Expeditors Navigates Rapid Fourth-Quarter Air and Ocean Freight Pullback

Expeditors International's gross revenue trend flipped negative, plummeting 36% year over year in the fourth quarter, well short of our expected run rate. This follows a 37% increase on average in the first half and staggering 72% jump in 2021. We’ve been expecting a material slowdown especially heading into 2023, but conditions deteriorated faster than we anticipated in the quarter. In short, air and ocean freight demand and pricing are retrenching off historic pandemic-driven highs seen throughout 2021 and into early 2022, especially given the pullback in retail sector inventory restocking and dissipating transportation supply chain constraints.