Key Issues in Trade Logistics

June 7, 2010

22

Customs Holds are the Key Challenge

• 20% of Destination Countries Hold Over 50% of All Imported Shipments

• 50% of Destination Countries Hold Over 25% of All imported Shipments

• On an average month, Over 1.5 million Express Carrier Shipments Are Held by Customs Administrations and Lose Service to Customers

33

Global Customs Priorities to Improve Flow of Products

• Balance Between Security, Trade Facilitation, (and in Some Cases Revenue Collection)

• Simplification of Border Regulations and Procedures

• Leverage Use of Automation and Technology Capabilities

• Reduction in Use of Paperwork

• Increase Exemptions for Low Value Shipments and Entry Limits

• Global Consistency

44

Barriers to Eliminating Use of Paper

• General Acceptance of Electronic Formats

• Definition of Pro Forma Invoice

• Acceptance of Imaged Documents

• What Constitutes Original Signature

• Limited Number of Countries Accept Paperless Documents

• Export/Import Requirements Not in Sync

55

II Tier Issues And Opportunities Impacting Global Trade Logistics

• Other Government Agency Clearances (As Applicable)

• Intellectual Property Rights Enforcement (IPR)

• Consumer Product Safety

• Account Based Management Program

• Trusted Importer Programs

66

Challenges to Improve and Comply With New Security Standards

• Data Elements Required for the Advance Transmission of Shipment Data

• Time Requirements for the Advanced Transmission of Data

• Mutual recognition of security programs (AEO, PIP, C-TPAT)

• Expansion of Security Programs to Other Modes of Transportation

• Considerations for Service Providers/Companies Who do More Than Required

77

Sustainability – Going Green Global Strategy

Social Responsibility

Environmental Stewardship

Economic Prosperity

Help Improve theHuman Condition

Help Protect the Environment

Help Strengthenthe Enterprise

Act Responsibly

Deliver“Green” Services

Operate Efficiently

Reduce, Reuse, Recycle

Lead by Example

Conserve Energy Protect Natural

Resources

Promote Wellness and Safety

Embrace Diversity

and Human Rights

Grow BusinessProfitably

Develop People

Build the Brand

Provide CompetitiveCompensation

Support Communities

Support Global Trade

Provide Value-Added Solutions

Focus on Customers

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(Source: World Resource Institute GHG Protocol)

* Metric Tonne-Kilometer is equal to one (1) metric tonne of freight moving the distance of one (1) kilometer

Intermodal Strategy Benefits

AIR

0.570*TRACTOR TRAILER

0.072*RAIL

0.020*

SHIP

0.010*

kg of CO2 per Metric Tonne-Kilometer*

99

Act Responsibly: Reduce, Reuse, Recycle

Reducing our environmental impact and increasing our efficiency

• Solid waste recycling — metals, plastics, paper, cardboard and pallets

• Electronics and battery recycling

• Strategic use of remanufactured parts and products containing recycled materials

• Extensive use of retreaded tires

• Paperless DIAD used in 49 countries

• Use of Hybrid, Natural gas, and Electric Vehicles