AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 4/6 · 18/10/2026
Moat38
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 2/4 · Consolidation delivers customer-level purchasing savings and global coverage narrows the full-service provider pool. Neither establishes a protected advantage over competing forwarders, particularly given competitors' resources.
durability · 1/4 · Regular competitive bidding and multiple-provider usage make competitive protection fragile. Long profitability supports business endurance, but does not establish durable barriers.
customer dependency · 1/4 · Customs knowledge and tailored services are useful, but observed customer use of multiple providers and recurring tenders indicate limited captivity. No material switching costs are demonstrated.
erosion resilience · 2/4 · Operating profitability and first-half earnings growth demonstrate resilience. Competitive bidding, personnel dependence and airfreight buy rates rising faster than sell rates limit evidence of protection from erosion.
Pricing power50
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 2/4 · First-half 2026 airfreight sell rates rose 28% and carrier costs were passed through, but buy rates rose 31%. Ocean rates declined in 2025. These are mixed realized outcomes rather than evidence of sustained discretionary pricing premiums.
retention · 2/4 · Continued demand from technology customers and higher tonnage provide indirect evidence of repeat demand. Industry demand growth could explain the results, and multiple-provider usage prevents a strong retention conclusion. No retention rate is inferred.
margin resilience · 3/4 · Reported absence of operating losses since the 1984 public listing, broadly stable 2025 earnings and first-half 2026 operating income growth demonstrate strong earnings resilience. Revenue-based operating margin also improved in first-half 2026, but changing freight pass-through and service mix limit its interpretation as pricing power.
contractual freedom · 1/4 · Customers regularly solicit bids seeking favorable prices, fixed-price arrangements, longer payment terms and expanded liability. Actual cost pass-through shows some flexibility, but the disclosed bargaining environment constrains pricing and terms; the requested terms are not assumed universally accepted.
Predictability81
Five consecutive annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 75.00
- Revenue growth volatility (pp)
- 23.22
- Positive FCF years (%)
- 100.00
- FCF margin volatility (pp)
- 2.61
Financial strength—
Missing required inputs: debtFcfGrade, netDebtEbitGrade, interestCoverageGrade. Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- currentRatioGrade
- 84.95
- Current ratio (x)
- 1.81
Capital allocation—
Missing required inputs: operatingReturn. Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year average dilution (%)
- -5.88
- 3-year average SBC / revenue (%)
- 0.62
- cashConversionGrade
- 100.00
Management69
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 3/4 · Long-term net share reduction, cash generation, modest property spending and substantial remaining liquidity support strong discipline. First-half 2026 repurchases and dividends exceeded operating cash flow and cash declined; short-term borrowings and contingent obligations remain. The new $3 billion authorization is permission, not completed spending, and repurchase value creation is unproven.
incentive alignment · 3/4 · Established profit-linked incentives, cumulative loss recovery, actual 2025 payout reductions and realized performance-share vesting demonstrate alignment beyond policy assertions. Branch exceptions and earnings metrics that can benefit from repurchases limit the conclusion; disclosed equity vesting is distinguished from future award targets.
execution · 3/4 · Long-running operating profitability, higher brokerage demand and first-half 2026 operating income growth support strong execution from operating evidence. Management missed its 2025 goals, and market demand and freight rates contributed to subsequent growth, so the results do not establish exceptional management performance.
governance · 2/4 · Independent committee requirements, independent pay decisions and disclosed clawback and hedging policies provide substantive safeguards. August 2026 bylaw changes expanded meeting-chair authority and shareholder nomination disclosure burdens, creating a countervailing concern about shareholder access without proving abuse.
Evidence
Solutions within Airfreight Services include: Airfreight Consolidation: as an airfreight consolidator, Expeditors purchases cargo capacity from airlines on a volume basis and resells that space to our customers at lower rates than what those customers could negotiate directly from the airlines on an individual shipment.
Business / airfreight consolidation purchasing model · Filed 25/02/2026
There are a large number of companies competing in one or more segments of the industry, but the number of firms with a global network that offer a full complement of logistics services is more limited.
Competition / global full-service provider coverage · Filed 25/02/2026
15 Industry Trends, Trade Conditions and Competition We operate in over 60 countries in the competitive global logistics industry and our activities are closely tied to the global economy.
MD&A / geographic operating footprint · Filed 05/08/2026
Nevertheless, many of these competitors have significantly more resources than Expeditors and may pursue acquisition opportunities and are developing new technologies to gain competitive advantages.
Competition / competitor resources and technology · Filed 25/02/2026
Many larger customers utilize the services of multiple logistics providers.
