MW Cargo giant Expeditors sees China-to-U.S. shipping 'declining significantly'

By Steve Gelsi

Expeditors sees strong demand ahead of potential tariff-related price increases, but a 'frenzied' environment keeps outlook uncertain

Shipping specialist Expeditors International of Washington Inc. said Tuesday the outlook for the cargo transport business is uncertain due to unresolved tariff negotiations. But the company is already seeing signs of reduced activity between the U.S. and China.

"I am not sure any of us have ever seen anything like the non-stop, rapidly shifting rules and regulations that have impacted our industry in recent days," Expeditors Chief Executive Daniel R. Wall said. "We believe that uncertainty is likely to continue for some time, with possibly significant impacts to our industry."

Expeditors International's stock $(EXPD)$ fell 4.2% in morning trading, even after it said its first-quarter profit and revenue rose 20% and beat analyst forecasts. It noted that importers stocked up on goods ahead of expected tariffs.

The company said it's facing a "frenzied landscape of tariffs, threats of tariffs, shifting geopolitics, and other disruptions that have had shippers around the world rapidly re-evaluating the risks to their supply chains."

After the quarter ended on March 31, Expeditors said it's too early to predict the potential decline in shipping volume, but it's already "seeing early signs that China-to-U.S. ocean volumes are declining significantly."

Some of those volumes may shift to other shipping routes as customers shift to less tariff-impacted countries.

"Speculation regarding additional tariffs may cause more customers to pause or cancel shipments entirely," Wall said. "While carriers have shown a willingness to manage capacity, the current environment is so unsettled that they simply may not be able to do enough to keep rates from continuing to fall if consumer resilience fades and the capacity/demand imbalance becomes significant in certain lanes."

The company's first-quarter adjusted profit of $1.47 a share beat the FactSet consensus estimate of $1.37 a share. First-quarter revenue rose to $2.67 billion from $2.21 billion in the year-ago quarter, and came in well ahead of the analyst estimate of $2.55 billion.

The company said it performed well in the first quarter, with 9% tonnage growth in air freight and an 8% increase in ocean volume tonnage.

During the quarter, importers front-loaded shipments in anticipation of higher trade tariffs, and air capacity was tight with online order export demand from North Asia and ongoing re-sourcing to South Asia and India.

Expeditors International's stock has dropped 3.4% in 2025, while the S&P 500 SPX has shed 4.7%.

-Steve Gelsi

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May 06, 2025 10:17 ET (14:17 GMT)

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