P.Oetker, Interpera, Rio Negro 2013 1

The success of the reefer containerand its potential to influence the logistics chain

P.Oetker, Interpera, Rio Negro 2013 2

Reefer market1

Conventional vessels vs. reefer containers

3

Omnipresence4

Economy of scale5

Reefer container fleet2

Strengths and weaknesses of the container

7

Agenda

Transport costs for reefer containers

6

P.Oetker, Interpera, Rio Negro 2013 3

91 95 103 113

0

20

40

60

80

100

120

2011 2012 2014 2016

Mio

ts

Year (Source: Drewry)

Ø +4.4% p.a.

1

Reefer marketGlobal volume (in conventional and container vessels)

P.Oetker, Interpera, Rio Negro 2013 4

38%

17%

25%

18%

2%

(Source: Drewry)

2001

2011

1

Reefer marketGlobal seaborne cargo (91 mm tons for 2011)

P.Oetker, Interpera, Rio Negro 2013 5

51% 35%

8%

1%1% 4%

2005

2012

1

Reefer marketHamburg Süd commodity split

P.Oetker, Interpera, Rio Negro 2013 6

Reefer container fleetTop 15 carriers

(Source: DynaLiners, early 2012)

2

Reefer Reefer as %age of Total Total Container

Carrier (TEU) Container Inventory Inventory (TEU)

Maersk Line 470.100 12% 3.761.000

MSC 250.000 8% 3.000.000

CMA CGM 150.000 7% 2.100.000

Hamburg Süd ( 4 ) 118.000 ( 1 ) 17% 691.000

APL 110.000 10% 1.100.000

Hapag-Lloyd 72.900 7% 1.042.000

CSAV 71.700 10% 712.000

Evergreen 57.000 5% 1.185.000

MOL 48.300 7% 690.000

OOCL 46.000 6% 730.000

NYK 41.000 6% 730.000

ZIM 38.400 6% 598.000

Hanjin 37.100 5% 723.900

China Shipping 30.000 3% 912.000

Coscon 28.000 3% 910.000

Total 1.568.500 8% 18.884.900

P.Oetker, Interpera, Rio Negro 2013 7

2

Year

2013 / 14

2010 / 12

2004 / 09

2001 / 07

Class

Cap San

Santa

Monte / Rio

Cap San / Bahia

Lenght(m)

ca. 336

300

272 / 286.5

254

Width(m)

ca. 48.2

42.8

40

32

Reefer Plugs(TEU)

2,100

1,600

1,365

800

Capacity(TEU)

ca. 9,600

7,100

5,500 / 5,900

3,700

Reefer container fleetHamburg Süd ship size development

P.Oetker, Interpera, Rio Negro 2013 8

85%

81%

78%74%

72%

69%70%

67%70%

61%67%

63%

84% 84%

15%

19%

22%26%

28%

31%

30%

33%

30%

39%

33%37%

16% 16%

0

10.000

20.000

30.000

40.000

50.000

60.000

70.000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013wk 12

units

20' Reefer

40' Reefer

13.144 TEU

114.503 TEU

22

Reefer container fleetHamburg Süd 2000 - 2013

P.Oetker, Interpera, Rio Negro 2013 9

Age Profile of conventional Reefer Fleet, Jan. 2012

above 100,000cft [Number of Vessels]

(Source: Drewry)

� Average age of

specialised reefer

vessels: 23 years

Conventional vessels vs. reefer containers

3

P.Oetker, Interpera, Rio Negro 2013 10

Age Profile of Reefer Container Vessel Fleet, Jan. 2012 [Number of Vessels]

(Source: Drewry)

� Average age of

reefer container

vessels: 11 years

Conventional vessels vs. reefer containers

3

P.Oetker, Interpera, Rio Negro 2013 11

51%

0

20

40

60

80

100

120

2011 2012 2014 2016

Mio

tsConventional Reefer Vessel Reefer Container

68%

(Source: Drewry) � 2011-2016 Conventionals: Ø - 2.9% p.a.

Containers: Ø +7.3% p.a.

