World Fuel Services 2004 Annual Report Download - page 15

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Description of Business
Our principal business consists of providing marine fuel services to a broad base of international shipping companies and
to the United States and foreign governments, and aviation fuel services to passenger, cargo and charter airlines, as well as
corporate customers and the United States and foreign governments. We currently employ 606 people worldwide, of which
218 are employed in our marine fuel services business, 267 are employed in our aviation fuel services business, and 121 are
employed in corporate.
Marine Fuel Services
We market marine fuel and related services to a broad base of customers, including international container and tanker
fleets, and time charter operators, as well as to the United States and foreign governments. Marine fuel and related services are
provided throughout most of the world under the following trade names: World Fuel, Trans-Tec, Bunkerfuels, Oil Shipping,
Marine Energy, Norse Bunker, Casa Petro, and Tramp Oil.
Through our extensive network of strategically located sales offices, we provide our customers global market intelligence
and rapid access to quality and competitively priced marine fuel, 24-hours a day, every day of the year. Our marine related
services include management services for the procurement of fuel, cost control through the use of price hedging instruments,
quality control and claims management. Our customers need cost effective and professional fuel services because the cost of
fuel is a major component of a vessel’ s operating overhead.
As an increasing number of ship owners, time charter operators, and suppliers continue to outsource their marine fuel
purchasing and/or marketing needs, our value added services have become an integral part of the oil and transportation
industries’ push to shed non-core functions and reduce costs. Suppliers use our global sales, marketing and financial
infrastructure to sell a spot or ratable volume of product to a diverse, international purchasing community. End customers use
our real time analysis of the availability, quality, and price of marine fuels in ports worldwide to maximize their competitive
position.
In our marine operations, we primarily act as a reseller. When acting as a reseller, we purchase fuel from a supplier, mark
it up, and resell the fuel to a customer. We extend unsecured credit to most of our customers. We also act as a broker and as a
source of market information for the end user, negotiate the transaction by arranging the fuel purchase contract between the
supplier and the end user, and expedite the arrangements for the delivery of fuel. For this service, we are paid a commission
from the supplier.
We purchase our marine fuel from suppliers worldwide. Our cost of fuel is generally tied to spot pricing, market-based
formulas or is governmentally controlled. We are usually extended unsecured trade credit from our suppliers for our fuel
purchases. However, certain suppliers require us to provide a letter of credit. We may prepay our fuel purchases to take
advantage of financial discounts, when limited by amount of credit extended to us by suppliers or as required to transact
business in certain countries.
Because we arrange to have fuel delivered by our suppliers directly to our customers, inventory is maintained only for
competitive reasons and at minimum operating levels. Currently, inventory is maintained at two seaport locations in the
United Kingdom. We have arrangements with our suppliers and other third parties for the storage and delivery of fuel.
We utilize subcontractors to provide various services to customers, including fueling of vessels in port and at sea, and
transportation of fuel and fuel products.
During each of the periods presented in the accompanying consolidated statements of income, none of our marine
customers accounted for more than 10% of total consolidated revenue.
Aviation Fuel Services
We market aviation fuel and related services to passenger, cargo and charter airlines, as well as corporate customers and
the United States and foreign governments. Our aviation related services include fuel management, price risk management,
flight plans, weather reports, ground handling, and flight permits. We have developed an extensive network that enables us to
provide aviation fuel and related services throughout most of the world under the following trade names: World Fuel,
Baseops, Airdata, PetroServicios de Mexico, and PetroServicios de Costa Rica.
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