Danish Export Association

DSV Air & Sea A/S - DenmarkCoronavirus (COVID-19) | 200227

Todays presentationWhat can you expect?

Our view on the situation and how can you minimize the impact to your business

Todays presentationWhat can you expect?

Disclaimer:

• This is the situation right now and it can change any minute

• Escalation of the situation in Europe has not be taken into consideration

• Our presentation is made to cover the majority of your needs and there can be customer specific cases

which will be different than this.

• We represent DSV Air & Sea Denmark

• Presentation is made 26th of February 2020

Our view on the situation and how can you minimize the impact to your business

Agenda

1. DSV Air & Sea

2. Current situation

3. Supply chain challenges

4. Potential solutions

5. Outlook (seen from DSV Air & Sea Denmark perspective)

BBB+Credit rating (S&P Global Ratings)

DSV PanalpinaFourth largest global freight forwarder

Committed to being responsible

Hedehusene, DenmarkHeadquarters

Nasdaq CopenhagenNo majority shareholder – 100% free float

Guided by

UN Global Compact & SDG(Sustainable Development Goals)

One company – three divisionsGlobal operations DSV Panalpina

60,000Employees

1,400Offices and logistics

facilities

Air & SeaA global network

RoadOverland transport

in Europe, North

America and South

Africa

SolutionsContract logistics

services worldwide

+80Countries

A Strong Presence

• Established in China in 2001 (since 1995 with rep office)

• 1,100 dedicated employees (A+S: 850, Solutions: 250)

• More than 41 locations, branch offices (16) and warehouse facilities (25)

Market leading position

• Moving more than 120.000 ton of air freight annually

• Shipping more than 300.000 TEU annually

• 120,000 m2 of warehouse facilities across China

Expanded services & solutions

• Air & Sea – global network

• Project – oversize shipments & turn-key

• Road – overland transport on four continents

• Solutions – contract logistics services worldwide

• Rail – connecting China & Europe

A strong business partner

• Financial stability with annual revenue of CNY 3.2 billion (USD 500 million) in 2016

DSV ChinaNorth & Central

North & Central China

South China

DSV in DenmarkLocations

Aalborg

GrenaaAarhus

Road

Air & Sea

Solutions

Projects

Horsens

Hedensted

Esbjerg

OdenseTaulovTaastrup

Hedehusene

Oem

Agenda

1. DSV Air & Sea

2. Current situation

3. Supply chain challenges

4. Potential solutions

5. Outlook (seen from DSV Air & Sea Denmark perspective)

8

DSV Update | DSV Re-opening Date Office open status

Business unit / Branch Open

Closed

until? DSV staff back to office?Region

Central Shanghai Open - Balance office / home

Central Fuzhou Limited - Working Remotely / Home

Central Nanjing Open - Balance office / home

Central Ningbo Limited - Majority working from home

Central Suzhou Open - Balance office / home

Central Wuhan Closed Mar 11th Majority working from home

Central Wuxi Limited - Majority working from home

Central Xiamen Limited - Working Remotely / Home

North Beijing Open - Balance office / home

North Dalian Open - Balance office / home

North Qingdao Open - Balance office / home

North Shenyang Limited - Majority working from home

North Tianjin Limited - Majority working from home

North Xi'an Limited - Majority working from home

West Chengdu Limited - Majority working from home

West Chongqing Limited - Majority working from home

South Guangzhou Open - Balance office / home

South Shenzhen Open - Balance office / home

South Zhongshan Open - Balance office / home

South Hong Kong Open - Balance office / home

South Macau Open - Balance office / home

Several city and provincial governments have either

announced (A) an official extension to the current closure of

business, or (B) on a local basis implemented regulations

that will limit the number of employees allowed to be

actively working in offices. These regulations should apply

across all business sectors, involving a range of clients,

shippers and vendors alike.

As a result, a majority of DSV China mainland locations

inclusive Shanghai will operate this week with limited

staffing and remaining employees working remotely

from home. A number of cities are still closed for business,

and consequently DSV offices in these cities will be closed,

with employees working remotely from home, until

otherwise advised. For South China offices, Hong Kong,

Macau and Guangzhou are operating normally with

staff on roster. For the colleagues that work in our offices,

health & safety is our highest priority. In line with our BCP

preparations all offices operate under strict adherence to

government regulations and DSV safety measures.

