ALPHALINER Weekly Newsletter

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1 ALPHALINER Weekly Newsletter Volume 2018 Issue to Web: Sales: The Alphaliner Weekly Newsletter is distributed every Tuesday. Information is given in good faith but without guarantee. Alphaliner does not accept any liability for any errors or omission or opinion. Please send your feedback, comments and questions to Unauthorized redistribution of the newsletter is prohibited and readers are requested to quote Alphaliner as source for all data derived from the newsletter. Please refer to full user terms and copyrights at Carrier Operating Margins 1Q 2018 Chart of the week Main carriers average operating margin by quarter : In US$ M Revenue Operating Profit % margin Hapag-Lloyd 3, % CMA CGM 5, % Wan Hai % Zim % Maersk 6, * -2.3%* K Line 1, % EMC 1, % NYK 1, % MOL 1, % Yang Ming 1, % HMM % Average Carrier Operating Margin 2.3% 2.2% 0.7% -1.7% -17.8% -19.2% -17.5% -11.3% -1.1% 10.7% 16.0% 7.4% -0.2% -5.5% -7.0% -10.5% -12.1% 1.3% 4.7% -1.1% -3.2% -1.0% 0.5% -4.3% -1.8% 0.4% 3.4% 1.0% 5.2% 2.4% -1.8% -5.9% -5.5% -9.2% -7.8% -1.2% -1.2% 2.8% 5.0% 0.9% -3.3% ALPHALINER Results for reported container shipping segments only, converted from local currency. *Maersk operating profits are estimated based on reported EBITDA for 1Q 2018 INSIDE THIS ISSUE: Failure to raise rates to compensate for 1 bunker rise proves costly for carriers Corporate Updates 2 CMA CGM posts -$77 M net loss in 1Q Zim posts net loss of -$36 M in the first quarter Service Updates 4 HMM to exit Transatlantic trade OCEAN Alliance to suspend TAT4 service Maersk Line launches own Med - Canada service 2M splits Europe-Far East - USWC pendulum service Maersk, Hamburg Süd and MSC rearrange USG - ECSA ship allocations Maersk, SeaLand and Hamburg Süd to rationalize USWC-Centram-WCSA loops Maersk & Hamburg Süd to merge Centram-North Europe services and upsize Centram-Med link CMA CGM adds fourth Asia - WCSA weekly service CMA CGM re-launches seasonal Bijagos cashew nut service RCL to introduce direct Thailand- Western India - Pakistan service Intermarine and Zeaborn merge multipurpose fleets Deliveries/Vessel Updates May deliveries Port and Terminal Updates Jacksonville Harbour Deepening ZPMC delivers first gantries to new Veracruz Terminal HPH-ICAVE DP World finalises Peru Deal Record ship at Wilmington, NC Zeebrugge port buys minority share in COSCO Terminal Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 Average of CMA CGM (incl APL to 2Q 2016), CSCL (to 1Q2016), EMC, Hanjin (to 3Q 2016), Hapag-Lloyd (incl CSAV to 2014), HMM, KL, Maersk, MOL, NYK, WHL, YML, Zim Carriers earnings slump in 1Q 2018 Following three positive quarters, average operating margins for the main carriers have slipped back into the red this year. In Q1 of 2018, increased bunker costs and weakening freight rates have started to pull carriers earnings down. Average operating (core EBIT) margin for the eleven largest shipping lines that published results fell to -3.3% in the first quarter - the worst performance since Q3 of In late 2016 and through much of 2017, the container shipping markets then experienced a mini-revival, prompted by the abrupt departure of South Korea s Hanjin Shipping, which had filed for receivership in August Only three container lines managed to stay in the black during the first quarter of 2018, led by Hapag-Lloyd, which posted operating profits of $66 M on revenues of $3,217 M for a margin of 2.1%. CMA CGM and Wan Hai also managed to turn in positive operating margins of 1.6% and 1.0%, respectively. The remaining eight carriers all reported negative margins, with HMM remaining at the bottom of the list for the eighth consecutive quarter with its negative margin of -15.6%. Notably, Maersk failed to post positive operating results with an operating loss estimated at -$158 M, based on its published EBITDA result of $492 M and deducting estimated depreciation and amortisation expenses of $650 M for its ocean business. This segment included - for the first time - the earnings of eight key strategic container transhipment hubs, previously reported under the results of APM Terminals (APMT). Page 1 Copyright Alphaliner

2 CORPORATE UPDATES CMA CGM posts a net loss of -$77 M in 1Q CMA CGM has reported a net loss of -$77 M in the first quarter of 2018, its first quarterly loss since the third quarter of CMA CGM Liftings and average revenue/teu by quarter : ,800 Although operating profits (core EBIT) remained positive at $88 M on revenue of $5,411 M for an operating margin of 1.6%, the results were insufficient to cover interest expenses on borrowings and other net financial items and tax of $182 M. Liftings in TEU millions ,700 1,600 1,500 1,400 1,300 1,200 1,100 1,000 Ave. Revenue $/TEU CMA CGM financial results by quarter ( ) CMA CGM (including logistics and terminals); inc. APL from 14 Jun 2016 Currency 1Q 17 2Q 17 3Q 17 4Q 17 FY Q 18 Revenue US$ m 4,620 5,311 5,702 5,483 21,116 5,411 EBITDA , EBITDA Margin % 8.3% 11.5% 12.4% 7.6% 10.0% 4.0% Core EBIT , Core EBIT Margin % 5.5% 8.9% 10.0% 5.2% 7.5% 1.6% Net Profit Ave. TEU Operated '000 2,150 2,232 2,419 2,495 2,324 2,522 Liftings in '000 TEU 4,304 4,732 4,984 4,929 18,949 4,949 Ave. Rev ($/TEU) 1,074 1,122 1,144 1,112 1,114 1, Q10 1Q11 1Q12 1Q13 1Q14 1Q15 1Q16 1Q17 1Q The company said the poor results were due mainly to the rise in bunker expenses which increased to $757 M compared to $564 M in the same quarter last year. Bunker costs now account for 14.6% of CMA CGM s total operating expenses, compared to 13.3% a year ago. CMA CGM Net Profit/Loss by Quarter The increased expenses erased the benefits of higher liftings, which jumped by 15% year-on-year to reach 4.95 Mteu. The increased volumes were led by gains in Middle East Gulf/India subcontinent (+35%), Africa (+29%), Latin America (+19%) and US (+13%). CMA CGM liftings breakdown by trade (in 000 teu) : 1Q 2018 vs 2017 Earnings US$ Million CMA CGM also revealed a strategic plan to build a synergetic logistics pillar aimed at expanding external growth in comprehensive logistics services in order to provide a differentiated and decommoditized shipping offer. 1Q14 3Q14 1Q15 3Q15 1Q16 3Q16 1Q17 3Q17 1Q18 The shipping line described its CHF 380 M ($381 M) investment to acquire a 25% stake in CEVA Logistics on 3 May 2018 as an opportunity to turn around (a) mid-size player to develop customer offers in logistics. The conversion of its mandatory convertible bonds into shares in CEVA is expected at the end of the third quarter, following the completion of anti-trust clearance. Page 2 Copyright Alphaliner

