Market Outlook for the Trans-Pacific Trade

1. Market Outlook for the Trans-Pacific Trade 11th Annual Trans-Pacific Maritime Conference Long Beach, CA March. 7th. 2011

2. Looking back 2010 ▣ Carriers Need • Volume recovery • Re-deployment of assets (vessels) • Financially viable • Cost – Effective service ▣ Shippers need • On - time delivery • Space Availability • Service Sustainability • Predictability / Stability

3. Trans pacific E/B Trade Growth(YOY) Demand/Net Capacity: Drewry 4Q 10 Utilization: TSA Data

4. Moving forward in 2011

5. Annual Global Container Capacity Growth Source:Alphaliner

6. 2011 Market Outlook Vessel Supply : Clarkson +6.6% Drewry +8.5% TSA +8-9% Alphaliner +8.8% global (+14% Transpacific)HJS (Research) (+7.3% Transpacific) Cargo Demand : NRF-Global Insight +6% (average for first half 2011) JOC-PIERS +7-8% TSA +7-8% Alphaliner +8% Drewry +6.1%

7. 2011 U.S. Economy Outlook ▣ U.S. Economic Indicators • Forecast GDP growth : 3.5% (2011 4th Quarter) • 2011 unemployment at 8.6% • 4.4% growth in consumer spending (+21.6% durable goods, +7.6% in nondurables) • Sharp drawdown in Q4 inventories points to replenishment • Inflation remains near 2% through the end of 2011 • Consumers remain deeply pessimistic but lessthan during the recession

8. Supply Forecast Consideration “ Eastbound growth across Pacific could be as high as 15~20% year on year in some Months during 2011.(Lloyds List, Mar 2, 2011) Peak to Peak : +7.3% Source: Alphaliner (Until 2011 Feburary), HJS Research Team (From 2011 March ~)

9. Some Other Considerations • Supply/demand equation will not significantly deteriorate and thus the pressure on freight is not warranted nor necessary. • Higher analyst forecasts often assume/miscalculate final destinations of new vessels; strong demand for the larger ships on other trades other than two east west trades. • Equipment availability will be a factor in determiningeffective capacity; container manufacturing in China has not fully recovered mainly due to continuing laborshortage.

10. Major Cost Factors in 2011

11. Bunker Cost Trend - 2010 Average Price : $476/MT - 2011 Current Price : $641/MT Assumption : 2Million MT /Year Extra Cost : + $330Mil. / Year Every $10 increase : + $20Mil/Year Assumption: 3Million MT/Year Extra Cost: + $495Mil. /Year Every + $10 increase : + $30Mil. / Year *Assumption based on carrier size 0.4Mil~0.6Mil in operation Source: Platts Oilgram The above data is the average price of ports; USWTI,SGSIN,JPOSA,CNHKGNLQTM,KRPUS,USLGB,USNYC “ It’s not quite 2008 again, but heads up : After two years of relative stability, transportation fuel prices are creeping back up, raising costs across the supply chain (JOC, Jan 31, 2011) “Oil rose in New York, headed for its biggest weekly gain in two years, as violence in Libya cut supplies from Africa’s third-biggest producer and signs of an improving U.S. economy prompted speculation demand may rise.” - (Bloomberg, Feb 25,2011)

12. What is expected in 2011 ▣ Peak Demand closer to equilibrium with Supply ▣ Cost increase within supply chain continues ▣ Service lane fine tuning with better origin / destination mix ▣ ‘Freight rates’ at compensatory level and Bunker Recovery ▣ 2010 = ‘Recovery’  2011 beyond = ‘Stability’

13. Shipper / Carrier Outreach and Engagement ▣ TSA/ WTSA Shippers Advisory Board • Opportunity for candid, confidential senior – level discussions • Focus on exchange of views, problem solving, best practices • Existing regulatory environment provides the platform ▣ Other Activities • Industry wide forums • FMC, USDA pilot programs • Suggestions from Shippers welcome !

14. “We don’t always know what’s going to happen”

15. “The only deal worth doing is a win-win deal”

16. Thank You