APL Logistics Overview

APLL Updates

Global logistics specialist in Automotive, Consumer, Industrials and Retail verticals

APL Logistics has revenues of USD $1.7B and over 6,000 employees

APL Logistics was acquired by Kintetsu World Express (KWE) in May 2015

Kintetsu World Express (KWE) intends to retain the APL Logistics’ headquarters in Singapore and run it as a separate unit

APL Logistics at a Glance

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Top three 3PL in Japan with more than 10,000 employees in over 30 countries

Focused on air and ocean freight, specializing in Asia

Publicly listed on Tokyo Stock Exchange with a market capitalization of USD $1.5B

44% owned by Kintetsu Corporation, one of Japan’s biggest conglomerates with a market capitalization of USD $7B

KWE at a Glance

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The Vertical View

APL Logistics 2013 Revenue USD million: 1,578

KWE 2013 Revenue USD million: 2,735

KWE + APL Logistics USD million: 4,313

*KWE's Industrials includes Heavy Industry, High-tech and Aerospace. *KWE's Consumer includes Healthcare.

9.4% 2.4%

24.3%

58.7%

5.2%

Automotive Retail

Consumer Industrials

Others

31.0%

30.0%

18.0%

11.0%

10.0%

Automotive Retail

Consumer Industrials

Others

17.3%

12.5%

22.0%

41.2%

7.0%

Automotive RetailConsumer IndustrialsOthers

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Our Areas of Expertise

Consumer Automotive

Retail Industrials

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The Coverage You Need

More than 60 countries 100+ service locations ~ 6,000 professionals

Automotive Industrials Retail Consumer

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Our Global Footprint

APL Logistics Office

APL Logistics Agent Office

Canada

United States

Latin America

Argentina

Brail

Chile

Colombia

Costa Rica

Dominican Republic

El Salvador

Guatemala

Honduras

Mexico

Nicaragua

Peru

Uruguay

France

Germany

Israel

Italy

Lebanon

Morocco

Netherlands

Portugal

Spain

Tunisia

Turkey

United Kingdom

North America China

Hong Kong

Japan

South Korea

Taiwan

North Asia

Europe Rest of Asia

Australia

Bahrain

Bangladesh

Brunei

Cambodia

Egypt

Fiji

India

Indonesia

Jordan

Kenya

Madagascar

Malaysia

Mauritius

Myanmar

Oman

Pakistan

Philippines

Singapore

South Africa

Sri Lanka

Thailand

United Arab Emirates

Vietnam

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Our Strategic Focus

Automotive

Consumer

Industrials

Retail

GROWTH STRATEGY CORE VERTICALS

U.S. / Mexico automotive

Finished vehicles in containers

− AutoDirectTM and AutoLinxTM

Aftermarkets in China and India

End-to-end, in-country solutions

Omni-channel and dynamic customer markets

Higher complexity categories and solutions

Supply chain optimization

Specialist in high-complexity solutions

APL Logistics network cost advantage

Asia-origin consolidation business

Help retailers expand into emerging markets

Evolving sourcing strategies

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Consumer Solutions HOW WE SERVE YOU

End-to-end, In-country Solutions

High Complexity Categories and Solutions

STRENGTHS KEY OFFERINGS

Established in developed and emerging markets

Track record of scaling services to meet growth

E-commerce growth

Value-added services

Compelling showcases

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Consumer Solutions PRODUCT OFFERING & INNOVATION

Purchase Order Management

Vendor Management

Global Air, Sea and Land Freight Management

Warehousing

Deconsolidation Vendor Managed Inventory

Order Fulfilment Distribution Management

End-to-end Supply Chain Visibility

Value-added Services

Visual Technology

Suite

Inbound Logistics

Consolidation

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Engineering & Technology Solutions PRODUCT OFFERING & INNOVATION

4PL / LLP Technology Applications

Performance Criteria Development

Engineering and Solutions Design

Packaging – design of better packaging

Global Compliance – advice on establish warehousing and supply chain infrastructure, based on global trade agreements

IT Solutions – global optimization, shipment collaboration and management of big data

