About Expeditors International of Washington

Expeditors International of Washington, Inc. (Expeditors) provides a full suite of global logistics services, offering customers a seamless international network of people and integrated information systems to support the movement and strategic positioning of goods. As a third-party logistics provider, the company purchases cargo space from carriers (such as airlines, ocean shipping lines, and trucking lines) on a volume basis and resell that space to the company's customers. The company provides a broad range of transportation services and customer solutions, such as customs brokerage, order management, time-definite transportation, warehousing and distribution, temperature-controlled transit, cargo insurance, specialized cargo monitoring and tracking, and other customized logistics and consulting solutions. In addition, the company's Project Cargo unit handles special project shipments that move via a single method or combination of air, ocean, and/or ground transportation and generally require a high level of specialized attention because of the unusual size or nature of what is being shipped. A significant portion of Expeditors' revenues is derived from customers in retail and technology industries whose shipping patterns are tied closely to consumer demand, and from customers in industries whose shipping patterns are dependent upon just-in-time production schedules. Expeditors' primary services include Airfreight Services, Ocean Freight and Ocean Services, and Customs Brokerage and Other Services. Airfreight Services Within airfreight, Expeditors typically acts either as a freight consolidator or as an agent for the airline that carries the shipment. Whether acting as a consolidator or agent, the company offers its customers routing expertise, familiarity with local business practices, knowledge of export and import documentation and procedures, the ability to arrange for ancillary services and to assist with securing capacity during periods of high demand. Solutions within Airfreight Services include: Airfreight Consolidation: As an airfreight consolidator, Expeditors purchases cargo capacity from airlines on a volume basis and resells that space to the company's customers at lower rates than what those customers could negotiate directly from the airlines on an individual shipment. Expeditors determines the routing, consolidates shipments bound for a particular airport distribution point, and then selects the airline for transportation to the distribution point, where either the company or one of its agents then arranges for the consolidated lot to be broken down into its component shipments and for the transportation of each individual shipment to its final destination. Airfreight Forwarding: As a freight forwarder, Expeditors receives and forwards individual, unconsolidated shipments, and arranges the transportation with the airline that carries the shipment. Ocean Freight and Ocean Services Within ocean services, Expeditors offers three basic services: ocean freight consolidation, direct ocean forwarding, and order management: Ocean freight consolidation: Expeditors, when acting as an ocean freight consolidator, contracts with ocean shipping carriers to obtain transportation for a fixed number of containers between various points during a specified time period at agreed-upon rates. The company handles both full container loads, as well as Less-than Container Load (LCL) freight, offering a wider range of shipping options and rates than available with the carriers directly. The company also generates fees for ancillary services, such as the preparation of documentation to comply with local export and import laws. Direct ocean forwarding: Expeditors acts as the agent when its customer contracts directly with the ocean carrier, and the company may receive a commission from the carrier in addition to customer handling fees and ancillary services. Order management: Expeditors provides a range of order management services including consolidation of cargo from many suppliers in a particular origin into the fewest possible number of containers, putting more product into larger and fewer containers in order to maximize space, minimize cost and help the company's customers reduce their carbon footprint. Customs Brokerage and Other Services Expeditors offers a range of custom solutions, including: Customs Brokerage and Import Services: Expeditors helps customers clear shipments through customs by preparing and filing required documentation, calculating, and providing for payment of duties and other taxes on behalf of the customer as well as arranging for any required inspections by governmental agencies, and import services such as arranging for local pick up, storage and delivery at destinations. Such services can include screening commercial documentation for assessed value, country of origin, application of special trade programs, and classification. The company's target market is primarily consisted of customers looking to reduce the number of customs brokers used, those looking to improve compliance and reporting, and those seeking opportunities to participate in special trade programs globally. Transcon: Expeditors' Transcon consists of intra-continental ground transportation, including time-definite less-than-truck and full-truck solutions. Warehousing and Distribution Services: Expeditors' services include inventory management, multi-channel order fulfillment, vendor managed inventory programs, and other value-added services. The company's warehousing services are generally offered globally in multi-client facilities so that customers may benefit from cost savings related to shared space, labor, equipment, and other efficiencies. The Expeditors Network Expeditors provides a complete range of global logistics services to a diversified group of customers that vary in size, industry and geographic location. Expeditors operates district offices in the following geographic areas of responsibility: Americas, North Asia, South Asia, Europe, and the Middle East, Africa and India. The company also maintains branch offices, which are aligned with and dependent upon one district office, where practical benefit is gained by having staff located closer to the customers they are