LCL Workshop KNIN 2019kkkkkkkkkkkkkk.pptx

Lcl process

1. Welcome to INDIA Feb 2019

2. LCL workshop Training material for Less - than -Container Loads (LCL) 8th Feb’19 Charmaine Vincent / Del ZS-X

3. Global LCL Sea Logistics No 1 in Seafreight More than 1,600,000 cbm 51,000 TEU consolidated cargo Over 2,000 own operated lanes We deliver proven LCL solutions, which will help our clients to identify and manage the challenges of adapting to new markets as well as maintaining existing ones. p. 3 LCL Sea Logistics - India Kuehne + Nagel LCL world in figures 3/6/2019

4. Global LCL Sea Logistics Global footprint – Team p. 4 LCL Sea Logistics - India planned ZS-X RS-X FS-X ZS-X RS-X FS-X 3/6/2019

5. Global LCL Sea Logistics Global footprint – Own Export Services p. 5 LCL Sea Logistics - India Toronto Perth Poznan Praha Riga Rotterdam Sao Paulo Seoul Shanghai Singapore Skopje Sydney Taipei Tokyo Vancouver Zurich Liverpool Milano San José Santiago Sao Paulo WEU to Alexandria Antwerpen Atlanta Bangkok Buenos Aires Cape Town Charleston Charlotte Chennai Chicago Cleveland Dalian Delhi Detroit Dubai Durban Greenville Hong Kong Houston Jakarta Jeddah Johannesburg Atlanta Auckland Bangkok Barcelona Belgrad Bilbao Blumenau Bratislava Bremen Bucarest Budapest Buenos Aires Chennai Chicago Dubai Durban Gothenborg Hamburg Helsinki Ho Chi Minh City Hong Kong Kiev Kuala Lumpur Le Havre Linz Liverpool Livorno Ljubljana Los Angeles MEA to Abu Dhabi Ad Dammam Kuwait Muscat Tel Aviv SCA to Bogotá Bremen New York EEU to Houston Limassol New York Seoul Singapore NAM to Barcelona Bogotá Bremen Buenos Aires Hamburg Hong Kong Lima Linz Kaohsiung Kuala Lumpur Lima Limassol Melbourne Mexico City Montreal Mosquera Mumbai New York Norfolk Osaka Porto Alegre Santiago Santo Domingo Sao Paulo Seoul Shanghai Singapore Sydney Taipei Tel Aviv Tianjin Tokyo Toronto North Asia to Antwerpen Arhus Porto Poznan Praha Pune Riga Rotterdam Sao Paulo Seoul Shanghai Singapore Suzhou Sydney Tallinn Tel Aviv Tokyo Toronto Vancouver Vilnius Zurich South Asia to.. Adelaide Antwerpen Arhus Atlanta Auckland Bangkok Bratislava Bremen Brisbane Bucarest Budapest Chennai Chicago Delhi Dhaka Dubai Dublin Genoa Gothenborg Hamburg Hanoi Helsinki Hong Kong Jakarta Kiev Le Havre Linz Liverpool Los Angeles Manila Marseille Melbourne Mexico City Milano New York Osaka Oslo 3/6/2019

