Introduction to APL Logistics

Confidential and Proprietary Information

Company Overview

• Top 10 container shipping line: 100+ vessel fleet 411,000+ containers 8 terminals

• US$5.96 billion in revenue (FY’05)

• 159 years of continuous operation

• Industry leader in innovation, reliability and service quality

• Global network serves 25,000 locations in 140 countries on 6 continents

APL: Containerised Transport & Terminals

• Global top 25 3PL

• US$1.29 billion in revenue (FY’05)

• 5,000 employees

• 260+ locations in 53 countries on 6 continents

• Leading provider of origin cargo management services in Asia

• 2.2 million m2 of logistics facilities globally (among largest in North America)

• Managing US$600+ million of purchased transport

APL Logistics: Logistics & Supply Chain Services

NOL at a Glance

• US$7.27 billion (FY’05) global transportation & logistics company

• Largest shipping / transport company listed on Singapore Stock Exchange

• Core business in Liner & Logistics

• Strategic focus on integrated supply chain solutions

Representative Customers

• Over 800 customers worldwide

Global Network and Principal Locations

United States of America

MexicoGuatemala

Dominican Republic

JamaicaEl Salvador

NicaraguaCosta Rica Columbia

Peru

ChileArgentina

UK & Ireland

Japan

South Africa

Madagascar

Mauritius

Australia

Egypt BahrainUAE

Thailand

Sri Lanka

Indonesia

MalaysiaSingapore

Philippines

TaiwanHong Kong

Korea

ChinaPakistan

IndiaSaipan

ItalyFrance

Turkey

Benelux

Germ

anyBrazil

Norway

Spain

Sw

eden Finland

Russia

PolandCzech Republic

Austria Romania

Hun

gary Bulgaria

GreecePortugal

CanadaEstoniaD

enm

ark

Europe Region

• Consolidation Services

• International Freight Management:

Ocean FCL and LCL

Customs Brokerage

• Intra-European Trucking and Intermodal Transportation

• Supply Chain Solutions

• Contract Logistics / Warehousing:

Dedicated & multi-user facilities

Manufacturing & distribution support

Capabilities Overview

• Origin Warehousing Services

• Consolidation Services (one of the largest consolidators of product from Asia)

• Vendor Management Services

• International Freight Management

• Rail Network:

JV with Concor to build and operate a CFS and CY in North India

• Customs Brokerage Services

Capabilities Overview

Asia/Middle East/Africa

• Consolidation Services

• International Freight Management

• Customs Brokerage

• Warehousing and Contract Logistics:

Dedicated & multi-user facilities

Manufacturing & distribution support

• VMI, merge in-transit, kitting, sequencing, light assembly:

Value added services Dedicated contract

carriage Freight management

• Automotive Logistics: Inbound to

manufacturing Finished vehicle

distribution

Capabilities Overview

North America

Latin America

• Deconsolidation & Distribution

• International Freight Management

• Warehousing & Distribution:

Market leader in Chile Operations in

Mexico, and Venezuela (JV), and Brazil (primary and agent)

• Cross-border Intermodal Services (NAFTA)

Capabilities Overview

Challenges in Operating Global Supply Chains

Sourcing Network Challenges• Dispersed vendors• Varying levels of infrastructure,

education, and technology • Few standardised processes• Difficulties of managing compliance • Impact of natural/political events

International Transportation Challenges Efficient routing and modal selection Managing lead times In-transit inventory visibility and manageability Freight and equipment optimization