71% 74% 78%

29% 26% 22%32%

Conventional vessels vs. reefer containers Market shares container/ conventional

3

P.Oetker, Interpera, Rio Negro 2013 12

Conventional vessels vs. reefer containersMarket shares per commodity group 2011

3

0%

20%

40%

60%

80%

100%

120%

Bananas Citrus Deciduous Exotics Fish &Seafood

Meat &Poultry

Dairy Other Total

Sha

re in

%

Reefer Container

Conventional Reefer Vessel

(Source: Drewry)

P.Oetker, Interpera, Rio Negro 2013 13

Conventional vessels vs. reefer containersMarket shares per commodity group 2016

3

0%

20%

40%

60%

80%

100%

120%

Bananas Citrus Deciduous Exotics Fish &Seafood

Meat &Poultry

Dairy Other Total

Sha

re in

%

Reefer Container

Conventional Reefer Vessel

(Source: Drewry)

P.Oetker, Interpera, Rio Negro 2013 14

OmnipresenceHS Container services are omnipresent

4

P.Oetker, Interpera, Rio Negro 2013 15

OmnipresenceHS Multiplication through transhipment hubs in 2012

4

Transhipments Worldwide: 1,329,000 TEU

(of which internal Transhipments 756,000 TEU)

Transhipment Share: 37%

P.Oetker, Interpera, Rio Negro 2013 16

� Example: „Rio Class“ Vessel from South America to Europe

Economy of scaleVersatility of a container ship

Meat (beef, poultry, pork)Fruit and vegetables (apples, citrus, mangoes, juice, grapes)

Fish and seafood

Wood products (furniture, plywood, paper)Coffee and tobacco

Car parts, steel products, agricultural products, chemicals, plastics

Other

5

P.Oetker, Interpera, Rio Negro 2013 17

� Dimensions of a „Santa Class“ Vessel vs. a large Reefer Vessel (approx.)

8 mio cft

8 x 1 mio cft

Economy of scale

5

P.Oetker, Interpera, Rio Negro 2013 18

587

1.218

338

874

105

375

0

500

1.000

1.500

2.000

2.500

3.000

Conventional Reefer Vessel

1 Mio cbf

Container Vessel (Santa Type)

8 Mio. cbf

TUSD

Port Costs

Time Charter

Fuel Costs

5

Conventional Reefer Vessel vs. Container Vessel (dry + reefer)

Economy of scaleVoyage calculation Buenos Aires / Rotterdam

Σ 1.030

Σ 2.466

P.Oetker, Interpera, Rio Negro 2013 19

0,66

0,16

0,38

0,11

0,12

0,05

0,00

0,20

0,40

0,60

0,80

1,00

1,20

1,40

Conventional Reefer Vessel

1 Mio cbf

Container Vessel (Santa Type)

8 Mio. cbf

USD / cbf

Port Costs

Time Charter

Fuel Costs

5

Economy of scaleVoyage calculation Buenos Aires / Rotterdam

Σ 1,16

Σ 0,32

Conventional Reefer Vessel vs. Container Vessel (dry + reefer)

P.Oetker, Interpera, Rio Negro 2013 20

Cap San reefer carrying capacity vs. a modern conventional reefer vessel:

5 Mio. cbf vs. 1 Mio. cbf

5

Economy of scaleThe new „Cap San Class“ vessels

Container capacity: 9,600 TEUReefer capacity: 2,100 plugsOverall length: 333.20 mWidth: 48.20 mMax. draft: 14.00 mSpeed: 21 knots

P.Oetker, Interpera, Rio Negro 2013 21

Transport costs for reefer containers (1)Bunker price development 2005-2013

6

0

50

100

150

200

250

300

350

400

450

500

550

600

650

700

750

800

Ø 233 Ø 292 Ø 345 Ø 475 Ø 352 Ø 450 Ø 618 Ø 641

2005 2006 2007 2008 2009 2010 2011 2012 2013

Ø 619

Source: Platts Oilgram Bunkerwire; IFO 380 Basis Rotterdam

Impact for RFSegment

1. Higher cost for vessel main engine

2. Higher cost for auxilliary engines required to generate the electricity required for the RF container cooling onboard

3. Higher cost for pre-/on-carriage with active cooling

P.Oetker, Interpera, Rio Negro 2013 22

Transport costs for reefer containers (2)Purchasing costs for reefer containers

6

■ Cost of a 40‘RH in absolute terms: 17,500 USD■ Current 40‘RH Hamburg Süd Reefer fleet: 52,000 units■ Annual ratio of equipment replacement: 8.33%

