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3 PL Full Solution

5.9.2011

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Warehouse Management System (WMS)

Movement of Distribution Center to the Mainland China has become a trend nowadays. Warehouse Management System (WMS) and Pre-distribution Cargo arrangement at origin will be beneficial to clients in cost reduction as the aim of WMS is to control the movement and storage of materials/cargo within a warehouse in a more effective and efficient way. Our service scope for WMS is not limited to the followings; it can be tailor-made to fit the specific requirements of our customers.

PO Management System (POMS)

It integrates the Internet system with the extensive network of trading partners to deliver maximum value to customers. These applications lever the Internet to provide worldwide visibility and interactive real-time information across supply chains.

With the assistance of our I.T. system, high visibility will be maintained throughout the supply chain and the freight movement. At the time of PO instruction issued by customer to vendors, Orient Star would receive copy of the PO via EDI or other media from the customer and upload the PO details into the system. Starting from this point, tracking and tracing service of the subject PO will be available at Orient-Net.

Benefits

Minimize the mistakes via utilization of EDI Locate shipment in the transport cycle through cargo tracking search Reduce administrative cost through on-line report Reduce safety stock and improve planning due to visible product flow Identify supply chain failures in the early stage, start contingency plans

Domestic Trucking Pick & Pack Service Scanning & Bar-coding

Labeling & Tagging Pallet Breakdown/Building EDI Linkage for Shipment

Customs ClearanceInventory ControlStock Balance Checking

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CONCEPTUAL IDEA

A. Flows Comparison

FACTORY 1

FACTORY 2

FACTORY 3

Physical Cargo

Movement

Information Chain

Origin CFS

In / Out

Sorting

Consolidation

Destination DCIn / Out

Pick and PackDistribution

LTL Delivery Address 2

LTL Delivery Address 1 LTL Delivery Address 3

ORIGIN DESTINATION

FACTORY 1

FACTORY 2

FACTORY 3

Physical Cargo

Movement

Information Chain

Origin CFS

In / Out

Sorting

Consolidation

Destination DC

Simple Distribution

LTL Delivery Address 2

LTL Delivery Address 1 LTL Delivery Address 3

ORIGIN DESTINATION

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FACTORY 1

FACTORY 2

FACTORY 3

Physical Cargo

Movement

Information Chain

Origin CFS

In / Out

Sorting

Consolidation

LTL Delivery Address 2

LTL Delivery Address 1

LTL Delivery Address 3

ORIGIN DESTINATION

Drop Shipment

to Ultimate Consignee

Information Chain

FCL / AIR

B. Services Scope

Buyer Consolidation Simple & Specific Consolidation Multi Origins Consolidation Customs Declaration (EDI linkage with Chinese Customs) Quality Inspection Labeling Bar Code scanning Pick and Pack (Down to pieces level) Palletization EDI hook up

Benefits

Lower labor and storage cost in China Maximize Loadability Minimize the Less Container Loads Minimize the LCL related charges in loading & discharging ports Less workloads in destination

Customs clearance – 1 container vs Several LCL shipment Cargo tracking – 1 container vs Several LCL shipment in different vessel/ container Door delivery – 1 drayage vs Several LCL trucking

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C. General Operation flow in the Warehouse

1. Shippers arrange booking with us2. We release the S/O to shippers for cargo delivery3. Supplier send the goods to our warehouse as per the S/O in LCL 4. Warehouse counts the quantity; inspect the status of master carton during receiving.5. POD will be signed by the warehouse to the truckers6. Warehouse arranges quality inspection to select the passed (Go to point 8-16) and defective item (Go to point 7)7. Return the defective item to the supplier for repairs8. Cargo storage in the warehouse9. Daily Gate in Activitiy report sending to the consignee via EDI or Internet10. Load Plan confirmed by the Consignee11. Arrange booking with carrier12. Arrange export customs clearance13. Daily Outbound Report sending to the consignee via EDI or Internet14. Build the Consolidation Box15. Return the loaded container to Terminal 16. Daily Inventory Stock Balance will be sent to the consignee via EDI or Internet

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Warehouse General Workflow

CargoInbound

Delivery by Chinese Suppliers

Quality Inspection ( If Needed )

Import from Other Origins

Container Pick-Up, Un-Stuffing

Delivery Container to Terminal

Customs Declaration for Entire Container

Customs Declaration

Labeling

Inbound scanning

Storage

Pick and Pack

Outbound Scanning

Stuffing

Customs Declaration

Outbound

Value Added Services in the

Warehouse

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Customs General Workflow (Inbound)

General Trading

Factorydelivers cargoes together

with required customsdoc. to CFS per S/O

Upon release ofdeclaration form,

an inbound summaryis prepared

Custom Officials request on-site cargo inspection

if necessary

Audits customs doc.against cargoes’ sample

Inputs inbound datainto customs

inventory system

Prints official customs declaration form and

submit to Custom

Prepares customs declaration doc.

