Maison Engineers and Constructorssalinari/LBT july 2002/geologistics_pro.doc · Web viewThe freight forwarding functions are managed from the GeoLogistics Control Center in Houston,

Large Binocular Telescope Project Large Binocular Telescope Project GeoLogistics Project Services RFQ Response

Any unauthorized use of the information contained within this proposal without the express written authorization of GeoLogistics Project Services is strictly prohibited.

GeoLogistics Project Services has always sought the most challenging transportation projects around the world. We are just finishing a mining construction project in the Andes Mountains of Peru. Over the past 16 months we have moved 236,000 revenue tons of cargo from worldwide origins to a site that is 5000 meters above sea level. We are also the project forwarder for the U.S. Government’s effort to destroy chemical and nuclear weapons in the Former Soviet Union. This project requires that we set-up remote operations in areas that don’t even appear on the map.

We would be extremely pleased to participate in the LBT Project. Yours is certainly a project that could change the world and we would be honored to help you achieve success.

A team of 7 GeoLogistics employees in Italy and the United States have been working for the last month to determine the best and safest way to move your telescope from Italy to Arizona. Our goal has been to maintain maximum protection of all components and minimum exposure to risk. The financial result of our efforts is a realistic expense, but one that very likely exceeds your expectations.

The details that follow will break the costs down into three separate shipments and describe the transportation process that we believe provides the necessary care for your equipment. We believe that there are cost reduction measures that can be taken in order to reduce your overall transportation expense, but our unfamiliarity with the equipment made it impossible for us to prescribe those methods without your counsel.

The greatest expense ($840,000) is the cost to move the telescope components from Ansaldo to the port of Venice, Italy, and from the port of Houston to Mt. Graham. Specialized truck equipment, road permits, and escorts are very expensive. We have received quotations from more than one trucking company with an excellent reputation and experience. We do not suggest that you trust a low-priced trucking company to handle this equipment. The extreme size of some of your components is the reason for the high costs. Items 2.1, 4.1, 7.1, 7.2, 8.1, and 15.1 are responsible for 83% of this $840,000 inland transportation figure.

There are methods of reducing this number. Perhaps the equipment can be disassembled. It may also be possible to build smaller boxes than the ones that we have prescribed. This would depend upon the sensitivity of the equipment. Some of the pieces mentioned in the previous paragraph would cost half as much if we can reduce the height by 2 or 3 inches. We can also move some of the equipment part of the way from Houston to Arizona by rail, on special rail cars designed to absorb the shock caused by wagons bumping into each other. We believe that it is possible to reduce the inland transportation figure by as much as $350,000 through mutual consultation.

“Use or disclosure of proprietary information contained on this page is subject to the restrictions on the title page of this Proposal.”

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The costs listed on the spreadsheets that follow represent our net cost for these services. You will see that at the bottom of each list of costs is our proposed commission or profit margin of 5% for managing this project. GeoLogistics will provide receipts for all costs. We would be willing to travel to Tucson to discuss this financial package in detail, and to discuss other methods of reducing your overall transportation costs.

Best regards,

Cary MasonVice PresidentGeoLogistics Project Services.


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PROCESS REVIEW

1. PACKING AND CRATINGOur rate package describes the dimensions of each piece both before and after crating. We have prescribed a fully enclosed, well-insulated wooden crate for all of the equipment, including equipment that will eventually be loaded into sea containers. This will allow maximum protection for all components after the containers are unloaded. The GeoLogistics branch in Milan will supervise all packing and creation of documentation (packing lists, customs invoices, etc.). If vacuum packing is required the cargo will be sealed and desiccant will be added to the crate before it is closed.

2. INLAND TRANSPORT (Italy)All cargo will be moved to the Port of Venice, Italy. The largest pieces will be moved from Milan to Cremona, Italy, where they will be placed on a barge and floated down the Po River to Venice. All rates are inclusive of full supervision, loading, unloading, escorts, and permits.

3. VESSEL LOADING (Italy)GeoLogistics will supervise the loading of all LBTC equipment onto vessels in Venice. We will be present when the cargo arrives at the port as well. Each piece will be checked by an insurance surveyor at Venice, and a meeting will be held with port personnel, GeoLogistics personnel and the insurance representative to discuss loading procedures. Special attention will be given to centers of gravity and prescribed lifting points. All cargo will be stowed under-deck and well-secured with straps and chains to ensure that there is no shifting of cargo during the trip. There will be three shipments. We have created a separate spreadsheet for each of three shipments to describe what will be shipped with each.

Shipment 1 will consist of most of the equipment that is ready by late June or early July. This will be an ocean shipment to Houston consisting of 2903 cubic meters of breakbulk (or non-containerized) cargo and 15 sea containers.

Shipment 2 will consist of the balance of the Houston-bound cargo which will be 585.34 cubic meters of breakbulk cargo moving in December.

Shipment 3 will be all cargo (items 8 and 15) being shipped to Columbus, Ohio. We will move this cargo to the Port of Baltimore (857.18 cbm-breakbulk, 1 x 40’ container).

4. VESSEL UNLOADING (Houston, Baltimore)


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GeoLogistics personnel and an insurance surveyor will also attend the unloading of all three vessels. A similar meeting will be held prior to vessel arrival with port personnel, the insurance rep. and GeoLogistics personnel. All port personnel, crane operators, etc., will be well-educated before handling the equipment. Cargo will be staged in a storage yard at the same port facility until it is loaded onto trucks for delivery to its final destination. All pieces will be inventoried and boxes will be checked for signs of damage.

5. INLAND TRANSPORT (U.S.)Only premium carriers will be used to truck your telescope! The first shipment will be 48 truckloads of breakbulk and containers. Some pieces will be combined on a single truck (22 pieces will be carried on 11 trucks), but 22 other pieces will be moved as single items per truckload. The containers will move individually as well. Drivers will be very cooperative at their destination to make sure that all items are received and inventoried before they leave the site or the base camp. Cranes, forklifts, and personnel will be supplied as necessary to lift cargo onto trucks at the base camp. The prices quoted are inclusive of these services as well as road permits, escorts, route surveys, State Patrol escorts, and traffic control as required.

