Expeditors International of Washington, Inc.

What they do

Expeditors provides airfreight consolidation and forwarding, ocean freight consolidation and forwarding, customs brokerage, warehousing and distribution, order management, time-definite transportation, temperature-controlled transit, cargo insurance and related supply chain solutions. It does not compete for overnight courier or small parcel business and does not own aircraft or ships. As an indirect carrier it issues House Airway Bills, House Ocean Bills of Lading or House Sea Waybills to customers and receives Master Airway Bills or Master Ocean Bills of Lading from the direct carriers. Operations are managed across five geographic areas: Americas; North Asia; South Asia; Europe; and Middle East, Africa and India (MAIR).

Revenue drivers

• Airfreight services — Expeditors buys cargo capacity from airlines on a volume basis and resells it, acting as either a consolidator or an agent for the airline. Revenue is driven by volume, sell rates and buy rates; in Q2 2026 airfreight tonnage rose 14% year over year, with management citing heavy AI hyperscaler and North Asia e-commerce demand for freighter space.
• Ocean freight and ocean services — Includes ocean freight consolidation, direct ocean forwarding and order management, with both full container load and less-than-container load freight. Q2 2026 ocean container volume was flat versus the prior year quarter but rose 7% sequentially from Q1 2026, and profitability per container increased.
• Customs brokerage and other services — Destination services including customs clearance, documentation filing, duty and tax payment, inspections, local pickup, storage and delivery, plus warehousing, distribution and time-definite transportation. Management reported double-digit revenue growth in Customs, Transcon, Distribution and Order Management for a second consecutive quarter in Q2 2026.
• North Asia region — The largest export-oriented region, accounting for 25% of revenues, 30% of directly related cost of transportation and other expenses and 21% of operating income for the year ended December 31, 2025.

Recent performance

Second quarter 2026 revenues increased 32% to $3.5 billion, compared with $2.78 billion in Q1 2026 and $2.86 billion in Q4 2025. Net earnings attributable to shareholders rose 45% to $266 million and diluted EPS rose 51% to $2.03. Operating income increased 41% to $350 million. Airfreight tonnage rose 14% year over year and 16% sequentially, while ocean container volume was flat year over year. Cash returned to shareholders was $461 million in the quarter and $748 million for the year-to-date period through share repurchases and dividends. Full year 2025 revenue was $11.07 billion with net income of $810.3 million and diluted EPS of $5.95.

Strategy

Management describes a strategy around operational excellence and taking market share by focusing on growth in each region, product and district, with sales, account management and operations teams executing globally. In July 2026 the company announced expansion of its Critical Logistics Services to include expanded global Aircraft on Ground capabilities, strengthening its presence in time-critical aviation and aerospace logistics. It continues to invest in facilities to expand capacity for temperature-controlled solutions. The company states it is targeting high-growth markets to serve a more diverse range of customer needs.

Risks

• Tariff and trade policy volatility — Changing trade tariffs through 2025 shifted trade volumes to different locations and caused importers and exporters to manage shipment timing in anticipation of higher tariffs, creating volatility in average sell and buy rates.
• Air capacity and rate pressure — Management noted air buy and sell rates were highly elevated in Q2 2026 as demand outpaced available space, driven by reduced passenger flights and constrained belly capacity due to conflict in the Middle East, alongside rising fuel costs and routing challenges for air carriers.
• Geographic and geopolitical concentration — North Asia is the largest and most export-oriented region, at 25% of 2025 revenues, and the company's results depend on trade lanes such as Asia-U.S. and Asia-Europe remaining relatively unaffected by conflict.
• Ocean market downturn — The ocean market has been in a long downturn, and management described Q2 2026 as possibly the start of a flattening, with volumes rising sequentially for the first time since the third quarter of 2025.

Outlook

Management said the ongoing heavy demand from AI hyperscalers shows no sign of slowing and that it has seen increased demand for freighter space as some hyperscalers require upper-deck access for servers. E-commerce out of North Asia has been climbing closer to levels before the U.S. government began restricting de minimis entries in Q2 2025, putting further pressure on capacity and rates. On ocean, management said carriers have adapted well and managed capacity carefully, driving rate increases late in the quarter, and the company may be starting to see a flattening of the long ocean market downturn. Management cautioned that given the geopolitical state of the world, rising fuel costs, tight capacity and routing challenges, air carriers are under enormous strain and may continue to be for some time.