APL UPDATE

Long Beach, March 2019

LONG BEACHMARCH 2019

APL UPDATE

APL UPDATE

Long Beach, March 2019

Forecasted

Demand +3.3%

Supply +3.2%

3.0%

4.1%

2.7%3.1%

-3.4%

8.7%

5.5%

2.1%

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

14%

16%

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2018 2019

% Y

oY

gro

wth

Supply Demand

Trans-Pacific market expected to remain robust in 2019

Source: PIERS, CTS for historical volumes

Alphaliner, Drewry Container Forecaster Q4 and APL

analysis for forecasted growth

2

FY YoY%

Demand +6.0%

Supply +7.0%

Trans-Pacific Supply & Demand YoY% Growth 2018-2019

Market showing restraint in capacity growth;

Option to further rationalize if demand weakens

Against an

exceptionally

high 2018 Q4

demand

“Beat the

Tariffs” rush

APL UPDATE

Long Beach, March 2019

Despite tariff war, China will remain a major US exporter

3

Source: PIERS/IHS Markit

100 5 15 20

China

India

Vietnam

Thailand

Indonesia

Exports from key Asia emerging countries

are nowhere near China’s scale today

47%

5%

3%

2%

2%

2018 share of

US imports

2016

2017

2018

YoY % growth

2016

2017

2018

2016

2017

2018

2016

2017

2018

2016

2017

2018

APL UPDATE

Long Beach, March 2019

Port volume surge:+17% YoY

in Dec 2018

Source : IHS Markit, 30 Jan 2019

LA-LB port congestion – an industry-wide issue

4

LA-LB is the most complex

port environment in the US:

• 12 container terminals

• Handles >16M TEUs p.a.

• 30,000 gate moves daily

‘Beat the tariffs’ rush: BCOs scramble to bring

inventory into US

34 extra loaders:Adding 250,000+ TEUs

Shippers

experienced:

• Full warehouses

• Local dwells up 3x

• Slower cargo availability

• Truck turns >90 mins

• Truck power shortage

• Chassis dislocation

• Rail connectivity issue

What happened in Q4 2018?

APL UPDATE

Long Beach, March 2019

Port volume surge:+17% YoY

in Dec 2019

Source : IHS Markit, 30 Jan 2019

5

LA-LB is the most complex

port environment in the US:

• 12 container terminals

• Handles >16M TEUs p.a.

• 30,000 gate moves daily

‘Beat the tariffs’ rush: BCOs scramble to bring

inventory into US

34 extra loaders:Adding 250,000+ TEUs

Shippers

experienced:

• Local dwells up 3x

• Chassis dislocated

• Lack of truck power

• Rail delays

What happened in Q4 2019?

FMS’ commitment

APL UPDATE

Long Beach, March 2019

EXX remains

>90% on-time

No appointment,

no queue;

25-min truck turn-time

via Bobtail gate

New off-dock express rail

service offers daily departures

and shaves ≥4 days’ transits

into key inland destinations

Guaranteed chassis

for local EXX

delivery, from APL-

dedicated pool

sidesteps the LA-LB congestion

6

99% local EXX cargo

on wheels and available

for pick-up within 12 hours

of vessel operation

APL UPDATE

Long Beach, March 20197

Choose EXX for its proven performance in speed, timeliness and service

99% 25minutes

WHEELED CARGOWithin 12 hours

of vessel dischargeCARGO PICKUPby trucks averaging*

from entry to exit at FMS terminal

*Average truck turn time via EXX-dedicated Bobtail gates

WHITE GLOVE SERVICEfrom dedicated APL team

throughout the journey

100% >90%

SPACE & EQUIPMENTavailability upon

booking confirmation

– no rolls

ON TIME11 days from Shanghai

12 days from Ningbo

Source: On-time performance based ion Seaintel’s Ocean Liner

Performance for Q4 2018; Others based on APL’s internal

analysis in Jan 2019 data.

APL UPDATE

Long Beach, March 2019

City

*Includes Ocean transit + 3 days dwell

Cuts ≥4 days of inland transits with

daily-departing express rail

8

Available for shipments sailing from Shanghai on 14 March onwards

APL UPDATE

Long Beach, March 2019

China-LTAM & Europe Sea-Air now viable with EXX

9

Halve all-sea transit time at a fraction of all-air freight cost

to Latin

America

via air

L.A.

Leverage APL-dedicated EXX’s

industry-leading transit, quick

availability and service for

seamless sea-air connection

to Europe

via air

11-day ocean transit from Shanghai12-day ocean transit from Ningbo

APL UPDATE

Long Beach, March 201910

Expanded to

all origins in Asia

Guaranteed

chassis from

APL’s dedicated

pool

Dedicated

bobtail gates for

swift pick-up

Instant

appointment

confirmation

LOS ANGELES - FMS

Specially reserved for dry 40’

containers on APL’s services:

• Eagle Express (EX1)

• South China 1 (SC1)

• Pendulum Loop 1 (PE1)

Cargo available on wheels

within 2 hours of discharge at L.A.

*Terms & Conditions apply

*

EXPRESS

ACCESS

SVC Vessel Voyage POL ETA POD ETA

EX1 President FD Roosevelt 0DB3NE1PL Qingdao, 7 Mar ’19 L.A., 24 Mar ’19

PE1 APL Detroit 0TU4ZE1PL Port Klang, 6 Mar ’19 L.A., 3 Apr ’19

SC1 CMA CGM Alaska 0TX2HE1PL Fuqing, 3 Mar ‘19 L.A., 23 Mar ‘19

Effective voyages:

NEW!

NEW!

APL UPDATE

Long Beach, March 2019

Project LIFT: Now in steady state

• Underlying platform proven robust for years

• Website interface upgraded to APL eBusiness, fully replacing the familiar HomePort

• New APL mobile app to be launched in 2 months

Oct – Dec 2018 Jan 2019

Parallel-run of legacy

and new systems

Running 100% on new &

improved

• Improved user familiarity

• Bugs, processes fixed

• Systems enhanced

EDI issues (customer cases): 3 open

Booking confirmation in 2 hours: 94.9%

Draft BL in 8 hours: 84.8%

BL accuracy: 98.4%

Issue resolution in 12 hours: 84.0%

Invoice dispute resolved in 7 days: 80.6%

Thanks to your support, and together

with the commitment of APL employees,

the most difficult period is now over

TODAY

11

Note: Figures are as of Week 7, 2019

APL UPDATE

Long Beach, March 2019

Sulfur Cap 2020: APL’s new BAF offers visibility

of fuel cost impact

12

=

FUEL PRICE

(Per Ton)

TRADE

COEFFICIENT

X

Revised formula makes the extent of fuel price changes on your total freight

rate in different trades more transparent and predictable

Fuel oil consumed (in ton)

per round voyage

per trade Total

number of

full TEUs carried

=3 months’ market average

historical fuel price* prior to

quarterly BAF quantum

announcement.

BAF

*Referencing IFO 380’s at:

40% Rotterdam

+ 50% Singapore

+ 10% HoustonTrade-specific quantum

revised and published quarterly.

Trade-relevant Low Sulphur Fuel surcharge

for ECAs will be applied on top of BAF.

Also known as Bunker

Surcharge (BSC) and Fuel

Adjustment Factor (FAF)

in some Trades.

Applicable for all contracts

with > 3-month duration

When APL starts switching over from regular to

low sulphur fuel in 2019, fuel reference and index

will be updated and announced accordingly.

APL UPDATE

Long Beach, March 2019

THANK YOU