With weakness in its ocean freight business, Expeditors International turned in a fourth quarter 2025 performance that was weaker in several key financial benchmarks than a year earlier.
Ocean freight tonnage was down year-to-year by 8% in October, 7% in November and 4% in December. That resulted in an overall decline of 6%.
That helped lead to an overall 3% decline in revenue for the company, dropping to $2.86 billion from $2.95 billion. And while the cost of transportation was down by 4%, the cost of salaries and other expenses rose 6%.
Operating income was down 17% to $250.9 million and net income was $200.7 million, down from $235.88 million. On a per share basis, the end result was net income of $1.49 for the quarter compared to $1.68 a year ago.
Expeditors’ earnings–and in particular its higher costs–are notable in part because of the inevitable comparisons to C.H. Robinson (NASDAQ: CHRW). The latter company has surged its use of AI, and with it has come a significant reduction in headcount.
And while Expeditors (NYSE: EXPD) and C.H. Robinson are not mirror images of each other, they are both 3Pls with a commitment to using technology to automate processes and reduce human touches.
Rising headcount
C.H. Robinson’s headcount in its North America Surface Transportation unit–where its truck brokerage activities lie–fell to 4,970 in the fourth quarter of 2025 from 5,348 a year earlier. Its total headcount dropped to 12,085 from 13,869.
But at Expeditors, the trend has been in the opposite direction. Total headcount at the end of the fourth quarter of 2025 was 20,359, compared to 18,917 a year earlier.
Headcount grew in North America to 7,507 from 6,999 a year earlier.
“Expenses were higher than we would like, driven primarily by strategic headcount additions to address higher‑growth opportunities, particularly in customs brokerage, as well as investments in technology,” CFO David Hackett said in a prepared statement released with the earnings. “We believe these investments are critical to our long‑term growth and expect them to generate attractive returns over time.”
CEO and president Daniel Wall said in the prepared statement that Expeditors “will also make strategic investments in high-return opportunities, such as AI and other customer vertical solutions where we see the most growth potential.”
Expeditors does not hold an earnings call with analysts.
Stock buyback doesn’t boost price
Even the announcement of a new $3 billion stock purchase plan released in conjunction with the earnings could not stem an early selloff of Expeditors stock in reaction to the company’s performance.
At approximately 10:20 a.m., Expeditors was down just under 5% to $142.17, a drop of $7.46.
While Expeditors has been hit hard in the last month as part of the selloff of stocks seen as particularly vulnerable to AI, with its stock down about 10.3% in the last month, it is up about 22.5% for the last 52 weeks
Wall’s comments on the performance of the company highlighted other data on what a tough quarter it was for the ocean freight segment at Expeditors.
He said average revenue-per-container in the ocean segment was down 41% year-on-year. Sequentially, it was down 17% from the third quarter, “as capacity continued to increase and lower volumes added further pressure.”
Not a lot of optimism
Wall did not see a turnaround anytime soon. “Ocean rates may remain soft in 2026, as capacity is likely to increase further as vessels resume transit via the Suez Canal” he said. “We will continue to adjust our ocean operating costs to more properly align with current market conditions.”
Air volumes rose 4% in October, 5% in November and 8% in December, for a total volume increase of 6%. Specific tonnage figures are not disclosed by Expeditors for air freight or ocean shipments.
Wall said air services margins were down about 2% from a year earlier as Expeditors recorded reduced per-kilo profitability even as tonnage rose. Hackett said there was about a 2 percentage point decline in air services margins in the fourth quarter.
“During the quarter, a surge in e‑commerce and tech demand pushed buy rates higher, further pressuring margins,” Wall said in the prepared statement.
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