PACIFIC MARITIME AGENCIES INC. INTERNATIONAL LINER CONTAINER SERVICES TO (ONE) LINE ASIA HAWAII EXPRESS (AHX) SERVICE (March 5, 2020)

ONE Line operates a direct fortnightly liner container service from North Asian ports to Harbor, Hawaii, as follows:

Full Name of Line: Ocean Network Express Pte. Ltd. (ONE Line) Name of Service: Asia Hawaii Express Service Service Code: AHX Service Frequency: Fortnightly (every two weeks or 14 days) Port Rotation: Busan (South Korea) / Yokohama (Japan) / Honolulu (Hawaii) / Busan Service Inaugurated: April 11, 2012 Service Vessels: String of 3 foreign-flag cellular containerships of approximately 1,000 TEU (Twenty-foot Equivalent Units) nominal container capacity each Hawaii Ports of Call: Honolulu Harbor Day of the Week: Thursday Honolulu Terminal: Diamond Head Terminal (Pier 1), Honolulu Harbor Terminal Operator: Pasha Hawaii Transport Line LLC / Hawaii Stevedores Inc. Honolulu Ship Agent: Inchcape Shipping Services 521 Ala Moana Boulevard, Suite 256 (Foreign Trade Zone No. 9) Honolulu, HI 96813 Tel: 808 599 8604

ONE Line is a Singapore-based joint venture formed in July 2017 by the major Japanese shipowners and operators Kabushiki Kaisha (NYK), Mitsui O.S.K. Line (MOL) and Kawasaki Kisen Kaisha, Ltd. ().

The ONE Line Asia Hawaii Express (AHX) Service currently employs three small feeder class containerships (defined as up to 1,000 TEU nominal capacity) as shown in the following tables:

Containerships Currently Employed in the ONE Line AHX Service Name of Ship Flag Container Capacity TEU Reefer Year Built Nominal Stability Plugs NOBILITY Liberia 1012 180 2012 KALAMAZOO Singapore 1042 2013 TALAHASSE Singapore 1042 2013 Notes: (i) The NOBILITY is geared with 2 x 50 metric tonnes (MT) side-mounted deck cranes the others are gearless. (ii) Stability capacity on the basis of 14 MT per TEU homogenously stowed.

ONE Line AHX Service Route Structure Voyage Leg Distance (nm) Busan, S Korea / Yokohama, Japan 657 Yokohama, Japan / Honolulu, Hawaii 3390 Honolulu, Hawaii / Yokohama, Japan 4114 Total Voyage Distance at Sea 8161

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The total voyage distance of the AHX Service is relatively long in terms of the small feeder class containerships it employs resulting in a relatively high unit cost in terms of each TEU carried by the service. In contrast, small feeder containerships are more typically employed in what are known as coastal trades or shortsea shipping feeding the larger mainline containerships by consolidating or distributing loads at entrepots or hub ports over relatively short distances.

The ONE Line AHX Service operates in competition with the East-West Transpacific services typically operating Neopanamax containerships (10,000 to 14,000 TEUs nominal capacity) between Asian and U.S. West Coast (USWC) ports combined with transshipment on the Jones Act container shipping services from the USWC to Hawaii. Although the Transpacific services offer a very high frequency and low freight rates, the high Jones Act freight rates between the USWC and Hawaii limit the competitiveness of this alternative. Those high Jones Act freight rates on the USWC-Hawaii segment allows ONE Line to price their AHX Service at a relatively high level to offset the unit cost of operating small feeder ships on long ocean voyages.

In addition, the ONE Line AHX Service competes with the Transpacific APL Ltd. (APL) Eagle Express X (EXX) Service that was inaugurated in August 2019 and calls fortnightly (every two weeks or fourteen days) at Honolulu Harbor. The APL EXX Service employs foreign-flag feedermax containerships (approximately 3500 TEU nominal each) that on-carry Asian cargo through , California, calling Honolulu Westbound. This is APL’s third iteration of an Asia-Hawaii service operated since August 2017.

NYK Line inaugurated the AHX Service in April 2012, prior to the formation of ONE Line in April 2017, and during that time was its sole operator employing three small containerships calling at Shanghai, China, in addition to Busan (or, Pusan), South Korea and Yokohama, Japan.

