2nd Logistics Roundtable Feburary 20, 2008

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1 2nd Logistics Roundtable Feburary 20, 2008 Topic Speaker Eurasian Land Bridge Dr. Sebastian Jürgens, Head of the DB Business Unit Discussion Buffet & Networking DB, Dr. Sebastian Jürgens,

2 1. Transportation & Logistics within the DB Group 2. Trends in the Transportation and Logistics Market 3. Strategic Focus DB 4. Eurasian Land bridge DB, Dr. Sebastian Jürgens,

3 DB AG is active in three market sectors DB Group 1) Passenger Transport Infrastructure and Services Transportation and Logistics DB AG as Management Holding company # 1 in rail passenger transport in Europe # 1 European rail network operator # 1 in European rail freight transport Integrated Group structure Rating: Aa1 / AA # 1 in regional and local public transport in Europe # 1 in bus transport in Germany # 1 in European rail vehicle maintenance # 1 in European land transport # 2 in global air freight # 3 in global ocean freight # 6 in global contract logistics Revenues ( bn) 30.1 Revenues ( bn) 11.5 Revenues ( bn) 1.3 Revenues ( bn) 17.0 EBIT ( mn) 2) 2,143 EBIT ( mn) 968 EBIT ( mn) 433 EBIT ( mn) 609 Employees ('000) Employees ('000) 52.6 Employees ('000) 74.2 Employees ('000) 79.2 Gross capex ( bn) 6.6 Gross capex ( bn) 0.7 Gross capex ( bn) 5.4 Gross capex ( bn) 0.4 Source: 2006 Annual Report 1) Difference between division and DB Group totals results from Other/Consolidation 2) EBIT 2006 before special items, EBIT adjusted for special items: bn DB, Dr. Sebastian Jürgens,

2006 was a very successful year for the Transportation and Logistics Division Transportation & Logistics - 2006 External revenues ( bn) Rail Freight

2 ('000) Freight Forwarding and Logistics Rail Freight Land Transport Air/Ocean Freight Contract Logistics/SCM External revenues ( bn) 3.

4 2006 was a very successful year for the Transportation and Logistics Division Transportation & Logistics External revenues ( bn) Rail Freight Transport Employees 17 (+37%)* EBIT ( mn) ('000) Freight Forwarding and Logistics Rail Freight Land Transport Air/Ocean Freight Contract Logistics/SCM External revenues ( bn) 3.8 (+12%) External revenues ( bn) 13.2 (+46%)** EBIT ( mn) 242 EBIT ( mn) 367 Employees ('000) 24.3 Employees ('000) 54.9 *+16% excl. BAX **+18% excl. BAX Employee figures: average no. of full-time employees Source: 2006 Annual Report DB, Dr. Sebastian Jürgens,

5 1. Transportation & Logistics within the DB Group 2. Trends in the Transportation and Logistics Market 3. Strategic Focus DB 4. Eurasian Land bridge DB, Dr. Sebastian Jürgens,

DB generates sustainable transport services and ensures that transport growth does not result in

Excellent freight forwarding and logistics services.

Source: Sustainability Report 2007 DB, Dr. Sebastian Jürgens, 21.02.

6 DB generates sustainable transport services and ensures that transport growth does not result in greater environmental impact Megatrends in freight transport market Globalization Climate Change Excellent freight forwarding and logistics services... with a strong rail backbone 100,000 fewer truckloads daily on Europe s roads, and Deregulation Source: Sustainability Report 2007 DB, Dr. Sebastian Jürgens, ,000 tons of CO 2 less each day as a result of DB AG rail freight services 33% reduction in specific energy consumption from 1990 to 2006 on rail freight services

Globalization is driving growth in international traffic flows Export of goods and trade flows in US $ bn 878 +12.2% p.a. North America +5% p.a. 1,225 1,478 2000 2005 South America 636 831 +9.1% p.a. 2,633 Europe 4,372 +14% p.

7 Globalization is driving growth in international traffic flows Export of goods and trade flows in US $ bn % p.a. North America +5% p.a. 1,225 1, South America % p.a. 2,633 Europe 4, % p.a % p.a % p.a % p.a. Asia +14% p.a. 1,657 2, Africa Source: World Trade Organization Time Series Flows of goods between two regions (Total exports in each case) +5% p.a. - Annual volume growth between two regions Total exports between two regions in 2004 DB, Dr. Sebastian Jürgens,

8 Climate protection: DB AG has assumed a pioneering role in protecting the climate and continues to reduce its specific CO 2 emissions 2005 Energy Saving Program Specific CO 2 reduction -25.9% 2020 Climate Protection Program Specific CO 2 reduction -11.4% % DB, Dr. Sebastian Jürgens,

8% Excellent potential in Eastern Europe Ocean freight (Global) + 8.0% Air freight (Global) + 5.

