Watch Now


Expeditors paying more to move freight but has solid quarter

CEO talks about a market he says he has never experienced before

Photo: Jim Allen/FreightWaves

By this point in the earnings cycle, the trends are firmly established with what most transportation companies experienced in their finances during the prior quarter. Expeditors International (NASDAQ: EXPD) is no different.

The asset-light logistics company, which is a member of the Dow Jones Transportation Average and which is a “dividend aristocrat” with 25 years of annual increases in payouts to shareholders, topped Wall Street estimates for both earnings per share and revenue. GAAP EPS came in at $1.67; Wall Street consensus had put it 61 cents less than that, according to Seeking Alpha. Revenue of $3.36 billion beat consensus forecasts by $640 million.

Expeditors does not conduct a conference call with analysts. In the prepared statement accompanying the earnings, Expeditors President and CEO Jeffrey Musser said, “Never before in our experience has capacity been so scarce in both air and ocean at the same time.” 

He added, “We are doing everything we can to leverage the strength of our carrier relationships in order to secure space for our customers.” 


The revenue of $3.36 billion was up 77% compared to the first quarter of last year. The most notable change from the prior year was that salaries and other operating expenses rose only 24% while the direct costs of transportation rose 87%. 

The end result was operating income of $385.5 million, a 142% increase over the first quarter of last year. Net earnings attributable to shareholders were up 135% to $287.2 million.

The relatively modest increase in salary expenses came as the headcount of the company fell slightly, to 18,065 from 18,102 in the first quarter of last year. In his comments, Musser said Expeditors had not laid off any employees as a result of the pandemic. 

The increase in tonnage handled by Expeditors was relatively consistent across the board, with the exception of ocean freight rising 54% in March. Beyond that, the year-on-year increase was generally between 20% and 35% for all months, with a full-quarter increase in tonnage of 29% for both airfreight and ocean freight. 


A breakdown of expenses at Expeditors shows just how much costs to move freight have risen. The quarter-on-quarter comparison for ocean freight expenses rose to $746.7 million from $366.5 million. Airfreight expenses soared to $1.1 billion from $520.1 million. Customs brokerage climbed to $553.7 million from $400 million. 

In his comments, Musser reviewed the landscape for a company like Expeditors that is a major purchaser of both airfreight and ocean freight services. 

“We expect the operating environment to remain unsettled as long as constrained capacity and other disruptions, such as port congestion, the uneven lifting of pandemic restrictions and rising fuel costs continue to impact the movement of freight,” he said. “History tells us that the supply/demand imbalance and rate volatility will stabilize over time. However, if the global response to COVID-19 has taught us anything, it is that conditions can change rapidly in today’s interconnected marketplace.”

More articles by John Kingston

TA lost money in the quarter but most measurements were improved

With AB5 about to roil California trucking, industry ponders next step

Fragmented factoring business may soon shift toward larger players


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.