6. INSURANCEWe have quoted the insurance for each piece separately. We have insured for the cost of the equipment, the cost of the transportation as well as an additional 10% which is customary to cover the administrative costs of filing a claim. The insurance premium includes the cost of insurance surveyors mentioned earlier in this description. There is a deductible of $5000 per occurrence and the insurance premium is based upon the shipment moving in three shipments.

EXECUTIVE SUMMARYGeoLogistics Services, Incorporated is a full service freight forwarding and logistics management company specializing in project cargo and re-supply. The freight


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forwarding functions are managed from the GeoLogistics Control Center in Houston, Texas.

We provide a full range of services including route studies, expediting orders with suppliers, arranging technical inspections, receiving, export packaging, preparation of all necessary shipping documentation, transport by to the United States from Milan, Italy by truck, sea and air, customs clearance, delivery to site and management of material as required by the Large Binocular Telescope (LBT) scope of required services.

We believe that the successful mobilization and management of the logistics channel needed for these activities require a company with the following characteristics:

A global organization with a proven ability to design and manage turnkey logistics programs including re-supply, that incorporates global responsibility for expediting, domestic freight management, export preparation, third party inspections, ocean and air forwarding, customs clearance, inland transportation, and destination delivery.

A proven global project capability. A state-of-the-art computerized project cargo management system, available on-line,

providing tracking capabilities for all purchase orders by line item and the generation of the documentation needed to ship and clear the cargo.

We are global with over 1,000 operations in 140 countries. This global coverage provides the ability to coordinate and expedite purchase orders anywhere in the world within our own organization. We are a focused project cargo and re-supply organization and have specialized in serving the needs of the international mining, oil & gas, engineering and construction industry. We are certain that GeoLogistics possesses the expertise and global network required to provide reliable and seamless transportation and logistics services.


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CORPORATE OVERVIEWIn 1996, three transportation and logistics companies merged to create GeoLogistics Corporation, a leading third party logistics company dedicated to serving the demanding and evolving needs of global clientele. The purpose was to fill a void in the marketplace by providing a highly capable logistics provider who will deliver on its commitments.

Seasoned senior management and world-class investor William E. Simon & Sons engineered the merger. The three chosen companies included:

Matrix International Logistics, Inc. – a leading supplier of international project cargo forwarding services with operations in the United States, Europe, and the CIS;

LEP International Worldwide – a United Kingdom based forwarding company with a 150-year history and offices on all continents; and

The Bekins Company – a highly specialized US high value product Distribution Company and domestic van line.

By 1998 revenues hit $1.6 billion, making GeoLogistics the largest non-asset based logistics provider headquartered in the United States. Our global presence spans 140 countries and includes more than 1,000 offices. This integrated enterprise is managed from Santa Ana, California where corporate management resides.

Our sole business is the provision of third party logistics services to global clients. Services span the entire supply chain, from inbound transportation and Just-In-Time (JIT) facilities to outbound distribution and logistics management. Examples include international project cargo management, re-supply logistics, merge-in-transit product fulfillment and distribution, JIT fulfillment for manufacturing, sole source global logistics, and rapid point-to-point distribution in the Americas.

We are confident that this global presence will provide you with worldwide service and flexibility to adapt to your specific re-supply and project requirements.


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PROJECT CARGO AND RE-SUPPLY

The project division of GeoLogistics has a 14-year history of providing site development, expansion, and re-supply management services. A cadre of experienced project personnel, hands-on experience with projects in Europe, China, Latin America, Asia, Africa, and the CIS, and a purchase order management and cargo tracking program were united and further developed for the express purpose to serve project cargo and re-supply clients.

GeoLogistics Services is responsible for developing the global project cargo and re-supply product. This division has the following defining characteristics:

Precise definitions of “project and re-supply cargoes” which are particularly appropriate to fulfill the requirements of our Clients. Project Cargo: the material and equipment being shipped internationally in support of a specific construction or operational activity. This includes shipping activity during the feasibility, engineering, procurement, and construction phases and applies to both new construction and expansion of existing facilities. Re-supply Cargo: the equipment and materials required to maintain ongoing operations and the prevention of down time and lost revenue. Re-supply items include consumables, spare parts, equipment replacements and preventative maintenance materials.

The selection of 64 key offices that are highly qualified in terms of dedicated management, experienced personnel, and specialized facilities to handle project cargo.

A common, global computer system with Internet access and EDI capability which enables our offices and clients to exchange purchase order, forwarding, and other project information without having to develop a dedicated system for each client or project.

Centralized responsibility for the program’s worldwide operation in Houston, Texas that assures our clients a consistent coordinated effort.

GeoLogistics Services has become respected as a provider of transportation services throughout the world for various Fortune 500 multinational corporations. GeoLogistics Services is established as an industry leader for logistics services for Project Engineering, Mining and Energy related clients. Our client list includes Bechtel, Cominco, Minera Maricunga, Grupo Hochschild Mining, Antamina, Kvaerner Metals, Fluor Daniel, SNC Lavalin/Kilborn, Agra, Simons, FMC, Shems, Mobil, Texaco, SOCO International, Westinghouse, Enron, Chevron, Baker Hughes, Dresser, I.R.I., Ingersoll Rand, Hurricane Hydrocarbons, Input-Output, Triton-Vuko and Tomskneft.

GeoLogistics Services has transported over 45,000 shipments valued at more than $6 billion to over 800 destinations worldwide in just the past 5 years. The experience


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acquired places GeoLogistics amongst the leaders as a provider of logistics management services.


