Ocean freight fared a bit better although yields dipped a
bit which, according to the company, is typical for second quarter due to the
time lag between when carrier rates increases during annual May contract
negotiations and on a year over year basis.
Volume-wise, airfreight declined 10% during the quarter. The
quarter started a bit rough with April volumes declining 17% but by June the
decline was 6%. Ocean freight volume increased 1% thanks to strong growth in
June at 3%.
Customs brokerage and other services posted positive growth
due to the international roll out of its domestic time definite product –
Transcon Services. In late 2011, Expeditors noted plans to expand this service into
Europe and Asia. Little information is available for this service but it
appears to be a bundled cross-border solution that utilizes all modes of
transportation, but in particular road services. Perhaps not only the success
along the US – Canada – Mexico borders along with increases in intra-regional
freight movements but also airfreight declines, prompted the company to expand
this solution abroad.
According to the company, the focus continues to be on
customer retention and profitable market share expansion. During the quarter,
Expeditors opened an office in Montevideo, Uruguay and a satellite office in
Xuzhou, China. Its Colombo, Sri Lanka office was closed.
Regionally, North America continues to post both positive
net revenue and total revenue, 16.4% and 3.3% respectively. Again, this appears
to be due to its cross-border solution, particularly along the US-Mexico
border. All other regions-Latin America, Asia Pacific, Europe & Africa and
Middle East and India all posted negative net revenue and total revenue. The US
region posted a 4% decline in total revenue but a slight increase in net
revenue.
Little guidance for the rest of the year was provided,
however, CEO Peter Rose noted there is still uncertainty in the global economy
and expects similar market trends to continue for the short to medium term.
Until then, he said, “These tough times too will pass and it should go without
saying at the end of the day, we’d rather be us, than anyone else inside or
outside this industry.”