9 All business units operate in growth markets Performance of transportation and logistics market (CAGR 07-12) Rail (Europe) + 2.5% Liberalization and M&A process in Europe will lead to more growth for DB Land Transport (Europe) + 6.8% Excellent potential in Eastern Europe Ocean freight (Global) + 8.0% Air freight (Global) + 5.3% Enormous growth opportunities, particularly in Asia Contract logistics (Global) + 7.6% Source: DB AG DB, Dr. Sebastian Jürgens,

is the market leader for European combined transport services Rail Freight Transport Business Unit Transport performance: app. 45 mill. train-km Maritime share: app.

$transport services between land-based origin and destination points (continental combined transport) Sales are mainly to resellers (intermodal operators), e.g. Kombiverkehr, Transfracht, etc.$

10 is the market leader for European combined transport services Rail Freight Transport Business Unit Transport performance: app. 45 mill. train-km Maritime share: app. 40% cars: 11,450 Traction units: 345 is the market leader in European combined transport Together with its business partners, the business unit provides a Europe-wide rail network for combined transport services Services are provided for containers, swap bodies and semi-trailers s markets are pre- and post-carriage services to and from the seaport (combined maritime transport) and transport services between land-based origin and destination points (continental combined transport) Sales are mainly to resellers (intermodal operators), e.g. Kombiverkehr, Transfracht, etc. The business unit holds shares in the leading European operators DB, Dr. Sebastian Jürgens,

11 Within its intermodal business DB Logistics has four core competencies besides traction Terminal Ownership Planning and construction Define handling technology Design terminal IT systems Selling transport of single boxes incl. services Neutral platform Capacity management/ Carrying the utilization risk of trains Link between forwarders/ shipping lines and traction companies Transport Operator (ITO)/IMC Core Competences of DB Terminal Operation Running terminal operation Defining terminal standards Controlling service and operational quality Compensate the imbalance of trade flow Storage of empty boxes Other Services on boxes, incl. repair, cleaning etc. Empty Container Depot Services DB, Dr. Sebastian Jürgens,

DB is the biggest operator of intermodal terminals in the world terminal network of DB DB intermodal terminals Sea port terminals Terminal operation competence: Worldwide the biggest Terminal

12 DB is the biggest operator of intermodal terminals in the world terminal network of DB DB intermodal terminals Sea port terminals Terminal operation competence: Worldwide the biggest Terminal Operator: 50 mainly owned Terminals Handling Volume per year: 4,5 million lifts = 6,8 million TEU* Equipment in operation: 120 heavy rail gantry cranes Terminal process competence: Defining terminal standards Controlling service and operation quality Operate own terminal IT System Defining intermodal terminal security standards (based on ISPS) * Including handling lifts DB, Dr. Sebastian Jürgens,

13 DB operates a dense network of empty container depots to serve the needs of the shipping companies Empty container depot network of DB SC SC Specification of empty container depots Compensate the imbalance of trade flow Solving problems of shipping companies with empty containers after unloading Located close to the intermodal terminals SC SC Depot service offerings: Storage of empty boxes Technical check of the boxes Repair shops Cleaning systems Inventory reporting CSC approvals* DB, Dr. Sebastian Jürgens, *Convention for safety containers

14 1. Transportation & Logistics within the DB Group 2. Trends in the Transportation and Logistics Market 3. Strategic Focus DB 4. Eurasian Land bridge DB, Dr. Sebastian Jürgens,

15 DB AG is systematically expanding its rail freight network in Europe along the main transit corridors 1 North/South corridor EWR 3 Long-distance routes, e.g. from northern and western seaports 2 West corridor Potential to increase rail's modal split Expansion of Spanish corridor (e.g. automotive) 3 East corridor Potential in EU accession countries Creation of land bridge to Asia DB / Schenker presence in China In planning stage/being implemented Corridors DB, Dr. Sebastian Jürgens, South-East Europe corridor Potential in EU accession countries Link to Turkish corridor

has a strong intermodal presence in China, with its joint venture company CUIRC Development of a Terminal Network China United International Rail Containers Co., Ltd.

16 has a strong intermodal presence in China, with its joint venture company CUIRC Development of a Terminal Network China United International Rail Containers Co., Ltd. (CUIRC) Terminal Container Handling Container Storage Container Services Agent Services Operator Block train network Street based pre- and post-carriage Provision of containers for national transports Current Chinese Five-year Plan Commitment to grow container traffic in China from 2m TEU to 10m TEU Logistics Empty container management Storage Development of real estate Other local logistics services DB, Dr. Sebastian Jürgens,

17 and is involved in creating an attractive rail connection to China. DB Activities 1 Rail connection to Russia 1 2 Russia/CIS 2 Joint venture (JV) between DB, PKP, RZD and BC 1) to optimize operations JV between DB and RZD for container transport Link to trans-russian corridors 1) PKP Polish Railways RZD Russian Railways China 3 3 Cooperation agreement between MoR 2), RZD and DB to strengthen relationship between the rail operators Partnership with relevant operators in CIS states Establishment of DB rail competence in China Joint venture for terminal operations and rail transport of containers (CUIRC) BC Belarusian Railways 2) MoR Chinese Ministry of Railway DB, Dr. Sebastian Jürgens,

