First Simultaneous Increase in Air and Ocean Freight Since 2021 -Increase in Air and Ocean Freight Despite Revenue Dip

Expeditors International reported mixed results in the first quarter, experiencing increases in both air and ocean freight tonnage for the first time since late 2021, yet facing a decline in revenue and transportation acquisition costs. The logistics firm noted a 4% rise in airfreight and a 2% increase in ocean freight tonnage, marking a significant recovery milestone. Despite these gains, total revenues fell by 15% to $2.2 billion, compared to $2.6 billion in the previous year, and transportation costs decreased by 17% to $1.43 billion.

CEO Jeffrey Musser highlighted the challenges of growing air and ocean carrier capacities, which have pressured rates already significantly reduced from their peaks. “We have adapted to this current environment by keeping headcount and other costs in check, while continuing to drive efficiency back towards our historical expectations,” Musser explained.

The company reported a net earnings drop of 25% to $169.1 million, down from $226 million a year earlier. Employee numbers were also reduced, particularly in North America, where head count fell to 6,839 from 7,455. The overall employee count at Expeditors decreased to 18,403 from 19,681.

Despite these challenges, the company did manage to exceed some Wall Street expectations with GAAP earnings per share at $1.17, ten cents above the consensus forecast. However, the slight miss in revenue expectations and the general downward trend in earnings reflected the ongoing adjustments in the freight market.

Expeditors did not hold an earnings call, but CFO Bradley Cooper noted in a statement that the reduction in head count was largely through attrition, aligning with the shifts in tonnage and shipping volumes. He also mentioned an increase in staffing in the information systems department to enhance network security, following a cyberattack earlier in the year.