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July 30, 2003
Kawasaki Kisen Kaisha, Ltd.

Enhancement of Terminal Business

International Transportation Service, Inc. (I.T.S.), a member of "K" Line Group, has been operating container terminals in the Ports of Long Beach, CA, Oakland, CA, and Tacoma, WA and providing high quality services not only to "K" Line (and its customers), but also to other major steamship lines (and their customers) calling at the I.T.S. terminals.

I.T.S, having commenced its Oakland, CA container terminal business in 1986, recently signed a Letter of Intent with Port of Oakland for a new 10 year Non-Exclusive Preferential Assignment Agreement, or terminal lease, commencing in July, 2003. Among other benefits, this Agreement provides I.T.S. with an option to add additional shoreside gantry cranes and to expand the berth length along with the terminal acreage. I.T.S. continues toward their commitment of providing a high level of quality services at the Port of Oakland, the third largest gate port along the U.S. West Coast.

In the Port of Long Beach, I.T.S. initiated its container terminal business by commencing container stevedoring and terminal operations in 1971. As the cargo volumes handled at the Ports of Long Beach and Los Angeles have been soaring steadily in recent years, especially from Asia, in order to cater to such strong market demand, I.T.S. has just completed, in January, 2003, Phase 1 of its terminal enhancement plan. During Phase 1, the terminal was expanded from 120 acres to 220 acres and a new state-of-the-art 19-lane one-stage pedestal gate system was introduced, which is augmented with a video camera inspection system, a driver's license reader recognition system, a voice communications system activated between truck drivers and clerk labor, a buckslip (or EIR transaction) printer system. The gate system will be further enhanced by the introduction of an Optical Character Recognition System (or O.C.R.) which will automatically read and recognize container numbers, chassis numbers and truck license plate numbers for each truck arriving and departing the terminal. With the use of these systems and high technology, efficiency of all gate activities has been significantly improved.

Another enhancement completed within Phase 1 was the expansion of the I.T.S. on-dock rail facility. In this regarding rail trackage has been added allowing capacity of the rail yard to increase from a total of 35 DST cars to 72 DST cars.

Furthermore, an additional deep-sea berth of 1,300 feet in length is under construction and is projected to be operational commencing in the fourth quarter of 2003. In late September, 2003, two post-panamax (19 containers wide) shoreside gantry cranes will be received at the new berth and will supplement the current 14 shoreside gantry cranes at the terminal. With the completion of the berth construction, an additional 13 acres will be added to the terminal acreage, bringing the total terminal acreage to about 233 acres at that time.

I.T.S. has and will continue to take necessary steps to provide the highest quality of services to all of its customers in anticipation of future market demand.

the Port of Long Beach, I.T.S.

the Port of Long Beach, I.T.S.


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