Distribution Network Challenges• Asset intensive and increasingly

expensive to operate• Increasing complexity and more

demanding customers

Global Supply Chain Management Solutions

Information Management

Supply Chain Design and Programme Management

Origin Services

Consolidation Services

Ocean & Air FreightLand TransportationCustoms Brokerage

Documentation Management

WarehousingServices

TransportServices

VendorManagement

Services

Origin Cargo Management

International Freight

Management Destination Services

Leader in Origin Cargo ManagementServices Across Asia

• Strong process discipline through our Service Integrity programme

• Award winning operations

• High customer satisfaction measures

• IT innovation and expertise

First with PO tracking First with EDI ASN’s Certified factory scanning and

PO management solutions Leading web-based supply

chain management tools

Year-on-Year Increases in Consolidation Volumes

Vo

lum

e (

00

0 C

BM

s) Year

Mixing Hubs• Mixing hubs in Singapore and

Kaohsiung• Benefits similar to Single Country

Consolidation• Can eliminate LCL/20’s from smaller

origins• Cost effective handling in Mixing

Hubs• Transits comparable to FCL services• Mixing hub free time can provide

delay in transit options

Single Country Consolidation• Available at any APL Logistics

warehouse location• In conjunction with any ocean carrier

and charged at FCL box rate• Reduces amount of handling• Cost savings vs LCL, 20ft and

fully-laden 40ft containers• Improved Transit Time vs LCL

services• Single Master Bill of Lading• Reduced Documentation and

Customs entries• Fewer deliveries to distribution

centres

Consolidation Services

• Vendor Management Services ensure that products are delivered:

To the right specification

In the right quantities

At the right time

• Improves supply chain efficiency and reduces costs

• APL Logistics works with customers to significantly improve the management

and control of their vendors, and communication between all links in the

supply chain

Vendor Management Services

Vendor Management

Vendor Education Programmes

• APL Logistics meets with all vendors to quickly establish a clear understanding of logistics processes and procedures

• Promote a spirit of teamwork between all parties and creates open and seamless communications

• Between 1994 and 2005, APL Logistics conducted over 350 Vendor Education Programmes at all origins for over 20,000 vendors

Vendor Performance Reporting

• APL Logistics offers customers a comprehensive range of vendor performance reports based on agreed key performance indicators

• Specific deliverables measured can include: Timeliness of meeting shipment requests Container utilisation Delivery quantity deviations Accuracy of shipment advice reports

International Freight Management

• A ‘one-stop-shop’ of International Freight Management services delivering speed and flexibility, whatever the shipment size

• Services include: Ocean Freight

First and/or second tier carriers, depending on the customer’s requirements

Airfreight Priority access to major international carriers Consolidated billing, door/airport collections and time definite services

International Freight Management (cont’d…)

Land Transportation

LTL (less than full truck load), FTL (full truck load), intermodal,

barge and freight operations throughout Europe

Customs Brokerage

Import and export customs management services

Combined with other services, delivers gains in flexibility, reduced

costs and improved cycle times

Documentation Management

Including documentation scanning

• Warehousing Services, including: Site selection Deconsolidation Inbound order management, including cross-docking and barcode scanning Bonded warehousing in many countries Value-added services, including pick and pack, kitting, sub-assembly, merge-

in-transit order fulfilment and returns management

• Transport Services, including: Full and part load distribution services Intermodal road/rail/barge container and swapbody transportation Parcel and small package services Secondary distribution and delivery to point of sale

Destination Services

Warehouse Management Services

• Contract Warehousing, including: Dedicated and multi-user facilities Facility design and site selection

• Public Warehousing

• Manufacturing Support, including: VMI Kitting Sequencing Merge-in-transit Light assembly JIT delivery Dedicated contract carriage

• Distribution Support, including: Inspections and configuration Order fulfillment Delivery optimization Packaging and labeling

See Change – Global end-to-end supply chain visibility from origin to destination

Supply Chain Visibility with See Change

• Web-based

• Any shipment mode (ocean, air, land)

• Any delivery mode (CY, CFS, SDD)

• Any carrier (ocean, rail, truck, air)

• Single application and global data repository

• Customised searches and reports

• Provides an automatic way to monitor what should happen against what is happening

• Standard and user-defined alert notification

• Notification methods include web-based “dashboards”, email and paging

Multi-Mode, Multi-Carrier Visibility

Exception Detection

Why See Change?

