Annual report
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-41871 EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. (Exact name of registrant as specified in its charter) Washington 91-1069248 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification Number) 3545 Factoria Blvd. SE Sterling Plaza 2, 3rd Floor, Bellevue, Washington 98006 (Address of principal executive offices) (Zip Code) (206) 674-3400 (Registrant’s telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, par value $.01 per share EXPD New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically, if any, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act. Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒ If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐ Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive o ffi cers during the relevant recovery period pursuant to §240.10D-1(b). ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒ The aggregate market value of the registrant’s Common Stock held by non-affiliates of the registrant, based upon the closing price as of the last business day of the most recently completed second fiscal quarter ended June 30, 2025, was approximately $15,362,848,688. At February 19, 2026, the number of shares outstanding of registrant’s Common Stock was 133,503,678. DOCUMENTS INCORPORATED BY REFERENCE Portions of the definitive proxy statement for the Registrant’s Annual Meeting of Shareholders to be held on May 5, 2026 are incorporated by reference into Part III of this Form 10- K. Auditor Firm ID: 185 Auditor Name: KPMG, LLP Auditor Location: Seattle, WA, USA
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2. EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. Form 10-K For the Fiscal Year Ended December 31, 2025 INDEX Page PART I Item 1 Business 3 Item 1A Risk Factors 18 Item 1B Unresolved Staff Comments 25 Item 1C Cybersecurity 25 Item 2 Properties 26 Item 3 Legal Proceedings 26 Item 4 Mine Safety Disclosures 26 PART II Item 5 Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities27 Item 6 [Reserved] 29 Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations 30 Item 7A Quantitative and Qualitative Disclosures about Market Risk 41 Item 8 Financial Statements and Supplementary Data 43 Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 44 Item 9A Controls and Procedures 44 Item 9B Other Information 46 Item 9C Disclosures Regarding Foreign Jurisdictions That Prevent Inspections 46 PART III Item 10 Directors, Executive Officers and Corporate Governance 46 Item 11 Executive Compensation 46 Item 12 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 46 Item 13 Certain Relationships and Related Transactions and Director Independence 47 Item 14 Principal Accounting Fees and Services 47 PART IV Item 15 Exhibits, Financial Statement Schedules 48 Item 16 Form 10-K Summary 51 Signatures 51
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3. Forward-Looking Statements In accordance with the provisions of the Private Securities Litigation Reform Act of 1995, the Company is making readers aware that forward-looking statements, because they relate to future events, are by their very nature subject to many important risk factors that could cause actual results to differ materially from those contained in the forward-looking statements. This Annual Report on Form 10-K contains information that may constitute “forward-looking statements.” For additional information about forward-looking statements and for an identification of risk factors and their potential significance, see “Cautionary Note Regarding Forward-Looking Statements” immediately preceding Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” as well as Item 1A - "Risk Factors" in this report and those risk factors described from time to time in our future reports filed with the Securities and Exchange Commission. Forward-looking statements speak only as of the date they were made. The Company undertakes no obligation to update these statements in light of new information, subsequent events, developments or otherwise, except as required by law. PART I ITEM 1—BUSINESS Overview Expeditors International of Washington, Inc. (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. We do not compete for overnight courier or small parcel business and do not own aircraft or ships. 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. In addition, our Project Cargo unit handles special project shipments that move via a single method or combination of air, ocean, and/or ground transportation and generally require a high level of specialized attention because of the unusual size or nature of what is being shipped. 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. Expeditors determines the routing, consolidates shipments bound for a particular airport distribution point, and then selects the airline for transportation to the distribution point, where either we or one of our agents then arranges for the consolidated lot to be broken down into its component shipments and for the transportation of each individual shipment to its final destination. Airfreight Forwarding: as a freight forwarder, Expeditors receives and forwards individual, unconsolidated shipments, and arranges the transportation with the airline that carries the shipment.
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4. 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. We also generate fees for ancillary services such as the preparation of documentation to comply with local export and import laws. Direct ocean forwarding: Expeditors acts as the agent when its customer contracts directly with the ocean carrier. We receive fees for customer handling and ancillary services. Order management: Expeditors provides a range of order management services including consolidation of cargo from many suppliers in a particular origin into the fewest possible number of containers, putting more product into larger and fewer containers in order to maximize space, minimize cost and help our customers reduce their carbon footprint. We also give customers visibility to the orders that they are moving, enabling them to ensure that their products get to the right location at the right time. Customs Brokerage and Other Services: Expeditors offers a range of custom solutions, including: Customs Brokerage and Import Services: Expeditors helps 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. Such services can include screening commercial documentation for assessed value, country of origin, application of special trade programs, and classification. Our target market is primarily comprised of customers looking to reduce the number of customs brokers used, those looking to improve compliance and reporting, and those seeking opportunities to participate in special trade programs globally. Transcon: Expeditors' Transcon consists of intra-continental ground transportation, including time-definite less-than-truck and full-truck solutions. Warehousing and Distribution Services: Expeditors’ services include inventory management, multi-channel order fulfillment, vendor managed inventory programs, and other value-added services. Our warehousing services are generally offered globally in multi-client facilities so that customers may benefit from cost savings related to shared space, labor, equipment, and other efficiencies.