serving. Additionally, the company contracts with independent agents in locations where the company does not have its own offices to provide required services for the company's existing customers. The company has established 36 such relationships worldwide. At Expeditors, the company creates its strategy and develops its global products and services; processes; technology; and compliance programs at the corporate level, in order to drive consistency across all levels of the organization. Global consistency and compliance are fundamental to preserving the company's culture and network of people, processes, technology and locations. The company leverages regional and local expertise by staffing its districts principally with local managers and personnel who are from the regions in which they operate and who often have extensive experience in logistics, coupled with a deep understanding of their local market. District offices are responsible for selling and executing Expeditors' products and services directly to customers and are involved in the selection of logistics service providers. Defining the company's strategy at a global level while executing it at the regional and local levels with customized supply chain solutions enables the company to drive consistency and efficiency for its network and customers. Strategy Expeditors' strategic plan is to achieve long-term, sustainable and profitable growth by focusing on the right markets and, within each market, on the right customers that lead to profitable business growth through the aggressive marketing of the company's service offerings. The company's key strategic initiatives include ensuring that base-line strategies for air, ocean and customs services for every district office and region lead to growth at the relevant market rates, profits and volumes by services; growing the company's business services into and out of Europe, with particular focus on certain defined markets beyond the company's base-line growth expectations; and growing the company's customs brokerage offering throughout Asia by leveraging its strength and expertise in customs brokerage services and developing critical talent, processes and tools. Global Logistics and Supply Chain Technology The company's technology platform is built on principles of innovation, agility, collaboration, performance and consistency across the Expeditors global network to meet diverse and complex global logistics and supply chain needs. The platform is consisted of proprietary, third party and open-source technologies. The company utilizes a globally-consistent infrastructure supporting both centralized and distributed technology strategies that incorporate security, disaster recovery and high availability. Expeditors' technology platform is designed, coded, tested and implemented by the collaborative efforts of the company's logistics industry and information technology professionals. The company utilizes internally developed and third-party solutions to perform its customs brokerage services, to address country and regional specifications. The company continuously monitors emerging technologies for potential applicability to its business. The company is continually enhancing its systems, including meaningful upgrades to core operating and accounting systems. Tailored Solutions As a non-asset-based logistics services provider, the company has considerable flexibility to tailor customer-specific solutions by product. By understanding a customer's logistics and supply chain processes, strategies, and objectives, the company identifies targeted areas of opportunity for improvement, and deploy the right services and solutions for that customer. These services include the company's core product offerings of transportation, customs clearance, warehousing and distribution, and order management, along with expertise in supply chain analysis and optimization, trade compliance consulting, cargo insurance, cargo security, and solutions for oversized and heavy-lift freight. The company's trained professional employees deliver these services across the globe through the company's network of district offices using a common technology platform, in conjunction with consistent and efficient operational processes that adhere to the highest standards of compliance while focusing on the individual needs of each customer. Because Expeditors is in the business of optimizing the company's customers' freight logistics and supply chains, the company focuses its sales and engagement strategies on professionals in logistics and supply chain management roles inside of customer organizations. While the company drives its sales strategies at a global level, district management of each office is responsible for its own business development, operations, and service execution. The company also employs dedicated account management staff who work with existing customers to improve operations and grow new business opportunities. What Expeditors Ships The goods that Expeditors handles are generally a function of the products that dominate international trade between any particular origin and destination. These goods include products from diverse industries, including electronics, high technology, healthcare, aerospace and aviation, manufacturing, oil and energy, automotive, retail consumer goods and fashion. In order to meet customers' complex and industry-specific demands, the company utilizes industry vertical teams throughout the company's network that focus on providing tailored solutions to different industries. Industry vertical teams work closely with the company's regional and district resources to grow the company's business. Expeditors' Services in Detail The following describes in more detail the operations of each of Expeditors' services: Airfreight Services When performing airfreight services, the company typically acts either as a freight consolidator or as an agent for the airline that carries the shipment. When acting as a freight consolidator, the company purchases cargo capacity from airlines on a volume basis and resell that space to the company's customers at lower rates than they could obtain directly from airlines on an individual shipment. The company then issues a House Airway Bill (HAWB) to the company's customers as the contract of carriage and