Innovations

Trade Compliance and Consulting

Sourcing/ Contracting/ Start-up

Process/Program Management

Performance Management, Compliance and Reporting

Strategic and Tactical Optimization

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APLL China & HKG

Managing warehousing and distribution network in China

Operating from 30 service hubs across 16 cities

Managing over 3 million square feet of distribution centers and freight stations across China

Broad transportation and distribution network covering over 2,000 locations in China, including 4th and 5th tier cities

Nationwide network consisting of line-haul trucking, local PUD, short sea, rail, Yangtze River ferry, domestic air, cross-border transportation

Zhengzhou

Shenyang

Wuhan

Shenzhen Guangzhou Huiyang

Changsha

Hong Kong Dongguan

Dalian

Nanjing

Ningbo

Qingdao

Tianjin

Fuzhou Xiamen

Beijing

Shanghai

DC Warehouse

CFS Warehouse

Zhangjiagang

Total sqm: 300,000+

Chengdu

Warehouse Fact

City Size (sqm)

Shanghai > 80,000

Shenzhen > 70,000

Hong Kong > 20,000

Guangzhou > 13, 000

Huiyang > 12,000

Zhangjiagang > 12,000

Qingdao > 30,000

Beijing > 20,000

Dongguan > 8,000

Xiamen > 5,000

Ningbo > 5,000

Zhengzhou > 4,000

Tianjin > 4,000

Chengdu > 3,000

Others > 15,000

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We manage and operate both owned fleet and network of partners

Over 100 owned trucks and access to over 1,000 trucks through managed transportation services deployed nationwide

Various type of trucks/service ensure a good balance of meeting the requirements in different areas (LTL/FTL)

Covering 1200+ cities in China

2.1 million CBM in 2014

500K+ orders in 2014

GPS-equipped with real time track & trace capability

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Enabling global brands across multiple industries

Bonded and non-bonded DCs

Inbound Logistics

VMI Management

Order Fulfillment

Value-Added Service

Distribution Management

After-Sales Management

Return Management

Jiading

Shenzhen Beijing

Dongguan

Futian Huiyang

Our people and expertise are key to customer care and satisfaction

Over 1,600 dedicated employees with key management staff in 30+ hub locations

Both International and local specialists offer high quality service to customer

Strong customer care provided through key account management teams in China

Total 50+ Customs registered specialists

Class AA customs Brokage License with good credits in Customs system

Annual customs entries up to 800,000

Advanced declaration system linking up with Customs port/gate system

Specialized License for import& Export agent

Specialized License for return electronic product testing, repairing, processing in FTZ

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E

D

C

B

A

APL Logistics Hong Kong Network

A. Skyline Office

B. Label Printing Centre

C. Hutchison Logistics Centre

D. Yuen Long In-transit Hub

E. Amber Park

APLL Hong Kong Office

(Established since 1980)

Skyline Tower, Kowloon Bay

APLL Facilities

• Hutchison Logistics Centre

Kwai Chung

• Amber Park, Yuen Long

• In-transit Hub, Yuen Long

• Label Printing Centre

Kwai Chung

Total Space: 30,000 m2

CFS Capacity: 800,000 m3

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Current Service Capabilities for Hong Kong

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Using BLP As An Regional Hub

Types of Warehouse

Warehouse in Non-Bonded Area

Warehouse in Bonded Area

BLP FTPZ

EPZ

FTZ

Bonded Warehouse (Import/Export)

A general warehouse for

storage of goods without any tax policy

A dedicated bonded warehouse for storage of export goods

A special zone under Customs supervision, with the functions of bonded light production, bonded storage, and entrepot trade

A special area following the

policy of FTZ and mainly for logistics industry, with additional functions for international procurement, distribution & transshipment

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Export Handling

Import Handling

Re-export

China Sales

Immediate Tax Refund Application

Application until cargo exported China & within 90

days of Receiving

Until the good are physically exported

Unlimited Staging Period

( Max 6 + 6 Months)

