Expeditors International of Washington(EXPD) - 2024 Q4 - Annual Report

Revenue Composition - Airfreight services accounted for approximately 34% of Expeditors' total revenues in 2024, compared to 35% in 2023[38] - Ocean freight services accounted for approximately 30% of total revenues in 2024, up from 25% in 2023[47] - Customs brokerage and other services represented about 36% of total revenues in 2024, down from 40% in 2023[55] Company Operations - The company operates 172 district offices globally, with 70 in the Americas, 45 in Europe, and 17 in North Asia[25][26] - Expeditors has approximately 18,000 employees and focuses on organic growth rather than acquisitions, although it may acquire technology or specialized expertise when necessary[23] - Expeditors employed more than 18,000 people as of December 31, 2024, with approximately 12,000 in international locations[65] Strategic Focus - Expeditors' strategic plan includes focusing on the right markets and customers to achieve sustainable and profitable growth[30] - The company emphasizes organic growth supplemented by select strategic acquisitions, contrasting with competitors who rely on aggressive mergers and acquisitions[74] - Expeditors is committed to maintaining a strong corporate culture and investing in employee training to adapt to market changes[29] Technology and Innovation - The company emphasizes a single enterprise technology platform to enhance logistics operations and provide comprehensive visibility and advanced analytics[31][34] - Expeditors' management is focused on developing innovative solutions to meet sophisticated supply chain requirements, investing in technology and digital solutions[73] - Expeditors supports customers' supply chain strategies through digital products, including quoting, booking, and data analytics, enhancing customer retention[70] Customer Service and Solutions - The company provides tailored logistics solutions by understanding customer-specific processes and objectives[35] - Expeditors emphasizes quality customer service and compliance, believing its prices are competitive in the market[69] - The logistics services offered include airfreight, ocean freight, customs brokerage, and warehousing, with a focus on optimizing supply chains for diverse industries[10][38] Market Environment - The company operates in a highly competitive global logistics services industry, with significant competition from both large firms and niche players[68] - Supply chain disruptions have led many companies to focus on building resiliency and agility in their supply chains, indicating a competitive market landscape[72] - The logistics services industry remains intensely competitive, with many companies vying for market share, including new technology-based entrants[68] Financial Management - Expeditors' pricing model is flexible, with fixed pricing arrangements for a portion of forecasted commitments and spot market pricing negotiated at regional levels[53] - The company anticipates continued trends in supply-chain efficiency and cost reduction among its customers, impacting pricing and capacity management[46] - The company faces risks from currency volatility and inflation, which have led to rising labor costs and service provider rate increases since 2021[76][77] Environmental Commitment - The company is committed to reducing its environmental impact and has been disclosing its Scope 1 and Scope 2 greenhouse gas emissions data since 2010[87] - Expeditors actively monitors climate-related risks and participates in initiatives like SmartWay to track and reduce freight emissions[88] Leadership and Governance - Expeditors' executive leadership includes Jeffrey S. Musser as CEO, with planned transitions in leadership roles set for 2025[97][98] - Daniel R. Wall appointed as President, Global Geographies and Operations effective January 1, 2024, and will become President and CEO on April 1, 2025[98] - Blake R. Bell promoted to President, Global Products and will take on the role of President, Global Business Development effective January 1, 2025[99] Risk Management - Expeditors has a total risk retained of $5 million in 2024 for cargo legal liability insurance covering claims for losses attributable to missing or damaged shipments[95] - Future fuel price volatility may impact revenues and operating income if increases cannot be passed through to customers[78] - The company maintains satisfactory relationships with service providers, which is crucial for operations, especially amid regulatory changes and security concerns[75]