separately, the company receives a Master Airway Bill from the airline when the freight is physically tendered. When moving shipments between points where the nature or volume of business does not facilitate consolidation, the company receives and forwards individual shipments as the agent of the airline that carries the shipment. Whether acting as a consolidator or agent, the company offers its customers expertise for optimum routing, familiarity with local business practices, knowledge of export and import documentation and procedures, the ability to arrange for ancillary services, and assistance with securing capacity during periods of high demand. In the company's airfreight operations, the company receives shipments from its customers, determine the routing, consolidate shipments bound for a particular airport distribution point, and select the airline for transportation to the distribution point. At the distribution point, either the company or an Expeditors' agent arranges for the consolidated lot to be broken down into its component shipments and for the transportation of the individual shipments to their final destinations. The company estimates that its average airfreight consolidation weighs approximately 3,600 pounds and that a typical consolidation includes merchandise from several shippers. At the origin, Expeditors typically delivers shipments from one of the company's warehouses to the airline after consolidating the freight into containers or onto pallets. Normally that shipment will then arrive at the destination distribution point within 48-72 hours from the point of origin. During periods of high demand, available cargo capacity from the scheduled air carriers can be limited and backlogs of freight shipments may occur. When these conditions exist, the company may charter aircraft to meet customer demand. Expeditors consolidates individual shipments based on weight and volume characteristics in cost-effective combinations. Typically, as the weight or volume of a shipment increases, the cost that the company charges per pound/kilo or cubic inch/centimeter decreases. The rates charged by airlines also generally decrease as the weight or volume of the shipment increases. As a result, by aggregating shipments and presenting them to an airline as a single shipment, the company is able to obtain a lower rate per pound/kilo or cubic inch/centimeter than what is charged for an individual shipment, while generally offering the customer a lower rate than could be obtained directly from the airline for an unconsolidated shipment. The company's airfreight revenues less directly related costs of transportation and other expenses for a consolidated shipment include the differential between the rate that the airline charges Expeditors and the rate that the company, in turn, charge the company's customers, in addition to commissions that the airline pays the company and fees that the company charges its customers for ancillary services. Such ancillary services the company provides include the preparation of shipping and customs documentation, packing, crating, insurance services, and the preparation of documentation to comply with local export laws. Ocean Freight and Ocean Services The company operates Expeditors International Ocean, Inc. (EIO), an Ocean Transportation Intermediary, sometimes referred to as a Non-Vessel Operating Common Carrier (NVOCC), which specializes in ocean freight services in most major trade lanes in the world. EIO also provides service, on a smaller scale, to and from any location where the company has an office or an agent. Ocean freight services are consisted of three basic services: ocean freight consolidation, direct ocean forwarding and order management. Ocean freight consolidation: As an NVOCC, EIO contracts with ocean shipping lines to obtain transportation for a fixed number of containers between various points during a specified time period at an agreed rate. EIO provides full container load services to companies that need flexibility and access to vessel capacity that they may not necessarily achieve by dealing directly with the shipping lines. Additionally, EIO supports customers that prefer to supplement their carrier strategy with an NVOCC. EIO also leverages the Expeditors global gateway network for the movement of LCL freight for customers needing to ship smaller consignments via ocean. EIO issues a House Ocean Bill of Lading (HOBL) or a House Sea Waybill to customers as the contract of carriage and receives a separate Master Ocean Bill of Lading (MOBL) when freight is physically tendered. Revenues from fees charged to customers for ancillary services that EIO may provide include the preparation of shipping and customs documentation, packing, crating, insurance services, and the preparation of documentation to comply with local export and import laws. The company also charters vessels to support both its customers' special projects and the company's container capacity needs. Direct ocean forwarding: When the customer contracts directly with the ocean carrier, EIO acts as an agent of the customer and derives its revenues from commissions paid by the ocean carrier and handling fees paid by the customer. In such arrangements, EIO does not issue a HOBL or House Sea Waybill. Rather, the carrier issues a MOBL directly to the customer who employs EIO to create documentation, manage shipment information and arrange various services to facilitate the shipment of goods. The MOBL shows the customer as the shipper. Order management: Order management provides services that manage consolidation of goods at origin, supplier performance, carrier allocation, carrier performance, container management, document management, delivery management and Order/SKU visibility through the company's web-based portal. Customers have the ability to monitor and report against near real-time status of orders from the date of creation through final delivery. Item quantities, required ship dates, required delivery dates, commodity descriptions, estimated vs. actual ex-factory dates, container utilization, document creation and visibility are many of the managed functions that are visible and reportable via the company's web-based portal. Order management is available for various modes of transportation, including