Competition / customers using multiple providers · Filed 25/02/2026
Customers regularly solicit bids from competitors in order to improve service and to secure favorable pricing and contractual terms such as: longer payment terms; fixed-price arrangements; higher or unlimited liability limits; broad indemnity undertakings; heightened cybersecurity and data privacy obligations; and performance penalties.
Competition / regular bidding and customer contractual demands · Filed 25/02/2026
The primary competitive factors are price and quality of service.
Competition / price and service quality · Filed 25/02/2026
Airfreight services revenues and expenses increased 36% and 41%, respectively, during the six months ended June 30, 2026, as compared to the same periods in 2025, due to 28% and 31% increases in average sell and buy rates, respectively, and a 10% increase in tonnage.
MD&A / first-half 2026 airfreight rates, tonnage and expenses · Filed 05/08/2026
Whether acting as a consolidator or agent, we offer our customers routing expertise, familiarity with local business practices, knowledge of export and import documentation and procedures, the ability to arrange for ancillary services and to assist with securing capacity during periods of high demand.
Business / routing and customs knowledge · Filed 25/02/2026
In order to meet customers' complex and industry-specific demands, we utilize industry vertical teams throughout our network that focus on providing tailored solutions to different industries.
Business / industry-specific tailored services · Filed 25/02/2026
• Growing complexity in customs brokerage due to the dynamic trade environment has resulted in high demand for our brokerage services resulting in growth in revenues from customs declarations fees, as well as increases in the resources to support that activity.
MD&A / brokerage demand, declaration fees and supporting resources · Filed 25/02/2026
Operational Risks We are dependent on our personnel and any inability to hire, develop or retain our key employees may have a negative impact on our operations.
Operational risks / personnel dependence · Filed 25/02/2026
Global Logistics and Supply Chain Technology Expeditors has long believed that it is a competitive advantage to focus on organic growth and to utilize a single enterprise technology platform designed and built by logistics technology professionals for logistics professionals.
Business / management's enterprise technology advantage claim · Filed 25/02/2026
Average sell rates increased during the three and six months ended June 30, 2026, as compared to the same periods in 2025 on exports out of North Asia and South Asia as higher carrier buy rates were passed on to customers starting in the first quarter of 2026.
MD&A / realized carrier cost pass-through · Filed 05/08/2026
• Revenue from ocean freight and other services decreased 11% resulting from significant decreases in average ocean sell rates and buy rates due to overall imbalance between demand and available capacity for ocean transportation due to global trade dynamics.
MD&A / 2025 ocean revenue and rate declines · Filed 25/02/2026
AND SUBSIDIARIES Condensed Consolidated Statements of Earnings (In thousands, except per share data) (Unaudited) Three months ended June 30, Six months ended June 30, 2026 2025 2026 2025 Revenues: Airfreight services $ 1,494,842 $ 951,787 $ 2,525,705 $ 1,853,547 Ocean freight and ocean services 710,922 675,782 1,309,806 1,457,447 Customs brokerage and other services 1,296,571 1,024,316 2,449,786 2,007,310 Total revenues 3,502,335 2,651,885 6,285,297 5,318,304 Operating Expenses: Airfreight services 1,134,773 698,402 1,904,256 1,346,896 Ocean freight and ocean services 531,886 483,475 947,907 1,057,376 Customs brokerage and other services 750,181 571,480 1,375,828 1,125,760 Salaries and related 573,698 471,336 1,073,269 929,273 Rent and occupancy 68,428 65,741 136,884 130,084 Depreciation and amortization 12,695 13,847 26,570 28,451 Selling and promotion 9,894 9,928 20,265 18,502 Other 71,162 89,940 155,872 168,368 Total operating expenses 3,152,717 2,404,149 5,640,851 4,804,710 Operating income 349,618 247,736 644,446 513,594 Other Income: Interest income 6,821 9,183 15,461 18,367 Other, net 2,022 1,050 5,040 1,889 Other income, net 8,843 10,233 20,501 20,256 Earnings before income taxes 358,461 257,969 664,947 533,850 Income tax expense 91,203 74,050 167,645 145,832 Net earnings 267,258 183,919 497,302 388,018 Less net earnings attributable to the noncontrolling interest 1,032 345 1,466 649 Net earnings attributable to shareholders $ 266,226 $ 183,574 $ 495,836 $ 387,369 Basic earnings attributable to shareholders per share $ 2.03 $ 1.35 $ 3.75 $ 2.83 Diluted earnings attributable to shareholders per share $ 2.03 $ 1.34 $ 3.74 $ 2.82 Weighted average basic shares outstanding 130,953 136,266 132,241 137,045 Weighted average diluted shares outstanding 131,372 136,631 132,724 137,537 See accompanying notes to condensed consolidated financial statements.
