Frequently Asked Questions

Invoicing Quality

Why are we measuring Invoicing Quality based on contractual customer control? The initiatives that will be rolled out in 2013 will involve changes from Maersk Line and its customers. The first conversation will have to be with the parties using our service and then with agents working for them (booking agents, etc). Additionally, to execute and invoice shipments correctly, the contracts must be up to date. Does this mean we measure by the contract holder? No. We are measuring based on the contractual customer from the shipment in GCSS. The main item is there is a piece to invoice

The contractual customer could move against their own contract or be affiliated on a contract managed in a different cluster. accuracy that is contract related and there is a piece that is booking/documentation related. Where the local contractual customer may only be an affiliate to a contract owned elsewhere, they will be involved with booking execution. Wont certain booking execution processes owned in the GSC impact my IQ? Isnt that the responsibility of the exporting cluster customer service to address? While the cluster executing the booking may not be the owner of the contractual customer, the owner of that customer has a duty to be aware of issues impacting them. With FOB shipments, the customer owner must take action if the origin Maersk office, GSC, or the shippers actions are impacting IQ. This aligns with the companys push for total customer ownership. Our local review has shown Contract Maintenance to not be a leading cause of credit memo generation, what is it on a global level? Customer felt Invoice Quality is 88% globally. Of that remaining 12%, 3,5% is impacted by invoice party (who pays the invoice), 2,6% contract maintenance, 2,0% booking execution, 1,9% terms of payment (which charges go prepaid v collect), with the remainder being system issues. While contract maintenance in and of itself is not the We must start with the end primary issue, who pays on behalf of that customer is. responsible party for each shipment to push higher quality. What does the percentage from tariff mean in the IQ weekly KPI report? This showcases the amount of credit memos issued to cancel tariff invoices. Why is CXED (Import D&D system) based invoices excluded?

Invoicing Quality

After going through the root cause analysis that has been done in the previous invoice projects, IIB, CTI, etc, the changes that can be made to improve invoice accuracy for CXED are heavily weighted to IT improvements. Any changes to behavior and processes for CXED will have minimal if any impact. Why is Safmarine excluded from the IQ project? Focus and priority in 2013 is on getting Maersk Lines Invoice Quality as high as possible. How can I improve contract maintenance if my contractual customer is affiliated to a contract owned in another cluster? If you identify that incorrect invoices are being generated because a contract you do not control is not updated, you must take charge of working with the contract owner. Every cluster and region has a goal of 92% and the focus is on all colleagues for a global team effort. Externally we need to drive the conversation with our customers and their agents based on who the clusters interact with, for the global clients, this is their local offices. The customer service initiatives to be rolled out this year will impact them the greatest. Contract maintenance is mainly an internal activity which will require a team effort across geographies to improve. Is it possible to have a negative IQ? Yes. In a given week if a cluster generates more credit memos than invoices, it will have a negative IQ. What does Sales Rep 0 mean in the IQ weekly KPI report? It means that the particular contractual customer does not have a sales representative assigned. Wont weekly reporting carry high variance? The reports will be published weekly in order to identify issues that may require immediate action. By setting targets and measuring on a monthly level, the volume of both types of documents stabilizes with little variation. What is the frequency of the reporting? Our goal is to publish the weekly reports every Friday. week 19 numbers will be uploaded. What is the basis of selecting Indonesia as a pilot? Asia Pacific region contacted the IQ project early on to understand how we could support each other to improve invoice quality There will be a one week lag

between week close and publishing of the reports. In other words, at the end of week 20,

Why dont we pilot the solutions in a mix of cluster from two/three different regions? The plan is to pilot the IQ solutions in 3 clusters from two/three different regions. How can clusters provide separate feedback and suggestions to address local market practices? Please contact the IQ project by talking to your local IQ general who is able to channel the feedback to the correct party in the leap. As we get closer to implementation we will also reach out to all clusters as they are impacted by the solution. Do we have any option to transfer data from GCSS into FACT with data from field reference? Currently we have to change something in pricing to force data transfer and update of Sales Order in FACT. This is currently not in scope of the IQ project and the process will be left as-is. CUSTOMER INDUCED HANDICAP

What is a customer induced handicap? In the current scenario, there is no differentiation between credit memos created due to Maersk Line service failure versus customer induced service failure. So, should our invoice quality go down because the customer switched destination in transit and a new invoice had to be generated, it will be considered a customer induced handicap . customer induced handicap. What is considered a customer induced credit memo? A customer induced credit memo is when a customer requests changes AFTER a correct invoice has been generated. Examples include change of destination, split/combined B/Ls, change of invoice party, etc. Put another way, when a new invoice is generated because of a customer amendment it will be titled a

