Global Market Insights

"This update contains information we have gathered from various public sources and share with you to the best of our knowledge, but we cannot guarantee it is complete or in all cases accurate. Moreover, the market is changing rapidly currently; statements in this document may quickly be superseded, despite our best efforts. Nothing in this document can be taken as a contractual undertaking.”

April 22nd , 2021

4/22/2021

Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.© 2020 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color dark brown tone are trademarks of United Parcel Service of America, Inc. All rights reserved.

Global air cargo capacity declined 12% compared to the same weeks in 2019

4/22/2021

Transatlantic still struggling with -33% capacity decline compared to 2019. There is lack of massive amount of space in the market.

Until belly-space, lower-deck and passenger space comes back to the market, the market will remain capacity constrained.

Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.© 2020 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color dark brown tone are trademarks of United Parcel Service of America, Inc. All rights reserved.

Belly capacity remains 53% below pre-COVID-19 levels

4/22/2021

Freighter capacity remains stable at double-digit growth rate.

Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.© 2020 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color dark brown tone are trademarks of United Parcel Service of America, Inc. All rights reserved.

UPS Supply Chain Solutions

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• Find the latest information on Air Freight Capacity Surcharges

• Track shipment status through UPS Flex Global View®

• International Air Transport Association (IATA) – iata.org

• World Health Organization (WHO) – who.int

4/22/2021

Our highest priority is to protect the health and safety of our employees, customers, and suppliers. UPS® is confident it can do so while maintaining

global operations, except where constrained by government restrictions or other circumstances beyond its control. The Novel Coronavirus

pandemic has created unprecedented complexities, which have required us to constantly reassess our operations and take mitigating actions to

minimize disruption to our customers.

Consider cost-effective multi-modal alternatives to traditional air freight

Asia to North America

Asia to Mexico

Europe to North America

North America to Europe

ISMEA to North America

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Book now at ups.com/supplychain

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Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.© 2020 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color dark brown tone are trademarks of United Parcel Service of America, Inc. All rights reserved.

Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly by UPS. © 2020 United Parcel service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.

Socioeconomic Updates• Johnson & Johnson resumes vaccine deliveries to Europe

• Belgium extends all coronavirus-fighting measures unchanged till 31st May

• German Cabinet approves uniform COVID measures nationwide

• Italy approves J&J Covid vaccine and recommends it for over-60s

• Italy set to approve reopening plan in new Covid emergency

decree

• In Portugal, shopping centers have reopened, all pupils

are now back in school.

Ocean Freight Updates Europe port congestion:

• Suez Canal incident is likely to impact North Europe supply chains until June.

• Congestion at the Benelux hubs of Rotterdam and Antwerp is delaying hinterland

barge operations.

• The average waiting time for the handling of the barges today is 34 hours

at Rotterdam and 41 hours at Antwerp. No improvement foreseen in the

next four to six weeks.

Transatlantic Westbound:

• Capacity stays heavily constrained.

• Equipment remains extremely tight across Europe.

• We recommend pre-bookings to be made 5 to 6 weeks prior to planned

vessel departure

APAC Westbound: Equipment shortage has become very serious again especially

out China south ports.

• The shortage of empty containers remains an “industry-wide challenge” and the

next several weeks will be very hard, as empty containers returning back to Asia

are delayed and import returns are lower.

• We recommend pre-bookings to be made 3 to 4 weeks prior to planned vessel

departure.

• Airfreight rates predicted to remain ‘strong’ in the long term

• The Europe, Middle East and Africa (EMEA) region saw cargo crime

continue at a high rate last year despite Covid lockdowns*

• KLM deploys custom-made cargo seat bags

• IAG Cargo has described the airfreight market as “incredibly busy” due to

growing e-commerce and automotive sectors & also the rollout of Covid

vaccines.

• *aircargo.net

Europe Update for April 22nd

This update contains information we have gathered from various public sources and share with you to the best of our knowledge, but we cannot guarantee it is complete or in all cases accurate. Moreover, the market is changing rapidly currently; statements in this document may quickly be superseded, despite our best efforts. Nothing in this document can be taken as a contractual undertaking.”

4/22/2021

Air Freight Updates

Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.© 2020 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color dark brown tone are trademarks of United Parcel Service of America, Inc. All rights reserved.

Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly by UPS. © 2020 United Parcel service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.

Socioeconomic Updates• A UAE study says:

• Vaccines are effective in preventing 93% of infections resulting in

hospitalization and 95% in ICU admission.

