Expeditors (EXPD) investor relations material

Market environment and key drivers

• Capacity and demand are currently balanced, but demand is up slightly and excess capacity is being absorbed, especially due to rerouting around the Suez Canal, which requires more ships per service.

• Fuel costs spiked due to geopolitical events but are expected to normalize in the coming months, impacting carrier behavior and rate management.

• Carriers are tightly managing capacity and vessel deployment to maintain profitability, leading to rapid rate adjustments and increased volatility.

• The traditional supply-demand cycle has shortened from five years to about 15 months, increasing rate volatility.

Capacity, consolidation, and supply chain disruptions

• Global fleet capacity is projected to grow by a third over the next five to six years, but demand growth lags behind, causing volatility.

• Market consolidation has left 10 global carriers controlling 88% of capacity, reducing shipper choice and increasing carrier control.

• Older ships remain in rotation due to limited scrapping options and anticipation of future demand spikes.

• Suez Canal disruptions and blank sailings have led to congestion and supply-demand imbalances, especially on Asia-Europe and Transpacific routes.

Demand trends and regional impacts

• Demand was down in early 2026 but is expected to remain tight through August, with a bounce back anticipated for year-end.

• Asia-North America trade is down year-over-year, but shippers are pushing cargo ahead of potential tariffs and vessel taxes.

• Carriers are manipulating services, canceling routes, and maximizing vessel value, causing congestion and equipment shortages in regions like India and Brazil.