3 CORPORATE UPDATES Zim posts net loss of -$36 M in the first quarter While we started to see an improvement in some of the trades towards the end of the quarter, Q results, on the whole, were negatively impacted by the combined effect of increased bunker prices, higher charter costs and lower freight rates, ALPHALINER APM-Maersk MSC CMA CGM COSCO Shipping Hapag-Lloyd ONE Evergreen OOCL Yang Ming PIL Zim Hyundai M.M. Wan Hai Zim Net Income US$ M (1Q)2018 Eli Glickman, ZIM President & CEO 24 May 2018 Top 13 carriers - Chartered fleet as % of total capacity operated (May 2018) 0% 50% 100% Zim has reported a net loss of -$36 M in the first quarter of 2018, while core EBIT dropped to a loss of -$2 M as operating margins slumped to -0.3%. The first quarter net loss erased all of Zim s net profits of $6 M recorded in the full year Zim : Financial results by quarter ( ) Zim (including logistics and terminals) Currency 1Q 17 2Q 17 3Q 17 4Q 17 FY Q 18 Revenue US$ m , EBITDA EBITDA Margin % 8.8% 9.4% 10.9% 7.0% 9.1% 3.4% Core EBIT Core EBIT Margin % 4.7% 5.9% 7.6% 3.3% 5.4% -0.3% Net Profit Ave. TEU Operated ' Liftings in '000 TEU , Ave. rate ($/TEU) 953 1,007 1, Although Zim s total liftings grew by 17% to reach a record high of 698,000 teu in the first quarter, average rates have continued to slide and are 2% lower than the first quarter last year and 11% lower than last year s peak during the third quarter. TEU 800, , , , , , , , Q Q Q Zim liftings and rates by Quarter : Q Q TEU Q 2,000 1,500 1,000 Zim s balance sheet position has continued to worsen following its latest quarterly loss, with total equity as at the end of March 2018 at a negative balance of -$130 M while total debt stood at $1,426 M. Apart from the increase in bunker costs, Zim is particularly exposed to the rising charter market as its chartered fleet currently accounts for 93% of the total capacity operated by the company - the highest chartered fleet ratio among the top 13 main carriers Q Q Ave Freight Rates Q Q Q Q $/teu Page 3 Copyright Alphaliner

4 SERVICE UPDATES Hyundai Merchant Marine to exit Transatlantic trade HMM : Transatlantic Services Details TA-2/TA-3 - to be suspended from June Slots on 2M services TA-2 : Bremerhaven, Felixstowe, Antwerp, Le Havre, New York, (Baltimore), Norfolk (Va), Savannah, New York, Bremerhaven TA-3 : Antwerp, Felixstowe, Rotterdam, Bremerhaven, Le Havre, Charleston, Savannah, [Freeport (Bah), Vera Cruz, Altamira, New Orleans, Mobile, Freeport (Bah) - HMM does not participate on these ports], Savannah, Charleston, Antwerp Hyundai Merchant Marine (HMM) will leave the Transatlantic trade as it is to cease to buy slots on two North Europe - US East Coast loops of Maersk Line and MSC operated within the frame of their 2M Vessel Sharing Agreement. HMM will therewith lose its global carrier status, which is defined by a participation in the three main East- West trades, on top of other trades. Since April 2017, HMM has been taking 700 teu per week on the 2M North Europe - USEC TA-2/NEUATL2 and North Europe-US Gulf TA- 3/NEUATL3 services, as part of the 2M+HMM Strategic Cooperation Agreement, which was officially signed on 15 March 2017 for a period of three years (ending 1 April 2020). This agreement covers the three main East - West trades and it allowed HMM to continue offering transatlantic services and Europe - Asia services after the dissolution of the G6 partnership, while retaining its own Transpacific services, complemented by slots on some of the 2M loops. On the US side, the HMM Transatlantic coverage was limited to the ports of New York, Norfolk, Savannah and Charleston. In a short message to North American shippers, the Korean carrier states that ''market conditions have driven HMM to concentrate its efforts to service its customers in other core trades''. The final westbound sailings from Europe will be offered in the last week of June, while the last eastbound sailings from US ports will be from Norfolk on 13 July (for the TA-2) and from Savannah on 31 July (for the TA-3). Freight rate $/FEU $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 Transatlantic Spot Freight Rates Rotterdam - New York New York - Rotterdam Weekly capacity in TEU 20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 North Europe-East Coast North America Weekly capacity by carrier (May 2018) $500 $0 Jan-11 Source : WCI Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 HMM s slot allocation of 700 teu/week on the Transatlantic market gave it a capacity share of less than 1% on the North Europe to East Coast North America route. The small market share proved to be unsustainable for HMM, while freight rates on the route have remained moribund. HMM s withdrawal is not expected to affect overall trade capacity as the 2M carriers, Maersk and MSC, are expected to retake all of the slots currently used by HMM, without any changes to existing 2M services. Page 4 Copyright Alphaliner