DSV Update |Oversea KOREA

Country Branch

Korea Seoul Normal No (but high risk) No (but high risk) No No No

Korea Busan Normal No (but high risk) No (but high risk) No No No

Korea Incheon Normal No (but high risk) No (but high risk) No No No

Air - Flight restriction? Customs restrictions? Warehouse restriction? Trucking restrictions?Operation Status Ocean - Vessel restriction?

▪ US raised warning level to 3 for Korea recommending

avoiding nonessential travel to the country. It is same warning

level for China.

▪ There is high risk on possible restrictions and DSV KR has

been.

▪ DSV will closely monitor the situation and keep you updated

of the potential impact to cargo from/to KR.

DSV Update | Market Update AIR

Note: Direct capacity only; All freighters and widebody passenger aircraft only, mainland China excludes Hong Kong; Date measured in UTC time; 1) Indicative week of Spring Festival, following Chinese New

Year; 2) US Centers for Disease Control and Prevention; Source: Seabury Capacity Tracking database, Seabury Consulting analysis (February 2020)

Worldwide belly cargo capacity reduction remains limited to Asian flights

Flight cancellations in the last two weeks have

reduced available cargo capacity by 40%

compared to last year, equalling a 75,000

tonnes decrease each way

Flight cancellations have removed in excess of 6,000 tonnes capacity per day

DSV Update | Market Update Ocean

➢ Between 21% to 63 % capacity removed from Asia to North Europe.

➢ Asia – Northern Europe 750,000 TEU removed over a seven-week period.

➢ Utilization on the vessels “remains low”.

➢ Heavy impact on export of Europe

➢ Blank Sailing to M.E. & APAC

➢ Lack of equipment to all trades

➢ Port Congestions in EU ports

Vessels from mainland China

DSV Update | Operational Situation Customs, Ports, Terminals

February 17TH Ocean Air Rail

Customs authorities Normal Normal

Normal

Ocean & airports, rail

terminals

Ningbo, Shanghai and Tianjin terminal reports full

reefer yard (no more plugs)

Nanjing terminal dangerous goods terminal is full

Rest Ports operating fairly normal

Cargo terminals operating, but many

cancellations

Some terminals operating, access to trucking

limited

WarehousesShanghai LCL warehouse ,Pick up needs to be

arranged with 24h notice

PVG import warehouse, Suzhou warehouse

are congested.

Xi'an, Hefei and Zhengzhou, restricting entry of

trucks

DSV Update | Operational Situation Customs, Ports, Terminals

February 17TH Ocean Air Rail

Customs authorities Normal Normal

Normal

Ocean & airports, rail

terminals

Ningbo, Shanghai and Tianjin terminal reports full

reefer yard (no more plugs)

Nanjing terminal dangerous goods terminal is full

Rest Ports operating fairly normal

Cargo terminals operating, but many

cancellations

Some terminals operating, access to trucking

limited

WarehousesShanghai LCL warehouse ,Pick up needs to be

arranged with 24h notice

PVG import warehouse, Suzhou warehouse

are congested.

Xi'an, Hefei and Zhengzhou, restricting entry of

trucks

DSV Update | Operational Situation Customs, Ports, Terminals

February 17TH Ocean Air Rail

Customs authorities Normal Normal

Normal

Ocean & airports, rail

terminals

Ningbo, Shanghai and Tianjin terminal reports full

reefer yard (no more plugs)

Nanjing terminal dangerous goods terminal is full

Rest Ports operating fairly normal

Cargo terminals operating, but many

cancellations

Some terminals operating, access to trucking

limited

WarehousesShanghai LCL warehouse ,Pick up needs to be

arranged with 24h notice

PVG import warehouse, Suzhou warehouse

are congested.

Xi'an, Hefei and Zhengzhou, restricting entry of

trucks

DSV Update | Operational Situation Domestic Trucking

Overall, It is slowly getting

back to normal. Still, some

areas in China where cross

provincial service is not possible.

