EGL said that March has traditionally reflected a sharp increase in activity, as compared to January or February, by as much as 20% in the last two years. This year, however, March reflected a 2% decline in North American priority shipments compared to January levels, while deferred shipments grew 1%.
EGL also said that some customers began converting shipments from air to ground during the quarter, in order to cut freight transport costs. Priority shipments in North America – typically moved by air – declined by 7% in the first quarter from a year ago, said EGL, while deferred shipments – mostly moved on the ground – increased 7%.
“We are seeing the impact of the weak economy on our business,” said Elijio Serrano, EGL’s CFO. “It is unlikely that we will be able to achieve our previous 2001 earnings, revenue and other forecasts. The uncertainty concerning the duration of the economic slowdown makes it extremely difficult to forecast future financial results.”
“We did not see sufficient new bid activity or market share gains in the first quarter to offset the effects of the slowing economy,” added James R. Crane, EGL’s chairman and CEO. “We remain confident that we will continue to add business from new and existing customers.”
