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Expeditors International of Washington Inc EXPD

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Morningstar’s Analysis

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Another Excellent Growth Quarter for Expeditors on Robust Global Trade

Matthew Young, CFA Equity Analyst

Analyst Note

| Matthew Young, CFA |

Wide-moat Expeditors International generated first-quarter gross revenue growth of 77% year over year, above our expected run rate on significant air and ocean volume gains. Strong growth stemmed from the pandemic-driven spike in consumer goods spending and heavy retailer restocking (in the United States and Europe), which has supported a surge in imports from the Asia-Pacific region. Airfreight tonnage rose 29% year over year (it was up 10% last quarter), while ocean freight volume also expanded 29% (up 19% last quarter). Freight demand started improving off pandemic lows during the third quarter of 2020 but heated up by the fourth-quarter peak season. At the same time, sell rates to shippers for airfreight (especially out of North Asia) spiked on extremely limited capacity linked to soaring demand and limited belly space availability among commercial airlines. Sell rates on ocean freight have also jumped due to capacity imbalances and heavy 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 steamship 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 Mar 31, 2021
Fiscal Year End Dec 31, 2020
Stock Type Cyclical
Employees 17,480

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