5 SERVICE UPDATES OCEAN Alliance to suspend TAT4 service OCEAN Alliance : TAT4 Service Details Independence Bridge/TAE2/TAX/ATE2 - suspended from June 3 x 4,200-5,000 teu (2 sailings skipped) Southampton, Le Havre, Antwerp, Rotterdam, Bremerhaven, Charleston, Savannah, Miami, New York, Southampton The OCEAN Alliance members (CMA CGM - APL, COSCO Shipping, Evergreen, OOCL) will suspend sailings of their newly launched North Europe - US East Coast TAT4 service in June, just two months after the loop was introduced. The service, branded respectively by the partners as the Independence Bridge/TAE2/TAX/ATE2, was part of the OCEAN Alliance s 2018 Day Two network implemented in April. It was to turn in five weeks deploying five 4,200-5,000 teu ships, of which three were to come from CMA CGM, while Evergreen and OOCL were to provide one ship each. Only three out of five ships have been deployed in the first two cycles of this service, resulting in two blank sailings on each five week cycle. The three ships will be withdrawn in June. The service calls at Southampton, Le Havre, Antwerp, Rotterdam, Bremerhaven, Charleston, Savannah, Miami, New York, Southampton. As a result of the suspension of the TAT4 sailings, the call at Savannah has been reinstated on the TAT2 service which reverts to its former Day 1 rotation with the new call at Baltimore dropped after being added only in April. From June, the revised TAT2 service will call at Southampton, Antwerp, Rotterdam, Bremerhaven, Le Havre, New York, Norfolk, Savannah (replacing Baltimore), Charleston, Southampton. Maersk : MMX Service Details Mediterranean-Montreal Express - New from July 5 x TBN Valencia, Salerno, La Spezia, Fos, Algeciras (APMT), Montreal, Halifax, Va- The launch of the new service is motivated by Maersk s forecasts for growth of 7% in container volumes on the Canadian routes thanks to the CETA* and CPTPP* accords. In addition, Maersk expects to see another year of healthy growth for Middle East, India, Pakistan, and Far East volumes to Canada s East Coast, which grew by over 9% in CPTPP - Comprehensive and Progressive Agreement for Trans-Pacific Partnership : a trade agreement between Canada, Australia, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. CETA - Comprehensive Economic and Trade Agreement (CETA) : a trade agreement between Canada and the European Union. Maersk to launch own Med-Canada service Maersk Line is to launch a Med - Canada service, branded 'Mediterranean-Montreal Express' (MMX). The new loop will directly connect Italy, France and Spain with the Montreal and Halifax gateways, and it will act as a relay service for Asian, African, Middle East and Eastern Med cargoes. The MMX service will offer weekly sailings, calling at Valencia, Salerno, La Spezia, Fos, Algeciras (APMT), Montreal, Halifax, Valencia. It will turn in five weeks. The first sailing is planned on 2 July from La Spezia. Maersk Line currently serves the Med - Canada route through slots on the 'MCA' service of Hapag-Lloyd. The eastbound call in Halifax, Nova Scotia, will cater in particular for the Canadian perishable export shipments. In Montreal, the Maersk 'MMX' ships will be handled at the Cast terminal of Montreal Gateway Terminals. This operator already handles at its Racine terminal the vessels deployed on the joint North Europe - Canada service of Maersk (branded 'Canada Atlantic Express') and CMA CGM (branded 'St Lawrence Service 1'). Page 5 Copyright Alphaliner

6 SERVICE UPDATES 2M splits Europe - Far East - USWC pendulum service 2M : TP-6/Pearl Service Details TP-6/Pearl - revised May x 13,100 teu Yantian, Xiamen, Los Angeles, Yokohama, Nansha, Hong Kong, Yantian 2M : AE-6/Lion Service Details AE-6/Lion - revised May x 13,500-15,300 teu Ningbo, Shanghai, Yantian, Tanjung Pelepas, Algeciras, Antwerp, Felixstowe, Le Havre, Port Said East, Singapore, Ningbo As planned, Maersk Line and MSC have split last week their joint Europe - Far East - US West Coast pendulum service branded as AE- 6/ Lion on the Europe - Asia leg and as TP-6/Pearl on the Transpacific. The loop was uncoupled into two stand-alone services that retain their former names, AE-6/Lion and TP-6/Pearl. The de-coupling of the pendulum s two legs is part of a broader revision of all Asia - Europe loops offered by Maersk and MSC within the framework of their 2M Vessel Sharing Agreement. While the rotation of the new Asia - Europe AE-6/Lion service was already announced in March, final details of the new stand-alone Asia-USWC TP-6/Pearl service only emerged last week. The new TP- 6/Pearl turns in six weeks, using six 13,100 teu ships previously deployed in the pendulum service. Ports served are Yantian, Xiamen, Los Angeles, Yokohama, Nansha, Hong Kong, Yantian. As for the new Far East - Europe AE-6/Lion service, it has been officially launched on 24 May with the sailing of the 15,282 teu MAERSK HANOI from Ningbo. The service turns in ten weeks calling at Ningbo, Shanghai, Yantian, Tanjung Pelepas, Algeciras, Antwerp, Felixstowe, Le Havre, Port Said East, Singapore, Ningbo. The split of the pendulum means that the fleet on the Asia-Europe leg no longer has to take into account operational constraints of the Transpacific trade, particularly in terms of vessel size. Nevertheless, the new AE-6/Lion will still be staffed by 13,500-15,300 teu ships. Capacity is only slightly increased as some more Maersk 'H-class' vessels of 15,300 teu will phase-in to replace neopanamax ships of 13,100 teu. Maersk/Hamburg Süd & MSC : UCLA/ USG-ECSA Service Details US Gulf-East Coast South America 7 x 5,500-6,700 teu Vera Cruz, Altamira, Houston, Cristobal, Cartagena, Suape, Santos, Navegantes, Itapoa, Paranagua, Santos, Rio de Janeiro, Salvador, Cartagena, Cristobal, Vera Cruz Maersk Line, Hamburg Süd and MSC to re-arrange US Gulf - ECSA ship allocations Maersk Line and MSC are to jointly operate the US Gulf - ECSA service so far run by Hamburg Süd and MSC. Hamburg Süd currently provides five ships and MSC two. In this respect, both Maersk and MSC filed an agreement with the US Federal Maritime Commission (FMC) last week. The service, branded 'UCLA' by Hamburg Süd, became part of the Maersk Line portfolio in the wake of the purchase of Hamburg Süd in November Maersk and its Intra Americas division SeaLand started to advertise sailings on the 'UCLA' earlier this year. The new arrangement stipulates that Maersk will contribute four ships, retaken from Hamburg Süd, and that MSC will contribute three ships, instead of two. Hamburg Süd, will continue to market the ser- Page 6 Copyright Alphaliner