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PROJECT MANAGEMENT

The overall success with which GeoLogistics has managed large scale and complex programs can be attributed to its integrated project management structure, which is unique in the transportation industry. The transport of cargo anywhere in the world is inherently problematic. GeoLogistics’ project management has been able to overcome obstacles by attaining two objectives: (1) the facilitation of communications among GeoLogistics offices worldwide so that every person involved with re-supply shipments knows not only the status of those shipments, but is also aware of all factors which could affect a shipment (such as seasonal conditions limiting site access, new customs regulations, port congestion, etc.) so as to be able to make the best informed decisions; and (2) the establishment of a proactive management style which ensures that each and every problem a shipment might encounter enroute is discussed and resolved before it occurs. Effective communication and flow of data have been key factors in problem avoidance and maintenance of problem free shipments.

The Houston office of GeoLogistics operates as the GeoLogistics Control Office (GCO) and oversees all North American and Global project and re-supply forwarding activities. The GCO provides sailing schedules, books vessel space based on vessel selection by the client’s project team, arranges technical inspections as instructed, prepares all export and customs documentation including translations, and coordinates clearance with site project personnel..


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SCOPE OF SERVICES

Services provided by GeoLogistics Services, Inc. include:

Executing Short Notice Implementation of Effective Transit Options Arranging All Shipping of LBT material Facilitating Inland Transport from Vendor’s Milan Facilities Preparing and Translation of Export Documentation Coordinating Government Mandated Pre-Shipment Inspections Warehousing Marshalling and Consolidation of Cargo Export Preparation Booking Shipments via Air, Ocean, Truck, or Rail Chartering Vessels and Aircraft Reporting Shipment Status Evaluating Cost Structures Tracking LBT Shipments On A Real Time Basis Coordinating with Consignee and Destination Representatives on Documentation

Requirements and Clearance Procedures Alerting LBT staff to Shipment Development Confirming Delivery

The process begins with the receipt of the purchase order. The project coordinator will enter all information from the purchase order to the MATRAK system. This will commence and facilitate the entire logistics management process. We require a copy of the purchase order issued to each supplier and contact them as quickly as possible to help them maintain the agreed upon delivery date. This communication is critical to effective shipment scheduling so that delays or unanticipated early completions can be planned for in advance. Expediting will ultimately affect delivery date to final destination.

Shipment Scheduling

GeoLogistics Services books each shipment/charter with the appropriate carrier. GeoLogistics Services utilizes the most economic mode of transport to meet the required delivery date at site.

In situations where cargo is to move directly from a supplier’s facility to the port/airport/railhead, GeoLogistics Services issues specific delivery instructions and provides all documentation, e.g., truck bill, dock receipt, to ensure that cargo is properly received at its point of embarkation. GeoLogistics Services coordinates all to port activities with the suppliers, truckers and port/airport authorities to ensure that cargo is transferred smoothly and on time.

Prior to export, GeoLogistics Services prepares all shipping documents including, but not limited to an Ocean Bill of Lading, Air Waybill and Export Declaration.


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GeoLogistics Services will monitor each step of the shipment process, while cargo is enroute and at each transshipment point, to ensure that the cargo is not delayed and notifies relevant parties of any change to the original Transportation Plan.

Documentation

The importance of accurate, complete documentation cannot be overemphasized. Through extensive experience GeoLogistics Services has developed documentation and procedures, which allow for reliable, smooth, unencumbered transit through ports and border crossings to the final destination. Relationships and reputation with Customs can not be underestimated. GeoLogistics Services’ proven expertise and success with these procedures and longevity of reputation worldwide is an invaluable asset in facilitating destination services.

GeoLogistics Services creates all customs documentation required for air and ocean import into the destination country including the Original Master Air Waybill/Ocean Bill of Lading, Commercial Invoice, Certificate of Origin and Packing List.

GeoLogistics can provide invoice and packing list translations, which are verified by the pre-shipment inspection company and our in-country personnel prior to submission to customs.

All documents are sent by courier to the destination as well as transshipment points as soon as the cargo has departed. Documents are also downloaded to GeoLogistics Services the day the cargo departs to ensure that all preparations for customs clearance, discharge and final delivery are in place well in advance of the cargo arrival.

Through experience, GeoLogistics Services has found that timely Pre-alert notification at final destination is crucial in avoiding costly delays. Our standard operating procedure is to provide recipients and destination offices with Pre-alert notification in addition to a full set of customs and shipping documents.

Technical Inspections

GeoLogistics coordinates government or client mandated technical inspections with the designated inspection agency. GeoLogistics has strong working relationships with all approved inspection companies. The inspections are scheduled to take place at the manufacturer’s premises, the craters facility or the load port depending on the mode of transport and the instructions received from the LBT project team.

Shipment Reporting


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Consolidated shipment and cargo reports are provided on an agreed upon schedule.

Destination and In-Country Services

GeoLogistics Services monitors the arrival of all shipments at the Port of Entry and at ultimate destination on Mt. Graham, Arizona.

GeoLogistics Service maintains complete records of all documents, correspondence and invoices, etc., by individual orders and shipments.

GeoLogistics Services arranges receipt of shipping documents and rechecks the same to ensure that all the documents are in order. Such as:

Original Bill of Lading and or Air WaybillOriginal InvoiceCertificate of OriginPacking List

GeoLogistics Services maintains liaison with customs authorities to keep informed of changes with import documentation requirements. We advise our LBT immediately of any changes or additions regarding shipping/forwarding instructions, transportation, or any other shipping documentation requirements.

GeoLogistics Services provides qualified representatives to attend and witness customs inspection and clearance to ensure proper staging and safe handling of the LBT material to avoid any loss or damage to materials during or after the customs’ inspection. Incoming cargo is inspected for any apparent damage or partial/total loss while obtaining delivery.

GeoLogistics Services provides and coordinates all transportation to assure prompt, damage-free delivery of cargo to destination site on Mt. Graham or any other specified location.

GeoLogistics Services will advise on all progress and problems and provides Project Reports on a weekly or as requested basis. This report provides all information on all shipped cargo through to delivery at the site on Mt. Graham.

GeoLogistics Services confirms delivery of cargo and reports on the status.

GeoLogistics Services will perform any other service not covered, which can reasonably be expected to assure the prompt and efficient customs clearance


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and forwarding services, including but not limited to, customs clearance and transportation of imported cargo arriving at seaports and airports.

