Global Market Insights

"This update contains information we have gathered from various public sources and share with you to the best of our knowledge, but we cannot guarantee it is complete or in all cases accurate. Moreover, the market is changing rapidly currently; statements in this document may quickly be superseded, despite our best efforts. Nothing in this document can be taken as a contractual undertaking.”

February 25, 2021

2/25/2021

Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.© 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.

Join Supply Chain Virtual Connecthosted by UPS Supply Chain Solutions

2/25/2021

Welcome to our first UPS SCS virtual conference covering the latest trends and strategy in today's global supply chains.

We have a great line-up of supply chain topics that you don't want to miss out on, including updates on COVID Vaccine Logistics, the Future of Forwarding, Hot Topics in Trade and more.

Register Today

The first 1,000 people to sign up and submit their mailing address before February 20, 2021 will be shipped free UPS Swag!

Wednesday, March 10, 2021, 1PM-5PM (EST)

Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.© 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.

Number of confirmed COVID-19 cases reported as of February, 24th

The coronavirus pandemic is ebbing in some of the countries that were hit hard early on, and the number of new cases has steadily declined since early January.

2/25/2021

"This presentation contains information we have gathered from various public sources including reference materials, webinars and share with you to the best of our knowledge, but we cannot guarantee it is complete or in all cases accurate. Moreover, the market is changing rapidly currently; statements in this document may quickly be superseded, despite our best efforts. Nothing in this document can be taken as a contractual undertaking.”

*The New York Times

2/25/2021

Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.© 2020 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color dark brown tone are trademarks of United Parcel Service of America, Inc. All rights reserved.

Global air cargo capacity declined 13% in the last two weeks compared to last year

2/25/2021

Most trade lanes showing double digit decline compared to the last year. Transatlantic at -29% & LATAM at -52% decline.

Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.© 2020 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color dark brown tone are trademarks of United Parcel Service of America, Inc. All rights reserved.

UPS Supply Chain Solutions

Stay Informed

• Register to receive important communications from UPS

• Find the latest information on Air Freight Capacity Surcharges

• Track shipment status through UPS Flex Global View®

• International Air Transport Association (IATA) – iata.org

• World Health Organization (WHO) – who.int

2/25/2021

Our highest priority is to protect the health and safety of our employees, customers, and suppliers. UPS® is confident it can do so while maintaining

global operations, except where constrained by government restrictions or other circumstances beyond its control. The Novel Coronavirus

pandemic has created unprecedented complexities, which have required us to constantly reassess our operations and take mitigating actions to

minimize disruption to our customers.

Consider cost-effective multi-modal alternatives to traditional air freight

Asia to North America

Asia to Mexico

Europe to North America

North America to Europe

ISMEA to North America

Book a Shipment Online

Book now at ups.com/supplychain

Customer First. People Led. Innovation Driven.

Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.© 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved. 2/25/2021

Brexit Updates

Source: *Seabury ; CNBC; today.com

Market Updates*

• Border situation stable

• Ro-Ro traffic at 98% of February levels

• 80-90% trucks are arriving “border-ready”

• UK fashion houses hit out at post-Brexit 'hidden costs' for EU customers

• As per Port Boulogne Calais chairman Jean-Marc Puissesseau the phasing-in of

additional UK border checks will be “smooth”

• Now only 12% of trucks coming from the UK are being asked to park and go

through additional checks, with another 3% of freight volumes coming via

ferry being subject to customs controls compared to 45% in January .”

UPS Updates

• UPS SCS is working without constraints

• Comprehensive guidelines for importers and exporters available on

ups.com

• EU/UK Trade & Cooperation Agreement (TCA)

• UK Brexit Guidence

This update contains information we have gathered from various public sources and share with you to the best of our knowledge, but we cannot guarantee it is complete or in all cases accurate. Moreover, the market is changing rapidly currently; statements in this document may quickly be superseded, despite our best efforts. Nothing in this document can be taken as a contractual undertaking.”

Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.© 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved. 2/25/2021

Frankfurt Airport Situation

Current Situation

This update contains information we have gathered from various public sources and share with you to the best of our knowledge, but we cannot guarantee it is complete or in all cases accurate. Moreover, the market is changing rapidly currently; statements in this document may quickly be superseded, despite our best efforts. Nothing in this document can be taken as a contractual undertaking.”

UPS taking measures to mitigate the impact

• UPS is closely working with all Air Cargo players, ground handlers, airlines at FRA as well

as the origins to smoothen the cargo flow

• Customized communication with our customers to update them with the current situation

and pro-actively create problem resolutions

• UPS is offering range of alternative routing if required for urgent cargo

• For more information, you can contact your sales representative or the UPS service centre

Congestion import volume at FRA

• Frankfurt airport is experiencing high cargo volume

• High amount of PPE material imports from APAC is driving volume increase and affecting

one out of six ground handlers FCS

• Processing time from flight arrival to recovery by FCS has reduced from 7 days to 4-5 days

• Truck waiting time is highly dependent on the traffic

• This situation is not only affecting UPS but all other service providers

Cargo congestion at European airports

Source: *The Loadstar

Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.© 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.

Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly by UPS. © 2020 United Parcel service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.

Socioeconomic Updates

• Number of cases reduced by -1.4% compared to last week

• EU gave Belgium ten days to justify non-essential travel ban

• Cargo load factors remain strong despite Chinese New Year

• Hungary first EU country to administer Chinese coronavirus vaccine

• Germany planning to re-open but cautiously

• UK set out £700m funding to help pupils in England catch

up on missed learning

Ocean Freight Updates • Ocean carriers serving the Asia–Europe trade lane are reporting huge

backlogs of cargo booked to move post–CNY.

• Strong overall cargo volume, industrial action, inclement weather

together with ongoing congestions and delays in most European ports

leading to disruptions of the vessel network, all Hamburg terminals are

now experiencing maximum yard utilization.

• General recommendation to make pre-bookings 4-6 weeks prior to

vessel sailing date & explore possibilities to divert to LCL Consol Box /

PLCL / Regular LCL

Inland Transportation

Air Freight Updates • Driven by an overall increase in volumes being handled at the Frankfurt airport

by 68% volume growth January 2021 vs. LY, delays for inbound cargo and

recoveries are to be expected.

• Heathrow (LHR): Due to Covid-19 Government measure cargo recovery is

getting delayed

• Freighters escape B777 suspensions after United Airlines engine

failure

Europe Update for February 25th

This update contains information we have gathered from various public sources and share with you to the best of our knowledge, but we cannot guarantee it is complete or in all cases accurate. Moreover, the market is changing rapidly currently; statements in this document may quickly be superseded, despite our best efforts. Nothing in this document can be taken as a contractual undertaking.”

2/25/2021

• Congestion between Germany and a number of its eastern neighbors

observed

• Tougher border controls with both the Czech Republic and Austria in place;

demands for test result from truck drivers crossing border

• Leading to long queues at the border but also disruption to freight transport

across Eastern Europe

• No discussion of closing the border with Poland or Denmark but there is some

talk of extending controls at the French border.

Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.© 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.

Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly by UPS. © 2020 United Parcel service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.

Socioeconomic Updates

• Covax vaccine-sharing scheme delivers first doses to Ghana

• India may see new lockdown as coronavirus cases rise again

• Maharashtra in the west and Kerala in the south have

reported a surge in cases

• Pakistan to get another 5.6 million Covid-19 vaccines by

March

• Vaccinations process started in Australia

Ocean Freight Updates • Space & equipment’s continue to be extremely tight

for all major ISMEA location (IN/PK in specific).

• Carriers have started allocating space based on target vessels

based on cargo readiness for March.

