Expeditors reports show challenges in the ocean freight sector during the fourth quarter

Expeditors International Faces Challenging Fourth Quarter in 2025

Expeditors International reported a weaker financial performance in the fourth quarter of 2025, largely due to ongoing struggles in its ocean freight division. Several key financial indicators showed declines compared to the same period last year.

Decline in Ocean Freight and Financial Results

Throughout the final quarter, ocean freight volumes dropped by 8% in October, 7% in November, and 4% in December, resulting in a 6% overall decrease year-over-year. This downturn contributed to a 3% reduction in total revenue, which fell to $2.86 billion from $2.95 billion. Although transportation costs decreased by 4%, expenses related to salaries and other operational needs increased by 6%.

Operating income fell 17% to $250.9 million, while net income declined to $200.7 million from $235.88 million. Earnings per share for the quarter were $1.49, down from $1.68 in the previous year.

Comparisons with Industry Peers

Expeditors’ rising costs and earnings are often compared to those of C.H. Robinson, which has aggressively implemented AI technology, leading to significant workforce reductions. While Expeditors and C.H. Robinson differ in some respects, both are third-party logistics providers focused on leveraging technology to streamline operations and minimize manual processes.

Workforce Trends

Increasing Headcount at Expeditors

C.H. Robinson reduced its North America Surface Transportation workforce to 4,970 in the fourth quarter of 2025, down from 5,348 a year earlier, and its total global headcount dropped to 12,085 from 13,869. In contrast, Expeditors expanded its workforce, ending the quarter with 20,359 employees, up from 18,917 the previous year. In North America alone, staff numbers increased to 7,507 from 6,999.

According to CFO David Hackett, “Expenses were higher than anticipated, mainly due to strategic hiring to support growth opportunities, especially in customs brokerage, as well as investments in technology. We believe these initiatives are essential for our long-term success and expect them to yield strong returns.”

President and CEO Daniel Wall added that Expeditors plans to continue investing in high-potential areas, including artificial intelligence and specialized customer solutions.

Unlike many of its peers, Expeditors does not hold earnings calls with analysts.

Stock Buyback Fails to Lift Shares

Despite announcing a new $3 billion share repurchase program alongside its earnings report, Expeditors’ stock experienced a sharp decline following the release of its results.

Market Reaction and Stock Performance

By approximately 10:20 a.m., Expeditors’ shares had fallen nearly 5% to $142.17, a decrease of $7.46. Over the past month, the company’s stock has dropped about 10.3%, reflecting broader market concerns about companies seen as vulnerable to AI-driven disruption. However, over the past year, the stock is up roughly 22.5%.

Ocean Freight Segment Under Pressure

CEO Daniel Wall highlighted the difficult conditions in the ocean freight market, noting that average revenue per container in this segment was down 41% year-over-year and 17% from the third quarter, as increased capacity and lower shipment volumes continued to weigh on results.

Outlook Remains Cautious

Limited Optimism for Ocean Freight Recovery

Wall expressed a cautious outlook, stating, “Ocean freight rates may stay subdued in 2026 as more vessels return to the Suez Canal, further increasing capacity. We will keep adjusting our ocean freight costs to better match current market realities.”

Air Freight Performance

Air freight volumes improved, rising 4% in October, 5% in November, and 8% in December, for a total increase of 6%. Expeditors does not disclose specific tonnage figures for air or ocean shipments. Despite higher volumes, margins in air services slipped by about 2% compared to the previous year, as profitability per kilogram declined. CFO Hackett confirmed a roughly 2 percentage point drop in air services margins for the quarter.

Wall noted that a surge in e-commerce and technology sector demand drove up purchase rates, further compressing margins during the quarter.