6. Global LCL Sea Logistics Global footprint – Own Import Services p. 6 3/6/2019 LCL Sea Logistics - India To MEA Antwerpen Bremen Dubai Hong Kong Istanbul Milano Milton Keynes Rotterdam Shanghai Singapore To SCA Antwerpen Bremen Gothenborg Hong Kong Miami Milano Sao Paulo Shanghai Singapore To EEU Athínai Detroit Hong Kong Milton Keynes Ningbo Seoul Shanghai Singapore Taipei Xiamen To NAM Antwerpen Barcelona Bremen Bucuresti Gothenborg Hamburg Hong Kong Linz Milano Milton Keynes Mumbai Ningbo Osaka Sao Paulo Seoul Shanghai Shenzhen Singapore St Denis/Paris Taipei Tianjin Tokyo Xiamen To WEU Alesund Atlanta Bangkok Bergen Chennai Chicago Colombo Guangzhou Hong Kong Jakarta Mexico City Mumbai New York Ningbo Osaka Penang Qingdao Sao Paulo Seoul Shanghai Shenzhen Singapore Taipei Tianjin Tiruppur Tokyo Xiamen To NAP Antwerpen Basel Bremen Chennai Chicago Gothenborg Guangzhou Hamburg Hong Kong Milano Milton Keynes Osaka Qingdao Shanghai Singapore To SAP Antwerpen Auckland Bangkok Basel Bremen Cebu Chennai Dalian Dhaka Gothenborg Hanoi Ho Chi Minh City Hong Kong Jakarta Kuala Lumpur Lahore Linz Ljubljana Manila Melbourne Milano Milton Keynes Mumbai Ningbo Osaka Paris Penang Phnom Penh Qingdao Rotterdam Seoul Shanghai Shenzhen Singapore St. Denis/Paris Sydney Taipei Tianjin Tokyo Vaasa Xiamen

7. At KN India we are focused on continuous development of in - house LCL product’s to design exclusive Global logistics solutions towards our customers. The product is one of the fastest growing, high yielding strategic Focus & Excellence driver for KN India. KEY BENEFIT’s Product is fully managed & monitored by KN IN All underlying suppliers are KN selected & controlled Fixed space allocation & departures with consistent sailings Better monitoring of shipments at origin & destination via internal systems CIEL +SALOG (backend) & KN Login (frontend) that enhance proactive updates to handle force majeure conditions Local charges at both ends are as per agreed tariff “no inflated rates” Competitive rates levering KN’s FCL buying power Via our LCL gateway system the transit times for LCL are often close to our economy airfreight product Flexible risk taking ability to offer longer validity in order to suit ever changing market needs 3/6/2019 p. 7 LCL Sea Logistics - India

8. Global Gateway’s National Gateway & Cargo Flow For global LCL services, we use direct routings wherever possible , where as our multinational gateway set up builds our backbone to bundle flows and increase sailing frequencies. 3/6/2019 p. 8 LCL Sea Logistics - India

9. Global LCL Sea Logistics Overview LCL Sea Logistics LCL Basics IMO in consolidation containers General sales approach to sell LCL LCL Products LCL e-business Knowledge review p. 9 3/6/2019 LCL Sea Logistics - India

10. LCL Basics Difference in between LCL and FCL p. 10 3/6/2019 LCL Sea Logistics - India Box Bullet point Bullet point Bullet point FCL - Full-Container-Load (CY/CY) Customer has got enough cargo to fill an entire container e.g. for a 20’ ctr = from 15 cbm up to max. 20-25 cbm and 20 tons. e.g. for a 40’ ctr = from 30 cbm up to max. 45-55 cbm and 20 tons. LCL - Less-than-Container-Load (CFS/CFS) Cartonized / palletized part loads with volume below FCL load factor, e.g. 3 cartons shipment only (total weight of 600 kg and 3 cbm) operated via Container Freight Stations (CFS) – these can be either KN own or co-loader (partner) locations.

11. LCL Basics Buyer’s Consol p. 11 3/6/2019 LCL Sea Logistics - India Box Bullet point Bullet point Bullet point BC - Buyer’s Consol (CFS/CY) Buyer’s consol = More than one Shipper and one Consignee Change from a several amount of different shipments to one shipment which is consolidated /containerized in a Container Freight Station to be delivered at destination as FCL. Completely handled and controlled by KN.