7 SERVICE UPDATES vice without providing tonnage under its name. The rotation will remain unchanged, serving Vera Cruz, Altamira, Houston, Cristobal, Cartagena, Suape, Santos, Navegantes, Itapoa, Paranagua, Santos, Rio de Janeiro, Salvador, Cartagena, Cristobal, Vera Cruz. Maersk/Hamburg Süd/SeaLand : WCCA/WCCA 2 Service Details USWC-WCCA-WCSA service WCCA : 5 x 2,500 teu WCCA 2 : 4 x 1,800 teu WCCA : Los Angeles, Port Hueneme, Lazaro Cardenas, Puerto Quetzal, Acajutla, Balboa, Paita, Guayaquil, Balboa, Puerto Caldera, Puerto Quetzal, Lazaro Cardenas, Ensenada, Los Angeles WCCA 2 : Long Beach, Oakland, Lazaro Cardenas, Corinto, Puerto Caldera, Balboa, Corinto, Acajutla, Lazaro Cardenas, Long Beach A total of nine ships of 1,800-2,500 teu with high-reefer intakes are expected to be deployed on these services, instead of ten ships on the current services. The launch of the new loops remains subject to the approval of the US Federal Maritime Commission (FMC). Maersk Line and its Intra Americas division SeaLand also cover the US Gulf - ECSA trade through slots on the CMA CGM 'Brazex' service, branding it as 'ACX', in an arrangement dating back to January 2014, while Hamburg Süd followed one year later within a different slot agreement. On its side, MSC also offers a second service on the trade, operated jointly with Hapag-Lloyd and ONE, on which Maersk/ SeaLand takes slots. MSC provides one vessel on this eight-ship service. Maersk, SeaLand and Hamburg Süd to rationalize USWC - Centram - WCSA loops Maersk Line, its Intra Americas division SeaLand, and its affiliate Hamburg Süd are to rationalize their offering between the US West Coast, the West Coast of Central America and the West Coast of South America with the launch in July of two new weekly services (WCCA/WCCA 2) that will replace the current Maersk/SeaLand USWC - Mexico - WCCA service and the current Hamburg Süd USWC - Mexico - WCCA - WCSA 'WAM' service. The new services will in particular eliminate the port overlaps as the two existing services have continued to run in parallel without significant changes since the purchase of Hamburg Süd by the Maersk Group in November CMA CGM, which is a ship operating partner alongside Hamburg Süd on the 'WAM' (branding it 'Azteca'), will take slots on the two new loops while APL, which takes slots on the Los Angeles - Mexico - WCCA segment of the Maersk/SeaLand service (branding it 'WC5'), has to confirm the continuation of this arrangement on the new loops. MSC, which takes slots on the Maersk/SeaLand service, has also to confirm its future participation. The new SeaLand services, which will remain partly reefer oriented to cater for Ecuador and Centram banana/fruit exports, will stand as follows : WCCA - Los Angeles, Port Hueneme, Lazaro Cardenas, Puerto Quetzal, Acajutla, Balboa, Paita, Guayaquil, Balboa, Puerto Caldera, Puerto Quetzal, Lazaro Cardenas, Ensenada, Los Angeles - Rotation in five weeks. WCCA 2 - Long Beach, Oakland, Lazaro Cardenas, Corinto, Puerto Caldera, Balboa, Corinto, Acajutla, Lazaro Cardenas, Long Beach - Rotation in four weeks. Page 7 Copyright Alphaliner

8 SERVICE UPDATES Maersk/Hamburg Süd : CRX/EMCS Service Details North Europe-Centram service 7 x 3,830 teu Antwerp, Bremerhaven, Altamira, Vera Cruz, Big Creek, Manzanillo (Pan), Puerto Limon, Cork, Tilbury, Antwerp Maersk/Hamburg Süd : WMCS Service Details West Med-Centram service 6 x 1,800-2,500 teu Algeciras (APMT), Manzanillo (Pan), Cartagena, Moin, Manzanillo (Pan), Marin, Vado Ligure, Livorno, Civitavecchia, Naples, Salerno, Algeciras (APMT) Maersk and Hamburg Süd to merge Centram - North Europe services and up-size Centram - Med link Maersk Line and its German affiliate Hamburg Süd are to merge in June their respective Central America - North Europe loop CRX and Europe - Mexico - Centram service EMCS into a single operation. The merged loop will be branded CRX by Maersk Line and EMCS by Hamburg Süd. Both services cater in particular for banana/fruit exports from Central America. The new combined service will turn in seven weeks using seven 3,830 teu ships with high reefer capacity calling at Antwerp, Bremerhaven, Altamira, Vera Cruz, Big Creek, Manzanillo (Pan), Moin (Puerto Limon), Cork, Tilbury, Antwerp. The northern Spain port of Marin (a fruit import gateway), currently served with the existing 'EMCS', will be shifted to the Maersk Line/Hamburg Süd West Med-Central America WMCS service. On top of the addition of Marin, the 'WMCS' service will be upsized with the 2,500 teu ships presently deployed on the CRX to gradually replace the 1,841 teu ships that operate on this service. The 'WMCS' was launched in January. It turns in six weeks and serves Algeciras (APMT), Manzanillo (Pan), Cartagena, Moin, Manzanillo (Pan), Marin, Vado Ligure, Livorno, Civitavecchia, Naples, Salerno, Algeciras (APMT). All services concerned are fruit-oriented in the eastbound direction. The 3,830 teu vessel POLAR ECUADOR arrives at Hamburg for the first time in early May. The ships will soon cease visiting Hamburg as the merged CRX/ EMCS only German call is at Bremerhaven. Photo: J. Tiedemann The revised CRX/EMCS service will later call at the new terminal that Maersk Line is constructing in Moin, to be opened in the first quarter of The new combined service will retain the direct North Europe - Mexico westbound connection offered with the current 'EMCS'. Of note, five ports currently served by one of the two existing loops are not included in the new rotation: They are Rotterdam (served by the CRX ) and London-Gateway, Hamburg, Cartagena and the Spanish port of Marin (served by the EMCS ). The new CRX/EMCS service will deploy seven 3,830 teu POLARclass vessels which are equipped with 1,000 teu reefer plugs. Hamburg Süd already operates eight ships of this type, of which two are deployed by its Brazilian affiliate Aliança on an ECSA coastal service whereas four others have been already introduced in the EMCS service as from March. The two remaining ships are currently on a positioning voyage from Asia to Latin America and should join the combined 'CRX/EMCS'. The assignment of larger vessels, initially ordered by Hamburg Süd prior to the Maersk acquisition, might have triggered the merger of the current CRX and EMCS services, which used to be both run with 2,500-2,800 teu ships fitted with 600 reefer plugs. Maersk describes the merger also as a response to challenging market conditions in the Central America/Caribbean-North Europe market. The eastbound leg of the combined CRX/EMCS service is identical to the old CRX pattern including Moin (Costa Rica) as last loading port in Central America, which is also served by the current EMCS. Page 8 Copyright Alphaliner