Xi’an, very limited trucking

capacity for LCL pick up and FTL

delivery

: update of Feb 25

Agenda

1. DSV Air & Sea

2. Current situation

3. Supply chain challenges

4. Potential solutions

5. Outlook (seen from DSV Air & Sea Denmark perspective)

17

Supply chain challengesCoronavirus (COVID-19)

Labor and supply shortages in factories

Slows the restart of factory operations

Public health requirements

Domestic provincial border checks

Supply from and to Vietnam and Hong Kong

Labor shortage causes congestion at airports and seaport

Limited air and rail cargo capacity

Blank sailings reduce ocean freight capacity out of China

Possible global supply chains impact

21

Agenda

1. DSV Air & Sea

2. Current situation

3. Supply chain challenges

4. Potential solutions

5. Outlook (seen from DSV Air & Sea Denmark perspective)

19

DSV Update | Market Update RAIL Connect CN and EU

Eastbound

: update of Feb 25

Environmental impactReliabilityLead time optimizationFlexibility Cost vs. Time

DSV New Charter AIR

DSV secured the slot-times to operate its full freighter airplane

(747-8) between China and its Charter network Hub in Huntsville,

AL –USA 3 times a week, Eastbound and Westbound.

This solution will secure 100% DSV controlled capacity and DSV

ground handling at an uncongested airports

Contact your local DSV Account Manger for a quote to get

your shipment on the DSV Charter network!

Space is limited and bookings are accepted from now on.

DSV Oriental Dixie

Newly installed airbridge connect Shanghai and Huntsville(US) starting February 26th, 2020

Sea-AirFar East via Dubai

22

Agenda

1. DSV Air & Sea

2. Current situation

3. Supply chain challenges

4. Potential solutions

5. Outlook (seen from DSV Air & Sea Denmark perspective)

23

DSV Update | Operational Situation Outlook Carrier, Capacity

February 19TH Ocean Air Rail

Carrier cancellations

For blank sailing please check with DSV account manager

to share further details. Maersk issued internal notice to

extend work from home arrangement in China until end of

Feb. ONE & Hamburg Sud offices in China except Wuhan

would resume on 17 Feb.

Increasing number of cancellations, impacting both PAX

& freighter. Please refer to the detailed summary in above

slides. .

Hefei, next available departure is Mar 1.

Suzhou, next available departure is Mar 10.

Zhengzhou, no schedule in Feb, since Mar, only one departure per week

till further announcement

Due to rail platform departure schedule adjustment, the earliest available

own CN-DE rail CCS ETD has been deferred to Feb.20.

Carrier Capacity outlookAt the current stage not critical. Expect the situation

to change next week

Very little demand in this week. However, the situation could

become more critical once China resumes working

The capacity is currently affected by several train cancellations and might

become an issue once China resumes working

Trucking capacities

Cross provincial transport of freight will be a challenge

in the period to come, and in certain areas also impact

outside of city limits transportation. We are working with our

core partners to secure needed capacities, while this will

come with possible limitations and prioritization of cargo.

For Pearl River Delta, pick up is still available. LTL truck

service is expected to resume after 18 Feb for location out

of Guangdong province.

SHA area pick up still available.

There is no major impact on the important PVG to CGO routing.

Overall, It is slowly getting back to normal. Still, some areas

in China where cross provincial service is not possible

Xi'an, Hefei and Zhengzhou restricting entry of trucks

Outlook next 14 dayswe expect a strong surgency once shippers in China go

officially back to work

we expect a strong surgency once shippers in China go officially

back to work

Import capacity is critical at the moment.

Besides YIWU Eastbound and Wuhan, space from/to other departure

terminal can be case by case checked

DSV Update | Operational Situation Outlook Carrier, Capacity

February 19TH Ocean Air Rail

Carrier cancellations

For blank sailing please check with DSV account manager

to share further details. Maersk issued internal notice to

extend work from home arrangement in China until end of

Feb. ONE & Hamburg Sud offices in China except Wuhan

would resume on 17 Feb.

