This Industry Leader Has An Interesting Strategy

It is impossible for its competitors to earn the same profit margins.

Expeditors International of Washington (EXPD) is a global logistics company. Customers use its services to move of goods all over the world. Its main customers are retailers, electronics and manufacturing. The customer base is well diversified with no company being worth more than 5% of sales.

The company has a global network offering complete logistics services. They own no trucks or airplanes instead rely on buying transportation space in bulk and reselling to customers. Even with the middle man customers receive lower rates than if purchased directly from each carrier.

The company is considered asset light since it owns no airplanes, ships or trucks. The competitors such as C.H. Robinson Worldwide and Landstar System earn lower profit margins since they have the extract expense of equipment and maintenance. This is shown in the profit margin comparison where Expeditors earns 7.1% verse around 4% for C.H. Robinson and Landstar.

If you are going to invest in the logistics business pick the one with higher profit margins and superior business model.

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Disclosure: I wrote this article myself, and it expresses my own opinions. I have no business relationship with any company whose stock is mentioned in this article. The information provided should NOT be considered advice. The topics discussed are risky and have the potential to lose a substantial amount. I am not an investment professional and therefore do not offer individual financial advice. Please do your own research before investing.

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