8-KOther Events

EXPEDITORS INTERNATIONAL OF WASHINGTON INC 8-K Report (Dec 23, 2002)

Filed December 23, 2002For Securities:EXPD

Summary

This Form 8-K filing from Expeditors International of Washington, Inc. (EXPD) on December 23, 2002, provides answers to selected inquiries received up to December 15, 2002, under its Regulation FD disclosure policy. The report addresses operational impacts of the West Coast port disruption, demand for air freight services, and company strategies. Key takeaways include the company's proactive approach to retaining business post-disruption, its utilization of charter capacity to meet demand, and its financial positioning, notably its lack of outstanding debt and reliance on a non-asset-based model. Expeditors highlights its ability to manage freight effectively through both ocean and air, showcasing its adaptability during market chaos. The company clarifies its stance on government financial assistance, stating its ineligibility as a non-airline operator, and reiterates its focus on service and organic growth rather than asset ownership. The filing also provides an anticipated release date for Q4 2002 results and outlines plans for future technology investments and office openings.

Key Highlights

  • 1Expeditors is scheduled to release its fourth-quarter 2002 results before the market opens on February 11, 2003.
  • 2The company demonstrated strong operational capability during the West Coast port disruption, effectively moving freight by both ocean and air, and is focused on retaining this business.
  • 3Expeditors utilized charter capacity extensively to meet airfreight demand, completing 66 charters from Asia to North America year-to-date, with 41 in Q4 2002.
  • 4The company does not believe that United Airlines' bankruptcy filing will have a direct financial or operational impact.
  • 5Expeditors views its non-asset-based model as a strength, allowing focus on service rather than asset utilization, and estimates its market share at 1-1.5%.
  • 6The company has no outstanding bonds or commercial paper and has not sought credit ratings, highlighting this as a cost saving.
  • 7Expeditors is ineligible for government financial assistance programs like the Air Transportation Safety and System Stabilization Act, as it is not an airline.

Frequently Asked Questions

Expeditors is scheduled to release its fourth-quarter 2002 results before the market opens on Tuesday, February 11, 2003.

The port disruption provided an opportunity for Expeditors to demonstrate its ability to move freight efficiently via air and ocean, leading to stronger relationships with customers who may not have fully utilized their services before. While acknowledging the risk of losing some business, the company believes it managed the situation effectively and is focused on retaining its existing client base.

Expeditors views its non-asset-based model as a strategic advantage, allowing the company to focus on providing the best service for the price rather than being burdened with filling owned assets like ships or planes. They believe this model enhances service quality and does not limit their ability to capture freight.

No, Expeditors is not eligible for government financial assistance programs such as the Air Transportation Safety and System Stabilization Act because it is not an airline. The company stated that such funds were intended for asset-based carriers who suffered losses, though they noted that some all-cargo airlines also received significant financial benefits.