Demand and Pricing Continue To Unwind in Expeditors’ Q3, but Margins Resilient

Expeditors International's third-quarter gross revenue growth moderated materially to roughly 1% year over year, compared with a 37% increase on average in the first half and 72% for all of 2021. Revenue came in ahead of our expected run rate, likely due to fuel surcharge noise. Overall, stalling growth is not a surprise (even amid the peak season) as we've been expecting the air and ocean forwarding landscape to see more meaningful core-pricing normalization in the second half off pandemic-driven highs, due in part to diminishing carrier-capacity constraints. Recall air and ocean volumes have already been falling in recent quarters on easing retail sector inventory restocking and softening international export activity.