8-KRegulation FD

EXPEDITORS INTERNATIONAL OF WASHINGTON INC 8-K Report, Regulation FD Disclosure (Jan 3, 2006)

Filed January 3, 2006For Securities:EXPD

Summary

This 8-K filing from Expeditors International of Washington, Inc. (EXPD) on January 3, 2006, provides insights into the company's performance during the peak season of 2005 and outlook for early 2006. The company describes the 2005 peak season as "challenging, but manageable," indicating it was a more demanding period than the prior year, particularly in terms of ocean container counts and air tonnage. Despite the challenges, Expeditors believes it effectively serviced its customers due to strong preparation and anticipation of space requirements. The report also touches on broader industry trends, including shipper preparedness and shifts in port utilization. Expeditors notes that shippers generally appeared better prepared in 2005, contributing to a more orderly flow. Regarding port activity, the company anticipates that other West Coast ports will continue to offer viable alternatives to Los Angeles/Long Beach due to infrastructure constraints at the latter. Overall, the filing suggests Expeditors navigated a demanding operational period successfully and remains focused on profitable business development.

Key Highlights

  • 1Expeditors characterized the 2005 peak season as "challenging, but manageable," exceeding internal expectations for difficulty.
  • 2The company reported that the 2005 peak season was significantly heavier than 2004 in terms of both ocean container count and air tonnage moved.
  • 3In October 2005, both airfreight tonnage and ocean freight container counts saw a 12% year-over-year increase.
  • 4November 2005 saw a 14% year-over-year increase in airfreight tonnage and a 4% increase in ocean freight container counts.
  • 5Expeditors believes shippers were generally better prepared for supply chain demands in 2005 compared to previous years.
  • 6The company views its domestic transportation spend not by its overall size, but by its ability to generate full-truck loads.
  • 7Expeditors anticipates that other West Coast ports will continue to serve as attractive alternatives to Los Angeles/Long Beach due to infrastructure limitations at the latter.
  • 8Yields for air and ocean freight remained strong and somewhat expanded through the fourth quarter of 2005.

Frequently Asked Questions

Expeditors described the 2005 peak season as "challenging, but manageable." While it met their internal expectations for difficulty, it was significantly heavier than the 2004 peak season in terms of both ocean container volume and air tonnage. The company attributes its ability to service customers effectively to strong preparation and anticipating space needs.

In October 2005, both airfreight tonnage and ocean freight container counts increased by 12% compared to October 2004. In November 2005, airfreight tonnage grew by 14% year-over-year, while ocean freight container counts increased by 4% year-over-year.

Expeditors indicated that, in general, shippers appeared better prepared to handle their supply chain demands in 2005 compared to previous years. They noted that better organization typically leads to better outcomes.

Expeditors focuses on attracting and developing 'sales experts' who bring in profitable new business, rather than merely 'sales specialists.' They do not measure sales recruitment in terms of 'incremental costs' but rather in the potential for profitable business. Furthermore, sales is considered everyone's responsibility within the company, with operational personnel playing a key role in sales support and customer retention.