9 SERVICE UPDATES CMA CGM adds fourth Asia - WCSA weekly service CMA CGM/APL : ACSA 5/QEX Service Details Asia-Mexico-West Coast South America service Slots on COSCO/Evergreen/PIL/WH service Busan, Kaohsiung, Shekou, Hong Kong, Ningbo, Shanghai, Manzanillo (Mex), Lazaro Cardenas, Puerto Quetzal, Callao, Guayaquil, Buenaventura, Manzanillo (Mex), Busan CMA CGM in April added a fourth Asia - Mexico - WCSA weekly service to its network. The offer,branded ACSA 5, is made through taking slots on the Asia - Mexico - WCSA joint service of Evergreen, COSCO Shipping, PIL, Wan Hai and Yang Ming. Simultaneously, CMA CGM Group's affiliate APL also starts slotting on this service under the product name Quetzal Express (QEX). The service calls at Busan, Kaohsiung, Shekou, Hong Kong, Ningbo, Shanghai, Manzanillo (Mex), Lazaro Cardenas, Puerto Quetzal, Callao, Guayaquil, Buenaventura, Manzanillo (Mex), Busan. It turns in ten weeks using ten ships of 4,200-6,500 teu. CMA CGM and APL advertise all the ports of the service. The ACSA 5 adds to CMA CGM s three services connecting Asia to Mexico and the West Coast of South America, the ACSA 1, ACSA 2 and ACSA 3, all three operated jointly with APL, COSCO Shipping, Evergreen and PIL, with Yang Ming also participating to ACSA 3 (and branding the line SA4 ). CMA CGM : Bijagos Service Details Bijagos Shuttle 2 x 1,700 teu (fortnightly) Lome, Kribi, Bissau, Lome CMA CGM re-launches seasonal cashew loop Bijagos CMA CGM is to re-launch its seasonal Bijagos Shuttle service, which this year will connect Bissau with the hubs of Lome and Kribi. The loop caters in particular for the export of cashew nuts from Guinea- Bissau to Asia, with transhipment at the West African hubs of Lome and Kribi. The service will operate from June to early September, on a fortnightly basis, using two 1,700 teu vessels. The Bijagos Shuttle will connect in Lome and Kribi with CMA CGM s Asia - West Africa WAX 1 service and ASAF service, allowing cashew nut exporters from Guinea-Bissau to forward their cargo to India (Cochin, Mangalore, Tuticorin, Visakhapatnam) in 40 days, and to Vietnam (Qui Nhon and Ho Chi Minh City) in 47 days, after transhipment in Colombo and Singapore, respectively. India and Vietnam are major importers of cashew nuts which are used extensively in the Indian and Vietnamese cuisine. The Bijagos Shuttle service was originally launched in May 2016 and suspended at the end of the cashew season in August It was then re-activated again from May to September Page 9 Copyright Alphaliner

10 SERVICE UPDATES RCL introduces direct service on Thailand - Western India - Pakistan route RCL : RIL Service Details RCL India-Laem Chabang Service Slots on ONE/X-Press Laem Chabang, Singapore, Port Kelang, Pipavav, Port Qasim, Karachi (PICT), Nhava Sheva, Colombo, Port Kelang, Singapore, Laem Chabang Regional Container Line (RCL) will introduce this week a direct service that connects Thailand with Western India and Pakistan. The new loop will wayport in the Straits in both directions, and in Sri Lanka on the way back from India. To be marketed under the name RCL India - Laem Chabang' (RIL), the loop will be ensured through slots on the TIP/HLS service, jointly operated by Ocean Network Express (ONE) and X-Press Feeders. ONE inherited its participation in the loop from NYK, the former partner of X-Press on this service. The service turnaround time has been stretched from the previous four weeks to five weeks in order to accommodate a new westbound Port Kelang call and to improve schedule reliability. From April, when the volumes of MOL and K Line were added to the NYK cargo further to the formation of ONE, the service first startedto be up-sized. Ships of 2,700-3,400 teu were replaced by vessels of 3,500-4,200 teu and, currently, a further upgrade to the 5,600 teu scale is in progress. The service successively calls at Laem Chabang (HLT), Singapore, Port Kelang, Pipavav, Port Qasim, Karachi (PICT), Nhava Sheva, Colombo, Port Kelang, Singapore, Laem Chabang. RCL plans to start its participation on 28 May from Laem Chabang on the 5,605 teu MOL GLOBE. The RIL will enable RCL to offer shippers a direct connection between Thailand, Western India and Pakistan, while adding another link to connect Western India with RCL s South East Asia network through transhipment in Singapore and Port Kelang. RCL currently covers the Straits and Western India trade with two of its current services, the RNI that is ensured through slots on Maersk s FI3 service and the GLX/RIM, a joint service with Emirates Shipping Line. The 'RIL' also enhances RCL's coverage of Pakistan by adding a second weekly call at Karachi, adding to the call offered with the RCL s RPM/GCX/APM/CMX service, that the carrier jointly operates with Gold Star Line, KMTC, TS Lines and SM Line. Page 10 Copyright Alphaliner