Check the customs sealand remove the seal

Custom Release inbound cargoes

Devanning & Storage

Transfer Customs General Trading

CFS Process

Customs Process

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Customs General Workflow (Outbound)

CFS Process

Customs Process

Upon stuffing completion, a Loading summary

is prepared for Custom’s approval

Customs Approve and release laden containers

Upon the return of Container,

Export customsdeclaration form is

submitted for Custom Release

Load PlanProvided from Importer

Check Load Plan against

WMS record

EDI Data to Custom inventory system

Prints official customs declaration form

Return the customsrelease form to Shipping Lines

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In-House Designed It System: Orient Net

To ensure the high flexibility, we team up with in-house IT experts in Shanghai. They endeavor in designing, maintaining and monitoring the Orient Net & securing information accessibility and data integrity. Any extra functions can be tailored made & programmed into the system for catering the specific service requirement.

Orient Net works on web-basis which enables proactive management of your supply chain through improved end-to-end high visibility and dynamic, intelligent exception alerting modules. For moving the goods globally, from factories to destinations with the basic concept A to Z theory, Orient Star is able to match the physical flows with near-real-time information via Orient Net on the status of inventory, shipment, order and order line down to the product ID.

This results a single inventory flow information source, allowing you to: Locate shipment in the transport cycle through cargo tracking search Reduce overall administrative cost through on-line report Reduce safety stock and improve planning due to visible product flow Identify supply chain failures in the early stage, start contingency plans

Using EDI technology, Orient Star can manage customers’ entire purchase order (PO) process from the PO creation to the receipt of the end user including tracking of PO items sourced from multiple countries. The system can be incorporated with any external networking without changing the customers’ current shipping systems.

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Basic Module & Functions of Orient Net

1. Container Volume ReportContainer Volume reports contains full details of the shipment with a specific time frame, such as monthly, quarterly or yearly reports..

2. Volume Summary ReportThe Volume Summary Report has a specialized function for our partners to keep track of the cargo movement of THE CUSTOMER

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3. Cargo TrackingAll concerned parties can keep track of the cargo status through our Orient Net. This function provides the precise status of your cargo and expected arrival information to the users. It can be tracked by bill of lading number or container number, etc.

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4. Consolidation PlanOur consolidation plan system provides an integrated tracking of all phases in the supply chain. The system integrates information for orders, shipment and container types.

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5. Cargo Receiving Summary Report (Inbound)

6. Container Loaded Report (Outbound)

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7. Inventory Level Report

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8. Schedule Search Manager

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9. PO, Proforma Invoice, Packing List Creation

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10. Online Booking

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11. Total Unit Landed Cost

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12. Real Time CCTV Online Monitoring

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LOCATIONS COVERED & FACILITIES

Facilities

Type of Warehouse: Custom Approved Export Warehouse (CAE) Storage Area: 15,000 Square Meter Capacity: 30,000 CBM Clearance: 6.5 meter Number of Load Bay: 15(simultaneously) Capacity: 30,000 CBM Clearance: 6.5 meter Number of Load Bay: 15(simultaneously) Coverage: 100% Indoor Distance from Major Ports & Airport: 55km from Shekou,

58km from Baoan Airport, 9km from Yantian (Express only 5 minutes) Surveillance TV: 24 hours, installed every corner of the entrances EDI Capability: Positive

COMPETITVE EDGES

Locative Advantages

Located in bonded area, it is under the supervision of China Customs Department.

Near the exit of Yanpai highway, it is convenient for the cargo moving in & out of the port and the logistic park

The integrated transportation networking between the port and Orient Star Warehouse offer easy access to the essential point like international airports & seaports in the area.

