Transportation Opportunities & Challenges

3rd Annual India Trade Conference

David Noe – VP Sales, Marketing & Customer Support

Brief India Overview

India Growth Sectors

APL India Overview

India Ports, CFS and ICD locations

Innovation:

Questions & Answers

Presentation Overview

India’s power as a major international player in services, manufacturing and exports continues to grow

With improved per capita Gross Domestic Product, the consumer markets in India continue to expand dramatically

Opportunities for importers and exporters continue to diversify – and the ocean carrier and logistics community is well positioned to greet the expansion

APL has had a presence in India for decades and we are a major service innovator -

High Level Points of Interest

Welcome to India

ChennaiChennai

New DelhiNew Delhi

MumbaiMumbai KolkataKolkata

Lotus TempleLotus Temple

Taj MahalTaj Mahal

Second fastest growing economy in the world.

GDP growth has consistently been close to 9% over the last 3 years and even during the current crisis still managed a healthy 6% growth.

Large domestic market and is less dependent on export markets which form less than 15% of India’s GDP.

APL was the pioneer in introducing containerisation in India way back in 1973.

We continue to be a leading carrier in the Transpacific and Intra Asia trades to and from India.

Second fastest growing economy in the world.

GDP growth has consistently been close to 9% over the last 3 years and even during the current crisis still managed a healthy 6% growth.

Large domestic market and is less dependent on export markets which form less than 15% of India’s GDP.

APL was the pioneer in introducing containerisation in India way back in 1973.

We continue to be a leading carrier in the Transpacific and Intra Asia trades to and from India.

3rd Largest Economy in the World by 2032

In terms of GDP, India will overtake: Italy by 2016 France by 2019 UK by 2022 Germany by 2023 Japan by 2032

SOURCE IMA

India's GDP

0.7 12

3

6

10

27

0

5

10

15

20

25

30

2005 2011 2020 2025 2032 2038 2050

Year

(In

US

$ t

ril

lio

n)

GDP

India – Growth Sectors & Industries

Textiles/Garments Contributes US$21 billion – 12% of exports and 14% of industrial production Employs over 35 million and targeted to create 15 million new jobs by 2015 Projected investment in next 5 years is US$30B and India allows 100% FDI in textiles Garment exports to USA at US$2.8B while to EU zone at US$6B Yuan appreciation to benefit Indian exporters

Sources: AEPC, FICCI

Automobiles & Auto Parts

Source : SIAM

White Goods/Home Appliances

Estimated market size of $40 Billion and projected average growth rate of 20% through 2012

Replacement cycle of 9-12 years is now down to 4-5 years

Direct Tax Code expected to spur consumer demand

Rural market accounts for 40% and growing faster than Urban demand

Foreign brands dominate over 70% of Indian Home Appliances market – huge import/export opportunity