12. LCL Basics Difference in between LCL and FCL p. 12 3/6/2019 LCL Sea Logistics - India Box Bullet point Bullet point Bullet point General LCL cargo flow Cargo consolidation at origin CFS Full container moves from POL to POD Cargo deconsolidation at destination CFS 1 2 3 Different customers but same origin / destination pair Splitting of full container back into separate shipments per customer Consolidation container (so-called SaCo)

13. LCL Basics CFS Cargo Flow p. 13 3/6/2019 LCL Sea Logistics - India Labelling, scanning Storing, waiting for loading Container loading, stuffing report Load securing, lashing Container unloading, destuffing report Palletizing Wrapping Delivery

14. LCL Basics Ratio p. 14 3/6/2019 LCL Sea Logistics - India Box Bullet point Bullet point Bullet point I mportant key words when dealing with LCL services… The ratio The ratio describes the relation between the cubage and weight of a shipment. Calculation A shipment measures 4 cbm and weighs 1 ton => The ratio is 1:4 A two pallet shipment measures ( l x w x h) 2.40 x 2.00 x 1.60 = 7.68 cbm and weighs 2.034 kgs 7.68 cbm divided by 2.034 = 3.77 => The ratio is 1:4 (3.71 rounded up) Why always length x width x height? => To ensure due container utilization by right space allocation.

15. LCL Basics Per weight measurement (w/m) p. 15 3/6/2019 LCL Sea Logistics - India Box Bullet point Bullet point Bullet point Important key words when dealing with LCL services… Weight / Measurement (w/m) Is a charge unit which applies either for the cubage or the weight of a shipment, which ever is greater. This unit of measurement is applicable in particular for the ocean freight and trucking charges of a shipment, but might also apply on other charges. Examples Shipment with 2 cbm and 0,5 tons Will be charged for 2 cbm as this is the higher number.

16. LCL Basics Per weight measurement (w/m) p. 16 3/6/2019 LCL Sea Logistics - India Box Bullet point Bullet point Bullet point Important key words when dealing with LCL services… Weight / Measurement (w/m) A container does have a maximum volume capacity and a maximum weight payload. The consol costs will be distributed by allocating part of the costs to the single shipments on basis of the volume or weight they take up in the container. Whichever creates the greatest revenue.

17. LCL Basics Calculation examples p. 17 3/6/2019 LCL Sea Logistics - India Box Bullet point Bullet point Bullet point Shipment details as advised by the customer: 2034 kgs / 7.542 cbm KN Rates advises an ocean freight rate of 50 USD per w/m, ratio 1:1 Since 7.542 cbm is the higher figure (7.542 cbm > 2.034 to) we have to calculate: 7.542 x 50 USD = 377,10 USD Result: The total ocean freight rate for this shipment is USD 377,10.  

18. LCL Basics Calculation examples p. 18 3/6/2019 LCL Sea Logistics - India Box Bullet point Bullet point Bullet point Same shipment but now for pre-carriage purposes: 2034 kgs / 7.542 cbm , Ration 1:3 (road freight) The pre-carriage rate is 20 USD per 100 Kgs . 7.542 cbm / 3 = 2.514 kgs 2.514 Kgs is the higher number (2.514 Kgs > 2.034 Kgs) so we have to calculate: 25.14 x 20 USD = 502.80 USD Result: The total pre-carriage rate for this shipment is 502.80 USD.  

19. LCL Basics - Why and what is ‘ratio’ ? p. 19 3/6/2019 LCL Sea Logistics - India

20. LCL Basics SaCo’s – Consolidation Containers at KN p. 20 3/6/2019 LCL Sea Logistics - India Box Bullet point Bullet point Bullet point Key words when dealing with LCL services… SaCo is the K+N abbreviation for consolidation containers, based on the German word Sa mmel - Co ntainer) Main driver for profitability is the load factor of KN SaCo’s – the level of utilization In 2013 we handled 1.110.000 cbm in own KN SaCo’s , 51.000 consolidated TEU The average load factor is 22 cbm per TEU Global GP SFR 94/ cbm , NPII SFR 29/ cbm