Export Addl. Processing

Trading within Free Zone

Value Added Services

F e

a t

u r

e s

Asia hub solution and China domestic warehouse selection criteria

Not allow Allow

F u

n c

t i o

n s

Type of Facility Export Bonded FTZ BLP, BLC & FTPZ General

Connection to Port Off Dock Off Dock On Dock Off Dock

Export Consolidation

Asia Hub & MCC for Export

Regional DC w/China Distribution

Air Freight Gateway

VMI w/o HK U-Turn

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Using BLP as Regional Distribution Center

• Features: With the strong functionalities and high flexibilities, BLP is the ideal place to setup regional distribution center (RDC)

• Benefits: Reduces overall supply chain cost

Purchase Order

Domestic Market

Domestic Suppliers (non-Bonded)

Ultimate POS

Overseas Market

Bonded Warehouse

BLP

Overseas Suppliers

Domestic Suppliers (Bonded)

Bonded Transfer

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• Safety stock can be Kept in BLP RDC without time limits

• Some VAS like light assembly, kiting are allowed here

Business Module – Regional Distribution Hub

Business Model VAS in Hub Comparison Case Study

Domestic Supplier A

Domestic BLP Overseas

Product A: 100 PCs

Domestic Supplier B

Overseas Customer A

Domestics Customer A

Overseas Customer B

Overseas Customer C

Product B: 150 PCs

A: 60; B: 50; C:40

Product C: 120 PCs

A: 20; B: 80; C:60

A: 20; B: 20; C:20

BLP WHS

APLL

Inbound Flow

Outbound Flow

Customs

Regional DC

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Key Benefits to Customer for operating in BLP

Storage/operation cost savings compare to HK

Able to operate as RDC to serve USA, Asia and Europe Market,

consolidation before ship will improve the utilization of container.

Improve the cash flow

No change in VAT refund process for supplier

Good connectivity and flexibility to allow cargo exporting via

HKG/Yantian/Chiwan/Shekou Ports

Capable to re-import products into China for China Domestics

business

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APLL Proposed Facility & Proposal Overview

APLL Proposed Yantian BLP for Customer to set up the International hub in South China

Yantian Port

Advantages:

•Accessibility

Distance to Major Ports :

To Yantian : 3km

To Chiwan/Shekou : 60km

To Hong Kong : 30km

Distance to Major cities :

To Shenzhen : 30km

To Dongguan : 100km

To Huizhou : 80km

To Guangzhou : 150km

Export Bonded BLP Area ZTY Current Logistics

Center

Modern Logistics Center

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APLL Solution Proposal- IT Solution Introduction

System Features Integrated with barcode scanning and basic distribution functionalities Inbound Management System

Reports generated for performance monitoring Web visibility on inventory – Pipeline View EDI with Customers on ASN & inventory Configuration and setup facilities Connection to TMS and SeeChange Outbound Distribution System

Benefits

Automated processes improve productivity

Flexible and scalable system solution to meet specific requirements

WMSp is a mainframe-based solution, with RF capability to provide timely & accurately

capturing of data, provides inventory visibility through Web and supports EDI integration with

Customer ERP systems

Robust warehouse management system

Pre-receiving

Receiving Quality inspections

Put-away

Inventory management

Picking & packing

Replenishment Documents

Shipping

Returns processing

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Pipeline view - inventory

Order/Product Search

Online Inventory

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Pipeline view – in/out

Inbound Receipt

Outbound Order Status

Order Event Tracking

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Making early decisions requires a strong IT platform

Multi-Mode, Multi-Carrier Visibility Web-based Any shipment mode (ocean, air, ground) Any delivery mode (CY, CFS, SDD) Any carrier (ocean, rail, truck, air) One single application and global data repository Customized searches, reports and analytics Exception Detection Provides an automatic way to monitor what should happen against what is happening Standard and user-defined alert notification Notification methods include web-based “dash-boards”, e-mail and paging Global capability

SeeChange: a web-based exception management system for real-time collaboration with trading partners across multiple channels, cultures, and continents, anytime and anywhere

SeeChange Dashboard

SeeChange Configurable Alerts

SeeChange Adhoc Reporting

SeeChange Charting

SeeChange End to End Supply Chain Visibility Platform

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Our Value Proposition

APLL Advantages in both “Hardware” and “software”

“Hardware”

ISO9001:2008 Certification of logistics and Import & Export; C- TAPT Certification