Inland Transportation

• UPS services continue to operate for both pickup and

delivery in postal codes across cities in India in line with

local restrictions-however, due to limited intra-country line

haul options, slight delays can be expected.

• Longer transit times for exports from India to Asia and the Middle

East, and imports into India from US/EU due to certain restrictions

are expected

Air Freight Updates • Zambia: In line with COVID-19 restrictions, flights are less frequent

and service continues with slight delays.

• Australia lifts ban on cargo flights from Bangladesh after security

revamp

• Melbourne port strike suspended

• Indian airline SpiceJet has launched a scheduled freighter

service to Singapore

• EK suspends flights to HRE from 13th Feb to 18th Feb,

flights to be operated DXB-LUN instead of DXB-HRE-

LUN

ISMEA Update for February 25th

This update contains information we have gathered from various public sources and share with you to the best of our knowledge, but we cannot guarantee it is complete or in all cases accurate. Moreover, the market is changing rapidly currently; statements in this document may quickly be superseded, despite our best efforts. Nothing in this document can be taken as a contractual undertaking.”

2/25/2021

Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.© 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.

Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly by UPS. © 2020 United Parcel service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.

Socioeconomic Updates

• Japan: Vaccination began for medical personnel on

Feb 17

• South Korea: will begin vaccination on Feb 27

• Australia: vaccine rollout began for frontline

workers or Aged-care on Feb 22

• Malaysia: the Movement Control Order (MCO) will

extend for two more weeks until Mar 4 for Selangor,

Kuala Lumpur, Johor and Penang. The 10km travel

restriction has been lifted but inter-state and inter-

district travel will still be banned

• Philippines: the Inter-Agency Task Force for the

Management of Emerging Infectious Diseases

(IATF) propose to place the entire country under

modified general community quarantine (MGCQ) by

March

Ocean Freight Updates

• Port congestion in the whole region

• China: Shortage of truck drivers started before CNY will

continue because of the strict Covid-19 quarantine

measures imposed by the Chinese authorities

Air Freight Updates

• Australia: International flights to Melbourne stopped until Feb 17

• Korea: suspension of operations for direct flights

departing the UK scheduled for until the 11th will increase

until the 25th of February

• New Zealand: Pick up and deliveries of freight in

Auckland is only to essential industries, delays for

imports expected

APAC Update for February 25th

This update contains information we have gathered from various public sources and share with you to the best of our knowledge, but we cannot guarantee it is complete or in all cases accurate. Moreover, the market is changing rapidly currently; statements in this document may quickly be superseded, despite our best efforts. Nothing in this document can be taken as a contractual undertaking.”

2/25/2021

Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.© 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.

Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly by UPS. © 2020 United Parcel service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.

Socioeconomic Updates• Biden “Made in America” executive order advocates for 100-

year-old U.S. maritime law

• Biden signs executive order to strengthen COVID supply

chains

• Importers face massive hike in ocean contract costs

• Maritime sector nervous about chances for COVID-19 relief

New world record set for shipping rates: $350,000 per day

• As the lagging U.S. vaccine rollout accelerates, more

pharmacies will begin distributing doses to high-risk

groups.

Ocean Freight Updates • Ports press Congress, Biden for emergency funds

[api-esp.piano.io]

• Port of Long Beach has best January on record

South Carolina Ports rides rails to robust January

• Port of LA will pay container terminals for efficiency

gains

• COVID outbreak could cripple California container

ports

Inland Transportation

• Crude tankers stuck in ‘rate hell’ but floating-storage pain

wanes

• Truckers chain up as snowstorms hit several Western states

this week

• Trucking markets: Strong trucking backdrop should resume

after slow holiday week

• Trucking industry lender's quarterly data shows significant

market improvement.