Additional Services

GeoLogistics is also able to provide cargo transit insurance for air, ocean, rail, and truck shipments, customs brokerage services, assistance in locating and purchasing standard containers or specialized equipment, customs clearance and delivery at destination. GeoLogistics is able to provide cargo transit insurance on a warehouse to warehouse basis. §This insurance attaches from the time the goods leave the warehouse and/or store at the place named in the policy for the commencement of the transit and continues during the ordinary course of transit, including customary transshipments, if any, until the goods are discharged over-side from the overseas vessel at the final port. Thereafter the insurance continues whilst the goods are in transit and/or awaiting transit until delivered to final warehouse at the destination named in the policy or until the expiry of 15 days or 30 days if the destination to which the goods are insured is outside the limits of the port whichever shall occur first. The time limits referred to above to be reckoned from midnight of the day on which discharge over-side of the goods hereby insured from the overseas vessel is completed.

§ This is an excerpt from The American Institute Cargo Clauses and is standard in all policies issued in the American market.


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SAMPLE LOGISITCS PROCEDURES

In general, GeoLogistics will assume a transportation scope of services from the date the purchase order is issued through to the cargos arrival at final destination at Mt. Graham. The scope of service will includes domestic inland transport, receiving, inspection, export packaging, marking, container loading, export documentation, arranging international transport air and ocean, supervising vessel loading and discharge, customs clearance, transport to site and preparation of status reports as designated by the Large Binocular Telescope project staff. This procedural draft is provided for review and integration with the LBT procedures.

Sample Logistics Procedures

1) Mobilization

a) Propose and introduce GeoLogistics key personnelb) Review standardization of shipping procedures and documentation, importation

requirements, customs clearance, and interface requirements, computerized tracking and reporting options.

c) Establish procedures for distribution of all documentation.d) Identify preferred carriers, departure schedules, transit times, equipment

availability and vessel handling capacities.e) Review special project freight rates for transportation and accessorial services.

2) Purchase Orders

Electronically download purchase orders or manually input data into MATRAK on a “line item basis”, identifying the intended destination and mode of transportation. This process will form the basis for cargo tracking and preparation of shipping and clearance documentation.

a) Obtain the following documents from vendors:Commercial Invoice, Packing List, Final Shipping Drawings for OverDimensional CargoMaterial Data Safety Sheet (MSDS) for hazardous materials

b) Review each P.O. to determine special handling requirements, including temperature or shock sensitivity, fragile, over-dimensional, heavy lift, high value or hazardous nature.

c) Confirm with vendor expediting contact, date of availability, pick up address, cargo details (number of pieces, weights and dimensions) and record all details in MATRAK.


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d) Obtain Material Data Safety Sheet, (MSDS) and ensure hazardous materials are packaged, marked, placarded and shipped in accordance with government regulations.

e) Based on dates of availability, track progress of P.O. and advise LBT project management by email or telephone of delays and the impact on shipping schedules. Update MATRAK with revised shipment dates and vendor’s explanation.

f) Coordinate pre-shipment inspection at vendor’s facility when time constraints require immediate shipment.

3) Inland Transport from Vendors to the Consolidation Facility or Italian Load Port

a) Confirm space available with approved steamship lines prior to routing cargo direct to pier. Make preliminary arrangements for offloading, receipt and inspection upon arrival at the port.

b) Issue shipping instructions to vendors, inland carriers, marshaling and crating facilities as required both domestically and overseas. Instructions are to include addresses, telephone numbers, points of contact and delivery dates.

c) Supervise all trucking movements and ensure proper equipment is utilized and materials are properly loaded and secured. Obtain shipping drawings from suppliers for all oversize cargo and coordinate handling and transport well in advance with both the inland and international carriers.

d) Schedule special equipment and obtain permits for over-dimensional and over-weight loads. Fax client copies of the vendor’s original packing slips prior to or immediately after pick up.

4) Receipt of Cargo at the Port of Export Consolidation Facility

All Materials will be received and checked in accordance with established Materials Receiving Protocol. The highlights of this procedure are:

a) Cargo arrives and Receiving Department creates a Material Receiver (MR) which contains customer name, purchase order number, date received, carrier, supplier, container type, quantity received, receiving location, and the initials of the receiver. Cargo received is to be checked visually for external damage and shortages. The carriers freight bill/delivery receipt will be noted accordingly and signature of acknowledgment obtained from the driver.

b) Copies of all forms arriving with cargo go to Data Entry and the Traffic Manager.c) Cargo is received and verified at a box level for sea shipments and at an item

level for air shipments. d) Prepare a consecutively numbered and unique Material Receiver. Weight is

confirmed, Distribute cargo to predetermined consolidation areas in the


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warehouse or yard. Location of storage within the warehouse/yard is noted on the Material Receiver.

e) Segregate hazardous cargo and arrange for approved crating, marking and placarding in accordance with Title 49 of the US Code (49 CFR) rules, ICAO and IMDG regulations.

f) Material Receiver is routed to the Checking Department. Checker verifies that all items received are in the correct quantity and described as specified on the project client purchase orders.

g) Material Receiver is routed to Data Entry where the clerk enters into MATRAK, our cargo tracking system, that the cargo has been checked, received and warehoused/stored. The information entered each day is gathered on a Material Receiving Report (MRR) for LBT.

h) Provide MRR for ocean freight to LBT within 48 hours of material receipt and complete export packing within 3 working days of receipt.

i) Provide MRR for airfreight to LBT within 48 hours of material receipt and complete export packaging within 2 working days of receipt. Details provided via email include: Material Receiver number, vendor’s name, receipt date, purchase order number, line item number, description, tag/serial numbers, quantity, weight and dimensions, status (partial or complete), exceptions, carrier name and freight bill number.

j) Coordinate pre-shipment inspections at marshaling facilities whenever possible to simplify the inspection process and reduce costs by arranging mass inspections.

