Increase in Fuel Surcharge and
Shortage of Marine Equipment in North America

February 14, 2008 -Please be advised that RBC will increase our fuel surcharge on domestic shipments from 17% to 22%, effective 3/1/08. This increase reflects the rising fuel costs associated with our industry and remains the one unpredictable factor in our otherwise stable pricing strategy.

On another important subject, the growing shortage of marine equipment in North America has significantly compromised our domestic repositioning operation. We are fervently trying to accommodate you, our customers, whenever and wherever possible. However, doing so is currently a difficult challenge. With a strong demand for export capacity, we must remind everyone that we require advance booking, prior to street turning our containers. It's very important that you abide by this rule to avoid the inconvenience of your having to divert your truckers, after being dispatched, or, worse yet, having to unload a container that is not available for domestic use. We appreciate your efforts to street turn our equipment, but, during this tight equipment period, we must actively control our inventory to address K-Line's core business needs. I hope you can understand our temporary need to more closely manage our boxes and we ask for your cooperation.

One other matter is in need of clarification. In a letter dated 1/30/08, we advised that we were offering reduced rates to encourage utilization of mty containers that end up in Indianapolis, for movement over St. Louis. We advised then that this equipment is either being stored at CPG, Indy, or in the possession of ARL Trucking. We also advised that you would not be restricted to using these two truckers, but could use whoever you want. We need to clarify these parameters. These reduced rates apply only for equipment that is either at CPG's CY, or in the possession of ARL trucking. For CPG domiciled containers, you are free to use any drayman you want; however, for containers in the possession of ARL Trucking, you must street turn the box using ARL. If you need further clarification on this matter, please contact us at the numbers above.

Sorry for the long discourse, but these are all matters of significant importance that came up on the same day.

Thank you for your business. More importantly, thank you for your patience and understanding during this period of compromised equipment availability.