Air Freight Updates • Airlines absorb $391 billion revenue shortfall in 2020

• Lack of passenger flights holds down airfreight

• United Airlines cargo planes to share space again with

passengers

• UPS expanding at Kansas City airport as e-

commerce surges

• New air cargo security standards could gum up e-

commerce exports

United States Update for February 25th

This update contains information we have gathered from various public sources and share with you to the best of our knowledge, but we cannot guarantee it is complete or in all cases accurate. Moreover, the market is changing rapidly currently; statements in this document may quickly be superseded, despite our best efforts. Nothing in this document can be taken as a contractual undertaking.”

2/25/2021

Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.© 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.

Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly by UPS. © 2020 United Parcel service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.

Socioeconomic Updates• Canada's vaccine rollout is slower than other countries

• Quebec imposes curfew as part of 4-week lockdown

• Canada clears 4 firms to bid on COVID-19 vaccine

distribution contract

• Transport Canada revises rules on worker fatigue in the rail

industry

• Canada COVID-19 vaccine distribution plans attract

big firms

• Pfizer plans ‘just-in-time’ COVID-19 vaccine

distribution in Canada

Ocean Freight Updates

• Ports are operational. Cargo transportation is still

allowed

• Slow in/out processing and delays in customs

clearance

Inland Transportation

• Daily pickups and deliveries except where restrained by

government

Air Freight Updates • New COVID-19 boarding rules for airlines will be tighter than

expected

• Air Canada finalizes decision to convert aircraft to freighters

• Air Canada eyes converted freighters to capitalize on cargo

boom

• Air Canada is resuming many of its international

flights, heading to the U.S., the Caribbean, South

America, Europe and the Pacific

Canada Update for February 25th

This update contains information we have gathered from various public sources and share with you to the best of our knowledge, but we cannot guarantee it is complete or in all cases accurate. Moreover, the market is changing rapidly currently; statements in this document may quickly be superseded, despite our best efforts. Nothing in this document can be taken as a contractual undertaking.”

2/25/2021

Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.© 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.

Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly by UPS. © 2020 United Parcel service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.

Socioeconomic Updates• Pfizer applies for full COVID-19 vaccine approval in Brazil

• Oil prices shake off COVID blues as Brent hits $60

• Brazil scrambles to secure COVID vaccine from India

• Mexico, Chile and Costa Rica become the first countries in

Latin America to begin vaccination campaign

• Mexico Bucks Latin America Trend as Inflation Doubles Amid

Virus

• Mexico once again No. 1 US trade partner

• Colombia expands reopening as coronavirus

cases stabilize

Ocean Freight Updates

• Italian firm building $150M shipyard in Mexico

• Ocean Port Restrictions (3 countries: DO, HN, PR)

• DO: Operations had been restricted up to 6pm

• HN: Limited service to Puerto Cortez Port

• PR: No passenger vessel allowed

Inland Transportation

• Despite some successes, Mexico still struggles with

fuel theft

• Mexican rail blockade continues to affect freight flows

• US-Mexico truck crossings decline 22% at Port Laredo

• Customs operation impacted (9 Countries: AR, CR, DO, EC,

GT, PA, PE, SR, VE)

Air Freight Updates • Dubai airline launches new freighter service to Mexico

• LATAM Common Carriage flights were reduced or forbidden

to/from US, Europe & Asia (19 countries: AR, BO, BR, CL, CO,

CR, DO, EC, GT, HN, NI, PA, PE, PR, PY, SR, SV, UY, VE)

LATAM Update for February 25th

This update contains information we have gathered from various public sources and share with you to the best of our knowledge, but we cannot guarantee it is complete or in all cases accurate. Moreover, the market is changing rapidly currently; statements in this document may quickly be superseded, despite our best efforts. Nothing in this document can be taken as a contractual undertaking.”

2/25/2021

Thank You

Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.© 2017 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.

Sources

• Official sources (WHO, Governments, etc.),** UPS Internal Sources Seabury

• Carriers • Sky cargo

• Emirates

• Lufthansa

• News Media Brussels times

New York Times

BBC News

Times of India

Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly by UPS. © 2020 United Parcel service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.2/25/2021