Chassis Provision - A New Paradigm- Briefing to World Trade Association of Philadelphia February 16, 2011 Mike Wilson –

1. Chassis Provision - A New Paradigm- Briefing to World Trade Association of Philadelphia February 16, 2011 Mike Wilson – Senior Vice President Hamburg-Sud North America, Inc. Chairman, Consolidated Chassis Management LLC 1

2. Agenda Background OCEMA Assessment Options Industry Challenges Potential Solutions Next Steps

3. Background • Current U.S. chassis provision model has been in place for 50+ years • Ocean Carriers own or lease chassis • Ocean Carriers have provided chassis for customer use • Shipping & Intermodal Industry dependency on Ocean Carrier chassis

4. Approx. 675,000 chassis are actively used in the U.S. Up to 75,000 chassis are currently idle No international chassis are currently being manufactured Enough assets in the system to last until at least 2012

5. Over 80% of chassis are used for International 60% of the International Fleet owned by OC’s

6. U.S. is anomaly – In rest of world, motor carriers or others provide chassis, and terminals operate without chassis support. • In very few U.S. locations, e.g. Miami, the dominant model is motor carrier provided chassis. • System is evolving as some ocean carriers have individually decided to explore alternative approaches to provision of chassis. • The new model should result in improved asset management which, in turn, will result in lower costs and environmental benefits.

7. Spreading Interest • Various Ocean Carrier announcements • Limited scope of impact, today • Possible Operational Scenarios • Motor Carrier or BCO Provision • Port Based Pools • 3rd Party provision • Co-op Pools • Evolution of Chassis Provision • New Concepts are still “Evolving” • DCL - a New Paradigm in Chassis Provision • Major impact to all stakeholders • Requires due diligence

8. OCEMA Review • Ocean Carrier Equipment Management Association Inc. • 20 Top ocean carriers in the U.S. are members • Lead ocean carrier organization re: U.S. equipment issues (efficiency, safety, roadability related regulatory and other operational matters). • Agreement filed with FMC authorizing equipment related discussions • OCEMA formed Consolidated Chassis Management, LLC (“CCM”) for regional chassis pool solutions (2005 – present) based on demands from facility operators for improved efficiency and the need to reduce congestion

9. OCEMA is exploring best solutions with focus on: • Stable chassis supply – sufficient availability in network • Maintain service and efficiency levels • Compliance with safety & regulatory requirements • Active outreach to stakeholders > Shippers / Consignees > Railroads > Ports/Terminals > Chassis Leasing Companies > Motor Carriers *Individual ocean carriers will decide what approach to take based on OCEMA studies and each carrier’s operational & commercial considerations.

10. Basic Options for Chassis Provision 1. “As is” - Ocean carriers can continue to provide chassis 2. Third Party (Neutral) chassis providers provide chassis on daily basis or longer term leases. 3. Chassis Pools may be able to provide daily chassis 4. Motor Carriers can provide “owned” assets 5. Shipper & Consignees can provide “owned” assets

11. Challenges • Impact to Infrastructure • Rail and Ocean Terminals are more productive with the minimum number of chassis on their facilities as possible. • Terminal productivity is based on train & ship operation, not chassis storage. • Segregation of private chassis fleets on a terminal is operationally near impossible.

12. Grounded Terminals – allow flexible • chassis provision solutions: • Motor Carriers, Chassis Pools, • Ocean Carrier, BCO provided • Wheeled terminals – approximately • 80% of the rail terminals and many • ocean terminals in the U.S are • wheeled operations, requiring chassis • for terminal operations • For wheeled terminals, complex solutions are required. Moving from wheeled to grounded will take time and money • Infrastructure Development Costs (pads, tracks, etc) • Capital for Equipment (Lifts, RTG’s, etc.)

13. CCM Pools MWCP MCCP SACP DCCP GCCP • COCP

14. Current Co-op Pool Structure Co-operative Pools merge chassis fleets and share the costs & management Members benefits include • Repositioning savings – synergies of flows between multiple locations • Reduced stock requirements – offsetting alternating supply/demand • Improved M&R and management of assets • Risk Management – Insurance, safety & reliability Terminals’ benefits include • Single point of contact for stocks • Simplified M&R presence • Reduction in terminal footprint • Gray chassis efficiencies of terminal & vessel operation

15. Necessary Evolution of Co-op Pools • Objective is to establish a utility to allow: • Open access and market competition for chassis provision • Incorporate all stakeholder needs within one operational structure • Ocean carriers desiring a transition, “at their own pace”. • Include Co-op chassis pools’ gray fleet efficiencies • No disruption to service • The ability for the pool to inject / remove assets as needed • Operate at non-profit or near non-profit basis • * OCEMA has outlined changes to CCM and its co-op pools to provide a viable solution that addresses all stakeholders concerns.

16. CCM Pools – Paradigm Shift CCM POOL Lines No Longer Providing Chassis Hand Over Stock in Pool New Chassis Provider Chassis Provider Contributing /Using Line Interchanges /Rents to Truckers Interchange to Truckers Motor Carrier or User Rents to Lines Chassis Provider Motor Carrier LIMITED Using Line Interchange to Truckers

17. Conclusion & Next Steps • OCEMA carriers are overwhelmingly supportive of move to more efficient models and the CCM Inc. model for the complex regions. • Individual Location Studies • view the complexities • Involve stakeholders • Location by location • Individual carrier decisions based on their own commercial and operational considerations. • Chassis are not disappearing. The assets will stay in place – what changes is the process by which chassis are provided • Ocean Carriers may continue to announce their divorce from chassis provision in regional pockets • Continued expansion of Neutral Pool networks • Solutions will continue to evolve as complexities come to the surface. • Outreach will include solicitation of non-ocean carrier participation • Development of new processes and systems / technology adaptations