Business identifier DHL Global Forwarding DHL RAIL FREIGHT ASIA EUROPE JOC Container Trade Europe Conference September 2016 Felix Heger V2.0-130915
ILLUSTRATIVE Why Asia Europe RAIL? Grow business more improve time to market at lower cost follow trends quicker and react faster refill shelfs faster and improve shelf life CO 2 Equivalent Climate changes tons 94,2 Grow business in least expensive way decrease working capital cycle free up cash sooner grow business with less reliance on capital funding increase flexibility and reliability in production due to faster transit option 3,9 Rail 1,8 Sea Air Grow environmentally sustainable slightly higher CO 2 emissions than Ocean but enormous advantages over Air most efficient on non-methane hydrocarbons and sulfur dioxide Improve capital utilization reduce interest payments on loans due to shorter repayment period invest free capital for other activities Value Container USD 100,000 Assumption Interest 4% Interest p.a. USD 4,000 Per diem USD 10.96 41 Days USD 449 19 Days USD 208 Delta USD 241 2
China Policies and DHL RAIL Solutions Development Population 4.4 Billion or 63% of the global population Economy 21 Trillion or 29% of the World output Coverage More than 26 Countries 2008 2012 2013 2014 2015 Concept definition, analysis and trials via various routes for West- and Eastbound Opening and launching of first regular block train (Chengdu-Lodz Block Train) Launch of Temperature Controlled Container Launch of LCL Rail Concept Launch of additional China connections & Japan connection Launch of Korea, Taiwan connection Launch of Moscow Block train Trial via South Corridor (Lianyungang Istanbul) 3
DHL RAIL: Connections, Gateways and Hubs St Petersburg Novorossisk Vladivostok & Russia Flexible multi-terminal solution based on various services to deliver cargo within a confirmed door-door transit time from Asia to Europe Multimodal ocean rail connections into Russia Reduced risk of congestion or lack of space Cost effective service solution 4
East Asia Connections via China Hubs CHINA Lianyungang Korea Japan Transit from from Europe via Chinese ports To/from Asia Pacific countries: Chengdu Suzhou & Taicang Hefei Xiamen Ningbo Shanghai JAPAN & KOREA Suzhou-Shanghai, Hefei-Shanghai Chengdu-Shanghai, Lianyungang TAIWAN Taiwan-Xiamen, Taiwan-Suzhou Hanoi ipingxiang Taiwan HONG KONG Shenzhen-Suzhou, Shenzhen-Chengdu VIETNAM Chengdu-Pingxiang, Chongqing-Pingxiang Suzhou-Pingxiang 5
DHL RAIL: FCL Service Specifications End-to-end Rail Solution Standard equipment; 40 High Cube containers (20 container in pairs 2x20 ) Pick up and delivery by trailer or chassis truck Customs procedure in China in rail hub or in customer bonded zone Container re-loading for gage change Efficient handling of import, export and transit formalities Daily status updates Addl. insurance coverage on request Professional and established solution High service level and performance Lean and secure processes Accurate planning and scheduling Consistent lead times 6
DHL RAIL: Asia Europe LCL service Chinese Hubs: European Hubs: Chengdu, Zhengzhou, Suzhou, Shenzhen Mala, Warsaw, Lodz, Hamburg, Duisburg. Moscow 7
Increase Visibility and Security GPS/ Cell Network Monitoring GPS monitoring at container level is available as value added service to provide you full visibility Door to Door Monitoring solution: Visibility available Full visibility on cargo status along the route 24/7 access to real-time status updates Regular reporting and real time alarms along the complete route Monitoring and Intervention possible DHL real-time monitoring of all movements and alarms Clear response plan in case of door open alarm 8
Liability and Insurance in Rail Rail is the only transport mode without unified convention applying Legally two conventions are applicable for Rail: COTIF/CIM and SMGS Standard liability limitation: *SDR 17/kg unless where a higher limit is provided by the applicable convention Enhanced liability: where required a higher than standard limit can be assessed and priced as add-on to freight charges (per container) Cargo all risks insurance available upon request at competitive prices (rates in % of cargo value) Convention Comparison COTIF/CIM SMGS SDR 17.00/kg SDR 17.00/kg COTIF: Convention concerning International Carriage by Rail CIM: Uniform Rules Concerning the Contract of International Carriage of Goods by Rail SMGS: International conventions which apply in Eastern Europe and Asia to the international carriage of passengers and goods by rail CMR (Europe) SDR 8.33/kg CMR is a United Nation convention that relates to legal issues concerning transportation of cargo by road. It has been ratified by the majority of European Countries and totally by 55 States MONTREAL / WARSAW HAGUE-VISBY RULES SDR 19.00/kg SDR 2.00/KG or SDR 666.64 per package Montreal Convention is the Convention for the Unification of Certain Rules for International Carriage by Air and It amend important provisions of the Warsaw Convention which attempts to re-establish uniformity and predictability of rules relating to the international carriage of passengers, baggage and cargo. Hague-Visby Rules is a set of international rules for the international carriage of goods by sea * SDR (Special Drawing Rights). The currency value of the SDR is determined by summing the values in USD, based on market exchange rates, of a basket of major currencies (the USD, EUR, JPY and GBP). Further info see http://www.imf.org/external/np/fin/data/rms_sdrv.aspx 9
