10-KPeriod: FY2001

EXPEDITORS INTERNATIONAL OF WASHINGTON INC Annual Report, Year Ended Dec 31, 2001

Filed April 1, 2002For Securities:EXPD

Summary

Expeditors International of Washington, Inc. (EXPD) operates as a global logistics provider, specializing in air and ocean freight forwarding, and customs brokerage. For the fiscal year ending December 31, 2001, the company demonstrated solid revenue growth, with net revenues increasing by 11% year-over-year to $606.5 million, driven by strong performance in airfreight and ocean freight services. Net earnings also saw a significant increase of 17%, reaching $97.2 million. The company's business model, which avoids owning physical assets like aircraft or vessels, allows for flexibility and scalability. EXPD's strategy of organic growth, supplemented by strategic acquisitions, and its focus on technology and customer service, position it well within the competitive logistics industry. The report highlights a robust financial position, with healthy working capital and no long-term debt at year-end 2001, underscoring its financial stability for future growth and operations.

Key Highlights

  • 1Expeditors reported a 11% increase in net revenues to $606.5 million for fiscal year 2001, driven by strong growth in airfreight and ocean freight services.
  • 2Net earnings grew by 17% to $97.2 million in 2001, demonstrating improved profitability.
  • 3The company maintained a strong balance sheet with $237.4 million in working capital and no long-term debt as of December 31, 2001.
  • 4Expeditors continues to expand its global network, opening 7 new offices in 2001, indicating a commitment to geographic growth.
  • 5The company's 'same store' net revenue growth of 7% and operating income growth of 13% in 2001 suggests healthy organic growth from established locations.
  • 6Expeditors is investing in technology, which is highlighted as a critical factor for competitive advantage in the logistics industry.
  • 7The company's compensation philosophy, linking employee incentives to business unit profitability, is seen as a key driver for growth and efficiency.

Frequently Asked Questions

Expeditors' net revenues in 2001 were primarily driven by its Airfreight services (42% of net revenues), Customs brokerage and import services (35%), and Ocean freight and ocean services (23%). Airfreight and Ocean freight services saw significant year-over-year net revenue increases of 13% and 21% respectively, indicating strong demand and effective margin management.

Expeditors competes by focusing on quality of service, reliability, responsiveness, expertise, and scope of operations. The company emphasizes investing in sophisticated computerized customer service capabilities, such as EDI and on-line tracing, to meet customer demands for efficient supply chain management. They also leverage their global network and organic growth strategy, supplemented by strategic acquisitions, to maintain a competitive edge.

Expeditors primarily pursues organic growth by opening new offices globally, with 7 new offices opened in 2001. While open to strategic acquisitions, their main focus is on building their network organically. They emphasize local expertise by hiring citizens of the countries where they operate and coordinate marketing and customer service activities across their international network.

Key risks include fluctuations in international trade due to economic and political conditions, currency exchange rates, customs regulations, and geopolitical events. The company is also dependent on third-party vendors (airlines, steamship lines) and faces competition. Managing foreign operations, retaining key personnel, and keeping pace with technology are also critical factors. Seasonality in business operations and the potential impact of unforeseen events like the Euro conversion are also noted.