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Expeditors International of Washington posted third-quarter gains in profit and revenue as the logistics company capitalized on tight freight capacity and soaring prices.
The Seattle company said net income rose 88% to $359 million in the third quarter, or $2.09 diluted earnings per share, from $191.3 million, $1.12, in the same period a year earlier. Revenue soared by 84% to $4.3 billion in the third quarter from $2.3 billion a year earlier.
“There is simply not enough equipment, warehouse and pier space, or people in the locations where they are needed to meaningfully reduce the significant backlogs of cargo. Handling record volumes under these conditions has not been easy, but we continue to set records for company performance,” CEO Jeffrey Musser said in a statement Nov. 2.
Musser said the global supply chain is plagued by a crucial shortage of airfreight capacity due to a reduction of passenger belly space on international routes as airlines have cut schedules because of the COVID-19 pandemic.
“Despite increased utilization of air charters, there is insufficient capacity to meet the current high demand,” Musser said.
At the same time, ports are experiencing “unprecedented congestion” caused by labor and equipment shortages.
“The entire global infrastructure for the movement of cargo remains stretched beyond its limits. While certain ocean ports are particularly constrained, most notably on the U.S. West Coast, many of the current bottlenecks stem from supply and infrastructure issues that were building well before the pandemic,” Musser said.
The lockdowns, closures and spikes in demand for certain products that resulted from the pandemic “exposed and exacerbated those long-simmering issues. Unfortunately, there is no simple or immediate fix. As a result, we believe these current conditions are likely to last well into 2022,” he said.
But Expeditors has learned how to manage through the disruptions to operate profitably, said Chief Financial Officer Bradley Powell.
“While we are performing exceptionally well under these trying circumstances, I continue to caution that we are unable to predict how long the current conditions will persist or the impact they will have on our future operations,” Powell said.
The company reported $1.63 billion in airfreight service revenue, a 65.6% gain from the third quarter of 2020.
It logged $1.6 billion in ocean freight and services revenue, a 162% increase from the same period a year earlier.
Revenue for its customs brokerage and other services revenue jumped 44.6% to $1.1 billion.
The company continues to ramp up employment and now has a staff of 19,034, 7.3% higher than the end of Q3 2020. Most of the growth has been in North America and Europe.
Expeditors ranks No. 4 on the Transport Topics Top 50 list of the largest logistics companies in North America.
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