Server: Microsoft-IIS/3.0 Date: Thu, 20 Nov 1997 17:32:34 GMT Content-Type: text/html Accept-Ranges: bytes Last-Modified: Wed, 20 Aug 1997 15:10:32 GMT Content-Length: 12420 Eagle USA Company News - News Stories (March 10, 1997)
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    Eagle USA Flying High, Posting Record Profits and Planning Overseas Business

    - Traffic World via Knight-Ridder, March 10, 1997

    
    
    
    
    
    
    
    
    Eagle USA Airfreight has found a niche that many believe was already saturated--
    
    the U.S. domestic forwarding market.
    
    

    Although Eagle competes with hundreds of small to midsized forwarders, as well as the big five multinational logistics companies, the company has managed to win some very substantial contracts from a growing list of Fortune 500 companies including Compaq, Motorola and Ford.

    Founded in 1984, Eagle started out slowly. The company went public in December 1995 and has since posted record revenue and profits, both ticking at above the 65 percent growth mark.

    Business has been extremely good for Eagle, posting $4.5 million in net income for the first quarter of 1997, up 78 percent over last year. Revenue grew 66 percent to $67.6 million for the quarter ended Dec. 31.

    Eagle's biggest challenge may come later this year as it attempts to break its mold as a domestic forwarder and gain some of the sought-after international business.

    Eagle has 51 terminals in the U.S. with plans to add 12 to 15 more by the end of the year and reach an eventual total of 91. The company has 10 international gateways today and is cautiously attempting to increase its presence overseas.

    "International business isn't critical, but it is a strategy we are pursuing," said James R. Crane, chief executive officer of Eagle and recently named Houston's entrepreneur of the year for 1996. "We don't want to stagnate. Long-term, we know we are going to need to offer a wider range of services as companies continue to reduce the number of forwarders they use."

    None of the other small domestic forwarders have ever done both well, Crane said. "We've done our homework. A lot of agents in Asia and Europe have a desire to do business with us because we have a good network."

    Crane likes the idea of being able to have exclusive arrangements with foreign agents, but the pool of good agents is shrinking. Like Fritz, Expeditors and AEI, Eagle is hoping eventually to purchase its agents outright.

    Once the international operation is up and running, Eagle will operate two different profit centers with separate sales teams to better track the international business.

    Crane predicts the company will generate $25 million in international sales, less than 9 percent of the $280 million in revenue he sees for 1997. In 1996, the company posted revenue of $185.4 million, up 46.9 percent over 1995's $126.2 million in revenue.

    The international growth strategy will force Eagle to compete with the likes of AEI, Expeditors and Fritz on a regular basis, something it mostly has been able to avoid as a domestic forwarder. Its real competition comes from other midsized forwarders such as Seko Worldwide, Pilot Air Freight and Associated Global.

    The difference is "they have been in the game a long time and haven't grown their business," Crane said. Many midsized forwarders operate as franchises, rather than as a centrally run company, making the enforcement of standards and computerization more difficult, he said. Another advantage is being a publicly held company. "It has given us a lot of credibility. Our customers can see our numbers, feel us, touch us. It has given us new financial stability, while a lot of others look quite shaky," he said.

    Eagle USA also boasts low operating costs, giving it a pricing advantage over integrated carriers like Burlington Air Express and Emery, he said.

    Eagle relies on common carriage and domestic all-cargo lift to move its freight.

    "Our service is as good or better than the integrators," Crane said. "If we can't perform and live up to our time guarantees, we'll lose the account."

    Therefore, Eagle uses only airlines that want to be in the cargo business.

    Eagle is one of the biggest accounts of Continental Airlines, Delta Air Lines and United Airlines. It also is a big user of lift from American International Freight and Kitty Hawk.

    "Cargo carriers are either with you or against you. If their service isn't that good and they haven't shown any loyalty," Crane said, he takes his growing business elsewhere.



    
    
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