• The Sinopharm vaccine is +90% effective in preventing hospitalization

• In SA, 55% of reported COVID infections are women

• Oman’s lifted their international travel ban, visa holders now

allowed in the country

Ocean Freight Updates

• HMM to order a dozen of 13000 teu ships

• Hapag-Lloyd orders 150,000 TEU of standard and reefer containers for

2021 with the investment of ~US $550mn

• CMA CGM has confirmed new reefer surcharges from Morocco to

several destinations worldwide

• The equipment and space situation continues to be challenging

ex- APAC to ISMEA, with rest of the April been over booked

• First available sailing is as Mid May.

• Carriers are Promoting NOR (non –operating Reefers) to

compensate the Dry equipment shortage and also to mobilize

the reefer equipment’s to demand locations, carriers are

offering 30% off from the DC rates

• EK extended PAX flight suspension to ZA and NG until 30th April

• FZ implemented additional frequencies to BJV (4 Jun to 1 Sep) and

to TZX (13 May to 1 Sep)

• Etihad cargo partnered with CargoWise to rollout real-time access to

available capacity, flight schedules and rates to forwarders across the

world

• Cape Town approved Amazon’s $280m River Club project, which will

consist of 150,000 M2 mixed-use spaces to br used as their Africa

headquarters

ISMEA Update for April 22nd

This update contains information we have gathered from various public sources and share with you to the best of our knowledge, but we cannot guarantee it is complete or in all cases accurate. Moreover, the market is changing rapidly currently; statements in this document may quickly be superseded, despite our best efforts. Nothing in this document can be taken as a contractual undertaking.”

4/22/2021

Air Freight Updates

Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.© 2020 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color dark brown tone are trademarks of United Parcel Service of America, Inc. All rights reserved.

Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly by UPS. © 2020 United Parcel service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.

Socioeconomic Updates

• China: More than 187 million doses vaccines administrated in China

as of Friday (Apr 16), 26 million more than last week

• Hong Kong: 345,900 people have been fully vaccinated.14-day

quarantine for fully vaccinated HKG-based air crew will be lifted

• Japan: Osaka recorded 1,220 new cases on Apr 18, topping 1,000

for the sixth straight day

• South Korea: Daily confirmed cases remained around 700 last

week. Private gathering is limited within five people

• Malaysia: Malaysia on Apr 18 reported 2,195 new cases,

the fourth consecutive day topping over 2,000

• Philippines: Foreign travelers are not allowed to enter the country

until Apr 21. Curfew hours is imposed from 8pm to 5am

• Singapore: Starting Apr 17, Singapore Airlines will stop carrying

transit passengers on their services from Singapore to Hong Kong

• Thailand: Starting from Apr 16, Bangkok and 17 provinces are

declared maximum control areas or "red zones"

• Agents: Cambodia imposed 14-day lockdown to Phnom Penh city &

Kandal province form Apr 15. Staff are restricted to work from home

Ocean Freight Updates

• Port congestion in the whole region

• China: Shortage of truck drivers started before CNY will

continue because of the strict Covid-19 quarantine

measures imposed by the Chinese authorities. Booming

demand out of China causing container shortages

Air Freight Updates

• Taiwan: Starting Apr 15, the Central Epidemic Command

Center (CECC) adjusted quarantine and diseases

prevention and control measures for flight crews of

Taiwanese airlines arriving in Taiwan

APAC Update for April 22nd

This update contains information we have gathered from various public sources and share with you to the best of our knowledge, but we cannot guarantee it is complete or in all cases accurate. Moreover, the market is changing rapidly currently; statements in this document may quickly be superseded, despite our best efforts. Nothing in this document can be taken as a contractual undertaking.”

4/22/2021

Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.© 2020 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color dark brown tone are trademarks of United Parcel Service of America, Inc. All rights reserved.

Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly by UPS. © 2020 United Parcel service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.

Socioeconomic Updates• Starting June 2, Federal Maritime Commission will allow ocean