Asia Europe RAIL Summary Rail is not «the better Ocean Freight» It can be a more cost effective and more reliable solution then deferred/slow Airfreight: less cost, more reliability It is a viable option to expedite shipments which would normally be sent via Ocean Freight: faster, and more reliable Altogether an ideal complementary service to the existing transport connections between Asia and Europe, it surely increases flexibility in the supply chain and makes shippers more agile Asia-Europe Rail business is on a strong growth path, and it will grow further especially now - but it will in no way diminish or even impact the relevance of maritime liner services Asia-Europe Rail industry is not saturated and still very fragemented it takes a strong focus to connect the dots of railways, customs, chinese decisions, customers, origins and destinations in a way which creates a truly reliable and high performing service 10
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Low Cost level High Why RAIL? Lower cost compared to Air Freight Faster transit time compared to Ocean Freight Transport Mode Comparison Short Transit time Long Flexibility Supports tight supply chain schedules with on-time reliable inflow of goods Creates additional market opportunities with faster delivery possibilities Avoids long deliveries and pick up from shipping locations far away from ports in the hinterland Reliability Provides stability to the supply chain as most time - accurate shipping mode Provides expedited transit possibility to avoid penalties or production stops as a result of supplier delays Improved Capital Utilization Reduced transit time compared e.g. to Ocean freight can lead to reduced interest payments on loans Frees up capital for other activities due to reduced transit time Traceability State of the art Track & Trace system ensuring that you are always informed on your shipment status Improved Ecological Footprint Significant ecological advantage compared to Air freight 12
Customer Benefits The Advantages of using DHL Rail Freight at a Glance Solution Defined schedule and capacity providing fast and secure connection between origin and destination Reliability You benefit from highly reliable door-to door lead times DHL RAILLINE DHL RAILCONNECT Flexibility Whatever the load, whatever the destination, we have the best experts in the industry who can provide you the solutions you need Tracking & Tracing With our state-of-art Track & Trace system you are always informed of your shipment status Security Different level of security during the trip: physical security on the wide gauge route + RFID Monitoring (min. twice a day) Environmental We help you meet your environmental responsibility commitments 13
INFORMATIVE NON EXHAUSTIVE Temperature Controlled Container and Thermal Blanket Protection Temperature Controlled Container Customer Requirement General temperature controlled cargo to be carried by rail (-25 C to +25 C) Active winter solution to keep the cargo at stable temperature also during harsh winter environment DHL Solution Diesel powered reefer container (45 ) able to keep temperatures stable between -25C / +25C degree during the whole trip Unit provides advanced track and traceability system including: - Remote control access to modify temperature set during the trip if needed - Door alarm - Temperature alarm - Advanced GPS system Thermal Blanket Customer Requirement Cargo sensitive to extreme temperatures fluctuations Cargo requiring additional protection DHL Solution The insulation layer installed the container protects cargo from moisture and temperature influences during transportation The liner works as a moisture and temperature barrier by creating an environment that reduces temperature fluctuation and prevent heat damage by temperature spike due to condensation Simple installation provided to shipper for easy installation 14