Unaudited statements of earnings / comparative first-half results · Filed 05/08/2026
The Company has never incurred an annual or quarterly operating loss since going public in September 1984.
Compensation discussion / reported operating profitability history · Filed 24/03/2026
Tonnage increased primarily on exports from North Asia and South Asia during the three and six months ended June 30, 2026, as compared to the same periods in 2025, as demand from technology customers remained strong.
MD&A / continued technology-customer demand and tonnage growth · Filed 05/08/2026
Due to the high degree of competition in the marketplace, we may not be able to increase our prices to our customers to offset this inflationary pressure, which could lead to an erosion in our margins and operating income in the future.
MD&A / prospective limits on inflation pass-through · Filed 05/08/2026
AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited) Three months ended June 30, Six months ended June 30, 2026 2025 2026 2025 Operating Activities: Net earnings $ 267,258 $ 183,919 $ 497,302 $ 388,018 Adjustments to reconcile net earnings to net cash from operating activities: Provisions for losses on accounts receivable 2,381 1,051 3,181 1,812 Deferred income tax (benefit) expense 794 (7,523 ) (968 ) (7,447 ) Stock compensation expense 32,200 27,267 45,023 38,816 Depreciation and amortization 12,695 13,847 26,570 28,451 Other, net (14,261 ) 4,474 (16,144 ) 6,765 Changes in operating assets and liabilities: (Increase) decrease in accounts receivable (575,863 ) (57,984 ) (625,376 ) 50,165 Increase in accounts payable and accrued liabilities 441,269 61,885 509,620 43,466 (Increase) decrease in deferred contract costs (84,703 ) (21,617 ) 16,433 54,356 Increase (decrease) in contract liabilities 96,590 16,961 (1,999 ) (72,327 ) (Decrease) increase in income taxes payable, net (1,124 ) (44,668 ) 37,459 (14,328 ) Decrease (increase) in other, net 1,404 1,600 (3,227 ) 4,087 Net cash from operating activities 178,640 179,212 487,874 521,834 Investing Activities: Purchase of property and equipment (11,991 ) (15,875 ) (24,603 ) (29,027 ) Other, net 21,356 24 21,486 180 Net cash from investing activities 9,365 (15,851 ) (3,117 ) (28,847 ) Financing Activities: Payments on borrowings from revolving lines of credit, net (39 ) — (321 ) — Proceeds from borrowings on lines of credit 172 194 7,267 624 Payments on borrowings on lines of credit (148 ) (102 ) (4,097 ) (337 ) Proceeds from issuance of common stock 1,236 5,132 4,362 18,175 Repurchases of common stock (354,907 ) (231,116 ) (642,531 ) (408,470 ) Dividends paid (105,770 ) (104,139 ) (105,770 ) (104,139 ) Payments for taxes related to net share settlement of equity awards (13,999 ) (9,844 ) (21,543 ) (10,353 ) Distribution to noncontrolling interest (869 ) — (1,519 ) (1,346 ) Net cash from financing activities (474,324 ) (339,875 ) (764,152 ) (505,846 ) Effect of exchange rate changes on cash and cash equivalents 1,270 14,156 (3,442 ) 20,701 Change in cash and cash equivalents (285,049 ) (162,358 ) (282,837 ) 7,842 Cash and cash equivalents at beginning of period 1,316,497 1,318,520 1,314,285 1,148,320 Cash and cash equivalents at end of period $ 1,031,448 $ 1,156,162 $ 1,031,448 $ 1,156,162 Taxes Paid: Income taxes $ 93,513 $ 125,277 $ 129,030 $ 165,901 See accompanying notes to condensed consolidated financial statements.
Unaudited cash-flow statement / cash generation, investment and distributions · Filed 05/08/2026
At June 30, 2026, working capital was $1,448 million, including cash and cash equivalents of $1,031 million.
Liquidity / June 2026 cash and working capital · Filed 05/08/2026
Other than our recorded lease liabilities, we had no long-term obligations or debt at June 30, 2026.
Liquidity / long-term obligations excluding leases · Filed 05/08/2026
At June 30, 2026, borrowings under these credit lines were $32 million and we were contingently liable for $81 million from standby letters of credit and guarantees.
Liquidity / short-term borrowings and contingent obligations · Filed 05/08/2026
Our focus on cash management has allowed us to increase our dividend per-share payment to shareholders each year for over 25 years and reduce the number of outstanding shares from 213 million in 2006 to 134 million shares at the end of 2025 through share repurchases.