Source : Assocham, IBEF

10

APL India Overview

10

Mumbai

Nagpur

Marmagoa

Mangalore

Cochin

Ahmedabad

Kandla

New Delhi

Ludhiana

Jaipur

Jodhpur

Loni

Kathmandu

Kanpur

Indore

Veraval

Kolkatta

Pune

Vizag

Hyderabad

Bangalore

Tuticorin

APL OFFICES IN INDIA

Global Perspective – APL Network

• 5th largest export country in 2010

• 3rd largest import country in 2010

Exports in FEUs      

Country 2,008 2,009 YTD P5,2010

USA 422,736 360,925 166,415

N. CHINA 357,300 325,219 158,090

S. CHINA 307,867 285,429 140,411

JAPAN 126,640 106,163 61,035

INDIA 119,350 105,441 53,450

Total 2,461,381 2,287,971 1,126,127

Imports in FEUs      

Country 2,008 2,009 YTD P5,2010

USA 562,385 492,376 242,647

INDIA 119,077 125,624 56,748

JAPAN 120,310 120,146 65,924

UAE 126,059 113,943 51,410

N. CHINA 83,736 94,439 54,088

Total 2,461,381 2,287,971 1,126,127

13

Ports & Inland ICD

13

Indian Port Overview

•Haldia

•JNPT

•Chennai

•Mumbai

•Murmagao

•New Mangalore

•Cochin

•Tuticorin

•Mundra

•Kolkatta

•Vishakapatnam

•Kandla

MUMBAI/NHAVASHEVA 4,163

CHENNAI 1,187

MUNDRA 840

TUTICORIN 455

MUMBAI 219

COCHIN 185

KANDLA 181

KOLKATTA 308

HALDIA 147

PIPAVAV 195

VISHAKAPATNAM 65

MURMAGOA 10

NEW MANGALORE 25

Volumes in thousands of TEUs for 2008

ICDs & CFSs

An ICD (Inland Container Depot) or CFS (Container Freight Station) may be defined as a common user facility offering services for handling and temporary storage of import/export laden and empty containers carried under Customs control and with Customs and other Agencies competent to clear goods. Generally:

An ICD is located in the interior of the country away from the gateway port, whereas,

A CFS is an off dock facility located near the gateway port which helps in decongesting the port by shifting cargo and customs related activities outside the port area.

The inbound containers need to move from ports to CFSs from where they are delivered.

Customs permit direct delivery from port CY, only to ACP (Accredited Customer Programme) customers.

FUNCTIONS OF ICDs/CFSs

Receipt and dispatch/delivery of cargo

Stuffing and stripping of containers

Customs clearance

Transit operations by rail/road to and from gateway ports

Consolidation and desegregation of LCL cargo.

Temporary storage of cargo and containers

Reworking of containers

Maintenance and repair of container units.

Nhavasheva

Jodhpur

Ludhiana

Moradabad

Kanpur

Delhi

Jaipur

Panipat LONI

- Location- Ports

North India ICD locations

•Mundra

Colombo

Tirupur

Bangalore

HyderabadVishakapatnam

Chennai

Mangalore

Cochin

Tuticorin

- Location- Ports

South India ICD locations

BiratnagarBirganj

Kathmandu

Kolkata

Haldia

- Location- Ports

East India ICD locations

Guwahti

Operational and Financial Summary

CFS (Port)

CFS nominated by APL

Ctr moved by CFS to depot

Customs Clearance at CFS

Storage and LoLo charged direct to consignee by CFS

Continued growth expected as the Indian economy expands

ICD (Inland)

Movement by rail controlled by APL for Imports. For exports can be either APL or shipper. Tax implications.

Customs Clearance at ICD

Storage and LoLo charged direct to consignee by ICD

Even more impressive growth as the network expands to meet demand

20

INDIALINX : Overview on Rail service

20

Why APL Developed

Extension of APL’s Liner service: Given the infrastructural constraints in India, it is critical to have control over choke points to ensure delivery certainties.

Improved Reliability for our Customers: APL has greater asset and operational control – making customers better able to plan and work their supply chains including Indian manufacturing capabilities.

Rail Movement Critical for north-Indian Hinterland

• Ports on the west coast handle around 70% of India’s container traffic.

• North Indian hinterland contributes to about 75% of the containers moving through Indian ports.

• Avg. distance covered by a container on the north-west corridor is 1300 km.

• Transportation by rail expected to grow to from current level of 1.8 million to 5 million TEUs by 2015.

Tuticorin

VIZAGNava Sheva

Mundra

Pipavav

Future Network and volumes (2015): Organic Growth

•Tuticorin

•VIZAG•Nava Sheva

•Mundra

•Pipavav

LONI

ACTL

LUDHIANA

RUDRAPUR

NAGPUR

HYDERABAD

Kalamboli

KOLKATA

INDORE

CHENNAI

COCHIN

Kandla

PANIPAT

Trains : 23

Rail Volumes: 217,000 Teus International : 88% Domestic: 12%

APL IndiaLinx – A New Industry Standard for Many Carriers

Hapag-Lloyd

NYK

OOCL

Evergreen

HMM

UASC

MOL

Emirates

K-Line

Yang Ming

Thank You!