Possible Locations: various hubs serving different location all over the world. Proposed Points: Shanghai, Shenzhen, Qingdao, Singapore, Malaysia, Vietnam, Taiwan & Thailand

Example Origin: Yantian, Shenzhen | Location: Lot 19, Yantian Port Hinterland | Distance from the International Terminal: 5 minutes driving | Class: 1st tier, custom approved warehouse | Applicability: all China PRC Ports

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Competitive Edges

Transportation Advantages (Exterior) To the Port: 5 minutes to the biggest port of Southern China-Yantian Port To the Airport: 1-hour to the Baoan International Airport, Shenzhen To the Railway Station: 30minutes to the Shenzhen North Railway Station Highway System: the connections of YanPai highway and Yanba high-

way provide the most convenient access to the Delta of Preal River area To the city central: only 30 minutes to the downtown of Shenzhen

Transportation Advantages (Interior) The Integrated management of transportation inside the park ensure the

smooth flow of internal traffic The interactive transportation between port area and the logistic park

increase the efficiency of the traffic flow Large parking area avoid the traffic jam in the busy time

The design of 3-storey frame and the elevator makes sure the goods can be delivered to every floor easily and fast.

CUSTOMS APPROVED EXPORT (CAE) WHAREHOUSE

This export supervised warehouse is officially approved by the General Administration of Customs

Certified as 5 star warehouse by the China Warehouse Services Association

Prompt Tax Rebate Application

Receiving export cargoes

(Once received, treated as being exported)

CAE Warehouse

Shipping abroadconsolidated cargoes

according to market demand

Maximum storage period is 1 YEAR

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Information Sharing and Network

The Network is innovated together with EC Link Shenzhen and link up with the China Customs, port terminals and warehouse

Base on the platform of Customs, the network was built for the data sharing and interacts between the warehouse and terminal

This will implement the online operation of systems between Customs, Liners and warehouse.

Automatic Management System & Exception Alert System

Equipped with 24 hours CCTV and Infrared Alarm System.. 16 online connections with China Customs H2000 system The live connections with Shipping Lines, for submission of manifest

of shipments We implement the most updated Warehouse Management System for

daily operation and inventory management Dashboard designed for exception alert reporting any operational &

documentation exception or abnormalities

Information Sharing and NetworkThe customs deal with the daily operation on site and can handle the inspection, custom release and approval with special requirements.

Currency (USD) Cbm LCL OOCL Evergreen MSC

Factory A 15 900

Factory B 15 900

Factory C 15 900

Total 45 2700 1725/40’GP 1850/40’GP 1650/40’GPOcean Freight $975 $850 $750

WHY DO I NEED THE SERVICE ?

Scenario 1 – Spot Rate on Mar/201145 cbm ready to shipped out – ex Yantian to Los Angeles, CA

Ocean freight rate Comparison LCL rate at USD 60 / cbm Local Surcharges : CFS USD20/cbm Vs THC USD269/40’ Destination Surcharges : CFS / DAD ranges from USD125 to 450 per job in total Destination Custom Clearance Fee : USD125 to175 per entry

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Result1. Total Ocean freight Charge Save is significant2. Customs clearance – 1 times vs 3 times3. Door delivery - 1 FCL drayage vs 3 LCL trucking4. Local Surcharge : CFS USD20 x 45 cbm = USD900 Vs THC USD269/40’5. Destination Surcharges : Destination CFS Vs no Significant Terminal Charges6. Time of Transaction in loading & discharging port CFSs

Scenario 2 – Spot Rate on Mar/201145 cbm ready on 2 Mar – ex Yantian to Los Angeles, CA

Ocean freight rate Comparison LCL rate at USD 60 / cbm + 20’ full load 0.85 of 40’ rate USD2030

OOCL Service Local Surcharges : CFS USD20/cbm Vs THC USD269/40’, 141/20’ Destination Surcharges : CFS / DAD ranges from USD125 to 450 per job in total Destination Custom Clearance Fee : USD125 to175 per entry

Currency (USD) Cbm LCL OOCL Evergreen MSC

Factory A 26 900

Factory B 18 900

Total 45 2700 1725/40’GP 1850/40’GP 1650/40’GPSave In $775 $650 $850

Result1. Total Ocean freight cost saved2. Customs clearance – 1 times vs 2 times3. Door delivery - drayage vs 1 LCL trucking + 1 FCL drayage 4. Local Surcharge : CFS USD20 x 18 cbm = USD360 + USD141/20’ = USD501 Vs THC USD269/40’5. Destination Surcharges : Destination CFS Vs no Significant Terminal Charges6. Time of Transaction in loading & discharging port CFSs