Expeditors International

“Any reduction in international commerce or disruption in global trade may adversely impact our business and operating results. Expeditors primarily provides services to customers engaged in international commerce. Everything that affects international trade has the potential to expand or contract our primary markets and adversely impact our operating results.”

Annual report 2025A · The company itself

“The declines in average buy rates and sell rates in the second half of the year are due to a softening demand primarily on exports out of North Asia and an increase in available carrier capacity.”

Annual report 2025A · The company itself

“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.”

Annual report 2025A · The company itself

“As a non-asset-based provider of global logistics services, Expeditors depends on a variety of carriers and other service providers, including air, ocean and ground freight carriers. Our ability to deliver our services depends on service providers having sufficient capacity available to purchase.”

Annual report 2025A · The company itself

“Expeditors' primary services include: • Airfreight Services • Ocean Freight and Ocean Services • Customs Brokerage and Other Services Airfreight Services: Within airfreight, Expeditors typically acts either as a freight consolidator or as an agent for the airline that carries the shipment. 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. 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.”

Annual report 2025A · The company itself

“As a non-asset-based provider of global logistics services, Expeditors depends on a variety of carriers and other service providers, including air, ocean and ground freight carriers. Our ability to deliver our services depends on service providers having sufficient capacity available to purchase.”

Annual report 2025A · The company itself

“Ocean Freight and Ocean Services: Within ocean services, Expeditors offers three basic services: ocean freight consolidation, direct ocean forwarding, and order management: Ocean freight consolidation: Expeditors, when acting as an ocean freight consolidator, contracts with ocean shipping carriers to obtain transportation for an allocation of containers between various points during a specified time period at agreed-upon rates. We handle both full container loads as well as Less-than Container Load (LCL) freight, offering a wide range of shipping options and rates.”

Annual report 2025A · The company itself

“Our ability to provide services to our customers is highly dependent on good working relationships with a variety of entities, including airlines, ocean carrier lines and ground transportation providers, as well as governmental agencies.”

Annual report 2025A · The company itself

“(herein referred to as "Expeditors,” the "Company," "we," "us," "our") provides a full suite of global logistics services, offering customers access to an international network of people and integrated information systems to support the movement and strategic positioning of goods. As a third-party logistics provider, we purchase cargo space from carriers (such as airlines, ocean shipping lines, and trucking lines) on a volume basis and resell that space to our customers.”

Annual report 2025A · The company itself

“We provide a broad range of transportation services and customer solutions, such as customs brokerage, order management, time-definite transportation, warehousing and distribution, temperature-controlled transit, cargo insurance, specialized cargo monitoring and tracking, and other customized logistics and consulting solutions.”

Annual report 2025A · The company itself

“ITEM 7 — MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Overview Expeditors International of Washington, Inc. provides a full suite of global logistics services. Our services include air and ocean freight consolidation and forwarding, customs brokerage, warehousing and distribution, purchase order management, vendor consolidation, time-definite transportation services, temperature-controlled transit, cargo insurance, specialized cargo monitoring and tracking, and other supply chain solutions.”

Annual report 2025A · The company itself

“Our three principal services are the revenue categories presented in our financial statements: 1) airfreight services, 2) ocean freight and ocean services, and 3) customs brokerage and other services.”

Annual report 2025A · The company itself

“Customs brokerage and other services involve providing services at destination, such as helping customers clear shipments through customs by preparing and filing required documentation, calculating and providing for payment of duties and other taxes on behalf of customers as well as arranging for any required inspections by governmental agencies, and import services such as arranging for local pick up, storage and delivery at destinations. These are complicated functions requiring technical knowledge of customs rules and regulations in the multitude of countries in which we have offices.”

Annual report 2025A · The company itself

“Expeditors relies heavily and must compete based upon the flexibility and sophistication of the technologies, including AI, utilized in performing our core businesses. Future results depend on our success in developing competitive and reliable systems to address the needs of our customers and suppliers.”

Annual report 2025A · The company itself

“A significant portion of Expeditors' revenues is derived from customers in retail and technology industries whose shipping patterns are tied closely to consumer demand, as well as the scaling of AI infrastructure, and from customers in industries whose shipping patterns are dependent upon just-in-time production schedules.”

