Expeditors International did well in the air in the first quarter, but not as well on the open seas.
In a quarterly earnings report that was overall strong, the difference in shipments as measured by weight was stark.
Airfreight tonnage in kilos at Expeditors (NYSE: EXPD) rose 7% in January, 7% in February and 3% in March, for an overall gain of 5% compared to the corresponding quarter of 2025.
The ocean freight performance was the inverse. As measured in forty foot equivalents, volume fell 2% in January, 7% in February and 4% in March, for an overall decline of 4% compared to 2025’s first quarter.
Expeditors does not conduct an earnings call with analysts. But its prepared statement on its earnings has relatively extensive commentary from its management team.
CEO Daniel Wall said airfreight margins in the first quarter were stronger than in the fourth quarter of 2025.
The higher per-kilo profitability resulted, Wall said, “from higher rates and a more stable balance between sell and buy pricing for the first two months of the quarter, as air capacity was less constrained until the conflict in the Middle East began.”
The increase in air tonnage featured demand from technology customers, who provided strong demand, Wall said.
Imbalance in the ocean
As for ocean freight, “the imbalance of global capacity versus demand, which we began to see in the latter half of 2025, continued to impact the ocean industry and led to a decline in our ocean revenues.”
Volume was not the only component that declined in the quarter for ocean freight, Wall said. Pricing was down too. “We were impacted by lower average profitability per-container and volume, primarily on exports from Asia,” according to Wall. “However, with favorable buy rates and disciplined cost control, we partially offset top-line pressure.”
The earnings announcement singled out the company’s performance in customs brokerage. “Higher entry volumes and complexity, along with tariff-related activity, drove revenue increases in our customs brokerage business,” Wall said. “In addition, disciplined cost control and pricing increases led to higher gross margins, both sequentially and year-over-year.
Expeditors benefitted from the fact that its cost of securing transportation rose 2%, but its revenues were up by 4%.
Bottom line was improved
It was squeezed by salaries which rose 9% from a year earlier. But that was not enough to offset other strong areas and operating income rose 11% to $294.8 million from $265.8 million. Diluted earnings per share rose to $1.71 from $1.47 a year earlier.
Expeditors’ stock rose on the earnings announcement. At approximately 1:45 p.m. EDT, Expeditors was up $8.47 to $148.18, a gain of 6.06%.
According to SeekingAlpha, the consensus forecast on the company’s EPS was 37 cents less than where it came in at $1.71. Revenue of $2.78 billion beat the consensus forecast by $160 million.
The stock is up about 31.5% in the last 12 months. Its 52-week high of $167.19 was set on February 3.
Expeditors is a company that has continued to add headcount. It climbed to 20,361 in the first quarter from 19,203 a year earlier. Employment in every region listed by Expeditors rose; only corporate headcount declined over the course of the 12 months.
In the prepared announcement, CFO David Hackett said the “strategic investment in headcount (was) aimed at higher-growth opportunities, particularly in customs brokerage, as well as essential investments in technology, including artificial intelligence. “
“We are starting to achieve benefits from these investments, which are helping to drive our productivity gains,” Hackett said.
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