Air and Ocean Demand Showing Signs of Normalization, but Expeditors' Q2 Margins Excellent

Despite lingering headwinds from the early 2022 cyberattack and signs of demand normalization, Expeditors International posted another solid top-line and margin performance. Gross revenue rose 28% year over year on soaring fuel surcharge pass-through and as the firm's sell rates to shippers continued to benefit from supply chain disruption. The air and ocean capacity crunch is showing signs of easing, but we suspect the supply/demand balance is still firm; global forwarders like Expeditors perform well during periods of tight supply from carriers.