18 1. Transportation & Logistics within the DB Group 2. Trends in the Transportation and Logistics Market 3. Strategic Focus DB 4. Eurasian Land bridge DB, Dr. Sebastian Jürgens,

The Eurasian landbridge is a complimentary product to air- and sea freight and has distinctive advantages Market segmentation Price Landbridge characteristics: Time Target Segment Targets a segement

19 The Eurasian landbridge is a complimentary product to air- and sea freight and has distinctive advantages Market segmentation Price Landbridge characteristics: Time Target Segment Targets a segement between seaand airfreight that is currently not sufficiently catered for Higher reliability than seafreight Helps to reduce bottlenecks in Chinese harbours Dimensional weight is less critical in comparison to air- and seafreight DB, Dr. Sebastian Jürgens,

20 For two routes from Asia to Europe test results have been sampled, a third route will be tested in 2008 First test runs have proved satisfactory: Test runs 2007/08 Different DB companies have been involved Competitive duration has been proven Upside potentials, such as customs processes, have been identitified Next test run will be staged in March 2008 through Railog, a DB Schenker subsidiary Lübeck Munich 1 2 Kotka Buslovskaya Brest Slawkow Moskau Dostyk Zabaikalsk Vostochnyi Beijing Europa Brest Erlian China Europa Riga Dostyk China 3 Europa Lübeck Kotka Buslovskaya Vostochnyi China DB, Dr. Sebastian Jürgens,

21 1 DB s Beijing Hamburg Express (January 2008) covered the distance between Asia and Europe in 15 days A distance of almost km was covered Railways from 5 countries were involved in operating this train - China - Mongolia - Russia - Belarus - Germany DB, Dr. Sebastian Jürgens,

2 Schenker Latvia has transported sucessfully containers in 2007 USA Krustpils Moscow Sestokai Tascala-Ozinki Almaty Container Terminal Dostyk Dostyk Astana Kontrakt Two container runs in 2007

22 2 Schenker Latvia has transported sucessfully containers in 2007 USA Krustpils Moscow Sestokai Tascala-Ozinki Almaty Container Terminal Dostyk Dostyk Astana Kontrakt Two container runs in 2007 Cooperation with CEAG, Kazakh and Chinese railways Connection to Central China from Dostyk and from Riga via ferry/truck/railway REGULAR CONTAINER BLOCK-TRAIN DOSTYK KRUSTPILS ALMATY DOSTYK A HUB FOR CHINA & FAR EAST KRUSTPILS A HUB FOR EUROPE ALMATY A HUB FOR CENTRAL ASIA DB, Dr. Sebastian Jürgens,

Schenker subsidiary Cooperation of Finnish railway, CRIFF, Fesco, Railog in China Expansion through HUB (Harbin) already

23 3 A joint Railog - UIC test train Kotka-China is planned for March 2008 Klaipeda Kaliningrad Brest Tschop Moscow The Trans Siberian Railway Naushki Zabaikalsk Vladivostok Yokohama Pusan Test runs initiated by UIC and managed by Railog, a DB Schenker subsidiary Cooperation of Finnish railway, CRIFF, Fesco, Railog in China Expansion through HUB (Harbin) already planned, connection from Kotka by ferry to central / western Europe and / or Railog-Hubs DB, Dr. Sebastian Jürgens,

24 In an extensive reserach various routes and their price potential have been analysed Kotka Buslovskaya Moskau Riga Klaipeda Kaliningrad Lübeck Brest Zabaikalsk Erlian Vostochnyi Dostyk Peking Europa Brest Zabaikalsk China (1) Europa Brest Dostyk China (2) Europa Brest Vostochnyi China (3) Europa Brest Erlian China (4)* Europa Klaipeda Molodetcnoe Sabaikalsk China (5) Europa Lübeck Kaliningrad Molodetcnoe Zabailkalsk China (6) Europa Lübeck Kotka Buslovskaya Vostochnyi/Sabaikalsk China (7,8) * Europa Slavkow Izov Dostyk China (9)* See (10) * Bereits realisierte Preise DB, Dr. Sebastian Jürgens,

DB has identified areas of improvement and is working hard to establish a regular and competetive product Example of a waybill China-Latvia Key Areas that are being improved Customs processes -

25 DB has identified areas of improvement and is working hard to establish a regular and competetive product Example of a waybill China-Latvia Key Areas that are being improved Customs processes - Documents - Reliability - Speed Establish demand for eastbound traffic Intercompany coordination Further cost reductions For further information please contact: Dr. Bernhard Wiezorek DB China Office, Beijing Tel: ext. 205 Mobile: (China) DB, Dr. Sebastian Jürgens,

26 Many thanks for your attention! DB, Dr. Sebastian Jürgens,

Increasing Russia's Transit Potential. Mikhail Goncharov Advisor to President of RZD

Increasing Russia's Transit Potential Mikhail Goncharov Advisor to President of RZD 1 Global GDP growth rate and GDP (on average) of individual countries in Asia, % According to IMF 2 East West Routes