GeoLogistics will track all Material Receipts and will compare them to the purchase orders entered into the MATRAK system. Purchase orders are entered into the computer system prior to any cargo arriving at the GeoLogistics warehouse dock or yard. Any discrepancies will be annotated and the vendors will be notified of shortcomings. Should there be any problems resolving shortfalls from the suppliers, GeoLogistics will immediately notify the project client. The process for OS&D situations follows:

k) Damage and discrepancies will also be noted on the Material Receiving Report (MRR). Photographs will be taken of all damaged items or packages to support claims.

l) Advise LBT within 24 hours of recorded Overage, Shortage & Damage (OS&D) by email, fax or telephone.

m) File claims with carriers for damage or missing materials and update computer with claim status, contact details and maintain claim records.

n) Obtain assistance from the project client if unable to resolve discrepancies directly with the vendor.


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o) OS&D materials are to be recorded and segregated in a secured quarantine area pending resolution. To avoid shipment delays contact client to obtain approval for partial shipments.

p) Coordinate returns to vendors for damaged or miss-shipped materials at vendor’s expense.

5) Upon Notification of Cargo Arriving Directly at the Load Port

a) Confirm expected arrival of cargo routed directly to the port.b) Material received is to be checked visually for external damage and shortages.

The carriers freight bill/delivery receipt will be noted accordingly and signature of acknowledgment obtained from the driver. Damage and discrepancies will also be noted on the MR and MRR. Photographs will be taken of all damaged items or packages to support claims.

c) The receiving procedure mirrors that of cargo arriving at the GeoLogistics warehouse facility. GeoLogistics maintains a staff in Houston to handle cargo receipt directly to the load port. All reporting, checks and balances are maintained for port receipt as they are for warehouse facility receipt.

6) Air Shipments

a) Export pack in accordance with packing specifications or confirm that vendor packing is in compliance. Mark and number all packages and attach copies of the packing lists internally and externally.

b) Book space with approved airlines, update MATRAK and prepay freight charges.c) Print computer generated detailed packing list and commercial invoice, numbers,

prepare air waybill, certificates of origin, insurance certificate and export declaration.

d) Distribute shipping documents whenever possible prior to flight departures and arrange for advance notifications.

e) Transport shipment to nearest airport with the most direct service.f) Confirm cargo departed on flights as scheduled, update MATRAK and advise

LBT.g) Issue project reports as requested by LBT.

7) Ocean Shipments

a) Reconfirm sailing and routing with selected carriers. b) Ensure that all materials designated for ocean transport are properly preserved;

export packaged and marked in accordance with project requirements. Containerization of materials will involve export packing of only those items requiring physical protection and the crating of sufficient items to ensure safe stowage of the cargo and maximum utilization of the container.


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c) Obtain LBT’s approval for re-packing of cases where vendor’s preservation or packing is deemed inadequate for international shipment.

d) Ensure marks and labels are uniform using appropriate size stencils, labels and bar code labels for easy recognition and identification. Mark two opposite sides of each package with the appropriate shipping marks.

e) Provide sailing schedules to the client on weekly basis. Update MATRAK with all particulars and sailing information.

f) Confirm acceptability of hazardous cargo with steamship lines. g) Arrange for containers to be drayed to the facility for loading and redelivery to the

steamship lines.h) Generate a computerized container manifest, commercial invoice, and packing

list, which note the container and seal numbers. i) Generate a consolidated packing list for the contents of each container by

purchase order number, package numbers, weights and dimensions. Affix a copy of the consolidated packing list to the right hand wall of the container next to the door.

j) Obtain copies of the vessel stowage plan and heavy lift drawings upon firm booking of vessel. Survey cargo loading, arranging marine survey of cargo vessels as required by LBT.

k) Prepare Ocean Bills of Lading (OBL) and export declarations. Provide the client with Steamship Master OBL’s.

l) Distribute shipping documents and arrange advance notifications. Advise the client of confirmed sailing and estimated arrival dates. Courier Ocean Bills of Lading to destination.

m) Issue project reports to the client identifying status of purchase order materials by line item.

8) Prior to Arrival of Vessel at the Houston Port of Entry

a) Reconfirm with carrier anticipated arrival dates and advise LBT of any changes. b) Confirm that all the necessary shipping documents have been received including

the original Ocean Bills of Lading, Customs Invoice, Customs Packing List, and Certificate of Findings.

c) Verify the accuracy of all shipping documents against established requirements.d) File an amendment with the carrier noting changes if discrepancies are found.e) Begin preparation of the customs entry and obtain the original inspection

certificate.f) Calculate duty and VAT to be paid if applicable and advise client.

9) Upon Arrival of Vessel at Houston Port of Entry

a) Supervise the unloading of cargo from the vessel.b) Locate and identify the goods against the packing list and stowage plan.


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c) File all the necessary documents for customs entry.d) Arrange for transport to receiving area.

10) Documentation

a) Prepare all documentation in compliance with both origin and destination regulations. All documentation will reflect LBT’s purchase order numbers.

b) Distribute all ocean documentation via courier to the client no later than five days after vessel departure. Air shipment documentation will accompany the freight with copies being transmitted electronically in advance of flight departure whenever possible.

c) GeoLogistics will provide or obtain the following shipping documentation:

i) Bill of Lading/Airway billii) Forwarders Packing Listiii) Commercial Invoice iv) Certificate of Origin as requiredv) Inspection Certificate (pre-shipment inspection acceptance.)

d) Ocean Documentation is to be sent via courier a minimum of 1.5 weeks prior to vessel arrival.


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REPORTING AND TRACKING SYSTEM

One of GeoLogistics Services’ greatest assets is its position as the industry leader in providing accurate, real-time reporting and tracking information. As a result of its corporate commitment to program-related logistics management, and to the integration of personnel, facilities, and state-of-the-art equipment resources, we are able to provide our clients with “In Transit Visibility”(ITV), i.e. the ability to “see” the location and status of each shipment at any point in time.

The acquisition of shipping status information is accomplished by comprehensive, behind-the-scenes efforts by an experienced staff of logistics professionals who investigate, plan, organize, check and recheck information from a variety of sources. GeoLogistics Services’ solid core of long term, experienced personnel are well versed in


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project management. MATRAK provides clients with easily accessible information for all parts of the shipping process, from the entry of purchase orders through to the shipment delivery.