How is the customer induced handicap calculated? The Near Term Delivery Team did a study reviewing 15,000 credit memos and worked out a % of those credit memos per cluster that are customer induced. Our understanding is that even if our systems and processes worked perfectly, these credit memos will still be generated. For 2013 we have essentially given every Region/Cluster a handicap based on this study. So, if 1000 credit memos are generated each week in Mediterranean Region, with 10% errors being customer induced, we still expect 100 credit memos to be customer

induced even if the total credit memo pool dips to 800 at the end of the year. Hence the customer induced error add-on. Is the handicap the same for every cluster? No. The handicap is assigned based on the study performed by the NTDT. Clusters that are impacted more frequently by customer requested changes will have a larger handicap added onto their raw score.

IQ KPI TARGETS

How are the targets set for clusters? Each cluster must achieve 92% quality by year end. Each cluster will have an expected scurve improvement schedule with corresponding targets. They will be set like the following: http://maerskline.apmoller.net/finance/FACT%20FORWARD/Invoicing%20Improvement% 20Board/IIBFrontpage/IQ%20presentations/Global%20Improvement%20Curve%20Target.xlsx How will Clusters be measured for a full year? Each cluster will have monthly targets and the full year score will be based on the performance to the monthly targets.

Is 92% ambitious enough? 92% will bring us on par with our peers; our goal is to make us no better or worse than other shipping lines. Due to system limitations, our ability to maintain any higher performance globally is limited. The next level of IQ will be addressed through the ERP project. What is the data source for the reporting and measuring? We will pull the raw number of invoices and credit memos from FACT RDD1020 each week. From this report we ID the TPDOC number. The TPDOC number is used to retrieve the contractual customer and geography using WEBI. Then the sales rep for that contractual customer is looked up in SCV.

COMPLETE BOOKING

What is the added value if we confirm the booking but customer is not able to pick up empty boxes? The customer will receive a DCC message that the booking is accepted and no agreed rates from the service contract provided. Equipment will only be released if the customers revert to ML for booking on tariff or a usable contract. This will avoid invoice disputes after shipment has taken place and is irreversible without incurring cost.

What is the correlation between Booking on Tariff and IQ? Would less bookings on tariff mean more accurate invoices to customers? Yes.

If incorrect rate is caused by internal issue, e.g. late filing, do not think this should impact the customer and hold equipment release. This is correct, which is why filing is still allowed until empty release/ store door appointment time. With the bookings specific change, is it safe to assume that the improvement will be by 2% from the pie chart on the slides? The RACER solution will generate 0.8-1.0% IQ improvement combined from either of the contract/rate and booking process error categories. Do we have any link between tariff bookings and rate filing GSC to expedite the filing process if the booking is already confirmed to our customer without rates as the current SLA for this is very high based on market practice. Yes, based on BOT RCA that shows that late filing is one of the root causes. If we will confirm the booking without releasing the container, what is the response time to resolve the rate issue and what is our procedure in contacting our customers so that they can collect their containers? The aim is to have a turn-time within 48 hours. GSC will not be contacting the customer directly, but will instead liaise with Sales and frontline CS to resolve the issue. There can be a scenario of round trip containers where customers utilize import containers directly to export. We would not be able to hold the empties. The situation is noted.

COMPLETE SI

If SI details not match with TOP data base when what GSC will do if customer doesnt have any CSOP filed? The information on the SI is our first choice of preference even if there is a mismatch of information with the TOP data base. Booked by party is not always the same as invoice party, so please share the result from pilot site. The Proof of Concept will be verified from week 12. Pilot results will be shared during this period on the IQ Website Will amendment fees be charged only on Invoice amendment or also cover amendments requested by customer on wrong instructions in TDI? Will it also include changes to gross weight, package count, split/combine tpdocs? 1) Invoice amendment after vessel sailing will be charged amendment fees. 2) Amendments for changes on the bill of lading will continue to follow the existing process. Addition of split or combine tpdocs will continue to be excluded from AMF as is done now. What would be the rule that would be used when customer do not inform the invoice/credit party on SI? a) If the customer does not mention Freight Prepaid or Freight Collect on the SI, the SI would be rejected and a DCC would be sent to the customer asking for complete details b) Below is the sequence that GSC follows for applying the payment terms
i. ii. iii. iv. v. vi. Country Exception (automated in GCSSTOP) MDWS TNPs (Starting with TOP CSOP overwrites SI/GCSSTOP : in MDWS) TDI Freight approvers note Customer Exceptions (automated in GCSSTOP) MDWS TNPs (Starting with TOP CSOP : in MDWS)

