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Mar 2, 2016
Air and Sea Freight

Despite tough global trade conditions, air freight and sea cargo facing toughest time, Expeditors International saw profit grow

Last three months of 2015 were one of the best times for Expeditors International of Washington, the Seattle-based global logistics firm, which despite of tough international trade conditions, managed to earn 20 percent more profit than previous years. Sea and Air cargo to Pakistan and other parts of the world is facing some serious decline for quite some time now.

Expeditors’ senior vice president and chief financial officer, Bradley S. Powell said in a statement that “in the fourth quarter, we continued to benefit from available ocean and air carrier capacity and favorable sport market buying opportunities.”

In his statement the President and CEO Jeffrey S. Musser said “a more finessed business plan also played a part, throughout 2015, we further implemented our strategic plan to align more closely with opportunities and focus on growing our businesses.”

Year-over-year air freight forwarding tonnage of Expeditors has fallen 1 percent in fourth quarter, it consequently dragged airfreight service revenue to $679.7 million with a 12.8 percent down. Sea cargo forwarding volume went down 2 percent year-over-year, consequently, declining the ocean services revenue to $491.5 million with a 13.5 percent down in fourth quarter.

According to the International Air Transport Association, sluggish trade growth in Asia-Pacific and Europe is the main reason behind the 2.2 percent year-over-year growth in global air cargo traffic increase in 2015.

According to Stifel, an equity research firm, volume growth expectations for the first half of 2016 is hard to predict and remain modest. The sea cargo volume also seemed to moderate through the fourth quarter with minimal growth in ocean cargo traffic. Since the second quarter of 2015 the inventories remain high and capacity continues to outpace demand, says Stifel.

Powell said in a statement that “it’s a rapidly changing environment. Looking forward, we are aware of the uncertainties and challenges with the global economy and global trade, and how that may impact the comparisons to our 2015 financial results.”

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