In order to accommodate our client’s needs effectively, accurately and consistently, GeoLogistics Services employs a computerized cargo tracking system called MATRAK. The Windows based client/server system is designed for easy client access through a multi-line remote access server. It features a high level of security along with EDI capabilities. Client project and transportation teams are able to coordinate their program’s management with GeoLogistics Services by accessing real time data on cargo status and utilizing reports tailored to fit project specific needs. The GeoLogistics Services project manager inputs all purchase order information, including change orders, into MATRAK. MATRAK traces purchase orders and individual line items from shipper through receiving, packaging, export packing, and/or containerization to final destination(s). All shipping documents such as invoices, packing lists, Certificates of Origin, air waybill/ocean bills, and export declarations and any specialized import documentation are prepared with MATRAK. Each report gives complete detail on every piece of equipment/material so that a client can follow an individual Purchase Order component through each stage of its transport to the ultimate destination. GeoLogistics Services operations staff continually updates MATRAK to reflect the current status and location of all cargo in transit for each and every project. MATRAK can transfer data to virtually any system through a variety of automated, electronic, and manual mechanisms. Internet connectivity is rapidly becoming a common transmission vehicle for shipment data and will be adapted for use on any project as requested.

MATRAK runs on a network that features internal and external Internet e-mail using Microsoft Exchange. Reports and data can be sent directly from the application by e-mail or fax. In addition, e-mail attachments may include word processing documents, spreadsheets, as well as graphic files.

1. Inventory Management

The data entered into MATRAK is utilized to generate project management reports. These reports allow the client ease in handling cargo and making purchasing and transportation decisions. Several examples follow:

Warehouse Receipt - The Warehouse Receipt is generated after cargo is received in the warehouse, or for cargo received directly from vendors.


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On-hand Report - The On-hand Report is similar to the Project Report except it reports only those items, which are physically “On-hand”, or received into the warehouse but not shipped.

Project Report - The Project Report details all items ordered, received, on hand in the warehouse, and shipped. The Project Report can be sorted by warehouse location; final destination or a variety of other user defined criteria.

Outstanding Items Report - The outstanding line items report is used to highlight items, which have not been received at the warehouse.

O.S. & D. Report - The O.S. & D. Report highlights items received in variance to the information shown in the purchase order. This can either be a size, part number, or quantity difference. This allows clients to follow up with vendors.

Client Transportation Plan - The transportation plan details all legs of the shipment ex-works to ultimate destination.

2. Shipment Documentation

In addition to the above Inventory Management Reports, MATRAK will prepare all shipping documentation in English. It is also possible to make the translation into Chinese as required. These are detailed below:

Certificate of Origin - A Certificate of Origin, when required, is prepared for each shipment detailing country of origin as well as material description.

Packing List - A Packing List details precisely what is packed in each box or container within the shipment.

Commercial Invoice - A Commercial Invoice is prepared in conjunction with the Valued Inventory. The invoice includes critical information required for clearance. This includes contract number, date, shipment date, material description, as well as the terms of shipment showing total value.

3. Shipping Management

MATRAK is also utilized as a shipment management tool. All details of the leg by leg transit are entered into MATRAK by the Project Coordinator to track the movement of the material from origin to destination.

Common management reports include Report of Receipt, O.S. & D., Reports, Master Inventory Report, Valued Inventory Report, Project Report, On-hand Report, and


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Shipment Status Reports.

4. MATRAK Adaptability and Data Link

MATRAK has been and will continue to be adapted to meet any specific needs of various clients. MATRAK has been adapted to allow EDI download of purchase order information and stock keeping unit (SKU) numbers, part numbers and serial numbers generated by a client. The transmission of purchase order information in EDI format, which generally produces greater consistency and uniformity in data reporting, is beneficial to all parties in a program.


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GEOLOGISTICS HOUSTON

Houston, TexasGeoLogistics Services, Inc.15625 Vickery Drive, #200Houston, Texas 77032Phone (281) 590-6200Fax (281) 590-8146

Houston is, by far, the most important location for project cargo in the United States. This is due both to the concentration of engineering, oil and energy multinationals in the vicinity as well as the position of the port of Houston as the pre-eminent port of export for project cargo. The port is especially active to Europe, Latin America, the CIS, and Asia.

The Houston GeoLogistics Center consists of a 54,000 square foot warehouse, a 42,000 square foot fenced outside storage compound and 11,000 square feet of office space. This facility is strategically located minutes from the Houston Intercontinental Airport. The Center combines GeoLogistics Services, the project cargo management division, with GeoLogistics Americas, the freight forwarding and logistics arm.

The GeoLogistics Services project forwarding operations located in Houston is the main control center for all project cargo forwarding activities. This office will coordinate the shipment of all freight regardless of origin. This office communicates with all GeoLogistics offices worldwide via email, telephone and fax. Dedicated management and personnel are assigned to each Client and can be contacted on a 24-hour basis.


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Given the ebb and flow of project business through Houston, GeoLogistics has pursued a philosophy of staffing to manage the cargo transiting Houston rather than performing all of the underlying services directly. Its’ dedicated project staff of 25 currently oversee the efforts of an additional 35 warehouse and port personnel.

GeoLogistics offers full receiving, marshaling, export packing, containerization and bar coding services at the Vickery Drive facility in addition to a number of export preparation facilities in the proximity of the Port of Houston.


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EXPERIENCE

GeoLogistics has significant transportation management experience, specifically in the mining, oil and gas, construction and energy industries. GeoLogistics has been involved in the start-up project-planning phase. We have performed site visits to assess equipment requirements and capabilities; advised on the most economical routing and method of transport; and ensured that all administrative requirements have been fulfilled and all procedures are in place. This ensures that initial shipments are cleared and delivered without delay. As a project becomes operational, GeoLogistics’ project management teams are structured to expand to accommodate the increased volume of project cargo. Upon completion of site construction and plant commissioning GeoLogistics provides operational and re-supply transportation services.