If the GSC is unable to determine the payment terms or Invoice party for specific charges, same would be updated basis BR2 or BR3 and DCC Inform will be sent to the customer. The customer is expected to revert with changes before vessel sailing. Invoice amendments after vessel sailing would be charged AMF

PRICED BOOKING CONFIRMATION

Did the priced booking confirmation result in improvements in accuracy? Priced booking confirmation is only a medium to communicate to the customers on what is the expected price for the booking they have placed. Our VoC indicated that several of our customers would prefer to have an indication on this early at the booking stage. Moreover, this provides us with an opportunity to correct our bookings or rate filings before the actual invoice is triggered in case the error was on ML. 70% of our booking confirmations are sent to booking agents and forwarders, not necessarily contract holder. Will country default setup be allowed? There will not be a default set-up, this is because our customers should be able to book from any location and receive the same level of service across geographies. However, there will be options for setting up preferences for customers on a customer code level in either SCV or SMDS (and self service through maerskline.com in future) where they could specify if they would like to receive priced booking confirmation or not.

COLLECT INVOICING

At which stage collect top will be performed? At export or import stage? Collect Charges updates using TOP DB will be done at Import Stage (i.e. VC + 4 days)

INVOICE LAYOUT

Will Invoice template is single template for all countries ? because some countries have the TAX limitation? We are aware of the local limitations regarding invoices. Once the new format is implemented, we know we will need to adapt it for some of the countries with special requirements.

CONTRACT MAINTENANCE

'Monitor expiring Contracts' - is it related to contracts or contract lines under contracts? Except KC customers rate validity is one month max. So every salesman at the end of each month will get a hundreds of notifications and will just ignore it GSC will be sending fortnightly report to Cluster sales showing Contract Lines that are expiring in next 2 weeks. The report will have appropriate filters so every Sales Rep will be able to narrow it down to see owned and used contract lines only. The fact report will also be used as a MARS filing form should be a good incentive for Sales to follow the process. By monitoring and filing Contracts proactively Sales will be able to reduce overall time spent on admin tasks. A lot of lines are filed by GSC on next day after providing by contract owner and as result we have disputes. Any idea how to solve it? Timeliness has been recognized as a main issue in MARS filing process, and there are two components to it; late instructions from sales, and late processing time by GSC. Either way, proactively monitoring expiring contract lines by sales and sending MARS filing requests in standardized forms will make the end-to-end timeliness shorter and more accurate. Instead of 'Standard MARS filing form' we need simplified filing way as currently we have a lot of disputes due to multiply ways of rate filing in MARS (especially outports, inland haulage and transport mode on inland leg) We are looking at process and behavioral changes that can be implemented in current year and lead us to 92% Invoice accuracy. Further simplification and better end to end connectivity of our systems will be achieved with new ERP solution which is being evaluated in parallel with IQ Project. Does 'Protected contracts' covers also GRI and implementation of new

surcharges? As example we have implemented in Poland liner THC and as nobody zeroed it in MARS earlier (it was not visible in MARS before implementation) charge has been applied with tariff value without notification to the customer. Protected Contracts are the ones with No GRI and No new surcharge clauses. The aim is to improve the process in order Protected Contracts are identified during the maintenance process and updated, or left out (in case of GRI). Calculation of sales related disputes is incorrect - if filing in MARS covers only one commodity code possibility that booking will get different one is very high. As many as possible contracts should be on FAK basis and related to the specific

commodity should be only exception. Agree, will suggest to GSC as a general rule, meantime feel free to make it your local initiative. In case of success would be very interested to learn more about it. Is there any plan to change MARS filing (for example FEAWEB) on Main Port Main Port basis (global forwarders)? It could reduce filing complexity big time in Poland all FEAWEB contracts have max 54 lines ... and it covers all possible pair of porst combinations, inluding 125OPAs. Its main port - main port + tarriff OPAa. Suggestion, not a question ;) Thank you for the suggestion and encourage you to continue sharing information. Good place for sharing but also learning about good practice from other clusters is our Chatter group, check it out here - Follow us on Salesforce.com