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US freight forwarder Expeditors has reported an 18% jump in nine-month revenues, pushing up net earnings 36%, despite carriers looking to take advantage of tight capacity.
Overall revenue hit $5.9bn for the nine months to September, generating earnings just shy of $439m, with chief executive Jeffrey Musser singling out the third quarter performance.
“We generated record third-quarter profitability, with the highest net revenue and operating income in our history,” Mr Musser.
“[This resulted from us] continuing to win new business and grow volumes with existing customers in an unpredictable rate environment.”
Total revenues for the three months to September passed the $2bn mark, up 16%, with net earnings climbing 35% to $163m.
Year-on-year, volumes climbed each month in ocean freight, up 8% for the quarter; air freight saw just 1% growth after a 4% dip in September offset gains made during July and August.
“Rates have been particularly volatile, but we managed similar cycles throughout our history and are adept at making adjustments to deliver quality long-term growth,” said Mr Musser.
“I commend our people for their exceptional efforts on behalf of our customers and our organisation.”
In nine-month revenues, air freight remained the breadwinner, bringing in almost $2.4bn, with $1.9bn coming from customs brokerage activities and $1.6bn from ocean freight forwarding.
All three divisions reported healthy growth, and Mr Musser said he was particularly pleased that the company had been able to circumvent capacity constraint issues.
“Carriers continued to take advantage of the supply and demand imbalance and sought opportunities to increase pricing in an effort to improve profitability,” he said. “That presented a challenge, particularly in ocean, requiring that we work our strong relationships to secure space for our customers, while remaining disciplined on pricing.”
In its latest Global Freight Forwarding report, Transport Intelligence notes that while Expeditors is at the upper end of freight forwarders, in terms of profitability, it faces obstacles. In particular, it pointed to its determination to grow organically as a potential for it to miss “first mover” advantages and that it may lack agility.
“[Furthermore], China-US is still the company’s largest by revenue and tonnage,” the report continues. “The company is working towards balancing the lanes it serves, but is still over-reliant upon this specific source of revenue.”