Centre Operation EMR Warranty

Centre Operation EMR Warranty April 2012 Warranty from Reefer Unit / Genset repairs

Centre Operation EMR – Warranty Perspective • What has Warranty and recoveries from Warranty to do with Back to Black? • Maersk Line loosing the equivalent of 7m usd per day (4th quarter 2011) • Total annual raised warranty amounts to 6m usd (2011 full year) • Hereof 4m USD realized recoveries • Shortfall of 2m USD full year contra 7m usd loss per day? Warranty from Reefer Unit / Genset repairs

Centre Operation EMR – Warranty Perspective • What has Warranty and recoveries from Warranty to do with Back to Black? • Is the answer then nothing? • Not entirely. The per day generated loss of 7m USD originates from something, not a standalone single spend, but from various sources. • Add the various sources – small and large – triggers the current loss. • Increasing awareness around our Warranty procedure and thereby increase our ability to recover adds to the many sources that will lead to ‘Back to Black’. Warranty from Reefer Unit / Genset repairs

Centre Operation EMR – Warranty Agenda • Process Walkthrough • Warranty SOP walkthrough • Warranty Status Tracker • AoB Warranty from Reefer Unit / Genset repairs

Centre Operation EMR – Warranty Process Steps • Weekly / Monthly Warranty claims filed (based completed MERC+ Workorder) • Reefer Unit manufactures to review and comment back with status and / or action if required (e.g. Parts to be returned / inspected, picture and/or data downloads to be submitted, error description / alarm codes to be advised etc) • Warranty Status file updated and follow up with Local country EMR if required • Repair Shop / Local Country EMR to follow up on pending (suspended) Warranty claims (if any) and provide feedback (email to GSC or update to Warranty Status file) • In case of rejected Warranty claims due to repair shops lack of compliance, local country EMR need to ensure recoveries (through reimbursement) from repair shop. Warranty from Reefer Unit / Genset repairs

Centre Operation EMR – Warranty Process Flow End Manufactures Warranty Accepted – Settlement Part and Labour 4 Stock Order / Stock Delivery Billing / Payment Warranty Claim (from MERC+ Workorder) 2 Reefer Unit Manufactories 3 Warranty Status Feedback DC Warranty Status (email / team site) GSC 3 Warranty Status Follow Up 3 3 Pictures / Downloads Return Part Local EMR Repair Shop 1 Damage Reporting (via MERC+) Repair Settlement – Part and Labour (via FACT) 3 Warranty Status Follow Up Reimburse Shop – None Compliance (Manual Invoice/FACT PO) 4 Warranty from Reefer Unit / Genset repairs

Centre Operation EMR – Warranty Process Flow Review Status file Review Status file Inform Repair shop Reimburse From Shop Estimate approval Workorder Completion Local EMR Repair Shops Deliver Docu- mentation / Parts Repair execution MERC+ Estimate Payment Weekly / Monthly Warranty Update Status file Update Status file Invoice And Posting GSC Process Warranty Claims Status Update Final Status Manufactures Payment Warranty from Reefer Unit / Genset repairs

Centre Operation EMR – Warranty Process Timelines Time Activity • For selected repair shop, Monday each week unit warranty claims will be raised • All other Warranty claims (Unit, Part, Genset) will be raised by the 10th of each month for the previous month repair • By latest end of each month, all reefer unit manufactures will provide feedback to the raised warranty claims. • By latest the end of each month the Warranty Status file will be updated for previous month repairs. • Typical lead-time from the point of updating the Warranty Status file to delivery of outstanding (picture, downloads, return parts etc) is one month. Unit repair and MERC+ WO completion Month 1 Unit, Genset, Part Warranty claimed on Repairs month 1 10th in Month 2 Status obtained By Daikin, Carrier, Starcool, TK end Month 2 Delivery of required Data / Parts etc as requested end Month 3 Closing Warranty Claims from Month 1 begining Month 4 Warranty from Reefer Unit / Genset repairs

Centre Operation EMR – Warranty Reefer Unit Manufactures SOP With Maersk Line’s reefer unit manufactures (Daikin, Starcool, Carrier and ThermoKing) Warranty agreements have been made. Different manufactures = different agreements Common is a Unit / Genset Warranty Common is a Part Warranty (subsequent to the Unit Warranty duration) Variation exists however on both parts and durations Warranty from Reefer Unit / Genset repairs