Solutions with Visibility

For example, will alert:

• That the order of 600 products only booked 450

• Logistics Analyst when a shipment has not cleared customs

• Warehouse Manager the status of standing inventories, customer orders and deliveries

Solutions without Visibility

• Silos of information

• Manual tracking processes

• Missed delivery dates and dissatisfied customers

Order DataERP, store, vendor, purchasing

Shipment DataOcean, air, rail, truck

Inventory DataIn-transit, store,warehouse, distribution centre

ASN Toolkit

• An easy to use barcode and scanning solution that can be implemented at

vendor’s factories or facilities

• Provides internet enabled PO management

• Increases supply chain visibility and ensures ASN (advanced shipping

notification) compliance with accurate routing of POs, barcode information,

electronic packing lists and label printing

• Multiple file formats

Innovation - RFID

• APL Logistics offer customers a suite of RFID solutions

• Solutions delivered via flexible delivery strategies to enable customers to comply with mandates

• Benefits of RFID include:

Provision of real-time information

Increased response times allowing companies to react more quickly to

changes in demand

Increased competitiveness

eBooking

• Facilitates the better management of resources by replacing the need to fax

booking requests to APL Logistics’ offices

• A secure, web-based application enabling vendors to add booking data

directly into ACS123, our origin based operating system

• On receipt of the eBooking submission, a confirmation email is automatically

generated to confirm APL Logistics’ acceptance or rejection of the booking

• Improves data integrity by eliminating unnecessary re-entering of information

and also provides data validation and system checks

• Reduces total booking response time

o In December 2005 Christian Salvesen joined forces with APL Logistics to form Holistica Solutions Ltd on an equal joint venture basis

o Holistica was created in response to the growing market demand for end to end supply chain solutions through a single provider, and combines the extensive distribution network and capabilities of Christian Salvesen in Europe with the global reach and international freight services provided by APL Logistics

o Holistica dovetails these complimentary assets, skills and geographies by drawing on the resources of the parent businesses, whilst enabling its customers to operate a single contract that provides end-to-end logistics services and continual improvement in cost efficiency and end-user availability

o Through true end-to-end supply chain collaboration and optimisation, Holistica is able to provide benefits to customers that significantly exceed the sum of the two constituent parts provided by Christian Salvesen and APL Logistics respectively

Turnover $1.3billion

5 ,000 employees

269 sites

53 countries worldwide

More than 800 customers in four

major vertical markets:

Auto/Industrial, Consumer,

Electronics and Retail

Turnover $1.7 billion

13,000 employees

200 sites

6 countries in EuropeManaging outsourced supply chain

operations for Manufacturing and

Retail customers in the Industrial,

Consumer and Food sectors

50/50 Joint Venture

Management and Account Development

integrates the complimentary assets and capabilities of its two principal organisations, and connects its knowledge and expertise for supply chain optimisation through one single source

Vendor Management

Origin CargoManagement

Export Freight Management

International Freight

Import Handling & Port Clearance

InlandTransportation

Warehousing & Distribution

Delivery Management

Design, Operation and Continuous Improvement of End-to-End Supply

Chain PerformanceEnabled by single systems connectivity that provides end to end visibility, event

management, performance measurement and analytics for supply chain optimisation

Origin Services Purchase Order Management Vendor Compliance Quality Assurance Warehousing Vendor Managed Inventory Kitting/Packaging/Labeling Garments on Hangers Consolidation Multi Country Consolidation Local Drayage Terminal Handling Freight Management Export Documentation Courier Services

Destination Services DC Bypass Warehouse/DC Management Cross Dock Inspection/Configuration Packaging/Labeling VMI / Kitting Sequencing Light sub-assembly Storage/Pick/Pack/Despatch Final Delivery Fine Distribution JIT pickup/delivery Returns Management

Global Transportation Freight Forwarding Carrier Management Ocean, Air and Overland Full and Part Loads Intermodal Transport Deconsolidation Local Transportation Customs House Brokerage Freight Payment & Audit