Port Operations in Los Angeles and Long Beach

Dear OOCL Valued Customers:

As you are aware, our company has been involved in negotiations over a new labor contract with the ILWU Local 63 Marine Clerks Office Clerical Unit (“OCU”) for over two and one-half years. Last week, the OCU declared an end to contract negotiations, indicating that they would likely initiate a work stoppage. On November 27, 2012, OCU employed at APM Terminals walked out and put up pickets. On November 28, the OCU widened their strike, walking out and putting up pickets at thirteen other companies in the ports of Los Angeles and Long Beach, including our company. While the OCU subsequently took down pickets at some companies, including our company, OCU remain on strike at terminal facilities. The ILWU longshore locals have honored the OCU’s pickets at terminal facilities, effectively shutting down operations in the ports of Los Angeles and Long Beach.

We are disappointed at the OCU’s actions and want you to know that we have worked diligently throughout these protracted negotiations to avoid any disruption to operations and reach a fair labor contract, understanding that harmonious labor relations benefit the harbor community and shipping industry as a whole. As an industry, we are facing continuing challenges in this economy. Our company has negotiated in good faith with the OCU, and we hope it will reconsider, and accept our complete proposal for a fair and reasonable labor agreement.

We value your support and our longstanding business relationship and will continue to do everything we can to meet your service needs, without interruption.

We will continue to keep you posted on developments.