Centre Operation EMR – Warranty Reefer Unit Manufactures SOP The various SOP’s and guidelines can be found under the ‘Warranty Management’ team site. Link: http://maerskline.apmoller.net/operations/CENOPS%20Inland,%20Terminals%20and%20Equipment/Equipment/Centre%20Equipment%20MNR/GLBEQUMER_Reefer/Warranty_Management/Pages/default.aspx Example of Starcool’s Warranty SOP Warranty from Reefer Unit / Genset repairs

Centre Operation EMR – Warranty Process GAP Review Status file Review Status file Inform Repair shop Reimburse From Shop Estimate approval Workorder Completion Local EMR Repair Shops Deliver Docu- mentation / Parts Repair execution MERC+ Estimate Payment Weekly / Monthly Warranty Update Status file Update Status file Invoice And Posting GSC Process Warranty Claims Status Update Final Status Manufactures Payment Warranty from Reefer Unit / Genset repairs

Centre Operation EMR – Warranty Process GAP Repair Shops Deliver Documentation / Parts Warranty from Reefer Unit / Genset repairs

Centre Operation EMR – Warranty Process GAP Deliver Documentation / Parts Repair Shops and what is the magnitude? • Missing or improper Repair Shop responses to Reefer Unit Manufactures request for documentation resulting in rejected warranty claims • Missing return parts from Repair Shop to Starcool’s Distribution Centre network resulting in rejected warranty claims • From January to June 2011 total 600.000 usd of raised Warranties has been rejected • For the month of November 2011 raised warranties, 80.000 usd has been rejected Warranty from Reefer Unit / Genset repairs

Centre Operation EMR – Warranty Warranty Status Tracker Process Step 3: ‘Warranty Status file updated and follow up with Local country EMR if required’ The file is available on the ‘Warranty Management’ team site, link: http://maerskline.apmoller.net/operations/CENOPS%20Inland,%20Terminals%20and%20Equipment/Equipment/Centre%20Equipment%20MNR/GLBEQUMER_Reefer/Warranty_Management/Pages/default.aspx Warranty from Reefer Unit / Genset repairs

Centre Operation EMR – Warranty Process Improvements How to avoid a relative ’late’ follow up after repair completion and reduce risk of having to reimburse repair shops in the event of none compliance? • Repair Shops are duly informed around Warranty requirements and during Unit repair are providing the necessary documentation in the form of • Correctly updated MERC+ Workorder (serial number if required, damage code, etc) • Pictures (when required reference SOP’s) • Data Downloads (when required reference SOP’s) • Error description (in MERC+ remarks field) • Alarm Codes (in MERC+ remarks field) • Tag relevant parts • Store or return Parts (as required reference SOP’s) Reducing or eliminating a subsequent follow up will not only lead to improved Warranty recoveries from our Unit manufactures but will moreover serve (timewise) both us and the repair shops. Warranty from Reefer Unit / Genset repairs

Centre Operation EMR – Warranty Question Time • FAQ from session. • Q.: Who will pay the vendor (repair shops) for the additional requirement (admin/transportation of return parts/storage)? • A.: The requirements of storing parts, tagging parts, picture documentation, data download, return parts, etc. is not new and therefore not an additional requirement. • The cost associated to the Warranty requirement is covered under the provision of a part Mark-Up (Shop type 1 and 3) Warranty from Reefer Unit / Genset repairs

Centre Operation EMR – Warranty Question Time • FAQ from session. • Q.: How to reimburse from repair shop and will GSC help creating invoices? • A.: The requirement to reimburse from repair shop will then be applicable if a rejected Warranty has been recorded as a result of repair shops not delivering according to our SOP’s. • The details as to whom and what to invoice (reimburse) for will be available in the Warranty Status Tracker file. • Invoicing requirements will follow local needs and will not be supported by our GSC team handling Warranty claims as it is considered an exception handling. • In FACT a reverse (negative) Purchase Order will have to be created, also according to local procedure. GSC will be able to support that process upon request. • The material code to use is RMXX-RC9995 (name: Warranty M&R). • A regular (monthly) follow up (using BW) will be performed by GSC to monitor recoveries from rejected warranty claims. Warranty from Reefer Unit / Genset repairs

Centre Operation EMR Warranty