where the product is at any point in time can help your inventory management and in meeting customer & market demands (e.g. Customs) Being confident the product within the container is in good condition upon arrival

Combining the two above items means delivering a solution to your higher value products which offers greater levels of reliability but still enjoys the benefit of shipping via ocean

DHL OCEAN SECURE: Customer Presentation | Feb 2010

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Addressing the Key Challenges faced by Our Customers in Ocean Freight Transportation
DGF OFR offers a Premium Solution with Enhanced Benefits
Security Physical/Electronic Seal With a GPS container security device, you have the assurance of knowing real-time where and when your container was opened; with the option of a light intrusion sensor The mechanical bolt seal (LSb device) is ISO 17712 compliant pull strength Our Control Tower/Operations will initiate immediate corrective actions via the local security response team upon a security alert Visibility Near-to Real-time Monitoring with GPS fixes and Geo-fences On-Time arrival - only 53% of on-time port arrivals for container shipping1) Pro-active monitoring of shipping lines performance vis--vis published sailing schedules (e.g. visibility of vessels slow steaming/super-slow steaming) Better planning more visibility means faster corrective actions by DGF to meet end- toend transportation commitments to meet your or your customers needs & execute additional downstream planning if required Reliability Day Definite door-to-door Service More stringent SLAs with all players in the chain to offer you A money-back guarantee2) on DHLs OFR day-definite door-to-door service / selected lanes Shift from air to sea Air freight customers switching to ocean freight are demanding greater reliability at lower cost Better reliability means lower inventory holding costs and better reaction to customer and market demands
Source: 1) Drewery report 4Q 2007; DNV Impact Assessment Report October 2005; 2) Money-back is 2 times of the additional service fee paid by customer, terms and conditions apply

DHL OCEAN SECURE: Customer Presentation | Feb 2010

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Agenda

Key Challenges faced by Higher Value Customers DHL OCEAN SECURE - The Premium Value Proposition CSD Technology by Savi Networks 5 Building Blocks for the Solution & Operational Execution Conclusion

DHL OCEAN SECURE: Customer Presentation | Feb 2010

CONFIDENTIAL

Deutsche Post DHL | Page

DHL OCEAN SECURE

Our value proposition - One Product with 3 Service Levels supported by GPS-enabled container security devices (CSDs)
Service Level Service Description/Benefits
Enhanced Visibility and Security: near real time and e2e GPS tracking via GPRS network comms Near real time exception alerts, e.g. milestone delays or security breach of container Pro-actively monitor and respond to exception events along DTD milestones

Key Features
Global Positioning (GPS) Container Security Door Open Alert Near real time corrective action

CLASSIC

PREMIUM

In addition to the CLASSIC Service Environment Sensors: near real time exception alerts of temperature, humidity, shock and/or light variations (options are device specific) Dry van Containers Reefer Containers (future)

Temperature Monitoring Humidity Monitoring Shock/Light Exposures

TIMESURE

In addition to the PREMIUM Service Provide day definite service Offers 2-times money back guarantee (selected lanes & strict terms and conditions apply) in case promised date of delivery not fulfilled

Day Definite DTD Reliability

DHL OCEAN SECURE: Customer Presentation | Feb 2010

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Service Factsheet: CLASSIC and PREMIUM Services

Terms and Conditions

Valid for Danmar Lines controlled business only Service applicable to FCL dry van containers (require on-deck stowage) Service will be applicable to FCL Reefer containers in the near future Valid for all transport legs, e.g. D-T-D, D-T-P, P-T-D If central monitoring/reporting is required, the DHL OCEAN SECURE services must be supported by an existing DGF control tower or Central Ops team If central monitoring/reporting is not required, the DHL OCEAN SECURE services will be supported by individual DGF stations

1) E.g. temperature, humidity or shock sensitive

DHL OCEAN SECURE: Customer Presentation | Feb 2010

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Service Factsheet: TIMESURE Service

Terms and Conditions

Valid for Danmar Lines controlled business only Danmar controlled business (shipping with DGF selected carriers only, including customs brokerage) FCL containers only (on-deck stowage) Valid for transport legs: D-T-D, P-T-D NOT x-T-P, i.e. D-T-P or P-T-P Selected lanes only and subject to detailed analysis of the entire transportation lane The Timesure service must be carried out via an existing DGF control tower or a dedicated operations personnel/team of an individual DGF station Subject to the operational terms and rates of existing OFR named-account contracts with specific carriers Money back guarantee (2 times the additional service fee1) paid) if the DTD/PTD committed transit time is not fulfilled Top-load on vessel is not guaranteed Exclusions: Force majeure and other extenuating events beyond DGFs control

1) Service Fee = a fee per container paid in addition to the contracted/agreed OFR transportation rate.

