Ferries

1. P& 175 years Ferries Freight

2. 175 years About us • One of Europe’s leading ferry operators • Serving the transport industry for 175 years • 8 routes (Channel, North Sea & Irish Sea) • 11 port operation centres • 7 dedicated freight booking-offices • 21 vessel fleet • Freight & multipurpose vessels • Strategic and reliable times and services

3. About us • A customer “relationship” approach • Excellent operational and back-office support • 2011 1,9 million freight units carried • 2011 – freight revenue £300 million+ • 2011 – newest and largest ever ferry on Dover/Calais the Spirit of Britain • 2012 – delivery of sister ship the Spirit of France • Over 5,000 freight customers in 15 countries

4. Dover - Calais • FREIGHT & PASSENGERS • Crossing Time • 90 minutes • Frequency • Up to 60 sailings per day • Dwell Time in Port • Average 45 minutes • Fleet • Spirit of Britain • Spirit of France (2012) • Pride of Calais • Pride of Kent • Pride of Canterbury • Pride of Burgundy • European Seaway

5. Tilbury - Zeebrugge • FREIGHT ONLY • Crossing Time • 8 hours • Frequency • 20 sailings per week • Fleet • Norstream • Norqueen • P&O’s newest freight route. • Zero to 130,000 unaccompanied freight movements per annum in less than 4 years • Rail handling available in Zeebrugge

6. Route • Europoort – Hull • FREIGHT & PAX • Duration • 10 hours • Frequency • Daily • Fleet • Pride of Hull • Pride of Rotterdam • Route • Zeebrugge – Hull • FREIGHT & PAX • Duration • 12 hours • Frequency • Daily • Fleet • Pride of York • Pride of Bruges • Route • Europoort – Teesport • FREIGHT ONLY • Duration • 16 hours • Frequency • 3 per week • Fleet • Norsky • Route • Zeebrugge – Teesport • FREIGHT ONLY • Duration • 16 hours • Frequency • 3 per week • Fleet • Boresong North Sea

7. Route • Dublin – Liverpool • Duration • 7 hours 30 mins • Frequency • 3 per day Fleet • Norbay • Norbank • Endeavour • Route • Cairnryan – Larne • Duration • 1 hours 45 mins • Frequency • 7 per day • Fleet • E. Highlander • E. Causeway • Route • Troon – Larne • Duration • 2 hours • Frequency • 2 per day • Fleet • Express (high speed craft) Pax and small Vans May till September Irish Sea

8. P&O Route Network Troon

9. NORTH SEA SECTOR CHALLENGES • Surplus capacity in most sectors STENA, COBELFRET, DFDS and a number of Lo Lo operators • All operators / routes suffer from a profitability / viability problem • Fuel regulations (Green for the sake of Green……. The Low Sulphur folly within the E.U.) • Covert or even overt state subsidies (yesterday Sea France, DFDS on Rosyth, Brittany Ferries / LD Lines and now My Ferry Link …. how many more) • Expansion of Direct Rail services via the TGV network / Channel Tunnel • Mileage / Duration linked Motorway Tolls in most if not all E.U. countries. Expected UK 2015 • Possible scrapping of Marco Polo and M O S funding for new projects due to austerity pressures on all European Governments

10. LOW SULPHUR LEGISLATION 2015 The P&O Ferries fuel bill has risen from £90m in 2007 to £125m estimate for 2012 The low Sulphur impact on the North Sea will impact customer rates by 10% to 30% based on current estimates – assuming we can even source enough of it We estimate 20% of all North Sea sector volumes could migrate to shorter crossings as Fuel less impact. Various University studies see 10 – 30% volume migration Not necessarily a North Sea haulier re routing but a commodity switch via a low cost Short Sea haulier Will it happen 2015? Will there be an exemption for older tonnage? Retro fit of scrubber technology even if proven is not always possible Whilst currently LNG rates are more economical that bunker fuel, demand will increase prices. Also bunkering via delivery vessels not available – could take 10 years to ensure a smooth supply? ARMAGEDDON – mass job losses and route closures

11. The Short Sea Market Growth will continue Market growth has dropped in the last 12 months from 5% per annum to 1.4% Growth in the main is NOT organic but migrated contracts and volumes

12. The North Sea Market Very limited data available on North Sea Freight Routes, P&O and Stena Killingholme and Harwich routes.

13. GROWTH IN THE NORTH EAST The market in the North East is very different to the South East with a higher % of carryings being lift units. North Sea market is chemical, plastics, paint, steel, automotive and supermarket related . The South East does not have the variety of exports so imports tend to be direct consumer related products –supermarket / fashion / beverages. Exports detergents, paper, steel. Current Scottish Ro Ro market is circa 20,000 units per annum, a market that has seen a massive decline We have seen an unaccompanied volume contraction in the North East region resulting in a reduced capacity offering. Some contracts are being re routed via the Short Sea or via Self Drives on the North sea. The NE industry went through a period of prolonged shut down however the green shoots of growth are now starting to appear. There are a number of opportunities on the horizon

14. THE ROLE OF RO RO ON THE NORTH SEA Right sizing a route – single engine single screw ships with a Scrubber combined with stacking across 3 decks can compete effectively against all comers Flexibility Frequency Capacity – Trailers / Self Drives / lift units of all types / loose cargo / new cars / maafi shipments of steel and forest products to name but a few No milk runs and no ‘Slow Boat to China’. Customer prefer to utilise mega Port hubs within an established route network Ability to interchange ships within a route network to reduce ship downtime and to flex capacity and frequency Mileage savings for the unaccompanied customer – Eastern European operators do benefit from a lower cost base (salaries / fuel / overheads) Ro Ro is here to stay - not sure in what form and on which routes at this stage

15. 175 P& Ferries Years Young