expeditors building

US-based Expeditors, considered a bellwether for forwarders in terms of financial performance, performed “relatively well” in a first quarter that saw volumes decline across all its business lines.

The company last night reported a 6% year-on-year decline in first-quarter revenue to a shade over $1.9bn, while operating income – the company does not report ebitda – dropped 15%, year on year, to $159m.

But president and chief executive Jeffrey Musser remained bullish, amid the decreases and the continuing economic uncertainty.

“Our first-quarter performance was better than we might have expected, given the contraction in global demand, as well as the severity and suddenness of the collapse in air carrier belly space and reduced containership sailings.

“While there is talk of various markets starting to come back on line, the impact of Covid-19 continues to have an enormous impact on the global economic environment, to both supply and demand, as well as to buy/sell rates.”

He added: “While we remain fully staffed and ready for when economies across the world start to regain their post-crisis footing, we do not know when, how quickly, or how uniformly that will take place.”

Without disclosing actual volumes, Expeditors revealed a 7% decline in air freight tonnage and a 10% decline in ocean container volumes during the period, which was the chief cause of a fall in profits.

Chief financial officer Bradley Powell said: “We experienced a shift in the goods we handle, with increased shipments of medical equipment and supplies to help combat Covid-19, and technology products to support social distancing and working remotely.

“Conversely, we saw a significant decline in shipments from our customers in retail, aerospace, automotive and the oil and energy sectors,” he added.

But, as Mr Musser noted, in contrast to a number of forwarders that have announced redundancies or taken advantage of government furlough schemes, Expeditors has the same number of employees globally – 18,102 in full-time employment – that it had at the same point last year, although it did manage to reduce salary expenses by 4%, “primarily as a result of lower bonuses and commissions under our variable compensation plans”, said Mr Powell.

“Importantly, we honoured our commitment to not furlough or lay off our valuable employees around the world during this crisis,” he added.

“We expect disruptions from Covid-19 to continue for the remainder of 2020. Our balance sheet and cash flow are strong and we expect to continue to make investments in our people, processes and technology.”

COMMENTS 6


Leave a Reply

  • Matt

    May 06, 2020 at 2:35 pm

    Once again, Expeditors shows its class by protecting its workforce whilst others take advantage of Furlough schemes or make redundancies. History shows that Expeditors take care of their workforce which helps them to continue to deliver a first class service to its customers. Onwards and upwards!!

    Reply
  • Vincent

    May 07, 2020 at 3:38 pm

    Pretty impressive (again) from Expeditors… When it comes to forwarding they are best-in-class and should be the blue print for many freight forwarders.

    Reply
  • Srinikesh

    May 22, 2020 at 10:23 am

    Commitment to customer service in these difficult times will always be remembered by customers and support given by the management to its employees will always have the commitment by each employee to go an extra mile for its customers

    Reply
  • Steve Roger

    May 27, 2020 at 9:55 pm

    Expeditors has always been strong in this regard.
    The real thing that concerns me as a stockholder in this company is their reluctance to move with the flow of the modern workforce. Meaning, will Expeditors do the smart thing after this downturn and continue to let a certain set of their support staff work remotely? Will they follow suit on four day work weeks? Etc.
    This company claims to look to the welfare of their employees first, but they historically have not. I would like to see these truths of the modern and future workforce become a part of the Expeditors business model. I love the way they work but more awareness of their “greatest asset” would only serve to make this company more productive and efficient, thereby more profitable (which serves all shareholders).
    The ball is in your court Mr. Musser, we would all love to see you make the correct choice for the future of this company.

    Reply
  • Jenifer Del Busto

    May 28, 2020 at 3:53 am

    The commitment that Expeditors shows to its customers and employees is a true portrayal of our culture. Proud to work for the best and continue to do the best for our customers day in and day out!

    Reply
  • Steve

    May 28, 2020 at 12:21 pm

    Expeditors has always been strong in this regard.
    The real thing that concerns me as a stockholder in this company is their reluctance to move with the flow of the modern workforce. Meaning, will Expeditors do the smart thing after this downturn and continue to let a certain set of their support staff work remotely? Will they follow suit on four day work weeks? Etc.
    This company claims to look to the welfare of their employees first, but they historically have not. I would like to see these truths of the modern and future workforce become a part of the Expeditors business model. I love the way they work but more awareness of their “greatest asset” would only serve to make this company more productive and efficient, thereby more profitable (which serves all shareholders).
    The ball is in your court Mr. Musser, we would all love to see you make the correct choice for the future of this company.

    Reply

Topics