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 Moreover, the market is changing rapidly currently; statements in this document may quickly be superseded, despite our best efforts.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.”

March 11, 2021

3/11/2021

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% in the last two weeks compared to last year

3/11/2021

Most trade lanes showing double digit decline compared to the last year except to/from Asia Pacific. Transatlantic at -24% &

LATAM at -52% decline...

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

Stay Informed

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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

3/11/2021

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

Book a Shipment Online

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• EU increases budget to EU4Health programme

• EU will receive 4 million extra Pfizer vaccines by end of March

• Johnson & Johnson confirms delivery of 200 million doses to

EU in 2021

• EU tourism countries to open to vaccinated or tested

travelers from May

• Belgium decided that the standard interval between two

Pfizer injections will be extended to 35 days (five weeks)

Ocean Freight Updates ASIA WB: Equipment shortage a challenge. Some carriers

are also accepting limited UK cargo again.

TATL WB: Expect void sailings to continue through March/April as carriers

try to recover schedule reliability.

• Recommend advanced booking notice at least 5 to 6 weeks prior to

vessel departure & for urgent cargo consider booking on Premium.

• The market is expected to remain strong through the end of Q2 due to

high demand and capacity constraints. Shortages of Reefer containers

and 40’/HC dry, in particular in Germany, Italy, Spain and Portugal.

Ongoing severe equipment shortage in Turkey.

Inland Transportation

Air Freight Updates • Lufthansa Cargo expects a good 2021 and rates to ease in H2

• Lufthansa Cargo downplays impact of vaccine volumes

• Cathy Pacific reports multi-billion dollar loss, despite cargo performance

• Network Airline Services renews with WFS in Belgium and the Netherlands

• IATA: Air cargo demand beats 2019 levels in January

• Heathrow (LHR): Due to Covid-19 Government measure cargo

recovery is getting delayed

Europe Update for March 11th

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.”

3/11/2021

• Border crossing between Switzerland –Germany; Switzerland –

Italy; Hungary – Romania constrained

• MPs urge UK to stop ‘unilateral’ action on Northern Ireland Brexit checks

• More than 25% of trucks leaving the UK for EU are empty as exports dive.

• Trucks were driving 12% less compared to January 2020 due to the combined

effects of covid and Brexit.

• Trucks were driving 2% less than in December mainly due to post-Brexit

chaos.

*Source: SixFold/ Theloadstar

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• Mauritius has suspended all inbound international passenger

movements for a week effective from 6th March

• Emirates’ passenger flights from South Africa to remain

suspended until March 20th

• 2,400 doses of fake covid-19 vaccines have been seized in

South Africa

• India has completed over 20 million vaccinations

since 16th Jan.

Ocean Freight Updates • India makes a move on container manufacturing

• West Container Terminal at Colombo port, Sri will be a

public (Sri Lanka Ports Authority) and private partnerships

collaborated development

• Trans-shipment at SIN/CMB facing 1-3 week delays. Equipment

shortages reported in Mundra and Delhi regions,

• Heavy Lift charge implemented ex-India to the Europe

(MUN/NSA/HZR) for cargo weight over 27.99 tons by Hapag-

Lloyd

Inland Transportation

• UPS services continue to operate for both pickup and

delivery in postal codes across cities in India in line with

local restrictions-however, due to limited intra-country line

haul options, slight delays can be expected.

• Longer transit times for exports from India to Asia and the Middle

East, and imports into India from US/EU due to certain restrictions

are expected

Air Freight Updates • EK – additional frequency between DXB-ACC-ABJ, 6x weekly

effective 1st April

• Kenya based freighter operator, Astral Aviation, names Sharjah Airport

as its Middle East hub as part of its expansion in the region

• EK – DXB to Maldives, additional frequency from 28th Mar to

18th Apr

• EK – DXB to Seychelles, additional frequency added from

28th Mar to 30th Oct

ISMEA Update for March 11th

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.”