The following represents recent projects successfully handled by GeoLogistics.

BHP Copper Tintaya Mine Project - In 1995, GeoLogistics was designated as the sole logistics provider for the expansion and re-supply of the BHP Copper Tintaya Mine in Peru involving the shipment of over 15,000 revenue tons of oversize construction and mining equipment and supplies from origin points worldwide. Tintaya is a major copper property located in Southern Peru, approximately 250 miles South East of Lima. Services included expediting and arranging worldwide transport of project materials and equipment from vendor’s facilities through to site. In addition, our Houston, TX facility operated a warehouse for the receipt, marshalling, crating, skidding and handling of cargo. Under the resupply component GeoLogistics was responsible for the tracking, consolidation, international shipment, and delivery of over 2000 purchase orders per year from origins in North America and Europe via air and ocean.

Cajamarquilla Zinc Refinery, Cominco Ltd - Refineria de Cajamarquilla is a zinc refinery in the District of Lurigancho, 22 km from Lima and 37 km east of the port of Callao in Peru. Refineria de Cajamarquilla is owned by Cominco Ltd. of Canada and Marubeni Corporation of Japan. H.A. Simons Ltd. Mining Group has been engaged by Refineria de Cajamarquilla SA for the engineering, construction and procurement of goods and services for three separate projects. GeoLogistics has been retained to provide the freight forwarding and logistics management to support these projects. The first project is to construct a new effluent treatment plant (ETP). The second project is an expansion of zinc production from 100,000 tons per year to 120,000 tons per year. The third project is another expansion of zinc production that will go from 120,000 tons per year to 240,000 tons. The total value of these projects is over USD 330 million and requires the movement of all types of equipment from origins in Europe, North and South America. The estimated cumulative tonnage is over 30,000 metric tons.


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Thai Copper Smelter and Refinery Project - The Thai Copper Smelter and Refinery project is located in the Rayong District of Thailand 60 kilometers east of Laem Chabang. GeoLogistics was awarded the contract for freight forwarding services and is responsible for the international logistics and transport services for over 100,000 freight tons of project cargo. Development of the smelter and refinery is valued at USD 600 million. Project highlights included 14 ocean charters, 3 exclusive air charters, and 500,000 kgs. of commercial airfreight.

Cerro Verde Expansion - The Cerro Verde mine site in Peru is located 30 miles east of Arequipa, Peru and is one of the largest copper mines in the world. The expansion was scheduled over a two-year period and was valued at USD 250 million. GeoLogistics was selected by Fluor and was awarded responsibility for the logistic activities. This entails managing all transportation, warehousing, documentation, electronic tracking and reporting activities for project cargo on a FOB basis from the vendor’s dock through to the site.

Groupo Hochschild – Groupo Hochschild handles various mines in Peru. They have contracted GeoLogistics to handle the international logistics for 8 different mines; Cementos Pacasmayo, Cementos Rioja, CNP Energia, Compania Minera Sipan, Compania Minera Arcata, Compania Minera Ares, Compania Minera de Caylloma, and Compania Mineria Selene.

Kassandra Mines, TVX Gold Inc – The Kassandra, formerly mined for its lead, zinc & silver content, is now being tapped by TVX to recover its refractory gold. This site, located approximately 60 miles east of Thessaloniki, Greece, is only a few miles for the birthplace of Aristotle, one of the causes of great domestic demonstrations, which have prevented the site from developing as quickly as planned. GeoLogistics has been contracted to provide all international logistics and transportation for the expansion valued at US $110 million and resupply.


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Schlumberger IPM, The Dunga Field, Aktau, Kazakhstan - Schlumberger IPM entered into a contract with GeoLogistics to provide global logistics and supply chain management for their Dunga Field in Western Kazakhstan. The Dunga field is owned by Oman Oil and is located 85 km northeast of Aktau, Kazakhstan on the Caspian. The program calls for the drilling of eight wells, construction of an oil and gas processing facility and an export pipeline. The project is expected to run 2 ½ years and requires $50 million in materials totaling 50,000 cbm. The scope of service required for this project includes but is not limited to the global receipt of cargoes, consolidation, export preparation, arranging third party inspections prior to shipment, and transportation of project material from the United States, Mexico, Europe, Russia and Kazakhstan. Shipments are transported via air, ocean, rail and road to the field site and include the discharging of all aircraft, river sea vessels, trucks and railcars at destination. GeoLogistics personnel provide all transit and final Kazakh customs clearance “duty and VAT free”. Onshore services include staging the drilling rigs and camp in Aktau base and field delivery, providing secure warehousing and storage. Additional services have included rig-up, water and fuel supply and purchasing. To date the GeoLogistics project highlights include the offloading of 400 railcars, the discharging of 3 river/sea vessels in the Port of Aktau, the rig up of a land base rig and the repositioning of a drilling rig from one site to the next.

Mobil Oil, Tulpar Munai JV, Aktyubinsk, Kazakhstan - Mobil Oil selected GeoLogistics as their logistics contractor for the Tulpar Munai JV west of Aktyubinsk, Kazakhstan. GeoLogistics offered a full service logistics package for this project. Due to CIS equipment and cargo size parameters, GeoLogistics established size restrictions and handling guidelines for Mobil’s manufacturers. Routine Manufacturer consultations occurred to ensure that these established guidelines were met during the production phase for various materials. GeoLogistics negotiated all rates for liner and charter vessels on behalf of Mobil and supervised the vessel loading and discharged in both US and Foreign ports of operation. The material, sourced globally, was consolidated in Amsterdam and St. Petersburg for final delivery to the rig site. Due to the urgent need for materials GeoLogistics established a purchasing group for this JV and sourced material both locally and internationally. When necessary, GeoLogistics performed expedited inland delivery for the client’s outsource materials.

GeoLogistics prepared all shipping documentation and customs clearance documents. These documents were prepared in both English and Russian. A noteworthy shipment was 800MT of oil field casing. This shipment was delivered from Veracruz, Mexico to Aktyubinsk via St. Petersburg. This shipment was expedited through the Port of St.