Compensation discussion / historical dividends and net share reduction · Filed 24/03/2026
Pursuant to Board authorization on February 23, 2026, a new share repurchase program became effective upon expiration of the prior program and permits the repurchase of up to $3.0 billion of the Company's common stock.
Share repurchases / authorization effective July 2026 · Filed 05/08/2026
Historically, the relatively consistent relationship between salaries and operating income has been the result of a compensation philosophy that has been maintained since the inception of our company: offer a modest base salary and the opportunity to share in a fixed and determinable percentage of the operating profit of the business unit controlled by each key employee.
MD&A / established operating-profit compensation structure · Filed 05/08/2026
Compensation for NEO and senior executives was reduced by 5% for all periods that did not meet the growth criteria since the requirement was adopted, including the third and fourth quarters of 2025.
Compensation discussion / actual incentive reductions · Filed 24/03/2026
Based on the Company’s performance in 2025, Executives vested in 190% of the 2023 PSU awards as the EPS target was achieved at the maximum level and the Net revenue target achieved was well above the target threshold.
Compensation discussion / realized 2023 PSU vesting · Filed 24/03/2026
Any operating losses must be offset in their entirety by operating profits before management is eligible for a bonus.
MD&A / cumulative loss recovery before management bonuses · Filed 05/08/2026
Executive management, in limited circumstances, makes exceptions at the branch operating unit level.
MD&A / exceptions to branch bonus restrictions · Filed 05/08/2026
3: Ratification of Independent Registered Public Accounting Firm ü FOR 40 2023-2025 Financial Performance (Data in millions except dividends per share and earnings per share (EPS)) 2025 Highlights • Strong Financial Performance: While our financial performance in 2025 did not meet our goals, it was fairly strong considering the severe decline that occurred in the ocean markets in Q3 through year end.
2025 highlights / performance below management goals · Filed 24/03/2026
The Board has designated that only independent Directors can serve as Committee members.
Governance / independent committee membership · Filed 24/03/2026
Notice of Annual Meeting & Proxy Statement | 24 Compensation: What We Do and Don't Do What We Do What We Don't Do Pay decisions are made by independent Directors; the Committees and the full Board meet regularly in executive session without management present No guaranteed bonuses Pay for performance (over 80% of CEO pay is 'at risk' and directly linked to performance) No pay disconnected from performance (excluding modest base salaries) Focus on multiple performance metrics No perquisites Increase the NEO allocation of the Executive Incentive Compensation pool at time of promotion No arbitrary increases to the NEO allocation of the Executive Incentive Compensation pool Reduce the NEO allocation of the Executive Incentive Compensation Pool over time No supplemental pension benefits Limit the NEO allocation of the Executive Incentive Compensation Pool to preset allocation percentages No repricing of underwater options Strictly tie NEO Executive Incentive Compensation to U.S.
Compensation practices / independent pay decisions and performance linkage · Filed 24/03/2026
GAAP operating income No hedging or pledging of Company shares allowed by employees or the Board of Directors Payouts to NEO and other Senior Executives from the Executive Incentive Compensation Pool are reduced by 5% if operating income does not grow by more than 5% No tax gross-ups paid on severance benefits Double trigger vesting of unvested equity upon a change in control Work with an independent compensation consultant Align with shareholders through PSU and RSU awards Maintain executive and outside Director share ownership guidelines Incentive compensation is subject to clawback policy Seek shareholder approval for NEO compensation agreements that provide termination benefits in excess of 2.99 times base salary plus target short-term bonus Engage shareholders on compensation matters Effect of Proposal The Say-on-Pay proposal is non-binding on the Board of Directors.
Compensation practices / clawbacks, ownership guidelines and hedging restrictions · Filed 24/03/2026
The amendments to the Bylaws, among other things, revise certain provisions relating to the conduct of shareholder meetings, including the expansion of authority of the chairperson of such meetings with respect to convening, postponing, recessing, and adjourning shareholder meetings and establishing rules and procedures governing their conduct.
August 2026 bylaws / expanded shareholder meeting chair authority · Filed 05/08/2026
The amendments expand the disclosure required to be delivered to the Secretary of the Company in connection with shareholder proposals and the nomination of directors, including disclosure of certain shareholder ownership interests, material relationships with the Company, its affiliates, and competitors, and other information as reasonably requested by the Company to evaluate the proposal or nomination.
August 2026 bylaws / expanded shareholder nomination disclosures · Filed 05/08/2026
• Operating income increased 1% and net earnings to shareholders remained flat, while earnings per share increased 4%.
MD&A / 2025 operating income and earnings outcomes · Filed 25/02/2026