Customs Brokerage Licenses/On site own declaration team

Import & Export License with AA Award

Domestics Transportation License

Existing operation in proposed warehouse which are good in infrastructure

Advanced IT system

“Software”

Rich experience in Yantian since we started operation from 2001

Stable management structure

Good relationship with landlord partner

Excellent Service Provider awarded by many electronic customers

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Account management program that provides comprehensive coverage to support requirement

Warehousing Management Material Handling Inventory Management Value-added Service Import/Export Management Brokerage Services Delivery& Pickup

coordination Over-packing for delivery Continuous Improvement Quality Management Documentation KPI Management Service Level

Commitment

Solution Engineering Layout/Workflow

Design/Improvement KPI Design/Evaluation Solution Customization Transportation Utilization IT Application EDI Interface Setup WMS Customization &

Implementation Helpdesk & Support Service Quality Staff Training SOP Compliance Quality Management

System

Single Point of Contact Efficient and effective communications and

interactions Regular Performance Reviews APLL Resource Coordination for response

to account requirements Problem-solving

Program Management

Program Sponsor

Shared Services

BD & Account

Management

Operations

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Strong focus on “design to operate” implementation methodology

Customer’s RFP/RFQ

Business & Financial Filter

Site Visit

High level discovery & analysis

Define Strategies & So In. development

Business Award

LOI

Establish Pricing & High level Imp, Plan

Contract

Process Mapping- Analyze detailed Operations, Data, Process and performance metrics

Draft Process DPM’s and detail Scope Document (Logistics Procedures)

Review and finalize with customer

Finalize Cost and Project Implementation Plan

System Design

Develop Systems

Validation

Integrated testing

User Acceptance Test

Prepare User Manual

Facility/ Transport Infrastructure design

Facility/ Transport Layout & Setup

Trial Run of Process Flows

User Acceptance Test

Prepare Work Instructions

System Infrastructure Installation

HR Recruitment & Stuffing

Process Training & Certification

Internal Dry Run

Dry Run with Customer

GO LIVE Transition to Operations

On Site Support. End Day Admin

Project Debrief

30 Day Steady State Audit

Hand Over to Account Manager

Proposal & Development

Analysis & Documentation

Design Development & Acceptance Implementation Support

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Show Case - Harman

Customer Current Business Snapshot

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Customer Current Business Scope:

Inventory Management

Value Added Service- warrant card tapping

Picking & Repacking

Order Dispatching

System Maintenance

Devanning & Stuffing

Business Scope In SHA-55,000 Sqft

Business Scope In FFTZ, SZX-52,000 Sqft

Inventory Management

Value Added Service- Barcode Scanning

Picking & Repacking

Order Dispatching

System Maintenance

Warehouse Handing

Transportation

Declaration

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• Reduce costs through

• Open communication

• Less disruption to supply chain

• Increased flexibility in supply chain with visibility of information flow

• Efficient and seamless process/ better control

• Consistent service

BENEFITS

• Vendor Requirements

• Vendor Performance Measurement

• Vendor Exception Management

• Vendor Education Program

• Proactive management of single/multiple suppliers

• To ensure suppliers meet shipment schedules & comply with customer’s order

• Avoid supply chain mishaps

• Minimize re-work & associated costs

• ON TIME ON TARGET

FEATURE

APLL VALUE-ADDED SERVICE

Production Tracking – Proactive Exception Management

Vendor Compliance KPI Management

2/3

Current Proactive Exception Management and KPI Measurements for Harman’s Vendors

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Continuous Improvement of Efficiency For Operation

APLL conducted ACI project to improve the efficiency of Harman’s operation including improve the space utilization, Handling in/out efficiency

APLL conducted 5S standard for Harman operation

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Customers Endorsement of Service Quality

Cited by actual user of customer- Supply Chain Manager of customerAsia and China.

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Why APL Logistics?

We are your long term proven global partner

You will be our No. 1 client in a vast emerging market

We understand your business and objectives

We will demonstrate a true End to End solution

We see opportunities to streamline and achieve cost savings

We are excited to deliver!

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Your best choice for a global integrated logistics partner!

Q & A

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