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Expeditors International of Washington Inc EXPD

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Morningstar’s Analysis

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Air and Ocean Demand Continues to Surge in Expeditors’ Q3; Margins at Record Levels

Matthew Young, CFA Equity Analyst

Analyst Note

| Matthew Young, CFA |

Wide-moat Expeditors International’s third-quarter gross revenue soared 84% year over year--once again above our expectations, as air and ocean activity (and underlying pricing) continues to surge. Strong growth stems in part from an easy comparison (initial pandemic disruption), but underlying demand remains robust thanks to the pandemic-driven spike in retailer restocking (in the United States and Europe), which is leading to unusually strong imports from Asia-Pacific. Airfreight tonnage rose 28% year over year, while ocean freight volume rose 15%. At the same time, sell rates to shippers for airfreight (especially out of North Asia) have spiked on constrained capacity linked to robust demand and limited belly space available among commercial airlines. Sell rates on ocean freight have also soared on carrier capacity imbalances and heavy West Coast port congestion.

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Company Profile

Business Description

Expeditors International of Washington is a non-asset-based third-party logistics provider, mainly focused on international freight forwarding. It employs sophisticated IT systems and contracts with airlines and ocean carriers to move customers' freight across the globe. The firm operates more than 200 full-service office locations worldwide, in addition to numerous satellite locations. In 2020, Expeditors derived 38% of consolidated net revenue from airfreight, 20% from ocean freight, and 7% from customs brokerage and other services.

Contact
1015 Third Avenue
Seattle, WA, 98104
T +1 206 674-3400
Sector Industrials
Industry Integrated Freight & Logistics
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2020
Stock Type Cyclical
Employees 17,480

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