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Investor Presentaiton

Counting Zeros Understanding relationships between freight weight, freight value, and mode grounds all other thinking in logistics SHIPMENT WEIGHT Tons Pounds MODE Air Freight Trucking Rail Water 0.0001 0.20 0.001 0.01 0.1 1.0 2 20 200 2,000 10 20,000 100 200,000 1,000 2,000,000 10,000 20,000,000 100,000 200,000,000 Air Freight 747 Jet Parcel Services LTL Trucking 1 Truck Load 1 Rail Car 50 Trucks 12 Rail Cars Barge Unit Train Small ship Ocean ship ā˜ Understanding Scale and Proportion Understanding the role of logistics in any given industry starts with comprehending orders of magnitude of freight weight and volume The range of shipment sizes literally span nine orders of magnitude, from 0.0001 ton parcels moved by ground or air mail to 100,000+ ton shipments moved by ocean-going bulk ships Some modes, have natural ceilings below the floor of other modes - - - A 747 cargo jet will carry about as much freight as one rail car A train of 100 rail cars barely fills a small ship Container shipping aggregates thousands of smaller shipments of 10 or 20 tons each into ship-sized units Some commodities, like bulk grain or iron ore, require locations with direct access to bulk shipping (rail and water) because inefficiency of transportation by any other mode erases the value of the product itself Relation to Business Attraction Strategies Unit cost for transportation increases Every time a product is touched Every time a product changes modes, cost increases The smaller the shipment size The further the product moves Seek locate businesses where location allows minimum touches, minimum mode changes, maximum shipment size, and minimum distance traveled for both its process inputs and output to customers The relative value of a cargo correlates strongly to its weight and mode of transportation. So, air freight efficiency will generally benefit companies dealing in small, light objects with very high value density ($100's or $1,000's per pound). Marine freight efficiency will typically deal with heavy objects with very low value (pennies or dollars per pound). SEABURY MARITIME 10
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