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Volume weakness at Expeditors continues, but rate of decline slows

Earnings fell short of consensus, and Wall Street sold off the stock

Year-on-year volumes continued to slide at Expeditors, but the pace of the declines is slowing. (Photo: Shutterstock)

Expeditors International’s slide in volume continued in the fourth quarter but showed improvement by the end of the period.

Expeditors (NYSE: EXPD) does not disclose actual volumes in its quarterly earnings report. But the air- and ocean-focused brokerage and forwarder does provide volume changes from the year-ago period.


In North America, airfreight as measured in kilograms was down 6% in October and November 2023 but was up 3% in December. Ocean freight measured in forty-foot equivalent units was down 12% in October, 10% in November and 7% in December.

The end result was that airfreight volume declined 3% for the quarter. Ocean freight was down 10%.


Since no shipment volumes are disclosed by Expeditors, sequential comparisons can’t be made. But comparing the year-on-year declines in Q4 against those of the first three quarters of 2023 suggests that the slide in volumes that went on all year may be coming to an end.

In the third quarter, the year-on-year declines were 14% for airfreight and 15% for ocean. The second-quarter figures were negative 15% and negative 13%, respectively. The first quarter was negative 6% for airfreight and negative 26% for ocean freight.

Expeditors’ earnings per share at $1.09 were down 22% from a year earlier when they were $1.39. According to SeekingAlpha, the $1.09 figure came in 13 cents per share less than consensus. Revenue of $2.3 billion was off by just $10 million.

The reaction to the earnings on Wall Street was swift and negative. At 10:50 a.m., Expeditors’ stock was down 5.67% to $117.12, near the low of the day. In the past 52 weeks, Expeditors’ stock is up 4.4%. Its 52-week high is $131.17, recorded on Jan. 25.


The overall weakness led to significant declines in earnings and revenue. Fourth-quarter revenues of $2.277 billion were down 34% from a year earlier. The cost of transportation secured by Expeditors fell even more, down 38% to $1.51 billion from $2.43 billion. But the amount spent on transportation by Expeditors rose from the third quarter when it was $1.4 billion.

Operating income fell to just under $200 million, down 40% in the corresponding quarter of 2022.  

Expeditors does not have an earnings call with analysts. In comments released alongside the earnings, CEO Jeffrey Musser said Expeditors “continue[s] to face further market uncertainty due to the current conflicts in the Middle East and on the Red Sea.

“Further, volumes and capacity have remained uncertain due to additional capacity recently brought into the marketplace, while shippers have cautiously sought to avoid overextending their inventory levels. These factors created an environment where rates, which had fallen fairly significantly from the pandemic period, stabilized in ocean and, in the case of air, increased in the fourth quarter of 2023.”

In the quarter, salaries and “other operating expenses” declined 18%, down to $564.8 million from $686.3 million. That is significantly less than the decline in revenue.

In the prepared statement, CFO Bradley Powell said the company’s expenses are “still high when compared to our efficiency target and we are working to bring expenses down further.”

Expeditors is “not as efficient as we need to be for the current environment of excess capacity, weak demand, soft rates and economic uncertainty,” Powell said.

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One Comment

  1. Stephen

    Quite an 8K, this one is. Their business has essentially been cut in half, and they still managed to spin off $160 million in Q4 cash. Revenues dropping a lot faster than volumes, which tells us that rates must’ve absolutely cratered y/y.

    Good to see they are sitting on $3 billion in liquid assets even after a difficult year like 2023. The balance sheet is a fortress, the customer base is still moving freight at a pretty steady clip. EXPD is a very well managed company.

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John Kingston

John has an almost 40-year career covering commodities, most of the time at S&P Global Platts. He created the Dated Brent benchmark, now the world’s most important crude oil marker. He was Director of Oil, Director of News, the editor in chief of Platts Oilgram News and the “talking head” for Platts on numerous media outlets, including CNBC, Fox Business and Canada’s BNN. He covered metals before joining Platts and then spent a year running Platts’ metals business as well. He was awarded the International Association of Energy Economics Award for Excellence in Written Journalism in 2015. In 2010, he won two Corporate Achievement Awards from McGraw-Hill, an extremely rare accomplishment, one for steering coverage of the BP Deepwater Horizon disaster and the other for the launch of a public affairs television show, Platts Energy Week.