Energy Issues and the Impacts on

Freight Transportation-

Jo Frigger

Global Economy Requires Global Transportation

Cost of Transportation Increases with Cost of Fuel

USAGasoline US$ 3.20Diesel US$ 3.30

EuropeGasoline US$ 6.30Diesel US$ 5.30

ChinaGasoline US$ 1.90Diesel US$ 1.15

ChileGasoline US$ 4.55Diesel US$ 3.20

Global Average Fuel Cost(Price per Gallon)

Jet Fuel(Price per Gallon)

New YorkUS$ 2.14

SingaporeUS$ 1.95

Anticipated Increase from 2005 to 200644%

Anticipated Cost Increase for all Air Carriers WorldwideUS$ 20 Billion

Air Cargo Fuel Surcharges

2005January US$ 0.30 per KgMay US$ 0.40 per Kg

2006 January US$ 0.50 per KgMay US$ 0.60 per Kg

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2005 2006

JFK / FRA – May 2005 Freight Rate US$ 0.45 per Kg (45.0 %)Fuel Surcharge US$ 0.40 per Kg (40.0 %)Security Surcharge US$ 0.15 per Kg (15.0 %)Total Cost US$ 1.00 per Kg (100 %)

JFK / FRA – May 2006 Freight Rate US$ 0.45 per Kg (37.5 %)Fuel Surcharge US$ 0.60 per Kg (50.0 %)Security Surcharge US$ 0.15 per Kg (12.5 %)Total Cost US$ 1.20 per Kg (100 %)

(20% increase from 2005)

Average Air Freight Rate(1000 Kg)

HKG / LAX – May 2005Freight Rate US$ 2.50 per Kg (82.0 %)Fuel Surcharge US$ 0.40 per Kg (13.0 %)Security Surcharge US$ 0.15 per Kg ( 5.0 %)Total Cost US$ 3.05 per Kg (100 %)

HKG / LAX – May 2006 Freight Rate US$ 2.50 per Kg (77.0 %)Fuel Surcharge US$ 0.60 per Kg (18.0 %)Security Surcharge US$ 0.15 per Kg ( 5.0 %)Total Cost US$ 3.25 per Kg (100 %)

(6.5% increase from 2005)

Average Air Freight Rate(1000 Kg)

Antwerp – New York | Jan – Mar 200640’ Container US$ 1,200.00 (59.0 %)Bunker Surcharge US$ 846.00 (41.0 %)Total Cost US$ 2,046.00 (100 %)

Antwerp – New York | Apr – Jun 200640’ Container US$ 1,200.00 (58.0 %)Bunker Surcharge US$ 872.00 (42.0 %)Total Cost US$ 2,072.00 (100 %)

Average Ocean Freight Rate

Hong Kong – Long Beach | Jan – Mar 200640’ Container US$ 1,800.00 (75.0 %)Bunker Surcharge US$ 590.00 (25.0 %)Total US$ 2,300.00 (100 %)

Hong Kong – Long Beach | Apr – Jun 200640’ Container US$ 2,250.00 (78.0 %)Bunker Surcharge US$ 635.00 (22.0 %)Total US$ 2,885.00 (100 %)

Average Ocean Freight Rate

Conclusion

• Transportation and Fossil Fuel

• Conservation

• Renewable Sources of Energy

Thank You for Your Attention

-Questions?