Southern Border Crossing points – Maquila and alike manufacturing -

1. Southern Border Crossing points –Maquila and alike manufacturing - www.HarpyLogistics.com Laredo – Primarily a through port for the Interior operations (Mex, GDL,) Otay Mesa – Twin Plant Operations Heavy Maquiladora operations. Raw Material Corridor – Asia / LAX / Mexico Finish Goods Distribution – Export to U.S McAllen / Brownsville / PharrSome Twin plant Maquiladora and Maquila operations , primarily a through port for the Interior operations (Monterey, GDL,) san NOG Nogales – Light Border Maquila Operations Heavy GM and FORD Maquiladora operations south of Nogales – Hermosillo Mx. Raw Material Corridor – Asia / LAX / Mexico Finish Goods Distribution – Export to U.S ELP Her LRD BRN Chi El Paso – Medium Maquila Plant Operations Strong Automotive thru-port for both the City of Juarez and Chihuahua Raw Material Corridor – Europe – US and Asia Finish Goods Distribution – Export to U.S MTY GDL MEX

2. Otay Mesa is made up of approx a 5 to 7 mile radius of both U.S and Mexican operated brokerage houses with multi-user warehouse facilities • U.S Customs Brokers in combination with warehouse operations. The following is an illustration of a standard profile and business activity handled by virtually all the Brokerage –warehouse facilitates • The Mexico Plant will set the parameters and response requirements in all phases of the inbound or outbound shipments. Goods will be processes or manufactured to a finished product or sub assembled parts. • The Mexican Broker, traditionally has a very strong relationship with the Mexico Plant or Maquila (More often the Corp Traffic managers / Decision makers on the U.S side have left the operation decisions up to the local plant mangers in Mexico rather than following the routing and carrier selection under the corp. matrix.) • More and More Mexican Brokers have some representation on the U.S side or have a standalone brokerage warehouse operations own and operated as a U.S company. This creates unneeded competition for the U.S Brokerage houses. Changes or additions in U.S Customs regulations may combat some issues. www.HarpyLogistics.com

3. Mexican Customs - Transactions in and out of the Mexican customs are an immediate presentation of all documents and duties / taxes at the time of export or import. Documentation and Communication are vital from all the parties involved. (Shipper- both U.S / Mex Brokers and Customs, as well as the transportation from factory to destination.) Changes in provisions for both Mexican and U.S Customs due to Nafta have been more and more noticeable. The increase in requirements of importing goods into and out of the paired countries have resulted in companies looking closer compliance issues and more efficient handling and routing methods. U.S Customs – Otay Mesa Customs facility is a full CMC (Customs Management Center) It houses most of the primary Federal and State Agencies- FDA / EPA / DOT / CHP . It also offers the Broker Community with a full staff of entry specialist and customs related support for Import and Export programs. Documentation is also back to back – All entries must be in hand by the driver upon entering each compound. U.S. Broker / Warehouse – Warehouse and U.S Customs Documentation are the two primary components for these facilities – The Customs Broker services are consolidated with the warehouse products in regards to invoicing and management. The majority of Brokerage houses operate with expanded “HOME GROWN” warehouse management system that provides some Web visibility and functions for this specific market. Document handling via Runners is a vital need to insure documents are transferred from both U.S / Mexican Brokers to and from the U.S / Mex Customs. www.HarpyLogistics.com

4. Consolidation of goods into Mexico- A consolidated Pedimento is accepted by Mexican Customs at this crossing. Good can only travel in a single conveyance draw upon the same Mexican Broker that is presenting the Pedimento. Transportation cost are calculated on a flat truck cost bases. Consolidation or single shipments out of Mexico north bound to the U.S. Market or other International destinations. Generally shipments must leave the Mexican Plant between 12 noon and 1pm to make thru both Mex / U.S. Customs, delivered to the designated broker or warehouse and into any next day integrated system. Inbound Domestic (U.S origin) or International will be processed from our designated broker / warehouse agent who is independent of the carrier or operates with multi carriers as the assigned consignee for the Mexican Plant. Shipments are processed as “In-Bond” Shipments or as Domestic received goods. In both cases a series of steps need to be followed in order to complete the export process into Mexico. Domestic origin goods would require an SED prepared, while In-bond goods from a foreign origin would require a processing and closing out of the carriers bond. www.HarpyLogistics.com

5. www.HarpyLogistics.com

6. Commercial invoice Letter of instruction Prepared by MX Plant / Customer Mexico to US Import Process Map Transmission via EDI Proposed Custom House Broker MX broker C.Entry or In-bond Export Pedimento Process Entry (customer IOR) In-Bond (IOR other) Truck proceeds to US border Prepare Pre-File 3461 / 7533 Transmit via ABI Prepare 7512 / 7533 214 entry, etc. YES NO Clears US Customs Fax 7533 to Mexico Plant to join w/ Pedimento Exam Truck proceeds to Broker / Warehouse for Unloading www.HarpyLogistics.com

7. AES Option 2Process Map US Export Process US – MX Southbound Supplier shipments arrive US Dock as Warehouse Shipments requiring SED preparation and Customs submission On behalf of the USPPI* Option 2 Dock receives invoices, Loads trailers and Creates load manifest Proposed Custom House Broker Manifest & commercial invoices created or assembled Merchandise verification Against supplier invoice by MX broker Multiple vendor consolidation AES SED prepared based On commercial invoice Import Pedimento Process Shipper set-up Option 2 Must be submitted prior To departure Trailer Must await AES to Proceed from US to MX Pedimento presentation to MX customs AES Confirmation of data Receipt, release response Truck proceeds to Maquiladora *USPPI – U.S. Principal Parties in Interest; exporter www.HarpyLogistics.com

8. AES Option 4Process Map US Export Process US – MX Southbound Supplier shipments arrive Warehouse Dock Shipments requiring SED preparation and Customs submission On behalf of the USPPI* Option 4 Dock receives invoices, Loads trailers and Creates load manifest Proposed Custom House Broker Manifest & commercial invoices created or assembled Merchandise verification Against supplier invoice By MX broker Multiple vendor consolidation AES SED prepared based On commercial invoice Import Pedimento Process Shipper set-up Option 4 Up to 10 days after depart To submit AES SED Trailer Proceeds US exit without AES response Pedimento presentation to MX customs AES Confirmation of data Receipt, release response Truck proceeds to destination *USPPI – U.S. Principal Parties in Interest; exporter *USPPI – U.S. Principal Parties in Interest; exporter www.HarpyLogistics.com