2020 SULPHUR CAPINTRODUCING MSC’S BUNKER CHARGE MECHANISM FOR 20191 December 2018

LOW SULPHUR – 2020 SCENARIO

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In specific Emission Control Areas (ECAs), defined by the UN IMO or other governmentbodies, the limit isalready 0.1%

The UN International Maritime Organization requires that from 1 January 2020, Sulphur content in the fuel used for international shipping must be limited globally to 0.5%, compared with the current standard of 3.5%, in order to minimize emissions of Sulphur oxides from ships.

ECAs: 0.1%

China: 0.5%; 0.1% limits under consideration

Global: 0.5%

PREPARING FOR THE 2020 SULPHUR CAP

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As we continue to prepare for the 2020 low-Sulphur fuel regime, the cost of adapting our fleet and fuel supply is expected to be in excess of USD 2 billion a year.

Low-Sulphur fuel is expected to be substantially more expensive than traditional marine fuel oil.

We believe it is essential to segregate transparently the rising burden of fuel costs, so these costs may be visibly passed on throughout the supply chain.

FORMULA FOR THE BUNKER RECOVERY CHARGE (BRC)

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Following considerable analysis of operating costs and market factors we have decided to implement a new BRC (Bunker Recovery Charge), effective 1 January 2019.

Bunker Recovery Charge (currently based on the monthly average of the HSFO 380 CST index

for each specific trade/service; from Q4 2019, low-Sulphur fuel oil 0.5% may apply, in order to be ready for

2020)

(coefficient = fuel consumption per round trip ÷ TEUs carried round

trip)

BRCFuel Price

per Ton= x Trade Factor

For reefer cargo, the BRC will be calculated as BRC x 1.5, due to the additional cost of electricity generation usedto power reefer containers

BRC FORMULA - ADDITIONAL INFORMATION

It does not cover charges related to coastal Emission Control Areas as defined by the IMO, EU or othergovernment bodies (for example, but not exclusively, N. American/Caribbean, Baltic/N. Sea, China).

The BRC is currently based on the monthly average of the HSFO 380 CST index for each specific trade/service; from 4Q 2019, a monthly average of a low-Sulphur fuel oil 0.5% index may apply, in order to be ready for 1 January 2020

The BRC replaces the current Bunker Contribution known as BUC, the Fuel Adjustment Contribution (FAD), the Emergency Fuel Surcharge (EFS), and largely absorbs otherfuel-related charges.

VARIATION BY TRADE – EXPLANATORY EXAMPLES

• The Trade Factor coefficient is one of the elements described above usedto calculate the BRC

• The table of selected trades shows how the BRC will vary when differentcoefficients are applied to examplefuel prices

• A Trade Factor coefficient maychange depending on modifications to the size, number of ships & container imbalance on any giventrade

• The BRC for 1 January 2019 is set one month in advance, based on the fuel price average of November

• BRCs will be updated monthly and communicated accordingly

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TRADEBUNKER RECOVERY CHARGES BASED ON EXAMPLE FUEL PRICES (USD)

$400 $450 $500 $550 $600 $650 $700Asia-EuropeEurope-Asia

$248$96

$279$108

$310$120

$341$132

$372$144

$403$156

$434$168

Asia-N America W CoastN America W Coast-Asia

$200$40

$225$45

$250$50

$275$55

$300$60

$325$65

$350$70

Asia-N America E CoastN America E Coast-Asia

$520$80

$585$90

$650$100

$715$110

$780$120

$845$130

$910$140

Asia-LatAm E CoastLatAm E Coast-Asia

$360$260

$405$293

$450$325

$495$358

$540$390

$585$423

$630$455

N Europe-N America E CoastN America E Coast-N Europe

$200$60

$225$68

$250$75

$275$83

$300$90

$325$98

$350$105

Europe-Med & Black SeaMed & Black Sea-Europe

$140$140

$158$158

$175$175

$193$193

$210$210

$228$228

$245$245

N Europe-Indian SubcontinentIndian Subcontinent-N- Europe

$140$140

$158$158

$175$175

$193$193

$210$210

$228$228

$245$245

N Europe-W AfricaW Africa-N Europe

$208$104

$234$117

$260$130

$286$143

$312$156

$338$169

$364$182

N Europe-Latam E CoastLatam E Coast-N Europe

$120$260

$135$293

$150$325

$165$358

$180$390

$195$423

$210$455

Europe-Israel & CyprusIsrael & Cyprus-Europe

$200$80

$225$90

$250$100

$275$110

$300$120

$325$130

$350$140