ocean, air, truck and rail. Order management revenues are derived from services provided to the shipper, as well as management fees associated with managing order execution against customer specific rules. One basic function of order management involves arranging cargo from many suppliers in a particular origin and 'consolidating' these shipments into the fewest possible number of containers to maximize space utilization and minimize cost. Through origin consolidation, customers can reduce the number of containers shipped by putting more product in larger and fewer containers. The company offers its customers a wide carrier footprint globally to meet their changing needs. With fewer global carriers than in the past, maintaining close relationships with the company's carrier partners allows the company to meet its customers' space requirements throughout the year, including during peak periods. Customs Brokerage and Other Services As a customs broker, the company assists its customers in clearing shipments through customs by preparing and filing required information and documentation, calculating and providing for payment of duties and other taxes on behalf of the customer, arranging required inspections by governmental agencies, and providing import services such as pick up, storage and delivery services, including value-added services, at destinations. The company provides customs brokerage services in conjunction with transportation services or independently. Expeditors supports regulatory compliance and visibility to the supply chain through process and system controls, technology, and licensed and trained professional oversight. The company offers a customized, solutions-based approach to its customers, based on the complexity of their business. The company also provides other value-added services within its network, such as warehousing and distribution, Transcon and consulting services. Expeditors' warehousing and distribution services include inventory management, multi-channel order fulfillment, vendor managed inventory programs, and other industry-specific, value-added services. The company's warehousing services are generally offered in facilities utilized by multiple customers so that customers may benefit from cost savings related to shared space, labor, equipment and other efficiencies. Expeditors' Transcon consists of intra-continental ground transportation, including time-definite less-than-truck and full-truck solutions. Expeditors responds to customer-driven trade compliance consulting services requests primarily through Tradewin. Fees for these non-transactional services are based upon hourly billing rates and bids for mutually agreed-upon projects. Seasonality Historically, the company's operating results have been subject to seasonal demand trends, with the first quarter (year ended December 2023) being the weakest and the third and fourth quarters being the strongest. Government Regulations With respect to activities in the air transportation industry in the United States, Expeditors is subject to regulation by the Transportation Security Administration (TSA) of the Department of Homeland Security (DHS) as an indirect air carrier. The company's overseas offices and agents are licensed as airfreight forwarders in their respective countries of operation. Each Expeditors office is licensed, or, in the case of the company's newer offices, has applied for a license as an airfreight forwarder from the International Air Transport Association (IATA), a voluntary association of airlines and air transport related entities that prescribes specific operating procedures for airfreight forwarders acting as agents for its members. The majority of the company's airfreight forwarding business is conducted with airlines that are IATA members. Expeditors is licensed as an Ocean Transportation Intermediary (OTI) (sometimes referred to as an NVOCC) by the Federal Maritime Commission (FMC). The FMC has established specific qualifications for shipping agents, including certain surety bonding requirements. The FMC is also responsible for the economic regulation of OTI/NVOCC activity originating or terminating in the United States. To comply with these economic regulations, OTI/NVOCCs, such as Expeditors, must file tariffs electronically, establishing the rates to be charged for the movement of specified commodities into and out of the United States. The FMC has the power to enforce these regulations by assessing penalties. Expeditors is licensed as a customs broker by the Customs and Border Protection (CBP) agency of DHS, nationally and in each U.S. customs district in which the company does business. All United States customs brokers must maintain prescribed records and are subject to periodic audits by CBP. In other jurisdictions in which Expeditors performs customs clearance services, the company is licensed by the appropriate governmental authority where such license is required to perform these services. Expeditors participates in various governmental supply chain security programs, such as the Air Cargo Advance Screening (ACAS), the Customs Trade Partnership Against Terrorism (CTPAT) in the United States and Authorized Economic Operator (AEO) programs in other countries. Additionally, Expeditors is subject to additional regulatory and licensing requirements in the countries where the company operates. In the United States, the company is subject to Federal, state, and local laws aimed at protecting the environment, including provisions regulating the discharge of materials and emissions into the environment. Similar laws apply in many other jurisdictions in which the company operates. The company monitors climate-related risks and opportunities through its engagement with its customers and service providers and through the company's active participation in key initiatives and organizations focused on climate. For example, the company is a SmartWay partner company in the United States. SmartWay is a voluntary public-private program sponsored by the U.S. Environmental Protection Agency (EPA) for tracking, documenting, and sharing information about fuel use and freight emissions across supply chains. History Expeditors International of Washington, Inc. was founded in 1979. The company was incorporated in the state of Washington in 1979.