3/11/2021

Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.© 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color brown 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: Chinese mainland reported no new locally

transmitted cases in the past week. Despite the impact

of COVID-19 pandemic and uncertainties, China foreign

trade in the first two month was very strong

• Hong Kong: Reported 11,074 cases with 202 deaths. 8

new cases of which 4 are local infections as of March

6th

• Japan: Tokyo, Kanagawa, Saitama and Chiba will

extend the state of emergency until March 21st

• Malaysia: COVID-19 restrictions will be relaxed for

Melaka, Pahang, Terengganu, Sabah, Putrajaya,

Labuan and Perlis. Inter-District travel would now be

permitted in all states except Sabah. Interstate travel is

still prohibited

• Vietnam: COVID-19 vaccination started this week with

the first batch of 117,600 doses received. Social

distancing in the epicenter Hai Duong has been lifted

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

Air Freight Updates

• Hong Kong: Cathay Pacific reports multi-billion dollar

loss, despite valiant performance by cargo

• China: Disruption across the ocean supply chain is

creating even more demand for air capacity, and Air Cargo

rates out of China are increasing

APAC Update for March 11th

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.”

3/11/2021

Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.© 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color brown 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• Biden’s transportation department focuses on aviation

emissions as part of net zero emissions goal for the US

• US will suspend tariffs on UK products for four months, focus

on negotiating a trade deal

• Federal stimulus checks expected to drive surge in e-

commerce shipments

• Biden orders review of transportation sector

• Amid volatile airfreight market, high rates remain constant

• Biden “Made in America” executive order advocates

for 100-year-old U.S. maritime law

Ocean Freight Updates • Los Angeles and Long Beach port congestion is the

worst in its history

• Container backlog at NY-NJ causing dray rates to

increase

• Ports press Congress, Biden for emergency funds

• South Carolina Ports rides rails to robust January

• Port of LA will pay container terminals for efficiency

gains

Inland Transportation• Dallas post-storm intermodal congestion could

continue for a couple more weeks

• Trucking companies lost more jobs than expected in

February

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

wanes

• Trucking industry lender's quarterly data shows significant

market improvement.

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

• United Airlines sacrifices cargo capacity to replace grounded

777s

• Airlines absorb $391 billion revenue shortfall in 2020

• Lack of passenger flights holds down airfreight

• United Airlines cargo planes to share space again

with passengers

• UPS expanding at Kansas City airport as e-

commerce surges

United States Update for March 11th

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.”

3/11/2021

Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.© 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color brown 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• Health Canada approves use of Johnson & Johnson’s

CPVID-10 vaccine, the fourth vaccine approved

• Health Canada allows warmer storage conditions for Pfizer

COVID-19 vaccine

• Canada's vaccine rollout slower than other countries

• Quebec imposes curfew as part of 4-week lockdown

• Canada clears 4 firms to bid on COVID-19 vaccine

distribution contract

Updates

• Ports are operational. Cargo transportation is still

allowed

• Slow in/out processing and delays in customs

clearance

Inland Transportation

• 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 March 11th

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.”

3/11/2021

Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS.© 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, and the color brown 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• COVID-19 cases are surging in many Latin American

countries including Brazil

• Latin America turns to China and Russia for COVID-19

vaccines

• Pfizer applies for full COVID-19 vaccine approval in 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

• Mexico once again No. 1 US trade partner

Ocean Freight Updates

• Italian firm building $150M shipyard in Mexico

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

• DO: Operations had been restricted up to 6pm

• HN: Limited service to Puerto Cortez Port

• PR: No passenger vessel allowed

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 • Dubai airline launches new freighter service to Mexico

• LATAM Common Carriage flights were reduced or forbidden

to/from US, Europe & Asia (19 countries: AR, BO, BR, CL, CO,

CR, DO, EC, GT, HN, NI, PA, PE, PR, PY, SR, SV, UY, VE)

LATAM Update for March 11th

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.”

3/11/2021

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.3/11/2021