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Welcome Aboard ZIM Investors

01-Mar-2021

Dear ZIM shareholder,

On the occasion of ZIM’s recent IPO, which marks both a significant milestone in our company’s 75-year history and an important inflection point, I am proud to share with you highlights from our journey thus far and our bold, innovative strategy for fueling ZIM’s growth and profitability into the future.

I am delighted to welcome you “on board” as we sail forward on this journey together!

ZIM today is a digital shipping liner with a modern spirit operating in an old-fashioned and traditional shipping industry, and I am confident that we are ideally positioned to become one of the most profitable and leading players in the industry. We are an innovative, agile, and surprising company!

Similar to Amazon, Airbnb and Uber that have disrupted and fundamentally changed their respective industries, we in ZIM are focused on changing the narrative in ours, including the outdated premise that a player in our industry needs to own the majority of its fleet, or the perception that advanced technology is not critical to our business.

We are a smaller company competing with behemoths from all over the world, which requires us to be different and innovative. The main pillars of our differentiation are our asset-light model, exceptional agility and technological innovation through business intelligence, big data, artificial intelligence, and technological partnerships.

A Major Sea Change
When I joined ZIM as CEO in 2017, it was clear to me that the shipping industry was ripe for disruption, and over the past few years we have navigated ZIM through a once-in-a-generation sea of change.

We aimed for nothing less than a total turnaround, seeking to capitalize on distinct changes in global commerce, container shipping and the value of big data. Today, ZIM is a revitalized company with new strengths, invigorated spirit, and a promising outlook for operating amid the new realities of shipping.

Our unique commercial strategy is tailor-made to fit us exactly, turning our relatively small size into an advantage, and is already yielding results!

Importantly, we have successfully harnessed an asset light model, a customer-centric approach and forward-thinking digital strategies, to reposition ZIM as an innovative leader of seaborne transportation and logistics services with relentless focus on:

  • Maximizing financial performance
  • Exceeding customers’ expectations including through our “powered by customers” approach
  • Promoting our core sustainability values
  • Embracing our “Startup Nation” DNA to fuel growth via technological developments and partnerships

Our unique approach has thus far yielded strong results, highlighted by our success in recent years in generating record financial performance in 2020 and consistently reaching margins and profitability at or near the peak of the industry. Based on our new and distinctive “Z-Factor” implemented across the company, which emphasizes a can-do spirit, results-driven approach, agility, collaboration, and sustainability, ZIM’s exceptional people and organizational culture have driven this success.

As we build on the momentum of the significant progress we have already made, we believe that there are exciting opportunities for ZIM on the horizon.

Full Speed Ahead
Innovation is at the core of ZIM’s culture, and we promote creativity to power new services and build opportunities. Examples of how we have used technology and innovation to advance our customer-centric approach, reduce costs, and create new engines of growth include:

  • Harnessing our “Startup Nation” DNA, including developing growth opportunities with startups and industry leaders such as our partnership with Alibaba, which enables us to gain a foothold in adjacent and new markets, grow our revenue streams and provide added value to our customers
  • Fostering our innovative spirit to achieve significant service improvements for customers, including utilizing blockchain technology to establish an entirely digital bill of lading system to reduce inefficiencies and losses
  • Utilizing our agile approach to launch high speed lines in response to growing ecommerce demand and the recent shift in consumer preferences from services to goods
  • Drawing on our performance-driven corporate culture to develop an internal revenue management system that enables us to manage our vessel and cargo mix to prioritize higher yields, enhanced efficiency, cost savings and profitability across the organization

Capitalizing on a Differentiated and Profitable Strategy
Uniquely among major players in container shipping, ZIM does not strive to operate in every market or to compete on size and volume. Rather, our operational strategy is centered on:

  • Serving only select global and niche markets where we have competitive advantages
  • Best serving our customers, being truly “customer-centric”
  • Maximizing our market position and profitability

ZIM has built an extensive and agile network of shipping lines and services, and as part of our transformation, we have sharpened our focus on two important trade lanes. Specifically, we have expanded our presence in the important Asia - US East Coast trade and are now one of its biggest importers overall and in critical ports such as Savannah and New York. Following our IPO, and consistent with our sustainability values, we have taken steps to expand our leading position in this growing trade by entering into an agreement for the long-term charter of ten state-of-the-art LNG dual-fuel extra-large container vessels. Additionally, we have in recent years nearly doubled our presence in the important Intra-Asia trade, which alone makes up approximately 40% of all global containerized trade.

Beyond our organic expansion and commercial progress, a real game changer for ZIM has been our strategic cooperation agreement with the 2M Alliance, which is operated by the two largest global carriers in the industry, Maersk and MSC. This important collaboration, which has expanded to include additional trades since the initial 2018 agreement, allows us to optimize fleet utilization by sharing capacity, as well as expanding our service offering and benefiting from cost savings.

We employ a unique, asset-light model, which also enables us to benefit from a flexible cost structure and operational efficiency. The chartering-in of most of our capacity, primarily on short-term charters, allows us to make nimble adjustments to meet changing market conditions, optimize vessel deployment, support high utilization of vessels, and exploit specific trade advantages.

Charting a Course for the Future
The shipping industry, like many others, is changing at a record pace, and the key to success is to act decisively and adjust quickly. I am proud of the progress we have made reinventing ZIM as a resilient and robust digital shipping company well positioned for the realities of the 21st century. With a strong foundation of talented professionals, a commitment to utilizing big data and technology, and a culture of innovation, I am honored and excited to lead ZIM, with the support of our strong management team, in our new chapter as a public company.

As we steam ahead, we will remain focused on the core values and competencies that drives our success.

Welcome aboard – we are at the beginning of an incredible journey!

Sincerely,

Eli Glickman

Eli Glickman
ZIM President & CEO




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