21. LCL Basics LCL Routings p. 21 3/6/2019 LCL Sea Logistics - India 1 st DIRECT SaCo Direct SaCo is our priority. It is our in-house product and the most profitable. We need to utilise our SaCo as much as we can. An increased SaCo load factor will increase the GP/Order and the GP per CBM as there is a greater volume to distribute costs across. TOP 2 ND KN GATEWAYS When no direct SaCo available, we should push volumes through our KN gateways connected with origins and destination by a combination of SaCo and NVOCCs services. A Gateway service usually implies a longer transit time than direct services. MEDIUM 3 RD NVOCC When no direct SaCo available and transit time requirements or cost factors do not allow using a Gateway option we should utilise one of the four globally approved NVOCC’s. LOW

22. Direct Saco - Factors to be taken into consideration 1 Cost Factors 2. Lead times 3 Numbe r of Shipments 4 Weight & Overall volume of shipment 5 Dimensions of the cargo 6. Type of Package 7 Load Factor 8 Break Even Point p. 22 3/6/2019 LCL Sea Logistics - India

23. Volume Distribution ( 2018) : KN & NVOCC Total Export Total Import We can increase our Buying power by focusing on our direct SaCo’s / national / regional gateways thereby increasing our Profitability. Greater the SaCo = Greater the GP/Order & GP/CBM as there is greater volume to distribute costs across. Therefore higher ROI on sales investment. Higher productivity v/s Coloaded shipments! 3/6/2019 p. 23 LCL Sea Logistics - India

24. LCL Basics SaCo p. 24 3/6/2019 LCL Sea Logistics - India A product fully managed by K+N , therefore increased control. All underlying suppliers are K+N selected and controlled. Competitive rates through cost control Ability to offer long rate validity Personalized pricing on request Increased control at both origin and destination Information accuracy Visibility Fixed (vessel) space allocation Consistent sailings “Local charges both ends as per agreed tariff, no inflated rates” Customer Benefits Kuehne + Nagel Benefits SaCo GP higher than co-load Hence higher ROI on sales investment Higher productivity levels vs co-load shipments. Easier / quicker ops handling http :// knet.int.kn/nc/bu/sea/lcl/worldwide_saco_list/ 1 st DIRECT SaCo SaCo stands for Sammel Container (= consolidated container). When using the word SaCo, we refer to our own consolidated container / LCL in house service. When shipping SaCo:

25. LCL Basics KN Gateways p. 25 3/6/2019 LCL Sea Logistics - India Customer Benefits On port pairs where no direct services are available this solution offers a product fully managed by K+N, therefore increased control. All underlying suppliers are K+N selected and controlled. Competitive rates through cost control Ability to offer long rate validity Personalized pricing on request Increased control at both origin and destination Information accuracy Visibility Fixed (vessel) space allocation Consistent sailings “Local charges both ends as per agreed tariff, no inflated rates” KN Global Gateways Higher GP Than NVOCC’s move (and therefore higher sales ROI) Higher productivity Vs NVOCCs Easier / quicker ops handling SaCo = development driver. We need to fill up the container. It is a support for the general trade-development http://knet.int.kn/nc/bu/sea/lcl/rates_tariffs/kn_gateways 2 nd KN GATEWAYS LCL Gateway: CFS strategically located where we collect the inbound cargo arriving from several origins/countries (by SaCo or NVOCC) and we then ship out to final destination by SaCo.

26. LCL Basics Global Hubs p. 26 3/6/2019 LCL Sea Logistics - India SIN Asia/EU SHA North China to EU PUS To USA Pusan Shanghai Dubai Colombo CMB ISC to EU SSZ EU to BR Santos MIA/PTY USA to LATAM New York Miami NYC EU/USA USA to DXB Antwerp ANR EU to NA EU to ME EU to Asia DXB EU to ME USA to ME Panama Singapore

27. Global LCL Sea Logistics Overview LCL Sea Logistics LCL Basics IMO in consolidation containers General sales approach to sell LCL LCL Products LCL e-business Knowledge review p. 27 3/6/2019 LCL Sea Logistics - India

