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Andy Gillespie Global Director Transportation

Global Ocean Program at Ansell How we operate in the current market. Andy Gillespie Global Director Transportation. September 2010. International Commerce Club Secaucus, NJ September 15, 2010. Introduction to Ansell Ocean Program Current Market Ansell & Current Market.

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Andy Gillespie Global Director Transportation

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  1. Global Ocean Program at Ansell How we operate in the current market. Andy Gillespie Global Director Transportation September 2010

  2. International Commerce ClubSecaucus, NJSeptember 15, 2010 Introduction to Ansell Ocean Program Current Market Ansell & Current Market

  3. ANSELL LimitedAustralian company headquartered in USAAnnual sales $1.1 B Consumer Products Professional Healthcare Professional Healthcare Occupational Healthcare Global growing organically & through acquisitions and develop new markets Section 1 -Overview

  4. Ansell Global Footprint North China – 6 Central & West China – 11 South China – 10 Current owned Factories Outsourced Manufacturing Current Ansell Warehousing 45% Korea – 3 Taiwan - 2 45% Malaysia – 13 Thailand – 6 Indonesia – 3 Sri Lanka – 3 India – 3 USA/Mex – 5 Brazil - 1 10% 4

  5. Global Logistics Strategy Visibility Reliability Velocity Cost Control • Vision • Create a fully integrated, optimized physical flow with end to end visibility. Prerequisite for world class customer relationship management • Longer Term • Create an integrated, end to end, transport management program 5

  6. Ansell Initiative Single Sourcing Global Logistics GLOBAL LOGISTICS PROVIDER (GLP) Single source –”One Throat to Choke” All providers under one GLP Integrated processes Standardized SOPs Continuous improvement Strong Executive Engagement P O R T P O R T Lots of touch points INTERNATIONAL TRANSPORATION Common to multi-source providers • Transactional • Local focus • Limited information • Lack standards • Regulations _ • Very Fragmented • Delays common • Many touches • Limited visibility • Hand off mentality • __ • “Umbrella” of control/visibility • Access to specialist skill sets • Creative Solutions • Experienced dedicated teams • Competitive, cost effective SOLUTION: ONE PROVIDER Arrive Charlotte DC Arrive Savannah Port Arrival at Shanghai Port Haulage To DC Shipper Books Container Clear Customs /FDA Off load Ship Container Loaded Ship departs Shanghai Loaded on truck DESTINATION Charlotte DC Arrive day 40 31 BROKER 35 36 38 -14 -4 -2 0 40 SHIPPER Export FWDG Ocean transit 35 days 12+ parties involved with moving ocean shipments and documents. Many delays caused.

  7. Shared Ocean Solutions Program (SOS) BCO vs NVO Chose NVO solution – UTi Worldwide Single Source Door to Door “Cost Plus” Open Book Carrier Management Shared knowledge / intelligence Single System Ansell approves routings, allocations, rates, fees Regular RFQ Process - by Trade Control Towers CEO support Negatives- cuts into BCO benefits, flexibility & relationships

  8. SOS Objectives • Build long term value: • strategic alliances • sharing knowledge • developing efficiencies • providing value • full transparency Integrated Supply Chain focus !!

  9. Benchmarking the Market Trade Publications - JOC, Containerization, Analysis Services - Drewry, Alphaliner Trade Conferences - TPM, NITL, Colleagues – other shippers Spot Quotes – forwarders & carriers UTI Ocean Regional input Determine Next Strategy Trends Contract Validity Assessorial, fees and fun RFP strategy development Ansell Process

  10. Market • A-Market Update • Container Shortages • Chassis Rentals • Higher Volumes • Higher Rate levels • More or Less Capacity ? • New Ship Builds • Slower Steaming • Better Financials from Ocean Carriers. B- Ansell Update Benchmark of Ansell rates vs market - how are we doing compared to how we should be doing? Forecast of where rates are likely to be headed over the next 6 & 12 months Capacity forecast/market for now, the next 6 months and any areas of concern? Future SOS negotiations - when and what will we do?

  11. Market SLOW STEAMING The ‘ hidden costs ‘ to manufacturers Table 2: Trans-Pacific In-transit Inventory Costs as a Function of Carrier Speed Hong Kong to Long Beach Vessel Speed (knots) TransitTime (approx. days)In-transit Inventory Cost (Annual) 26 10 $138,888.89 22 12 $166,666.67 19 14 $194,444.44 17 16 $222,222.22 15 18 $250,000.00 13.5 20 $277,777.78 Data Interpolated with equation from: http://www.ifw-net.com/freightpubs/ifw/opinion/understanding-the-impact-of-slow-steaming/20017748957.htm Data source USMMA

  12. USEC Deployment Plans: Carriers planning additions of many 7,500 TEU Asia/USEC service by 2012. Possibility of 35-60 ships +7,500 TEU routinely calling the USEC by the end of 2012. Two carriers considering 10,000 TEU services. Market Big Ships Matter: For the Ocean Carriers: • 3-Foot of draft = 300 fully-loaded 40-foot containers. • 52 Sailings per year on a weekly sailing. • Assume only 300 FEU. 52 x 300 = 15,600 containers. (in & out) • Average import & export rate of $2,000 per box. $60 M + in potential revenue for that extra 3 feet of water!

  13. Market Projection where rates on TPEB will be by end 2011

  14. Trans Pacific Validity – April 30; 50% single carrier, validity Oct 31 Rate trends - slightly downward currently Capacity - good Issue - address single carrier Do we request extension or RFQ to others? Asia-Europe, Asia APAC & Intra Asia Validity - Dec 31 Rate trends - slight downward & flat Capacity - good Proposed Full RFQ Set up timeline Teams propose carriers for RFQ Leadership – decide on format / location for negotiations Set expectations Assign negotiation team members from both Ansell/UTI team approach to market

  15. Conclusion Global Logistics Strategy - Integrated process One Throat to Choke. Joint Ocean Solution QUESTIONS / DISCUSSION

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