ILLUSTRATIVE Rail Environmental Impact Ecological Footprint of Sample Shipment of 15.3 Tons from Shanghai City District to Vienna City District Carbon Dioxide (CO 2 ) CO 2 Equivalent Non-methane Hydrocarbons Greenhouse gas, global warming tons 92,2 Climate changes tons 94,2 Smog, health damage kilograms 47,0 3,6 1,8 11,3 3,9 1,8 11,6 1,1 2,0 8,4 Rail Sea Truck Air Rail Sea Truck Air Rail Sea Truck Air Sulfur Dioxide (CO 2 ) Primary Energy Nitrogen Oxides Acidification, health damagee kilograms 135,6 Resource consumption mega joules 1.386,4 Acidification, smog, over-fertilization kilograms 401,3 16,1 18,3 21,8 60,4 26,4 173,9 12,9 33,4 115,9 Rail Sea Truck Air Rail Sea Truck Air Rail Sea Truck Air Compared with Air, Rail has significant ecological advantage Rail has slightly higher CO 2 emissions and uses more primary energy than Sea Rail has an advantage on all Air, Sea and Truck in non-methane hydrocarbons and sulfur dioxide Source: www.ecotransit.org 15
Rail sector solution Automotive Industry Buyers consolidation service DHL Double Decker Car Racking Industry specific design driven by Customized DHL Supply buyer s Chain shipper s solutions Designed consolidation to achieve allowing maximum to bundle optimization products and and orders cost purchased benefits in utilization Dedicated through Full container to decanting loads End stuffed to end in defined management location control or at and railway pooling hubs of empty returns Currently Increased in visibility trial phase of shipments with BMW including between daily tracing Germany and China Optimized loading at origin Improved securit adn more control Unique equipment for flexible and secure delivery of nonstackable cargo DHL Double Decker allows maximum load factors to be achieved Reduced transport costs due to improved container loading Reduced damage due to better stacking Safe support for finished car deliveries Racking according to requirement Loading support available Rail routing via predefined routes supporting finish car shipping mode 16
Rail sector solution Fashion Buyers consolidation service GOH (Garments on hanger) Dedicated Warehouse Facilities Industry specific design driven by Customized DHL Supply buyer s Chain shipper s solutions Designed consolidation to achieve allowing maximum to bundle optimization products and and orders cost purchased benefits in utilization Dedicated through Full container to decanting loads End stuffed to end in defined management location control or at and railway pooling hubs of empty returns Currently Increased in visibility trial phase of shipments with BMW including between daily tracing Germany and China Optimized loading at origin Improved security and more control Unique equipment for flexible and secure delivery of nonstackable cargo DHL Double Decker allows maximum load factors to be achieved Reduced transport costs due to improved container loading Reduced damage due to better stacking Dedicated DHL Fashion warehouse Possibility of integration with 3PL unit for additional services On-demand re-distribution according to market needs 17
Rail sector solution Technology Active Winter solution (Reefer) Passive Winter solution (Thermal Blanket) High-care handling and security Industry specific design driven by Active DHL winter Supply solution Chain to solutions keep the Designed cargo at stable to achieve temperature maximum also optimization during harsh and winter cost environment benefits in utilization Special 45 through equipmement to decanting with End diesel to powered end management reefer control and Keep pooling temperatures of empty stable returns Currently between in -25C trial / phase +25C degree with BMW during between the whole Germany trip and China Including advanced GPS system The insulation layer installed the container protects cargo from moisture and temperature influences during transportation The liner works as a moisture and temperature barrier by creating an environment that reduces temperature fluctuation Simple installation provided to shipper for easy installation Value added service with GPS to monitored 24/7 by dedicated DHL control tower Containers door reinforced with T-bar locs upon request Optional security convoy to protect high value shipments during last mile delivery etc. Possibiltiy of deconsolidation at destination at delivery directly to end customer 18
Rail sector solution Wine and Spirits Wine & Food Business Licences Wine & Spirits Labeling and Packaging Dedicated Warehouse Facilities Industry specific design driven by Support DHL Supply for Import Chain trader solutions Designed Agreement to with achieve overseas maximum optimization seller/shipper and cost benefits in utilization Assistance through with customs decanting End formalities to end including management CIQ and control and customs pooling affairs of empty returns Currently Preparation in trial of importatin phase with BMW process between documents Germany and China To manage inventory of imported wine Wine Labelling according to chinese market requirements Preparation for customs and Dedicated wine storage possibilities Cross docking operation Free trade zone/ bonded logistic park/ free trade park operation Vendor managed inventory 19