Annual report 2025A · The company itself

“Road freight and warehousing and distribution services benefited from high demand from our technology customers.”

Annual report 2025A · The company itself

“Airfreight services revenues and expenses both increased 9% in 2025, as compared with 2024, due to a 6% increase in tonnage and 2% and 3% increases in average sell and buy rates, respectively.”

Annual report 2025A · The company itself

“Our ability to provide services to our customers is highly dependent on good working relationships with a variety of entities, including airlines, ocean carrier lines and ground transportation providers, as well as governmental agencies.”

Annual report 2025A · The company itself

“Our three principal services are the revenue categories presented in our financial statements: 1) airfreight services, 2) ocean freight and ocean services, and 3) customs brokerage and other services.”

Annual report 2025A · The company itself

“The increase in 2025 is primarily due to higher rental and occupancy expenses, technology related expenses as well as consulting, and travel, and indirect taxes. We expect to continue to enhance security and internal controls over our technology and systems and plan to deploy additional solutions which will result in increased expenses in the future.”

Annual report 2025A · The company itself

“Expeditors relies heavily and must compete based upon the flexibility and sophistication of the technologies, including AI, utilized in performing our core businesses. Future results depend on our success in developing competitive and reliable systems to address the needs of our customers and suppliers.”

Annual report 2025A · The company itself

“We do not compete for overnight courier or small parcel business.”

Annual report 2025A · The company itself

“Customs brokerage and other services: Customs brokerage and other services revenues and expenses increased 13% and 14%, respectively, in 2025 as compared with 2024, primarily due to double-digit growth rates in customs clearances, import services, road freight and warehousing and distribution from higher shipment volumes, principally from shipments into North America and Europe.”

Annual report 2025A · The company itself

“A significant portion of Expeditors' revenues is derived from customers in retail and technology industries whose shipping patterns are tied closely to consumer demand, as well as the scaling of AI infrastructure, and from customers in industries whose shipping patterns are dependent upon just-in-time production schedules.”

Annual report 2025A · The company itself

“Customs brokerage and other services: Customs brokerage and other services revenues and expenses increased 13% and 14%, respectively, in 2025 as compared with 2024, primarily due to double-digit growth rates in customs clearances, import services, road freight and warehousing and distribution from higher shipment volumes, principally from shipments into North America and Europe.”

Annual report 2025A · The company itself

“Industry Risks The current volatile international trade environment as a result of intergovernmental disputes, trade actions, increased tariffs and other geo-political risks may adversely impact our business and operating results. The United States has undertaken a substantial global tariff rebalancing effort, resulting in higher tariffs on imports, including significantly higher tariffs on goods made in China and sectoral tariffs on a range of materials and products.”

Annual report 2025A · The company itself

“The "de minimis" exemption, which exempted goods made in China and Hong Kong of less than $800 in commercial value from tariffs and entry submission, was terminated on May 2, 2025, and expanded to all countries on August 29, 2025.”

Annual report 2025A · The company itself

“On February 20, 2026, the United States Supreme Court issued a ruling on certain tariffs imposed in the United States under the International Emergency Economic Powers Act (IEEPA). The ruling invalidates many of the tariffs imposed on imports to the United States in 2025.”

Annual report 2025A · The company itself

“We cannot predict how changes in tariffs and trade restrictions will affect our business. Additionally, the constant changes in trade regulations since the beginning of 2025 are adding complexity to the customs declarations process, making compliance with regulations increasingly challenging.”

Annual report 2025A · The company itself

“Some customers are relocating manufacturing to other countries to mitigate the impact of higher tariffs on imports, reduce their supply chain risks, address disruptions caused by pandemics and geopolitical issues. These changes could negatively affect our business.”

Annual report 2025A · The company itself

“While the elimination of low-value de minimis exemption on shipments from China to the U.S. resulted in a decrease in demand for airfreight in the second half of 2025, the expected downward pressure on average buy rates was largely mitigated by carriers redistributing capacity to other lanes and high demand from the technology sector.”