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Petersburg during the May holiday. A 24 hour a day, 7-day a week schedule was maintained to allow for a smooth transit and prompt delivery. The picture above shows the casing loaded into rail wagons at the staging area in St. Petersburg, Russia.

Hurricane Hydrocarbons Cyprus Ltd., Kumkol Munai, Kzyl Orda, Kazakhstan - GeoLogistics managed the worldwide cargo logistics for the Hurricane Kumkol Munai, JSC Oil Exploration Project in Kzyl-Orda, Kazakhstan. The project consisted of the infrastructure development and rehabilitation of over 200 oil wells in the Kumkol field. Hurricane went out for bid for a two-year transportation contract and GeoLogistics was awarded the business above seven other competitors in January of 1997.

The scope of services under this contract ranged from providing chartered aircraft for high-value and sensitive cargoes such as explosives; to handling the complete turnkey movement of an entire mancamp by rail from Hungary to Kzyl-Orda. This particular move consisted of three complete trains of over 90 rail wagons of cargo. Security was also provided from origin to destination.

Our services were further augmented by our on-site GeoLogistics’ logistics office in Kzyl-Orda, Kazakhstan that was staffed by two full-time bilingual transportation specialists. These individuals worked directly with the Hurricane expatriates and local nationals on a variety of levels to ensure cargo was properly received, customs cleared and delivered on time. Additionally, our Almaty, Kazakhstan office-established in 1993, and currently operating with an experienced staff of 10, oversaw all project requirements while providing custom transit clearances for air shipments and consolidated weekly truck deliveries to Kzyl-Orda.

KilbornENKA - In June 1994, GeoLogistics was chosen to provide transportation services including planning, shipping, and site delivery of all equipment for the construction and operation of one of the world’s largest gold mines located in the Tien-Shan Mountains of Kyrgyzstan by Kilborn, a Canadian EPCM contractor.

The specialized cargoes shipped to the gold mine consisted of many oversize pieces, which were transported by both scheduled and chartered vessels and aircraft. A substantial number of the air movements were full-chartered aircraft. GeoLogistics arranged for the chartering of aircraft as small as the AN-26 and as large as the AN-124. We supplied the mine site with monthly supply flights from Canada using the AN-124. Food flights from our Netherlands office, using the AN-12 augmented the monthly supply flights. Regular flights of explosives were chartered by GeoLogistics using the AN-12 and IL-76 aircraft. GeoLogistics also chartered and managed the mining crew rotation flights using an A-320 passenger aircraft based in the United Kingdom. Total


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volume of cargo shipped exceeded 106,000 FT (50,000 metric tons). The containerized, breakbulk and oversize breakbulk cargo for this program originated from over 80 venders located in the US, Canada, Europe, Japan, Turkey, South America, South Africa, China, and the CIS. Breakbulk and containerized shipments entered the CIS through the ports of St. Petersburg, Vladivostok, Odessa, and Mariupol. GeoLogistics completed more than 2,000 airfreight shipments, 400 combination ocean/rail shipments, and 100 rail shipments (all originating in the CIS) in support of this contract. Commodities shipped included cranes, bulldozers, pipe layers, pipe of all types, steel, fuel, milling equipment, drill rigs, a full assortment of vehicles and the associated spare parts, and hazardous and non-hazardous chemicals including demulsifying agents. The total value of the items shipped exceeds $150,000,000.

Bechtel - GeoLogistics Services is one of Bechtel’s preferred worldwide carriers and is currently working on the following projects:

Bechtel Quezon Power PlantCargo from worldwide origins to Manila, Philippines (air and ocean). This Bechtel project site is southeast of the city of Manila on the island of Luzon in the Philippines (opposite side of the island from Manila). Here Bechtel, General Electric, and Foster Wheeler are building a 450 megawatt coal-fired power plant. Transportation expense is expected to be almost $18 million for this project which will pay for 90,000 freight tons (including 1000 containers) of material. Most of the cargo that GeoLogistics is transporting at this time is airfreight because the project is now close to completion.

Bechtel Monsanto CT ArgentinaCargo from Europe and America to Buenos Aires, Argentina (air and ocean). This chemical plant will produce a well-known weed killer when it is finished at the end of 1999. Bechtel is a 50/50 partner with Techint who will be constructing the facility. Bechtel’s role will be engineering and procurement. GeoLogistics will ship cargo from Europe, North America and other South American countries to a site at Zarate, Argentina (about 80 kilometers from Buenos Aires).

Bechtel Antamina Mining ProjectBechtel is building a copper mine in the Andes Mountains for Compania Minera Antamina in Peru. Since award in 1999, GeoLogistics has been and will continue to be responsible for the transportation of an estimated 170,000 tons of cargo from origins in North America, Europe and other Latin American countries. Destination services include warehousing, customs clearance, the final delivery to site and in country supervision of all activities. Most recent shipments highlights include six charter vessels of pipe and machinery from Spain, Canada and Brazil, the transport of 250 - 20’ containers via ocean and a 22 - ton airfreight shipment. The project is expected to continue for 15 months (January 2000


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through March 2001). Currently the estimated transportation budget is over $13 million.

ADDITIONAL PROJECT CARGO EXPERIENCE IS AVAILABLE UPON REQUEST.


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CONCLUSION

GeoLogistics Services, Inc. appreciates the opportunity to provide this profile of our logistics and freight forwarding services. This document demonstrates our capabilities and experience in the successful management of transportation and associated services.

It is the intent of GeoLogistics to continually develop and improve our services, to maintain our clients’ confidence and exceed their expectations.

I look forward to our next correspondence and will welcome your call whenever we may be of assistance.

Thank you for considering GeoLogistics Services, Inc.

Regards,

Andy OttVice President – United States Project Sales

GeoLogistics Services15625 Vickery DriveSuite 200Houston, TX 77032

T-281-590-6200F-281-590-8146M-713-515-4437


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