Business Segment Information

6 Months Ended

Jun. 30, 2021

Segment Reporting [Abstract]

Business Segment Information

Note 8. Business Segment Information

The Company is organized functionally in geographic operating segments. Accordingly, management focuses its attention on revenues, directly related cost of transportation and other expenses for each of the Company’s three primary sources of revenue, salaries and other operating expenses, operating income, identifiable assets, capital expenditures and equity generated in each of these geographical areas when evaluating the effectiveness of geographic management. Transactions among the Company’s various offices are conducted using the same arms-length pricing methodologies the Company uses when its offices transact business with independent agents. Certain costs are allocated among the segments based on the relative value of the underlying services, which can include allocation based on actual costs incurred or estimated cost plus a profit margin.

Financial information regarding the Company’s operations by geographic area is as follows:

	UNITED STATES		OTHER NORTH AMERICA		LATIN AMERICA		NORTH ASIA		SOUTH ASIA		EUROPE		MIDDLE EAST, AFRICA AND INDIA		ELIMI- NATIONS			CONSOLI- DATED
For the three months ended June 30, 2021:
Revenues	$	997,567		101,465		46,981		1,309,382		417,718		544,949		192,186		(1,155	)		3,609,093
Directly related cost of transportation    and other expenses1	$	566,882		59,311		25,952		1,086,641		335,219		376,856		148,290		(518	)		2,598,633
Salaries and other operating expenses2	$	241,121		31,300		14,735		106,812		49,046		123,408		34,026		(633	)		599,815
Operating income	$	189,564		10,854		6,294		115,929		33,453		44,685		9,870		(4	)		410,645
Identifiable assets at period end	$	2,972,363		196,558		102,296		1,114,475		377,370		929,706		291,406		(31,003	)		5,953,171
Capital expenditures	$	2,905		64		72		400		532		2,100		466		—			6,539
Equity	$	2,163,114		80,802		36,316		318,111		146,583		255,006		128,148		(44,429	)		3,083,651
For the three months ended June 30, 2020:
Revenues	$	639,226		73,679		37,553		984,715		217,152		358,060		101,571		(878	)		2,411,078
Directly related cost of transportation    and other expenses1	$	354,619		40,814		22,701		775,572		153,194		242,170		72,868		(451	)		1,661,487
Salaries and other operating expenses2	$	207,703		25,283		12,112		97,171		39,184		95,757		25,188		(433	)		501,965
Operating income	$	76,904		7,582		2,740		111,972		24,774		20,133		3,515		6			247,626
Identifiable assets at period end	$	1,886,463		170,873		72,912		669,335		213,007		581,988		221,381		(5,782	)		3,810,177
Capital expenditures	$	19,076		1,148		216		385		182		993		114		—			22,114
Equity	$	1,399,124		71,165		29,758		306,022		108,777		168,060		116,279		(37,587	)		2,161,598
	UNITED STATES		OTHER NORTH AMERICA		LATIN AMERICA		NORTH ASIA		SOUTH ASIA		EUROPE		MIDDLE EAST, AFRICA AND INDIA		ELIMI- NATIONS			CONSOLI- DATED
For the six months ended June 30, 2021:
Revenues	$	1,872,957		195,582		91,845		2,518,430		767,484		1,011,282		352,692		(2,359	)		6,807,913
Directly related cost of transportation    and other expenses1	$	1,069,517		112,361		52,652		2,054,170		605,163		683,765		269,399		(1,110	)		4,845,917
Salaries and other operating expenses2	$	479,819		57,037		27,112		213,732		92,211		232,863		64,301		(1,239	)		1,165,836
Operating income	$	323,621		26,184		12,081		250,528		70,110		94,654		18,992		(10	)		796,160
Identifiable assets at period end	$	2,972,363		196,558		102,296		1,114,475		377,370		929,706		291,406		(31,003	)		5,953,171
Capital expenditures	$	5,930		186		125		757		1,111		5,654		1,167		—			14,930
Equity	$	2,163,114		80,802		36,316		318,111		146,583		255,006		128,148		(44,429	)		3,083,651
For the six months ended June 30, 2020:
Revenues	$	1,289,631		154,910		75,444		1,481,872		383,233		665,020		206,553		(1,818	)		4,254,845
Directly related cost of transportation    and other expenses1	$	728,578		86,104		46,467		1,160,075		271,515		450,488		147,787		(896	)		2,890,118
Salaries and other operating expenses2	$	433,647		48,995		23,861		154,604		69,092		177,611		51,138		(902	)		958,046
Operating income	$	127,406		19,811		5,116		167,193		42,626		36,921		7,628		(20	)		406,681
Identifiable assets at period end	$	1,886,463		170,873		72,912		669,335		213,007		581,988		221,381		(5,782	)		3,810,177
Capital expenditures	$	23,573		1,209		318		710		370		1,638		423		—			28,241
Equity	$	1,399,124		71,165		29,758		306,022		108,777		168,060		116,279		(37,587	)		2,161,598

¹ Directly related cost of transportation and other expenses totals operating expenses from airfreight services, ocean freight and ocean services and customs brokerage and other services as shown in the condensed consolidated statements of earnings.

² Salaries and other operating expenses totals salaries and related, rent and occupancy, depreciation and amortization, selling and promotion and other as shown in the condensed consolidated statements of earnings.

^{3 See Note 9 - Correction of Immaterial Errors.}

The Company’s consolidated financial results in the three and six months ended June 30, 2021 and 2020 were each significantly impacted by the effects of the global pandemic in divergent ways. In the first and second quarter of 2021, the Company experienced strong volumes and high average sell and buy rates as a result of imbalances between demand and carrier capacity and continuing effects of disruptions in supply chains originating in measures to combat the pandemic in 2020.

This is in contrast with slower activity in North Asia in the first quarter of 2020 as the pandemic resulted in temporary closures and limited operations in the Company’s China offices. Shipments were also rerouted or delayed by customers and service providers as they were taking their own precautionary measures. This was followed by significant increases in airfreight services revenues and related expenses, in the second quarter of 2020, as a result of demand for time-sensitive delivery of technology equipment and medical equipment and supplies from China, which combined with reductions in airfreight supply resulted in significantly higher average buy and sell rates.

These impacts are affecting all of the Company’s geographical segments and most notably the year-over-year comparability of the North Asia segment. For the three months ended June 30, 2021 and 2020, the People's Republic of China, including Hong Kong, represented 29% and 34%, respectively, of the Company’s total revenues and 22% and 38%, respectively, of the total operating income. For the six months ended June 30, 2021 and 2020, the People's Republic of China, including Hong Kong, represented 29% of the Company’s total revenues and 24% and 33%, respectively, of the total operating income.