Increasing number of cancellations, impacting both PAX

& freighter. Please refer to the detailed summary in above

slides. .

Hefei, next available departure is Mar 1.

Suzhou, next available departure is Mar 10.

Zhengzhou, no schedule in Feb, since Mar, only one departure per week

till further announcement

Due to rail platform departure schedule adjustment, the earliest available

own CN-DE rail CCS ETD has been deferred to Feb.20.

Carrier Capacity outlookAt the current stage not critical. Expect the situation

to change next week

Very little demand in this week. However, the situation could

become more critical once China resumes working

The capacity is currently affected by several train cancellations and might

become an issue once China resumes working

Trucking capacities

Cross provincial transport of freight will be a challenge

in the period to come, and in certain areas also impact

outside of city limits transportation. We are working with our

core partners to secure needed capacities, while this will

come with possible limitations and prioritization of cargo.

For Pearl River Delta, pick up is still available. LTL truck

service is expected to resume after 18 Feb for location out

of Guangdong province.

SHA area pick up still available.

There is no major impact on the important PVG to CGO routing.

Overall, It is slowly getting back to normal. Still, some areas

in China where cross provincial service is not possible

Xi'an, Hefei and Zhengzhou restricting entry of trucks

Outlook next 14 dayswe expect a strong surgency once shippers in China go

officially back to work

we expect a strong surgency once shippers in China go officially

back to work

Import capacity is critical at the moment.

Besides YIWU Eastbound and Wuhan, space from/to other departure

terminal can be case by case checked

DSV Update | Operational Situation Outlook Carrier, Capacity

February 19TH Ocean Air Rail

Carrier cancellations

For blank sailing please check with DSV account manager

to share further details. Maersk issued internal notice to

extend work from home arrangement in China until end of

Feb. ONE & Hamburg Sud offices in China except Wuhan

would resume on 17 Feb.

Increasing number of cancellations, impacting both PAX

& freighter. Please refer to the detailed summary in above

slides. .

Hefei, next available departure is Mar 1.

Suzhou, next available departure is Mar 10.

Zhengzhou, no schedule in Feb, since Mar, only one departure per week

till further announcement

Due to rail platform departure schedule adjustment, the earliest available

own CN-DE rail CCS ETD has been deferred to Feb.20.

Carrier Capacity outlookAt the current stage not critical. Expect the situation

to change next week

Very little demand in this week. However, the situation could

become more critical once China resumes working

The capacity is currently affected by several train cancellations and might

become an issue once China resumes working

Trucking capacities

Cross provincial transport of freight will be a challenge

in the period to come, and in certain areas also impact

outside of city limits transportation. We are working with our

core partners to secure needed capacities, while this will

come with possible limitations and prioritization of cargo.

For Pearl River Delta, pick up is still available. LTL truck

service is expected to resume after 18 Feb for location out

of Guangdong province.

SHA area pick up still available.

There is no major impact on the important PVG to CGO routing.

Overall, It is slowly getting back to normal. Still, some areas

in China where cross provincial service is not possible

Xi'an, Hefei and Zhengzhou restricting entry of trucks

Outlook next 14 dayswe expect a strong surgency once shippers in China go

officially back to work

we expect a strong surgency once shippers in China go officially

back to work

Import capacity is critical at the moment.

Besides YIWU Eastbound and Wuhan, space from/to other departure

terminal can be case by case checked

Contacts

Country Denmark Denmark ChinaContacts Keld Søgaard

Strategic Account Manager & Trade Lane

Manager

Jesper Petersen

Director Commercial, Air & Sea

Denmark

Morten Vassard

Director, Trade Lane

Development China

Mobile +45 25 41 60 10 + 45 24 77 92 55 +86 181 2120 2202

E-mail: keld.m.soegaard@dk.dsv.com jesper.petersen@dk.dsv.com Morten.vassard@cn.dsv.com

DSV Air & Sea Co. Ltd. (HQ)9F, Raffles City Changning Office Tower 3

No. 1193 Changning Road

Shanghai, 200051

P.R. China

Tel: +86 21 3325 9800

www.cn.dsv.com

Thank You

谢谢