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The company’s earnings on their face were not particularly strong. Diluted net earnings declined 1% to $1.64, with net earnings dropping 3% to $222 million. Operating income was down 4%, as were revenues. But the $1.64 was better than Wall Street estimates, helping to lead to the higher stock price. Beat Wall Street consensus The transportation research team at TD Securities led by Jason Seidl said the earnings per share figure “easily exceeded” its forecast of $1.42 and a Wall Street estimate of $1.39. Revenue of $2.9 billion also was better than forecasts, as well as EBIT margins. A bright spot at Expeditors was higher volume in its airfreight business. Shipments measured in kilos were up 4% overall for the quarter, though the gains decreased as the three months went on: July was up 6%, August rose 3% and September inched up just 2%. Wall said of the air business that the capacity it buys was looser, following the expiration of the de minimis exception which he said had tightened space as importers rushed to get goods into the U.S. before that development at the end of August. “That extra capacity led to slightly lower sell and buy rates during the quarter,” Wall said. Tariffs lift Customs Brokerage Another strong area was Customs Brokerage, which saw its revenue grow 13.3% year-on-year. In a prepared statement released in conjunction with the earnings–Expeditors does not hold an earnings call with analysts–president and CEO Daniel Wall cited Customs Brokerage as a strong performer in the quarter. Wall said the group is “(continuing) to perform at a high level” and has been positively affected by tariffs and the need for information and guidance among shippers and importers. “The increase in volume and complexity of entries continues to test our customs group,” Wall said. “We are investing in and exploring ways to further enhance our productivity in this area, including enhancements from AI and other technology solutions.” But the strength in air freight and customs brokerage was not matched in Expeditors’ ocean freight business. Measured in forty foot equivalents, ocean traffic was down 3% on the quarter, with volume deteriorating as the quarter went on. It was up 3%in July, but down 4% in September and 6% in October. “In the first half of the year, U.S. importers accelerated shipments in advance of expected tariffs,” Wall said in his prepared statement. “Volumes declined in the third quarter, primarily related to retail customers and, as additional capacity came on-line, sell and buy rates declined substantially. Despite these market challenges, we remained disciplined and efficient while adjusting our ocean business for slower market growth, as we recognize that the ocean capacity/demand imbalance could continue for some time.” Seidl’s report also saw a negative outlook in Expeditors’ ocean business. “We expect to see this segment to see continued pressure over ‘26 as peer commentary has indicated that 6% to 9% additional ocean capacity is anticipated next year and rate recovery would require a significant turnaround in the demand picture, which faces trade headwinds,” Seidl said. More articles by John Kingston DAT execs in two forums discuss how it seeks to reshape the freight sector NMFTA’s freight classification overhaul: surprising shipper preparedness
