2010 International Food Aid Development Conference August

2010 International Food Aid & Development Conference August 2 -4, 2010 Kansas City, Missouri Sponsored by the USDA and USAID Vessel Loading Observation Break-Out Session Presentation by H. Keith Powell

Potomac Maritime LLC - Ship Broker with offices in Washington DC and Houston, Texas - Represents US flag and Non US Flag Ship Owners participating in the US Government food AID Programs - Major Clients: Maersk Line, Maersk Line Limited and Sealift, Inc

What does a Ship Broker Do? > Market Analysis > Contract Administration > Prepare and Submit Freight Bids > Keep various parties informed of Vessel positions > Collect Freight Monies due to Carriers > Logistical Support > Problem Solve

Other Ship Brokers Participating in the Program: Ø Phoenix Chartering Ø Euro America Ø International Navigation Ø Next Wave Ø Potomac Shipping

Potomac Maritime Broker at Work!

Other Ship Brokers at Work!

Problem Solving: Load Port Challe Delayed Cargo Arrival / Off Grade Cargo: Action Required: > Swap Out Cargo Between Vessels or Programs > Expedite Deliveries > Flexibility from Cooperating Sponsors > Quick Decisions from Decision Makers

Problem Solving: Load Port Challenges Infestation of Cargo at Load Port: - Current Contract Terms Place Burden on Carrier - Infestation Either Latent and in Cargo at Time of Delivery to Port or - Cargo Becomes Infested While in the Load Port Warehouse - Carrier is Responsible for Fumigating Cargo in Warehouse, on Board Vessel or in Containers

Problem Solving: Load Port Challenges Infestation of Cargo at Load Port: New Approach: US Government pays for any fumigation required at load port (in warehouse or on board vessel or in container) Rational: > Cheaper. . . ? Perhaps. USG already paying cost to Carriers > USG can possibly negotiate better fumigation cost than individual Carriers > More Proactive Approach to Issue > Focus is on Delivering Cargo Free of Infestation > Commercially Shipper Responsible for Fumigation of Cargo

Public Enemy Number 1

Problem Solving: Load Port Challenges Rodent Infestation of Cargo at Load Port: - Clear Understanding of Various Parties Responsibilities: Port Authority Suppliers Shipper Stevedores Ocean Carrier US Government - Contractually Cargo is in the care and custody of the Ocean Carrier - Physically cargo in the Possession of the Stevedores - Ocean Carrier does not have direct control of the Cargo - must work through Stevedores as it’s subcontractor

Problem Solving: Load Port Challenges Rodent Infestation of Cargo at Load Port: Ocean Carrier’s Main Concerns: - Important that only clean cargo being loaded on vessel - If a higher level inspection procedure is to be used establish well in advance of vessel loading - Any delay in handling the cargo and loading the vessel is minimized or eliminated altogether

Problem Solving: Load Port Challenges Rodent Infestation of Cargo at Load Port: Suggestions: > USDA to establish standards for cleanliness and rodent remediation procedures for all terminals handling US Government Food Aid > USDA to conduct regular terminal inspections to ensure compliance > If there is a higher level of inspection required prior to loading – clearly spell out the procedure / protocol in the freight tender > This should help avoid problems developing at time of vessel loading

Problem Solving: Load Port Challenges Cargo Claims at Load Port: Current Contract Terms holds Ocean Carrier responsible for cargo damage that occurs at the load port with zero tolerance for loss Result: > Carriers must increase their rates to cover potential for cargo claims yet they have no direct physical control over cargo Cargo is in the possession of the stevedore / terminal operator who is subcontractor to cargo Suppliers for rail car unloading and Ocean Carrier for loading vessel or stuffing containers

Problem Solving: Load Port Challenges Cargo Claims at Load Port: Suggestion: Make Terminal Operator directly responsible for any load port damage Rational: > Direct accountability > No free lunch – Freight rates currently include provisions for potential claims and if suggestion adopted stevedores rates will include provision for potential claims > BUT. . . Holding the party responsible that is in direct control of the cargo, should promote more effective methods for minimizing cargo damage and loss > For Stevedores – Minimizing cargo claims can become a

Potomac Maritime LLC Thank you for listening and enjoy the Conference