HISTORICAL BACKGROUND

In the post-World War II (WWII) era, NYK Line has operated several versions of a Asia-Hawaii service since States Line Inc.’s bankruptcy in December 1978. Further in the past, NYK operated Transpacific liner passenger and cargo steamship services that called at Hawaii on a pass-by basis from the late 19th Century through the late 1930’s and the onset of WW II. Prior to enactment of the Hawaii Organic Act of 1900, NYK carried passengers and cargo between Hawaii and the U.S. Pacific Coast.

APL Slot Charter Service with ONE Line AHX

APL commenced in May 2018 a slot charter arrangement with ONE Line to carry on its AHX service the APL container cargo between Asia and Hawaii. This arrangement began when APL withdrew its own Aloha Express (AEX) Service in April 2018 and was ended when APL launched its EXX (Hawaii) Service in August 2019.

APL Aloha Express Service (AEX).

APL deployed a new fortnightly Asia-Hawaii service dubbed the Aloha Express (AEX) service, which was formally announced on Friday, July 7, 2017. The direct AEX Service commenced with the arrival of the APL ALOHA on August 13, 2017, to the Pasha Hawaii Transport Line LLC terminal at Sand

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Island Container Terminal (Pier 51A) in Honolulu Harbor. Similar to the ONE Line AHX Service, the APL AEX Service was operated with three small feeder containerships calling on a direct basis at three Asian ports and Honolulu. APL withdrew their direct AEX service vessels in April 2018 and entered into a slot charter agreement with ONE Line whereby APL hired container slots on the ONE Line ships.

ONE Line AHX Weekly Service

NYK announced on June 16, 2017, that they would increase the frequency of their AHX service from fortnightly (every two weeks) to weekly beginning in late July 2017 under the new ONE Line auspices. NYK / ONE Line did this in direct response to APL announcing the inauguration of their AEX Service. In order to increase their service frequency from fortnightly to weekly, ONE Line added two additional small containerships to their existing string of three ships for a total of five. According to ONE Line’s promotional material, the total turnaround time (i.e., to complete a full round voyage) for the ships employed in their AHX service is 35 days. Employing five ships on a 35-day turnaround time routing produces a weekly frequency. The first arrival of ONE Line’s revised weekly frequency to Honolulu Harbor was on August 3, 2017. ONE Line reverted to a three-ship deployment after APL withdrew their direct AEX Service in April 2018

NYK AHX Fortnightly Service

NYK discontinued the Margarita Service and replaced it in Hawaii with the AHX Service in April 2012 employing three approximately 700 TEU containerships operating between three North Asian ports and Honolulu on an approximately fortnightly frequency providing significantly fewer direct port options. The NYK AHX service became a ONE Line service in July 2017.

NYK Margarita Service.

For approximately 13 years from 1999 until the AHX Service was inaugurated in April 2012, NYK called at Honolulu, Hawaii, with a Transpacific liner container service known as the “Margarita Service,” which operated fortnightly between North Asian ports and the West Coast of Mexico and Central America with a string of six containerships. The service called at Honolulu on a pass-by basis both Eastbound and Westbound giving Hawaii shippers (i.e., cargo owners) many options.

NYK Monthly Service

NYK inaugurated a monthly Asia-Hawaii service with a single multipurpose ship in approximately 1980 following the bankruptcy of States Lines Inc. Matson Navigation Company Inc. (MNC) provided ship agency (through its subsidiary Matson Agencies Inc.) and marine terminal services (through its subsidiary Matson Terminals Inc.) to NYK at U.S. Pacific Coast ports under a post WWII agreement which extended to Hawaii. The monthly NYK service called in Hawaii at MNC’s marine terminals first at the Diamond Head Terminals (Piers 1 / 2) and subsequently at the Sand Island Terminal (Piers 51 – 53), Honolulu Harbor. MNC sold Matson Agencies Inc. in 1990 exiting the ship agency business. As a result, NYK appointed Lavino Shipping Agencies Inc. (which was later purchased by Inchcape Shipping Services) as their Hawaii ship agent. MNH’s terminal agreement with NYK for the U.S. Pacific Coast and Hawaii was terminated in 1999. In response, NYK made arrangements with Hawaii

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Stevedores Inc. and inaugurated their Margarita Service calls at the Diamond Head Terminal (Piers 1 – 2) Honolulu Harbor with geared containerships.

States Lines Transpacific Service.

