Expeditors (EXPD) investor relations material

Market conditions and capacity trends

• U.S. trucking market is experiencing significant tightening, with spot and contract rates reaching record highs due to reduced capacity and increased regulation enforcement.

• Key performance indicators like the Logistics Managers' Index and Purchasing Managers' Index show economic expansion and increased freight movement since early 2026.

• Tender rejection rates have surged to historic highs, indicating shippers are struggling to secure capacity, especially during peak shipping months.

• Spot rates have surpassed contract rates, signaling a new truck cycle and further upward pressure on transportation costs.

• Capacity constraints are driven by regulatory crackdowns, including ELD enforcement, non-resident driver restrictions, and closure of fraudulent CDL mills.

Regulatory and legal impacts

• Enforcement actions are removing hundreds of thousands of trucks from the market, with estimates ranging from 250,000 to 450,000 vehicles affected.

• Supreme Court ruling now holds brokers financially responsible for hiring negligent carriers, prompting stricter vetting and favoring larger, established carriers.

• Increased regulation is expected to drive up driver wages and attract new entrants, but also creates challenges for small carriers and brokers.

Security and cargo theft

• Cargo theft remains at record highs, with organized crime using sophisticated tactics, including AI-driven phishing and fictitious pickups.

• Targeted commodities include metals, food, and beverages, with New Jersey emerging as a new hotspot.

• Zero-trust security approaches and thorough vetting of drivers and carriers are recommended to mitigate theft risks.

• Legislation like the Combating Organized Retail Crime Act aims to enhance law enforcement collaboration and prosecution of cargo crimes.