11 SERVICE UPDATES Intermarine and Zeaborn merge multipurpose fleets Following several consolidation moves in the multipurpose vessel owner and manager sector, the US-based Intermarine and the German Zeaborn Group have announced on 29 March a combination of their global offices under the umbrella of a newly-formed vehicle called Zeamarine. Ownership details have not been disclosed, but the Zeaborn Group said it will be the majority shareholder in Zeamarine in the joint venture with Maritime Holdings Delaware, the parent company of Intermarine. The shareholders have also committed to provide new capital to grow Zeamarine, which will control a fleet of over 75 mpp vessels and is expected to grow to over 100 vessels by year-end. The transaction is subject to antitrust clearance. Intermarine currently controls a fleet of over 40 mpp/heavy-lift ships of 5,000-20,000 tdw. while Zeaborn controls a fleet of 33 mpp/bulker units of 7,500-30,000 tdw The Zeamarine management team will include Ulrich Ulrichs and Nicki Schumacher from Zeaborn and Andre Grikitis, Frank Fischer and Michael Dumas from Intermarine. The agreement includes the consolidation of vessel fleets, staff, and the global network of customers and offices. Intermarine was founded in 1990 in New Orleans, while Zeaborn was established more recently in 2013 but has grown organically and through acquisitions. Last year, Zeaborn acquired Hamburg s Rickmers-Linie and NPC Projects, a major player in the mpp liner market. In addition to this, Zeaborn also acquired the two competing ship management firms of brothers Bertram and Erck Rickmers, which turned the group into a major player in the container tonnage market. A formal merger of the two Hamburg-based firms under the banner of Zeaborn Shipmanagment could be imminent. The establishment of Zeamarine is another move toward consolidation in the mpp sector. In 2016, Thorco Shipping Holland, the Dutch arm of Danish cargo vessel operator Thorco Projects, Dutch companies Navigia and Feederlines reached an agreement to cooperate in the field of technical ship management to generate savings through economies of scale, with 65 vessels under joint technical management, while commercial operations remained separate. Earlier in 2016, Rickmers-Linie, now also Zeaborn-controlled, had acquired the tramp activities of Nordana, while Thorco merged with United Heavy Lift. In July 2017, Germany s Harren & Partner bought its compatriot SAL Heavilift. While originally a German firm as well, SAL had been under K Line s ownership since Page 11 Copyright Alphaliner

12 DELIVERY/VESSEL UPDATES Cellular Containership Deliveries May 2018 Name Teu CMA CGM JEAN MERMOZ 20,954 Operator MUMBAI MAERSK 20,568 Maersk MAERSK HAMBURG 15,282 Maersk CMA CGM JEAN GABRIEL 10,926 CMA CGM CMA CGM MUNDRA 10,010 CMA CGM CMA CGM COCHIN 10,010 CMA CGM CMA CGM MUMBAI 10,010 CMA CGM EVER BONUS 2,926 Evergreen EVER BRACE 2,910 Evergreen KMTC PENANG 2,806 KMTC REN JIAN XIA MEN 2,444 QASC CMA CGM CMA CGM CHENNAI 10,010 CMA CGM BG SAPPHIRE 1,004 BG Freight right: The CMA CGM JEAN MERMOZ at the outfitting pier of the HHIC Shipyard, Subic Bay. CMA CGM JEAN MERMOZ (20,954 teu) is delivered CMA CGM has received the CMA CGM JEAN MERMOZ, second of three 20,954 teu megamax container ships from HHIC s Subic Bay Shipyard in the Philippines. The French Line had ordered the three sisters in March 2015 at a price of $146M per vessel and the trio s lead ship, named CMA CGM ANTOINE DE SAINT EXUPERY, was delivered in January The third and last unit of the type, the CMA CGM LOUIS BLERIOT, will follow in September. All three of the HHIC-built megamax sister ships are named after French aviation pioneers. Currently CMA CGM s largest ships, the aviator sisters have an Loa of 400 m Loa and a breadth of 59 m (23 rows) They are propelled by an 11-cylinder Wärtsilä engine of the X92 model, which develops 67,430 kw at MCR. The CMA CGM JEAN MERMOZ will join on 4 June the OCEAN Alliance Asia-Europe 'NEU4' loop, branded 'FAL 1' by CMA CGM. The 'FAL 1' is operated with the largest ships of CMA CGM. Its is currently staffed with nine 16,000-17,800 teu vessels (21 rows wide), the first 20,954 teu aviator class vessel (23 rows), and with two smaller 13,800 teu standard ULCS (20 rows) that will be replaced by CMA CGM s megamaxes number two and three. The new vessel sports the revised French Line house colours with a darker shade of blue and red racing stripes. photo: HHIC-Phil continues on next page... In addition to the three HHIC jumbos, CMA CGM in September 2017 ordered a further nine next-generation megamaxes of 22,500 teu (24 rows). Built in China and scheduled for delivery in 2020 and 2021, these new vessels will be the first large containerships to run (almost) exclusively on natural gas as a clean fuel. The CMA CGM CHENNAI (10,010 teu) is delivered Seaspan Corporation has received last week the CMA CGM CHENNAI, a 19-row VLCS of 10,010 teu, ordered in April 2015 at Yangzijiang Shipbuilding together with a sister ship. As the last vessel of the 'YZJ SAVER' type, the vessel brings the number of sisters of this successful design to 25 units. In this series, the CGM CHENNAI follows the CMA CGM MUMBAI, delivered one week earlier. Page 12 Copyright Alphaliner