carriers to file contracts up to 30 days after they go into effect

• Over half of US adults have received first COVID-19 vaccine dose

• State Department to increase Do Not Travel list to 80% of countries

worldwide because of coronavirus risks

• Biden’s transportation department focuses on aviation emissions =

• US DOT allots $1B in infrastructure grants

• US will suspend tariffs on UK products for four months

Ocean Freight Updates • Port Houston sets monthly record in March, container

moves climbed 20% year-over-year

• Port of Charleston opened first new container terminal in

the US since 2009, increasing capacity by 30%

• US ports, shippers face major fallout from Suez Canal chaos

• Los Angeles and Long Beach port congestion is the worst in its

history

Inland Transportation

• March trucking jobs were down year-over-year while many

companies announced pay increases for drivers

• Trucking interests skeptical of zone-based congestion pricing

• Crude tankers stuck in ‘rate hell’ but floating-storage pain wanes

Air Freight Updates • Air Cargo demand recovers to pre-COVID levels

• Airfreight market saturated; businesses looking to avoid Suez

gridlock have limited options

• Chicago Rockford and Cologne Bonn airports collaboration hopes to

boost air cargo traffic between US and Germany

• IATA predicts airline recovery to start by mid-year 2021

• Airlines absorb $391 billion revenue shortfall in 2020

• UA sacrificed cargo capacity to replace grounded 777s

United States Update for April 22nd

This update contains information we have gathered from various public sources and share with you to the best of our knowledge, but we cannot guarantee it is complete or in all cases accurate. Moreover, the market is changing rapidly currently; statements in this document may quickly be superseded, despite our best efforts. Nothing in this document can be taken as a contractual undertaking.”

4/22/2021

Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.© 2020 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color dark brown tone are trademarks of United Parcel Service of America, Inc. All rights reserved.

Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly by UPS. © 2020 United Parcel service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.

Socioeconomic Updates• North Dakota will give COVID 19 vaccines to Canadian truck

drivers

• Canadian federal government extends $5B in aid to Air

Canada

• Canadian Prime Minister hinted that reopening of U.S.-

Canadian border won’t be anytime soon

• Health Canada approves use of Johnson & Johnson’s

CPVID-10 vaccine, the fourth vaccine approved

Ocean Freight Updates

• Mediation discussions continue for Port of Montreal,

union continues weekend and overtime strike

• Port of Toronto moved over 2 million metric tonnes of

cargo for fourth consecutive year

• Ports are operational. Cargo transportation is still allowed

• Slow in/out processing and delays in customs clearance

Inland Transportation

• Canadian railway CN offers to acquire Kansas City Southern

• Some Canadian trucking companies shut down amid

financial struggles

• Daily pickups and deliveries except where restrained by

government

Air Freight Updates • New COVID-19 boarding rules for airlines will be tighter than

expected

• Air Canada finalizes decision to convert aircraft to freighters

• Air Canada eyes converted freighters to capitalize on cargo

boom

• Air Canada is resuming many of its international

flights, heading to the U.S., the Caribbean, South

America, Europe and the Pacific

Canada Update for April 22nd

This update contains information we have gathered from various public sources and share with you to the best of our knowledge, but we cannot guarantee it is complete or in all cases accurate. Moreover, the market is changing rapidly currently; statements in this document may quickly be superseded, despite our best efforts. Nothing in this document can be taken as a contractual undertaking.”

4/22/2021

Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.© 2020 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color dark brown tone are trademarks of United Parcel Service of America, Inc. All rights reserved.

Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly by UPS. © 2020 United Parcel service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.

Socioeconomic Updates• Brazil is in talks to buy another 100M doses of Pfizer vaccine

• Mexico once again No. 1 US trade partner

• COVID-19 cases are surging in many Latin American countries

including Brazil

• Oil prices shake off COVID blues as Brent hits $60

• Mexico, Chile and Costa Rica become first countries in

Latin America to begin vaccination campaign

Ocean Freight Updates • Capacity is constrained out of Brazil due to increase in

export commodities like sugar and wood

• Blank sailings from East Cost South America to Asia

seek to shore up freight rates

• Italian firm building $150M shipyard in Mexico

• Ocean Port Restrictions (3 countries: DO, HN, PR)

Inland Transportation

• Despite some successes, Mexico still struggles with fuel theft

• Mexican rail blockade continues to affect freight flows

• US-Mexico truck crossings decline 22% at Port Laredo

• Customs operation impacted (9 Countries: AR, CR, DO, EC, GT, PA,

PE, SR, VE)

Air Freight Updates • “Le Sourfriere” volcano activity affects St. Vincent and Barbados

• Canadian airlines have extended their suspension of flights to Mexico

• Latin America’s airline network recovery impeded by COVID-19

quarantines and restrictions, will be slow to return

• Dubai airline launches new freighter service to Mexico

• LATAM Common Carriage flights were reduced or

forbidden to/from US, Europe & Asia

LATAM Update for April 22nd

This update contains information we have gathered from various public sources and share with you to the best of our knowledge, but we cannot guarantee it is complete or in all cases accurate. Moreover, the market is changing rapidly currently; statements in this document may quickly be superseded, despite our best efforts. Nothing in this document can be taken as a contractual undertaking.”

4/22/2021

Thank You

Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.© 2017 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.

Sources

• Official sources (WHO, Governments, etc.),** UPS Internal Sources Seabury

• Carriers • Sky cargo

• Emirates

• Lufthansa

• News Media Brussels times

New York Times

BBC News

Times of India

Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly by UPS. © 2020 United Parcel service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.4/22/2021