Expeditors sees more air cargo but less tonnage

   Expeditors International of Washington last week reported a profit of $76.7 million for the first quarter of 2012, 16 percent less than the $91.2 million earned in the first quarter of 2011.
   Revenues for the first quarter of 2012 were $1.41 billion, 3 percent less than the $1.46 billion recorded in the first quarter of 2011.
   The company warned shareholders earlier that earnings would be lower.
   “Our public comments on the state of the global economy these past six months foreshadowed the possibility that some volume weakness could develop in 2012 as compared with 2011,” said Peter J. Rose, Expeditors’ chairman and chief executive officer. “However, a 9 percent decline in year-over-year air freight tonnages during the first quarter of 2012 was not what we would have predicted, even if we made predictions.
   “Our largest customers are being very cautious about the amount of air freight they are using this year. The 5 percent increase in air freight shipments handled during the first quarter, despite this decline in tonnage, reinforces that our customers do continue to ship, however,” he explained.
   “Historically, March is a very significant air freight month from a tonnage perspective. March 2012 was a notable exception,” Rose said. “It is also an anomaly when we experience both a strong reduction in year-over-year air freight tonnage and a margin contraction. Those who understand the nuances of this business will recognize that as a sign of what it is, a very atypical air freight environment.”
   Rose said the results “reflect full accrual of a $5.5 million fine levied by the European Commission the last week of March. We will also take this opportunity to reiterate what we announced when the EC disclosed the fine. We disagree with this decision. As we said then, we did not enter into any agreement that affected customer pricing in any way.”
   He added “our focus for the remainder of 2012 will be to aggressively expand our customer base and seek to extend our business reach with existing customers while implementing the kind of common sense cost control measures that we used in 2009.”