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Rolf Altorfer President & CEO North America Kuehne + Nagel, Jersey City, NJ

Rolf Altorfer President & CEO North America Kuehne + Nagel, Jersey City, NJ. International Trade Supply & Demand. Limitations (i.e. Seafreight) Possible Consequences. Who We Are & What We Do. Non-asset based company More than 830 offices worldwide, 85 in the US

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Rolf Altorfer President & CEO North America Kuehne + Nagel, Jersey City, NJ

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  1. Rolf Altorfer President & CEO North America Kuehne + Nagel, Jersey City, NJ

  2. International TradeSupply & Demand • Limitations (i.e. Seafreight) • Possible Consequences

  3. Who We Are & What We Do • Non-asset based company • More than 830 offices worldwide, 85 in the US • One of the largest global logistics providers • Seafreight, airfreight, contract logistics and supply chain services • Competitors: • DHL, Deutsche Post, Expeditoors, Panalpina, Nippon Express, Maersk Logistics

  4. Our Customers Additional 4,000 smaller customers

  5. Our Seafreight Partners All asset-based steamship lines and carriers: • NOL • Evergreen • Yang Ming • APL • Hanjin • OOCL • Cosco Maersk/Sealand Maersk Hapag-Lloyd, CMA MSC Hamburg Sud Zim The number of lines has diminished by 40% over the past 10 years due to consolidation of the industry

  6. MS Emma Maersk – Capacity: 11,000 – 15,000 TEU

  7. Suezmax (2006) Post-Panmax (1994*) 3rd - 4th Generation (1972) 1st-2nd Generation (1968) Market DevelopmentContainer vessels doubled in size during the last decade Development of Container Vessel Size * First Post-Panmax already in 1988

  8. Glossary • TEU: Twenty foot equivalent unit • FEU: Forty foot equivalent unit • CFR: Cost of goods and freight • Seller’s TEUs, seller owns goods to arrival point/port • FOB: Free on Board • Buyer’s TEUs, buyer owns goods or loaded on ship and pays freight

  9. World Container Traffic Millions TEU

  10. Asia-Europe-Asia Trade Volume Rates TEU’s Volume in Millions Eastbound: 6M Europe Asia Westbound: 15M Asia Europe Intra Asia: 34M All Directions

  11. Asia-USA-Asia Trade Volume Rates TEU Volume in Millions Pacific: Eastbound 22M Asia North America Pacific: Westbound 6M North America Asia Atlantic: Eastbound 2M Westbound: 5M

  12. Port of Singapore • 12% of global container capacity is laid up! • 17-18M TEU capacity • Approximately 200 ships of all types and sizes

  13. Supply & Demand potentially ineffective under certain economic conditions • Load factors: insufficient levels • i.e. Asia/Europe, lay-ups – reduce capacity • Imbalance of trade • There is a cost for positioning equipment/containers • Consolidation of the carrier industry will increase the leverage of carriers to influence price/cost

  14. Higher costs for consumers may result despite of ample carrier capacity (incl. idle) because: • Higher base rates from carriers and/or capacity • Present rates provide insufficient revenue levels. Carriers may lay up more ships or go out of business • Higher inventory, costs of goods due to fewer services and frequencies • Customer dissatisfaction, late deliveries may result in loss of business • In addition to shipping costs, other incremental costs linked to the supply chain affect goods ultimately reaching the consumer.

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