13 DELIVERY/VESSEL UPDATES * May Apr Mar Feb 2018 Jan Dec Nov Oct Sep Aug Jul Jun May Apr Mar Feb 2017 Jan Dec Nov Oct Sep Aug Jul Jun May Apr Mar Feb 2016 Jan Dec Nov Oct Sep Aug Jul Jun May Apr Mar Feb 2015 Jan Dec Nov Oct Sep Aug Jul Jun May Apr Mar Feb 2014 Jan Dec Nov Oct Sep Aug Jul Jun May Apr Mar Feb 2013 Jan Cellular Containership Deliveries by Month TEU Delivered 25 Units Delivered * Deliveries recorded month-to-date...continued from previous page CMA CGM in mid-2017 secured three-year charters, all starting in the second quarter of this year, for six 'YZJ 10000' from two owners. In addition to the Seaspan ships, the French carrier has chartered the new-built CMA CGM CALCUTTA, delivered in late April, from Navigare Capital Partners. The carrier also took the SEASPAN ELBE, a former Hanjin charter vessel from Seaspan, that CMA CGM will take on in June. The CMA CGM CHENNAI is scheduled to join on 13 June the OCEAN Alliance s Suez-routed Far East - PSW - Far East - ECNA pendulum, a loop that the French Line brands 'Columbus' service. The BG SAPPHIRE (1,004 teu) is delivered Reederei Jüngerhans has taken in charge the BG SAPPHIRE, third of four 1,004 teu short-sea container vessels from Zhoushan Changhong International Shipyard of China. The ships were ordered in 2015 by Arkon Shipping, Jüngerhans brokering arm, with the backing of long-term charters to BG Freight Line, a subsidiary of the British Peel Ports Group. Tailor-made for BG Freight Line's Irish Sea services, the design is referred to a 'Ireland Max' by the company. The ships are, in particular, designed to stow up to 488 x 45 ft boxes as well as other odd-sized containers and they come equipped with 253 reefer plugs. The BG SAPPHIRE is currently idle at the shipyard in China. She is however expected to proceed to Rotterdam in the near future to join her sisters BG DIAMOND, delivered in December, and BG JADE, delivered in January, on the BG Freight Line network. BG Freight covers the Continent - Ireland and Continent - UK regional trade with several shuttles that also act as common feeders for third party carriers. The new ships bear the project names of FIRST NEW HORIZONS, SECOND NEW HORIZONS, THIRD NEW HORIZONS and FOURTH NEW HORIZONS. They have been developed jointly by BG Freight, Arkon Shipping, Jüngerhans Maritime Services and CIMC ORIC. The latter is a ship design firm and a subsidiary of the container manufacturer China International Marine Containers (CIMC), which also provides ship leasing services. All four sisters are fitted with an exhaust gas wet scrubbers to fulfil the requirements for trading within the Emission Control Areas of the North Sea and English Channel. A 8,340 kw six-cylinder MAN-B&W engine of the G45ME-C9.5 model (in Tier II version) drives them at a speed of up to 16 knots. BG Freight currently operates a fleet of twelve chartered vessels of up to 1,036 teu, totalling 10,300 teu. Page 13 Copyright Alphaliner

14 PORT UPDATES Florida: Scaled-down St. Johns River dredging program could prompt terminal changes at Jacksonville The Florida port of Jacksonville has reportedly decided to change the scope of its St. Johns River deepening project in a cost-cutting effort. According to local media, the port landlord Jaxport considers to only deepen eleven nautical miles of the river fairway, compared to the initially-planned 13 nautical mile stretch. On top of the changes related to the dredging program, Crowley will soon switch its Jacksonville - San Juan Service from a fleet of towed barges to two new LNG-powered conro vessels. Opposed to the current barges, which use the Crowley Terminal, the new ships wll operate out of the Talleyrand Marine Terminal. This means that the fairway would only be deepened from the Atlantic Ocean up to the Dames Point Bridge, a cable-stayed highway bridge that spans the St. Johns River west of Blount Island. Crucially, this would improve the draft capabilities of some Jacksonville container terminals, but it would do nothing for the container and mpp piers located west of the bridge. photo: Crowley ALPHALINER right: Our map shows the main roro, mpp and container terminals at Jacksonville. The Dames River Bridge divides the port on an eastern and a western part. Only the eastern part will benefit from the deeper river fairway in the future. map: Alphaliner Under the down-scaled dredging program, the Blount Island Marine Terminal (Berths 30-33) and the SSA Jacksonville Terminal (Berths 34 and 35) would benefit from the deepening, while the Trapac Terminal further upriver would not. Dames Point Bridge Contrary to earlier plans, the St Johns River will likely only be deepened east of the Dames Point Bridge. This is not so much a concern for the Talleyrand and Crowley Terminals, which handle smaller ships and barges and which are located beyond the scope of the full dredging program anyway. An alternative solution is now, however, needed for the TraPac container terminal. Local sources now claim that the port landlord Jaxport has started talking to various port tenants in an effort to consolidate their facilities at Blount Island. Reportedly, TraPac has already signed a joint letter of intent with SSA to working together at Blount Island. Under the proposed scenario, container facilities on Blount Island could be enlarged and modernised over the next five years to accommodate the additional TraPac traffic. The container terminals' footprint could be expanded relatively easily, as some 32 hectares of land in the direct vicinity will be vacated soon. Currently used for the handling of cars and trucks, these vehicle storage sites are to be relocated to Jacksonville Dames Point in a move that is unrelated to the deepening project. continues on next page... Page 14 Copyright Alphaliner

