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.