Annual report 2025A · The company itself

“Seasonal changes in demand, impact from disruptions in the ocean market due to security concerns and variable demand for airfreight capacity from direct e-commerce business cause volatility in average buy rates on certain routes. Additionally, geopolitical concerns, inter-governmental trade disputes, new tariffs on imports into the U.S. and retaliatory actions from other countries create uncertainty in the economy and the trade environment.”

Annual report 2025A · The company itself

“This was mainly due to customers relocating sourcing out of China to other regions and softening of the retail sector.”

Annual report 2025A · The company itself

“The global economic conditions and trade environment are increasingly uncertain and dynamic with increases in trade tariffs and inter-governmental disputes. As shippers and carriers reacted to these volatile conditions, it negatively affected demand, which reduced our volumes and average sell and buy rates.”

Annual report 2025A · The company itself

“Customers value our brokerage services due to an increasingly dynamic and complex trade environment and its impact on the declaration process. They seek knowledgeable customs brokers with operational capacity and sophisticated systems capabilities critical to an overall logistics management program that are necessary to rapidly respond to changes in the regulatory and security environment.”

Annual report 2025A · The company itself

“Should international trade slow or there is substantial removal of tariffs, our revenues and operating income could be negatively impacted.”

Annual report 2025A · The company itself

“Higher duty rates have resulted in increases in the amounts we advance on behalf of our customers. Given the short time frame until we are reimbursed, we do not expect these outlays to have a significant effect on our liquidity.”

Annual report 2025A · The company itself

“Industry Risks The current volatile international trade environment as a result of intergovernmental disputes, trade actions, increased tariffs and other geo-political risks may adversely impact our business and operating results. The United States has undertaken a substantial global tariff rebalancing effort, resulting in higher tariffs on imports, including significantly higher tariffs on goods made in China and sectoral tariffs on a range of materials and products.”

Annual report 2025A · The company itself

“In addition to being influenced by governmental policies and inter-governmental disputes concerning international trade, our business may also be negatively affected by political developments and changes in government personnel or policies in the United States and other countries, as well as economic turbulence, political unrest and security concerns in the nations and on the trade shipping routes in which we conduct business. The future impact that these events may have on international trade, oil prices and security costs is uncertain.”

Annual report 2025A · The company itself

“Seasonal changes in demand, impact from disruptions in the ocean market due to security concerns and variable demand for airfreight capacity from direct e-commerce business cause volatility in average buy rates on certain routes. Additionally, geopolitical concerns, inter-governmental trade disputes, new tariffs on imports into the U.S. and retaliatory actions from other countries create uncertainty in the economy and the trade environment.”

Annual report 2025A · The company itself

“Rate declines could continue in 2026 if demand softens and additional vessels are brought into service and passage through the Red Sea resumes.”

Annual report 2025A · The company itself

“Currency and Inflation Our worldwide operations require that we transact in a multitude of currencies other than the U.S. dollar. That exposes us to the inherent risks of volatile international currency markets and governmental interference.”

Annual report 2025A · The company itself

“For example, international trade is influenced by: • currency exchange rates and currency control regulations; • interest rate fluctuations; • changes and uncertainties in governmental policies and inter-governmental disputes, which could result in increased tariff rates, quota restrictions, trade barriers and other types of restrictions; • changes in and application of customs, trade and security regulations; • wars, strikes, civil unrest, acts of terrorism, and other conflicts; • changes in labor and other costs, including the impacts of inflation; • increased global concerns regarding working conditions and environmental sustainability; • changes in consumer attitudes regarding goods made in countries other than their own; • changes in availability of credit; and • changes in the price and readily available quantities of oil and other petroleum-related products.”

Annual report 2025A · The company itself

“The principal foreign exchange risks to which Expeditors is exposed include Chinese Yuan, Indian Rupee, Euro, Mexican Peso, Canadian Dollar, British Pound and Vietnamese Dong.”

Annual report 2025A · The company itself

“All other things being equal, an average 10% weakening of the U.S. dollar, throughout the year ended December 31, 2025, would have had the effect of raising operating income by approximately $60 million. An average 10% strengthening of the U.S. dollar, for the same period, would have the effect of reducing operating income by approximately $49 million.”