Annual replacement capital expenditure (1st year): 75.8 Mio USDAssuming an add. annual fleet growth of 5%: 45.5 Mio USD/yearTotal reefer equipment costs per year: 121.3 Mio US D

P.Oetker, Interpera, Rio Negro 2013 23

Reefer40’RHReefer40’RH

PURCHASE PRICE +340%

M & R COSTS +1.100%

EQUIPMENT FIX COSTS +580%

BUNKER COST

PTI AND DEPOT COSTS

INSURANCE

SEASONALITY

Dry40’HC

Dry40’HC

MKT OPPORTUNITIES

EQ PRODUCTIVITY +22%

6

Transport costs for reefer containers (3)Opportunity Cost Analysis

P.Oetker, Interpera, Rio Negro 2013 24

6

Transport costs for reefer containers (3)Opportunity Cost Analysis (continued)

CARGO SELECTION ANALYSIS 40' DRY 40' REEFER CHOICEPeanuts Pears

BUE-RTM BUE-RTM

2012

A) Revenue* based USD 1.920 USD 3.530 REEFEREquivalent to Ocean freight incl. BAF USD 1.500 USD 3.000B) Contribution based before fuel costs and equipment repositioning x � REEFER

C) Contribution based after fuel costs but before empty repositioning x � REEFER

D) Contribution based after fuel costs and empty repositioning � x DRY

Average equipment productivity per year (index) 122 100

E) Contribution based after fuel costs and empty repo sitioning p.a. 100 67 DRY

2013

A) Revenue* based USD 1.920 USD 4.730 REEFEREquivalent to Ocean freight incl. BAF USD 1.500 USD 4.200B) Contribution based before fuel costs and equipment repositioning X � REEFER

C) Contribution based after fuel costs but before empty repositioning X � REEFER

D) Contribution based after fuel costs and empty repositioning X � REEFER

Average equipment productivity per year (index) 122 100

E) Contribution based after fuel costs and empty repo sitioning p.a. 100 120 REEFER

* Ocean Freight incl. BAF, LTHC, DTHC

X

����

P.Oetker, Interpera, Rio Negro 2013 25

6

Transport costs for reefer containers (3)Opportunity Cost Analysis (continued)

In USD per 40'RF for RTM STP PHL SIN SSZChilled Fruit Rotterdam St. Petersburg Philadelphia Singapore Santos

Chile Base PortsPeak-Season $6,400 $7,600

$4,700$6,400

$4,000Off-Peak $4,700 $5,900 $4,500

South Africa Base Ports $6,000 $6,500 $6,500 $3,600 $4,600

Brazil Base PortsPeak-Season

$4,000 $5,000$4,300

$3,000 N/AOff-Peak $6,100

Australia/New Zealand Base Ports $7,200 $8,500 $7,000 $4,100 $5,600

Rates are indications of the levels applied during 2013

Rates are inclusive of BAF but subject to origin and destination charges

Rates are net of any discount or volume rebate

P.Oetker, Interpera, Rio Negro 2013 26

PRODUCT

SUPPLIESTAXES

INVESTMENTSLOGISTIC

DEPRECIATIONADMINISTRATION

SUPERMARKETTRANSPORT

1 x 40’RH = USD 30,000 6% @ USD 3.64/kg = USD 92.800

C&F PriceRotterdam

Retail Price to Final

Consumer

6

Transport costs for reefer containers (4)Ocean Freight in the context of the overall value chain

Ocean Freight as % of Final Consumer

Price

P.Oetker, Interpera, Rio Negro 2013 27

Feature ReeferVessel

ReeferContainer

Short transit times due to limited calls Yes NoFumigation aboard (USDA) Yes NoOpen sea exchange (vessel to vessel, for fish) Yes No

Intermodal advantages:Door-to-door steering → Higher flexibility No YesNo intermediate cargo storage → Reduced costs No YesMinimized handling → Less claims No YesUnbroken cold chain → Less claims No YesFixed-day-service (Liner schedule) No (partly) YesSuited for small lots (e.g. air cargo) No Yes

7

Strengths and weaknesses of the container

Pre-carriage Ocean Transport Ware-

housingDistri-bution

TerminalHandling

On-carriage

TerminalHandling

Pre-cool.

P.Oetker, Interpera, Rio Negro 2013 28

Thank you for your attention!