28. KN Optima Consolidation for Import containers with economic benefits Our Optima concept is a new mean of consolidation. It allows combination of 20’ containers into 40’. Based on the loading factor and weight of our customer's 20’ container(s), we provide them a rebate on the FCL tariffs. http://knet.int.kn/regions/weu/france/sea_logistics/lcl/optima_solutions/ Solution which satisfies all parties To the client : Advantage for the invoicing part, and opportunity to get a better optimization of imported flows To the LCL department : Improve loading factor of LCL containers, and enhance base loads at SaCo levels To Sales : Have on hand a new mean to sell LCL product as an attractive consolidation solutions To Kuehne + Nagel as a whole : Increase market share by providing Optima as an innovative solution and a competitive advantage p. 28 3/6/2019 LCL Sea Logistics - India

29. EcoCargo Kuehne + Nagel’s EcoCargo program… … makes sure that cargo remains consolidated and transported as full containers on single trucks avoiding the use of multi groupage services in key markets. http://knet.int.kn/nc/bu/sea/lcl/lcl_products/new_ecocargo/ Result Long distance routes will be operated as FTLs / FCLs results in less shipments While the last final mile distance decreases tremendously By utilizing the EcoCargo program for their supply chain clients can gain access to: Full Visibility of transport door-to-door CO 2 emissions Access to “greener” carriers with granted CO 2 and SO x reductions of up to 15% Potential for annual savings on European distribution of 10-15% through our consolidation services p. 29 3/6/2019 LCL Sea Logistics - India

30. Professional Removals LCL business within the professional removal industry This market sector has a large global volume potential, with well packed, ideal LCL cargo for our global SaCo services. OMNI has appointed Kuehne+Nagel as an approved supplier for global LCL services. For further information please visit the Professional Removals KNET page. http://knet.int.kn/bu/sea/lcl/professional_removals/ p. 30 3/6/2019 LCL Sea Logistics - India

31. Global LCL Sea Logistics Overview LCL Sea Logistics LCL Basics IMO in consolidation containers General sales approach to sell LCL LCL Products LCL e-business Knowledge review p. 31 3/6/2019 LCL Sea Logistics - India

32. The new sailing schedule provides the same functions as the previous version: Search function http://lclss.int.kn/#/search eMail subscription KNET http://knet.int.kn/bu/sea/lcl/lcl_sailing_schedule_new/ LCL KNET page LCL Sailing Schedule New LCL e-business p. 32 3/6/2019 LCL Sea Logistics - India All key facts and data summarized on these pages including continuing links Rates + Tariffs News + Contacts Sales Material http://knet.int.kn/bu/sea/lcl/

33. The new tool offers E Quote for the client http://knet.int.kn/gsm/tools_and_systems/kn_freightnet/seafreight_lcl/ KN Freight Net LCL e-business p. 33 3/6/2019 LCL Sea Logistics - India

34. Global LCL Sea Logistics Overview LCL Sea Logistics LCL Basics IMO in consolidation containers General sales approach to sell LCL LCL Products LCL e-business Knowledge review p. 34 3/6/2019 LCL Sea Logistics - India

35. Knowledge Review LCL calculation p. 35 3/6/2019 LCL Sea Logistics - India Box Bullet point Bullet point Bullet point Volume: 13,34 cbm Weight: 1,410 kgs What is the shipment ratio? What is chargeable weight for pre-carriage based on 1:3 ratio? What is chargeable weight for ocean freight based on 1:1 ratio?

36. Knowledge Review LCL calculation p. 36 3/6/2019 LCL Sea Logistics - India Box Bullet point Bullet point Bullet point Volume: 13,34 cbm Weight: 1,410 kgs What is the shipment ratio? 13,34 cbm / 1,410 kgs = 9,46 Ratio = 1 : 10 (9,46 rounded up) What is chargeable weight for pre-carriage based on 1:3 ratio? 13,34 cbm / 3 = 4,446 cbm chargeable weight is 4,446 Ton , as this is the higher figure What is chargeable weight for ocean freight based on 1:1 ratio? 13,34 cbm , as this is the higher figure

37. Thank you! 3/6/2019 p. 37 LCL Sea Logistics - India