For many years beginning in the aftermath of World War II until 1980, the subsidized U.S.-flag carrier, States Lines Inc., operated a liner service from a broad range of Asian ports from South East Asian to Japanese ports calling Honolulu on a weekly frequency. It was an excellent service in terms of range of ports offered by direct call and weekly frequency. States for many years operated conventional tween- deck cargo ships and beginning in the mid-1970s deep-sea Roll-on/Roll-off ships in their Transpacific service. States received federal Construction Differential Subsidy (CDS) to build its ships in the U.S. and Operating Differential Subsidy (ODS) to support its foreign trade ships.

LINKS

Inchcape Shipping Services – Hawaii https://www.iss-shipping.com/directory/offices/honolulu

NYK Press Release: NYK Announces New Service between Asia and Honolulu, Hawaii April 11, 2012 https://www.nyk.com/english/news/2012/NE_120411_2.html

Press Release: NYK Enhances Asia–Hawaii Express (AHX) Sailing Frequency June 16, 2017 https://www.nyk.com/english/news/2017/20170616_01.html

Japan-based carrier increases frequency of Asia-Hawaii route Pacific Business News, July 7, 2017 https://www.bizjournals.com/pacific/news/2017/07/07/japan-based-carrier-increases-frequency-of- asia.html

AHX: Asia Hawaii Express Asia – North America, Service Maps, ONE Line https://www.one-line.com/en/routes/current-services

Port Schedule, ONE Line (Insert Port Honolulu, Mode Including Feeder Vessels and Period Two Months, and service vessel schedules will appear) https://ecomm.one-line.com/ecom/CUP_HOM_3006.do?sessLocale=en

Fleet List, ONE Line https://www.one-line.com/en/vessels

What Ever Happened to States Line? The Pacific Maritime Magazine, June 1, 2017 http://www.pacmar.com/story/2017/06/01/features/what-ever-happened-to-states-line/527.html

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Pacific Maritime Agencies Inc. Ocean Network Express (ONE) Line Asia Hawaii Express (AHX) Service Service Ship Particulars Description Units Ship #1 Ship #2 Ship #3 Ship Name NOBILITY KALAMAZOO TALLAHASSE Int’l Maritime ORG (IMO) Number 9459101 9611058 9611046 Former Names WSA DRAGON MELL SENANG KOU AN Ship Type Container Container Container Flag Liberia Singapore Singapore Gross tonnage (GT) Admeasurement 9998 9743 9743 Net Tonnage (NT) Admeasurement 5080 4679 4679 Deadweight Tons (DWT) Summer Metric Tonnes (MT) 12,754 12,593 12,574 Length Over All (LOA) Meters (M) 146.3 143.18 143.18 Breadth, Moulded (Beam) Meters (M) 22 22.8 22.8 Draught (Draft), Maximum Meters (M) Speed, Maximum Knots (kn) Main Engine Model MAN 25A6CY GRT-FLEX48T-D GRT-FLEX48T-D Main Engine Power Kilowatts (KW) 8280 8730 8730 M. Eng. Fuel Consumption at Sea MT/Day x Type CST Endurance Nautical Miles (nm) Bow Thruster No. x Power Kw 1 x 590 1 x 590 Stern Thruster No. x Power Kw Container Capacity, TEU* 1012 1042 1042 Profile/Nominal Container Capacity, Stability TEU @ 14 MT homog Reefer Points Number 180 Cargo Gear No. & Capacity MT Deck 2 x 40 Gearless Gearless Year Built 2012 2013 2013 Builder Dae Sun Shpbldg Taizhou Shpbldg Taizhou Shpbldg Place of Build Busan Taizhou Taizhou Country of Build South Korea China China Classification Society KR DNV GL DNV GL Port of Registry Monrovia Singapore Singapore Owner Cosmo Ship Mgt Goodwood Mgt Goodwood Mgt Manager Cosmo Ship Mgt Goodwood Mgt Goodwood Mgt Manager Location Piraeus, Greece Singapore Singapore Operator (Time Charterer) ONE Line ONE Line ONE Line Price (if for sale) Millions of U.S. Dollars *TEU = Twenty-foot equivalent units Particulars taken from various internet sources, not guaranteed. Cosmo Ship Management S.A., Piraeus, Greece Goodwood Shipmanagement Pte. Ltd., Singapore Taizhou Kouan Shipbuilding Co., Ltd., Taizhou, China Dae Sun Shipbuilding & Engineering Co., Ltd., Busan, Republic of Korea

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M/V NOBILITY

M/V KALAMAZOO

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M/V TALLAHASSE

File Ref: PMTC-352 (ONE Line AHX Svc Info Piece 03-04-2020)

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