Sea-Cargo, 8th June 2007

BAF and NOx surcharge

Bunkers prices has increased substantially in the last few months, from a level of abt. USD 250/MT IFO180 in January 2007 (which is when we had our last change/reduction in BAF) till abt. USD 360/MT today. MGO has in the same period increased by more than USD 100/mt. We are therefore left with no alternative but to adjust our BAF surcharge – which as from 22nd June will be set to 16% - up from our present level of 14% (which still is very reasonable compared to most other lines).

In January 2007 Norwegian government introduced a NOX duty on all ship operations within Norwegian waters. This duty was payable at the end of first quarter, and we have as such been able to calculate the effect and cost per ton that this has had for our liner system. The actual cost percentage in terms of freight is close to 3%. We will therefore, also with effect as from 22nd June, increase our NOX surcharge to 2,5% - up from our present level of 2%.

We sincerely apologize for these increases – however we trust you understand and accept that there are no alternatives to this at present.

Sea-Cargo is very committed to work for a better environment and we have already started a project in which we are evaluating the use of LNG (Liquidated Natural Gas) rather that Fuel Oils. This project include our ships under the new building program – as well as all existing tonnage. If we are successful with our LNG project this will eliminate 80-90% of all NOX emission and substantially reduce CO2 emission (abt 20%).