Annual report 2025A · The company itself

“Any significant disruptions or unapproved third-party access to our global systems or the internet for any reason, which could include equipment or network failures; co-location facility failures; power outages; sabotage; government interference, employee error or other actions; cyber-attacks or other security breaches; reliance on third party technology; geo-political activity or natural disasters; all of which could have a material negative effect on our results. Significant disruptions to, or unapproved third‑party access into our networks and systems could materially harm our business and financial results by interrupting critical operations and degrading systems continuity.”

Annual report 2025A · The company itself

“Beginning in 2021 and continuing through 2025, many countries, including the United States experienced increasing levels of inflation. As a result, our business continues to experience rising labor costs, service provider rate increases, higher rent and occupancy and other expenses. 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.”

Annual report 2025A · The company itself

“For example, international trade is influenced by: • currency exchange rates and currency control regulations; • interest rate fluctuations; • changes and uncertainties in governmental policies and inter-governmental disputes, which could result in increased tariff rates, quota restrictions, trade barriers and other types of restrictions; • changes in and application of customs, trade and security regulations; • wars, strikes, civil unrest, acts of terrorism, and other conflicts; • changes in labor and other costs, including the impacts of inflation; • increased global concerns regarding working conditions and environmental sustainability; • changes in consumer attitudes regarding goods made in countries other than their own; • changes in availability of credit; and • changes in the price and readily available quantities of oil and other petroleum-related products.”

Annual report 2025A · The company itself

“When the market experiences seasonal peaks or any sort of disruption, the carriers often increase their pricing suddenly. This carrier behavior creates pricing volatility that could impact Expeditors' ability to maintain historical unitary profitability.”

Annual report 2025A · The company itself

“Demand in South Asia remained strong as a result of manufacturing relocations in that region.”

Annual report 2025A · The company itself

“North Asia is our largest export-oriented region and accounted for 25% of revenues, 30% of directly related cost of transportation and other expenses and 21% of operating income for the year ended December 31, 2025.”

Annual report 2025A · The company itself

“Seasonality Historically, our operating results have been subject to seasonal demand trends, with the first quarter being the weakest and the third and fourth quarters being the strongest; however, there is no assurance that this seasonal trend will occur in the future or to what degree it will be impacted by an uncertain economy. This historical pattern has been the result of, or influenced by, numerous factors, including weather patterns, national holidays, consumer demand, new product launches, just-in-time inventory models, economic conditions, pandemics, governmental policies, inter-governmental disputes and a myriad of other similar and subtle forces.”

Annual report 2025A · The company itself

“Many of our customers are subject to the increased tariffs and may experience increased costs of conducting business. This could result in a loss of business, bad debt or increased expenses in the future if our customers were to abandon cargo, enter into bankruptcy or insolvency proceedings, or their ability to pay deteriorates.”

Annual report 2025A · The company itself

“Beginning in 2021 and continuing through 2025, many countries, including the United States experienced increasing levels of inflation. As a result, our business continues to experience rising labor costs, service provider rate increases, higher rent and occupancy and other expenses. 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.”

Annual report 2025A · The company itself

“Overhead expenses: Salaries and related costs increased 9% in 2025, as compared with 2024, principally due to an 8% increase in headcount and increases in base salaries and benefits along with increases in incentive compensation commensurate with higher revenues and operating income.”

Annual report 2025A · The company itself

“Currency and Inflation Our worldwide operations require that we transact in a multitude of currencies other than the U.S. dollar. That exposes us to the inherent risks of volatile international currency markets and governmental interference.”

Annual report 2025A · The company itself

“The principal foreign exchange risks to which Expeditors is exposed include Chinese Yuan, Indian Rupee, Euro, Mexican Peso, Canadian Dollar, British Pound and Vietnamese Dong.”

