8-KOther Events

EXPEDITORS INTERNATIONAL OF WASHINGTON INC 8-K Report (Jan 18, 2002)

Filed January 18, 2002For Securities:EXPD

Summary

Expeditors International of Washington, Inc. (EXPD) filed an 8-K on January 17, 2002, detailing responses to investor inquiries. The report highlights significant year-over-year declines in airfreight tonnage for December 2001 (-19%), indicating a missing 'last minute run-up' typically seen in this peak shipping month. However, air-to-air yields showed a strong increase of 380 basis points in Q4 2001. Ocean container volume, conversely, surged over 40% for the quarter, with a substantial 58% increase in December, which the company believes represents new business rather than a shift from air to ocean freight. The company also addressed concerns about the sluggish economy, noting that its disciplined credit procedures have mitigated risks from deteriorating shipper creditworthiness, though some customer losses have occurred. Expeditors emphasized its ongoing focus on productivity, process improvement, and system enhancements for cost control, rather than headcount reductions. Despite broad economic uncertainty and post-September 11th adjustments, Expeditors maintains its core strategy of delivering strong customer service, expanding market share, and preserving its culture, regardless of economic cycles.

Key Highlights

  • 1December 2001 airfreight tonnage declined 19% year-over-year, significantly impacted by a lack of typical holiday season 'last minute run-up'.
  • 2Air-to-air yields increased by 380 basis points in Q4 2001, suggesting improved pricing power or a favorable mix.
  • 3Ocean container volume saw robust growth, up over 40% for Q4 2001, with a notable 58% increase in December year-over-year.
  • 4The company attributes the ocean volume increase to new business, not a modal shift from airfreight.
  • 5Expeditors has maintained strong credit control discipline, mitigating risks from a sluggish economy and shipper creditworthiness issues.
  • 6Focus remains on productivity, process improvement, and system enhancements for cost control, avoiding headcount reductions.
  • 7The company emphasizes consistency and core business principles (customer service, market share, employee opportunities, culture) over economic forecasting.

Frequently Asked Questions

In December 2001, airfreight tonnage was down 19% year-over-year due to a missing 'last minute run-up'. Conversely, ocean container volume increased significantly, up 58% year-over-year for the month, which Expeditors believes is new business.

Expeditors has maintained disciplined credit procedures, even during good times, which has helped them avoid significant issues with deteriorating shipper creditworthiness during the economic downturn. While some customer losses have occurred due to credit concerns, the company states they have not needed to take additional reactive steps.

Expeditors continues to focus on productivity improvements, process enhancements, and system upgrades as key areas for potential further cost improvements, rather than resorting to headcount reductions.

Expeditors acknowledges that inventory levels have been depleted and anticipates an 'uptick' as consumer confidence and purchases increase, leading retailers and wholesalers to buy more goods. However, the timing and magnitude of this upturn are uncertain.