DHL OCEAN SECURE: Customer Presentation | Feb 2010

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Agenda

Key Challenges faced by Higher Value Customers DHL OCEAN SECURE - The Premium Value Proposition CSD Technology by Savi Networks 5 Building Blocks for the Solution & Operational Execution Conclusion

DHL OCEAN SECURE: Customer Presentation | Feb 2010

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Container Security Device Technology (1/2)

2 types of GPS devices are available for standard dry van Containers

LS (Location + Security)

LSE (Location, Security + Environment)

Tag

Features

Global GPS coverage (on-deck stowage) GPS location fix frequency is configurable (default: 30 mins) Cellular communication (GPRS) with back-haul frequency configurable (default: 4 hours) Battery Capacity: 90 days all weather Security: mechanical barrier seal (ISO compliant pull strength) Alerts: immediately upon security events GPS accuracy: 85% of time within +/- 50 meters 98% of time within +/- 150 meters

Same as LS devices

Environmental sensors (inside) Temperature (resolution of 2 deg) Humidity (resolution of 2%) Shock/Vibration (resolution equal to a 1 inch drop) Alerts: immediately upon environmental events Optional: light intrusion sensor Mounting: C-clamp on left door
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DHL OCEAN SECURE: Customer Presentation | Feb 2010

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Container Security Device Technology (2/2)

Lock-Bar Mounting solution for reefer containers (under test)

DHL OCEAN SECURE: Customer Presentation | Feb 2010

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Agenda

Key Challenges faced by Higher Value Customers DHL OCEAN SECURE - The Premium Value Proposition CSD Technology by Savi Networks 5 Building Blocks for the Solution & Operational Execution Conclusion

DHL OCEAN SECURE: Customer Presentation | Feb 2010

CONFIDENTIAL

Deutsche Post DHL | Page 12

DHL OCEAN SECURE: Building Blocks of the Solution

The overall solution comprises a combination of processes (E2E supply chain mapping, pro-active monitoring) and tools (GPS device, Information system)
Processes
1 End-to-end SC1) mapping
HubHandling Ground Handling Customs clearance Port Handling Ocean Freight Port Handling Customs clearance Ground Handling Hub Handling

Elements of Innovative OFR Services

Pick-up

Delivery

2 Pro-active monitoring & response 3 Device-pool management & logistics Full device-pool management and maintenance with market-leading technology provider Via existing DGF Control Towers or Central Operations teams in OFR Stations

Tools
4 GPS Device and Communications via GPRS/GSM networks 5 Information System GeoView and web access

1) Supply Chain

DHL OCEAN SECURE: Customer Presentation | Feb 2010

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Full Shipment Transparency: Standard Milestones

11 standard milestones defined: Expected timings are mapped and monitored against near-to real time information from GPS security devices
Standard Milestone Events

Container loading @ customers warehouse

Actual customs declaration (update by operations)

Actual arrival @ origin ocean terminal

Actual vessel departure @ port of origin

Actual vessel arrival @ stopover/transshipment port

Actual vessel departure @ stopover/transshipment port

Actual arrival in 20 miles area @ destination port

Actual vessel arrival @ destination

Container discharged of vessel

Customs clearance @ destination (update by operations)

Actual POD

Source: DHL Global Forwarding

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Regular Status Report (Sample) by Savis Program Management

1

E2E Transportation Chain Mapping and Monitoring

6.5 Container Departed Origin Location 30-Jul 30-Jul 26-Aug 28-Aug 7 Container Arrived at Port-ofLoading 4-Aug 3-Aug 31-Aug 31-Aug 8 Export Customs Cleared 10 13(A) 15(A) 13(B) 15(B) 19 20 21 24 Import Customs Cleared Vessel Vessel Vessel Vessel Vessel has Arrived at Departed Vessel Arrived Vessel Arrived Port-ofat Port-of-Call Departed at Port-of-Call Departed Neared PortPort-ofContainer (Aqaba) Port-of-Call (Jebel Ali) Port-of-Call of-Discharge Discharge Discharged Loading 6-Aug 22-Aug 25-Aug 26-Aug 5-Aug 15-Aug 21-Aug 24-Aug 26-Aug 26-Aug 26-Aug 1-Sep 31-Aug 12-Sep 13-Sep

Container ID MSKU0569081 MSKU6846049 MRKU0420795

Timestamp Status Type |||||||||| Estimated Actual Estimated ||| Actual Estimated ||||| Actual Estimated Actual

The regular status report is distributed through emails.

