Profile: UTi Worldwide Inc (UTIW.OQ)
6 Mar 2014
UTi Worldwide Inc., incorporated on January 30, 1995, is a holding company. The Company is an international, non-asset-based supply chain services and solutions company, which provides services through a network of offices and contract logistics centers. As of January 31, 2012, the Company operated a global network of freight forwarding offices and contract logistics and distribution centers in a total of 59 countries. In addition, it serves its clients in 83 additional countries through independent agent-owned offices. Its services include air and ocean freight forwarding, contract logistics, customs brokerage, distribution, inbound logistics, truckload brokerage and other supply chain management services, including consulting, the coordination of purchase orders and customized management services. Through its supply chain planning and optimization services, it assists its clients in designing and implementing solutions. The Company operates in two segments: Freight Forwarding, and Contract Logistics and Distribution. The Freight Forwarding segment includes airfreight forwarding, ocean freight forwarding, customs brokerage and other related services. The Contract Logistics and Distribution segment includes all operations providing contract logistics, distribution and other related services. Effective October 31, 2011, the Company completed the acquisition of UTi Logistics Israel, Ltd. (UTi Israel).
Freight Forwarding Segment
As a freight forwarder, the Company conducts business as an indirect carrier for its clients or occasionally as an authorized agent for airlines and ocean carriers. It acts as an indirect carrier with respect to shipments of freight. When it acts as an indirect carrier with respect to shipments of freight, it issues a House Airway Bill (HAWB) or a House Ocean Bill of Lading (HOBL) to its customers as the contract of carriage. When it tenders the freight to the airline or ocean carrier (the direct carrier), it receives a contract of carriage known as a Master Airway Bill for airfreight shipments and a Master Ocean Bill of Lading for ocean shipments. It does not own or operate aircraft or vessels and consequently, contract with commercial carriers to arrange for the shipment of cargo. Its freight forwarding business is conducted through non-committed space allocations with carriers. It arranges for, and provides, pick-up and delivery service between the carrier and the location of the shipper or recipient.
When the Company acts as an authorized agent for the airline or ocean carrier, it arranges for the transportation of individual shipments directly with the airline or ocean carrier. In these instances, as compensation for arranging for the shipments, the carriers pay the Company a commission. If it provides the client with ancillary services, such as the preparation of export documentation, it receives an additional fee. During the fiscal year ended January 31, 2012 (fiscal 2012), airfreight forwarding services accounted for approximately 35% of its consolidated revenues. During fiscal 2012, ocean freight forwarding services accounted for approximately 25% of its consolidated revenues.
As part of the Company's freight forwarding services, it provides customs brokerage services in the United States (U.S.) and other countries in which it operates. It provides customs brokerage services in connection with a majority of the shipments, which it handles as both an air and ocean freight forwarder. It also provide customs brokerage services in connection with shipments forwarded by its competitors. In addition, other companies may provide customs brokerage services in connection with the shipments, which it forwards.
As part of the Company’s customs brokerage services, it prepares and file formal documentation required for clearance through customs agencies, obtain customs bonds, facilitate the payment of import duties on behalf of the importer, arrange for payment of collect freight charges, assist with determining and obtaining the commodity classifications for shipments and perform other related services. It determines its fees for its customs brokerage services based on the volume of business transactions for a particular client, and the type, number and complexity of services provided. Revenues from customs brokerage and related services are recognized upon completion of the services. During fiscal 2012, customs brokerage services accounted for approximately 3% of its consolidated revenues. Other revenue in its freight forwarding segment is consisted of international road freight shipments. During fiscal 2012, other revenue within its freight forwarding services accounted for approximately 6% of its consolidated revenues.
Contract Logistics and Distribution Segment
The Company’s contract logistics services relate to value-added warehousing and the subsequent distribution of goods and materials in order to meet clients’ inventory needs and production or distribution schedules. Its services include receiving, deconsolidation and decontainerization, sorting, put away, consolidation, assembly, cargo loading and unloading, assembly of freight and protective packaging, warehousing services, order management, and customized distribution and inventory management services. Its outsourced services include inspection services, quality centers and manufacturing support. Its inventory management services include materials sourcing services pursuant to contractual, formalized repackaging programs and materials sourcing agreements. Contract logistics revenues are recognized when the service has been completed in the ordinary course of business. During fiscal 2012, contract logistics services accounted for approximately 17% of its consolidated revenues.
The Company provides a range of distribution, consultation, outsourced management services, planning and optimization services, and other supply chain management services. During fiscal 2012, distribution services accounted for approximately 11% of its consolidated revenues. It receives fees for the other supply chain management services, which it performs. During fiscal 2012, other services within its contract logistics and distribution segment consist of supply chain management services, and accounted for approximately 3%of its consolidated revenues.
UTi Worldwide Inc
c/o UTi, Services, Inc. Suite 15
LONG BEACH CA 90802