Annual report 2025A · The company itself

“Climate change, including measures to address climate change, could adversely impact our business and financial results. The long-term effects of climate change are difficult to predict and may be widespread. The impacts of climate change may include physical risks (such as rising sea levels, which could affect port operations or frequency and severity of extreme weather conditions, which could disrupt our operations and damage cargo and our facilities), compliance costs and transition risks (such as increased regulation and taxation to support carbon emissions reduction investments), shifts in customer demands (such as customers requiring more fuel efficient transportation modes or transparency to carbon emissions in their supply chains) and customer contractual requirements around environmental initiatives (such as greenhouse gas emission reduction target setting) and other adverse effects.”

Annual report 2025A · The company itself

“Climate change, including measures to address climate change, could adversely impact our business and financial results. The long-term effects of climate change are difficult to predict and may be widespread. The impacts of climate change may include physical risks (such as rising sea levels, which could affect port operations or frequency and severity of extreme weather conditions, which could disrupt our operations and damage cargo and our facilities), compliance costs and transition risks (such as increased regulation and taxation to support carbon emissions reduction investments), shifts in customer demands (such as customers requiring more fuel efficient transportation modes or transparency to carbon emissions in their supply chains) and customer contractual requirements around environmental initiatives (such as greenhouse gas emission reduction target setting) and other adverse effects.”

Annual report 2025A · The company itself

“There is uncertainty as to how future regulatory requirements and volatility in oil prices will continue to impact future buy rates. Because fuel is an integral part of carriers' costs and impacts both our buy rates and sell rates, we would expect our revenues and costs to be impacted as carriers adjust rates for the effect of changing fuel prices. To the extent that future fuel prices increase, and we are unable to pass through the increase to our customers, fuel price increases could adversely affect our operating income.”

Annual report 2025A · The company itself

“Significant global health emergencies may prompt governments around the world to mandate lockdowns and implement other restrictions that can have a direct impact on international trade. Such government restrictions may contribute to shortages of both labor and capacity and increase costs that impact our operations.”

Annual report 2025A · The company itself

“For example, international trade is influenced by: • currency exchange rates and currency control regulations; • interest rate fluctuations; • changes and uncertainties in governmental policies and inter-governmental disputes, which could result in increased tariff rates, quota restrictions, trade barriers and other types of restrictions; • changes in and application of customs, trade and security regulations; • wars, strikes, civil unrest, acts of terrorism, and other conflicts; • changes in labor and other costs, including the impacts of inflation; • increased global concerns regarding working conditions and environmental sustainability; • changes in consumer attitudes regarding goods made in countries other than their own; • changes in availability of credit; and • changes in the price and readily available quantities of oil and other petroleum-related products.”

Annual report 2025A · The company itself

“Interest Rate Risk At December 31, 2025, we had cash and cash equivalents of $1,314 million, of which $763 million was invested at various short-term market interest rates. We had no long-term debt at December 31, 2025.”

Annual report 2025A · The company itself

“Expeditors' activity is particularly exposed to trade volume impacts from trade actions and tariff disputes between China and the United States, as we generated 19% and 22% of our revenues and 15% and 17% of our operating income in 2025 and 2024, respectively, on exports from China and Hong Kong.”

Annual report 2025A · The company itself

“Seasonality Historically, our operating results have been subject to seasonal demand trends, with the first quarter being the weakest and the third and fourth quarters being the strongest; however, there is no assurance that this seasonal trend will occur in the future or to what degree it will be impacted by an uncertain economy. This historical pattern has been the result of, or influenced by, numerous factors, including weather patterns, national holidays, consumer demand, new product launches, just-in-time inventory models, economic conditions, pandemics, governmental policies, inter-governmental disputes and a myriad of other similar and subtle forces.”

Annual report 2025A · The company itself

“The Organization for Economic Cooperation and Development (OECD) reached agreement among various countries to implement a minimum 15% tax rate on certain multinational enterprises, commonly referred to as Pillar Two. Many countries continue to announce changes in their tax laws and regulations based on the Pillar Two proposals.”

Annual report 2025A · The company itself

“We also expect that pricing volatility will continue as carriers adapt to changes in demand, changing fuel prices, available capacity, security risks and react to governmental trade policies and other regulations.”

Annual report 2025A · The company itself