DHL OCEAN SECURE: Customer Presentation | Feb 2010

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Pro-active Monitoring of Alerts & Timely Response

DGF Control Tower or Central Operations teams are enabled with GPS container tracking technology
TECHNOLOGY BACKBONE All services are supported with GPS devices for near-to real-time tracking Containers will be mounted with device on door for entire DTD journey Status updates incl. security alerts, location, environmental events will be transmitted via the GPRS (GSM) global communications network
Destination Origin
Pro-active Tracking and Exception Management Consist of existing DGF Control Towers or origin and destination personnel Receives exception notification and determines corrective actions Interacts with customer if necessary Web Server Configures devices and geo-fences Collects data from all devices Raises alerts in case of exceptions GPS Devices with GPRS Communications Determine position via GPS Sends data back via GPRS (mobile phone network) when in reach Monitors environment (e.g. temperature)

Current Limitations Container needs to be stowed on deck to keep GPS contact GPRS (GSM) connection1) only available in vicinity of shore (no CDMA: JP/KR)

1) For data upload into the web server

DHL OCEAN SECURE: Customer Presentation | Feb 2010

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GPRS Coverage Container Movement

Actual collected data shows that GPRS coverage, shown below in purple and green, has been excellent on land and has extended up to 20 miles (30 km) offshore.

Source: Savi Networks

US Snapshot CONFIDENTIAL
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DHL OCEAN SECURE: Customer Presentation | Feb 2010

GeoView of GPS Locations and Heartbeat Data

DHL OCEAN SECURE: Customer Presentation | Feb 2010

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Example:Temperature Graph Depiction

New data points are added for changes greater that 2C or 2% (not at a regular interval) Alerts are triggered when measurements exceed pre-set thresholds Full sensor histories are available in Excel format after shipment conclusion
Source: Team, Savi

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Agenda

Key Challenges faced by Higher Value Customers DHL OCEAN SECURE - The Premium Value Proposition CSD Technology by Savi Networks 5 Building Blocks for the Solution & Operational Execution Conclusion

DHL OCEAN SECURE: Customer Presentation | Feb 2010

CONFIDENTIAL

Deutsche Post DHL | Page 20

DHL OCEAN SECURE - Introductory Offer

OFR FCL is ready to perform (further) Proof of Concept trials with our existing customers to demonstrate benefits of new services

Offer valid until Q1 2010 Extended! Free customer trials (1st 20 customers) for up to 6 container security devices each Money back guarantee is not part of introductory offer

Key Criteria for Offer DANMAR controlled OFR business Minimum volume of 15 FCL containers per month D-T-D or P-T-D lanes only Existing control tower, central operations team or supply chain coordinators monitoring OFR shipments High value and/or highly sensitive cargo Subject to final approval by OFR Global FCL

DHL OCEAN SECURE: Customer Presentation | Feb 2010

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BACKUP

DHL OCEAN SECURE: Customer Presentation | Feb 2010

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Value proposition for Customers E2E Supply Chain

Independent studies have shown if customer can address transparency, reliability & lead time, savings can be achieved
Assumptions Average value per container is $100,000 Transportation cost on trans continental route is $ 2,000 Variability of lead time reduced +/-4 to +/-2 days and transparency increased Lead time reduced from 47 to 42 days Savings Potential from each Service for Customer
in $ per container 237
Safety stock Pipeline inventory Service charges Admin labor Pilferage & loss ALL FIGURES ARE ESTIMATES EXAMPLE STUDY

540

250 239 130 80

64

40 40 Reliability1) Transit time1) Total savings

Transparency1)

Source: DP DHL Inhouse Consulting; Based on study from Prof. Hau Lee Study for SST (Smart and Secure Tradelanes); 1) Effect distribution to Transparency, Reliability and Transit time estimated

DHL OCEAN SECURE: Customer Presentation | Feb 2010

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Shock Alerts The shock sensor reports a 0 unless it measures a force greater than 25x gravity (equivalent to a drop of ~3cm) SaviTrak displays shock measurements in the raw data sent from the sensor module Any shock reported by an LSE tag will add an environmental alert
This will send an email to users configured to receive them Alerts are also displayed in the Container Visibility & Event Management pages

Raw Data Impact Force Drop Height Impact Duration <55 63 86 112 130 149 >153 <25 G 32 G 55 G 81 G 98 G 117 G >120 G 1 in. 2 in. 3 in. 4 in. 5 in. Insignificant* 6.8 ms 5.5 ms 4.7 ms 4.3 ms 3.9 ms Extreme*

*sensor accuracy decreases beyond this point

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