Expeditors International of Washington, Inc., incorporated on May 1979, is engaged in the business of providing global logistics services. The Company offers its customers a network supporting the movement and positioning of goods. Its services include the consolidation or forwarding of air and ocean freight. It also acts as a customs broker. The Company also provides additional services, including distribution management, vendor consolidation, cargo insurance, purchase order management and customized logistics information.
During the year ended December 31, 2009, airfreight 35% of the Company’s consolidated revenues net of freight consolidation expenses (net revenues) respectively. When performing airfreight services, the Company acts as a freight consolidator or as an agent for the airline, which carries the shipment. When acting as a freight consolidator, the Company purchases cargo space from airlines on a volume basis and resells space to its customers at lower rates than the customers could obtain directly from airlines. When moving shipments between points where the volume of business does not facilitate consolidation, the Company receives and forwards individual shipments as the agent of the airline, which carries the shipment.
In its airfreight forwarding operations, the Company procures shipments from its customers, determines the routing, consolidates shipments bound for a particular airport distribution point, and selects the airline for transportation to the distribution point. At the distribution point, the Company or its 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 deliver shipments from a Company warehouse at the origin to the airline after consolidating the freight into containers or onto pallets. Shipments arrive at the destination distribution point within 48 hours after such delivery. The Company also performs breakbulk services which involve receiving and breaking down consolidated airfreight lots and arranging for distribution of the individual shipments. Breakbulk service revenues also include commissions from agents for airfreight shipments.