8-KRegulation FD

EXPEDITORS INTERNATIONAL OF WASHINGTON INC 8-K Report, Regulation FD Disclosure (Jan 31, 2005)

Filed January 31, 2005For Securities:EXPD

Summary

This 8-K filing from Expeditors International of Washington, Inc. (EXPD) on January 31, 2005, addresses several key inquiries from investors regarding the company's performance in December 2004 and its outlook. Expeditors reported strong international volumes in December 2004, which ended up being the best month of the fourth quarter and exceeded management expectations. This performance contrasts with some domestic competitors who cited a slowdown in the last week of December. The company also provided insights into its ocean freight business, noting increased container counts year-over-year by over 29%, indicating market share gains, though at potentially lower rates compared to the prior year. The filing also touches upon the impact of fluctuating fuel prices and addresses the calculation of NVOCC revenues, clarifying how their reported gross ocean freight revenues are presented. Additionally, Expeditors commented on the impact of the December 26th Asian tsunami, stating no employee or facility was directly harmed and anticipating no long-term loss of freight business in the region.

Key Highlights

  • 1International volumes in December 2004 were strong and exceeded management expectations, making it the best month of Q4 2004.
  • 2Expeditors did not experience the same domestic volume slowdown reported by some competitors in the last week of December.
  • 3Ocean freight business saw a year-over-year increase in container counts of over 29%, indicating market share gains.
  • 4Yields in ocean freight expanded somewhat in December 2004, though the exact impact of seasonal trends, customer rate increases, and lower carrier rates due to fuel moderation is difficult to quantify.
  • 5The company clarified its revenue reporting, stating that reported gross ocean freight revenues include NVOCC gross revenues along with forwarding and consolidation, and do not equate solely to NVOCC gross revenue.
  • 6Expeditors reported no direct impact on its employees or facilities from the December 2004 Asian tsunami and does not foresee long-term business loss in the affected region.
  • 7Ex-dividend dates for 2004 were provided as May 27, 2004, and November 29, 2004.

Frequently Asked Questions

No, Expeditors reported strong international volumes in December 2004, which exceeded management expectations and was the best month of the fourth quarter. The company noted that its international business is different from domestic small parcel and overnight envelope services, and it anticipates a natural slowdown in the last week of December due to holidays, so it was not disappointed by low activity.

Expeditors saw significant growth in its ocean freight business, with year-to-date container counts up by over 29% year-over-year, indicating market share gains. While yields did expand somewhat, the company acknowledged that it may have attracted this market share at lower rates compared to the prior year and that the pricing environment is competitive.

Expeditors reported that none of its employees or facilities in the affected region (Sri Lanka, India, Bangladesh, Thailand, Indonesia, or Penang Island in Malaysia) were directly harmed by the tsunami. While there were some work interruptions, operations returned to normal quickly. The company does not anticipate any long-term loss of freight business into or out of its offices in that region.

Expeditors clarified that its reported gross ocean freight revenues include charges when acting as a Non-Vessel Operating Common Carrier (NVOCC), which involves issuing House Ocean Bills of Lading. However, this total also includes ocean forwarding and consolidation services. Therefore, NVOCC gross revenue is not solely equivalent to the total gross ocean freight revenue reported, and the company does not report a separate, distinct 'NVOCC gross revenue' or 'NVOCC net revenue' figure.