15 PORT UPDATES...continued from previous page. Zeebrugge port buys minority share in COSCO Terminal The Chinese terminal operator COSCO Shipping Ports (CSP), a sister company of the country's largest ocean carrier, has sold a 5% stake in the CSP Zeebrugge Terminal to Port of Zeebrugge for an undisclosed price. CPS Zeebrugge became a wholly owned subsidiary of CSP in November 2017 after the Company acquired a 76% stake from the previous owners, APMT and the Shanghai International Port Group (SIPG). Immediately after the takeover, COSCO then agreed to sell a 10% stake in the terminal to its Ocean Alliance partner CMA CGM. So far however, CSP and the French Line have not yet finalised the sale, leaving the terminal under the sole ownership of COSCO Group for the time being - and down to 95% after the this week's deal. Following the closure of two of Zeebrugge's former container terminals, the PSA-operated ZIP in 2015 and the PSA- CMA CGM joint venture CHZ later that year, CPS Zeebrugge is currently the only dedicated container terminal in Zeebrugge. The port nevertheless also handles considerable amount of containers on roro vessels, including on services of P&O Ferries, CLdN, and others. While CSP is already invested in the Northwest European ports of Rotterdam (Euromax) and Antwerp (Antwerp Gateway), Zeebrugge is the first terminal in this region, where the Chinese group holds a controlling stake. COSCO Shipping Ports commented on the new arrangement and the company pointed out that it planned to 'establish a major hub port and global strategic focal point', underlining that Zeebrugge was a 'strategic investment'. In the recent past, CSP aggressively expanded its footprint in Europe with terminal expansions and acquisitions. Among others, the Chinese bought a majority in Noatum Ports of Spain, bought a share in a soon-to-launch terminal at Vado Ligure, Italy, and very actively pushed volumes at Piraeus. Should the negotiations between TraPac and SSA be successful and should they lead to a cooperation or even to a merger of the companies' respective Jacksonville operations, this will however raise further questions: What will happen to the current site of the Trapac container terminal and how could TraPac's equipment be transferred to Blount Island. The latter is a problem since the terminal's large ship-to-shore gantries will not fit underneath the Dames Point Bridge unless the cranes will be partly disassembled. ZPMC delivers first gantries to new Veracruz Terminal Hutchison Ports very recently took delivery of the first two ship-toshore container gantries for its new deep-water container terminal in the new outer port of Veracruz. The new facility is the first of up to three container terminals - or terminal modules - that are to be developed in the Mexican Atlantic port and it is scheduled to launch in late 2018 or early Mexico's Government Secretariat of communications and transport, together with the local port authority, last year awarded the concession to operate the first new Veracruz terminal to Hutchison Ports ICAVE (Internacional Contenedores Asociados de Veracruz), a Mexican affiliate of the Hong-Kong-based Hutchison Group. The concessionaire already operates the largest container terminal in the 'old' inner port of Veracruz, also marketed as ICAVE. Phase one of the new Veracruz container terminal will have an annual capacity of 1.80 Mteu on a 41 hectare footprint and it will offer a 700 meter pier with a depth alongside of meters. The terminal will be equipped with seven ultra-large ship-to-shore gantries and phase one represents a total investment of some USD 450M. Hutchison recently stated that, once phase one is concluded, the construction works on the second phase will begin. This will cover a 73 hectare footprint with an annual design capacity of 2.10 Mteu. Phase two will have a pier length of 1,050 meters, equipped with twelve ship-to-shore gantries. As for the recently-delivered cranes, Hutchison said they represent an investment of about USD 10M each. Dimensioned for the handling of ULCS, including Megamax ships, the quay gantries have an outreach of meters and a lift height of meters over the rail. Hutchison's current terminal in the inner port of Veracruz is expected to close in the foreseeable future, as soon as sufficient capacity in the new outer port comes on stream. In addition to phases one and two of the new Hutchison ICAVE Termi- Page 15 Copyright Alphaliner

16 PORT UPDATES...continued from previous page. DPW is already active in Peru Since 2010, DPW already operates the largest container terminal in Peru, the Muelle Sur (South Pier) at Callao. The terminal is equipped with seven large ship-to-shore cranes on a 660 meter pier and it has an estimated annual capacity of 0.95 Mteu. nal, the masterplan for Veracruz' new large-scale outer port also holds provision for a potential third container terminal, as well as for new mpp and general cargo piers - not to mention facilities for tank and drybulk. DP World finalises Peru Deal Two months after announcing the acquisition of the Peruvian logistics and terminal services firm Cosmos Agencia Maritima (CAM), DP World has now formally closed the transaction on 18 May. The UAE-based global ports operator today stated that it reached an agreement with Andino Investment Holding, under which DPW is to acquire 100% of the shares of CAM for USD 315.7M. The purchase also includes 100% of the shares in Triton Transports and Neptunia, and 50% in Terminales Portuarios Euroandinos S.A., in the Port of Paita, which is the second largest container terminal in Peru after Callao. DP World Group Chairman and CEO, Sultan Ahmed Bin Sulayem, commented that the takeover of Cosmos Agencia Maritima underlined the company's confidence in Peru and the potential of its economy. In a written statement, the company pointed out that the deal would help diversify the revenue of its business through a wider range of logistics services. Record ship at Wilmington, NC The United States East Coast port of Wilmington, North Carolina, this weekend handled its largest-ever container ship with the 10,010 teu SEASPAN ELBE. The 337-meter vessel is the largest ship on the Far East - USEC service EC2 of the THE Alliance. The ship is currently on a charter to ONE, the carrier created from the merger of NYK, MOL and K Line. above: the 10,010 teu neo-panamax vessel SEASPAN ELBE was handled at the Wilmington Container Terminal. The 19-row wide 337 meter long ship is one of over twenty SAVER Type container ships that Seaspan received from a Chinese yard. photo: NC Ports Earlier this year, the local port authority NC Ports had prepared for the arrival of increasingly-large container ships with the acquisition of two ULCS-ready ship-to-shore container cranes. The two ZPMC-built gantries arrived in early April aboard the heavy-load carrier ZHEN HUA 18. After two consecutive years of volume losses, Wilmington handled a throughput of more than 300,000 teu in Nevertheless, Wilmington remains one of the smaller container ports on the USA's Atlantic Coast, where volumes totaled at an estimated 21 Mteu last year. Page 16 Copyright Alphaliner