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5. Revenues The following chart shows our 2025 revenues by service type: The Expeditors Network Expeditors has approximately 20,000 employees and provides a complete range of global logistics services to a diversified group of customers that vary in size, industry and geographic location. As opportunities for profitable growth arise, we will continue to open new offices where it makes sense to support existing global customers and serve new local markets. As a knowledge-based global provider of logistics services, we have often concluded over the course of our history that it is better to grow organically rather than by acquisition. When we have made acquisitions, it has generally been to obtain technology or gain specialized industry expertise that could be leveraged to benefit our entire network. Expeditors, including its majority-owned subsidiaries, is organized functionally in geographic operating segments and operates district offices in the regions identified below. Our district offices are defined by geographic boundaries and have been established in locations where Expeditors maintains unilateral control over operations, and where the existence of the parent-subsidiary relationship is maintained by means other than record ownership of voting stock. Expeditors operates 172 district offices in the following geographic areas of responsibility: • Americas (70) • North Asia (17) • South Asia (16) • Europe (45) • Middle East, Africa and India (24)
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6. We also maintain branch offices, which are aligned with and dependent upon one district office, where practical benefit is gained by having staff located closer to the customers they are serving. Additionally, we contract with independent agents in locations where we do not have our own offices to provide required services for our existing customers. We have established 35 such relationships worldwide. At Expeditors, we create our strategy and develop our global products and services; processes; technology; and compliance programs at the corporate level, in order to drive consistency across all levels of the organization. Global consistency and compliance are fundamental to preserving our culture and network of people, processes, technology and locations. We leverage regional and local expertise by staffing our districts principally with local managers and personnel who are from the regions in which they operate and who often have extensive experience in logistics, coupled with a deep understanding of their local market. District offices are responsible for selling and executing Expeditors' products and services directly to customers and are involved in the selection of logistics service providers. Defining our strategy at a global level while executing it at the regional and local levels with customized supply chain solutions enables us to drive consistency and efficiency for our network and customers. We believe that focus on hiring and developing a diverse and talented workforce with an emphasis on exceptional customer service, along with our incentive-based compensation program, enables us to achieve superior financial results and provide for ongoing career advancement opportunities. Our Culture and Strategy We believe that our unique culture, at the center of which are our employees, is a critical component to our continued success. As a result, management's focus is on building and maintaining a global corporate culture and an environment where well-trained employees and managers are prepared to identify changes as they develop, to adapt and thrive as major trends emerge. Expeditors’ strategic plan is to achieve long-term, sustainable and profitable growth by focusing on the right markets and, within each market, on the right customers that lead to profitable business growth through the aggressive marketing of our service offerings. Innovative solutions, integrated platforms and data quality are vital to achieving a competitive advantage. Our teams are aligned on the specific markets of these focused priorities; on the targeted accounts within those markets; and on ways that we can continue to differentiate ourselves from our competitors. Our key strategic initiatives include: 1. Ensuring that base-line strategies for air, ocean and customs services for every district office and region lead to growth at sustainable and competitive market rates, profits and volumes by services. 2. Growing our business services into and out of Europe, with particular focus on certain defined markets beyond our base-line growth expectations. 3. Growing our customs brokerage offering throughout Asia by leveraging our strength and expertise in customs brokerage services and developing critical talent, processes and tools. Our chief strategy officer, along with our senior leadership team, continues to oversee all strategy within Expeditors, with a deep focus on exploring new avenues for innovation, differentiation and expansion. Global Logistics and Supply Chain Technology Expeditors has long believed that it is a competitive advantage to focus on organic growth and to utilize a single enterprise technology platform designed and built by logistics technology professionals for logistics professionals. Our technology platform is built on principles of innovation, agility, collaboration, performance and consistency across the Expeditors global network to meet diverse and complex global logistics and supply chain needs. The platform is comprised of proprietary, third party and open-source technologies. We utilize a globally-consistent infrastructure supporting both centralized and distributed technology strategies that incorporate security, disaster recovery and high availability. Expeditors’ technology platform is designed, coded, tested and implemented by the collaborative efforts of our logistics industry and information technology professionals. Internally developing, maintaining and enhancing technology capabilities is in keeping with Expeditors' long-held belief that it not outsource core functions, with global technology being one of those core functions.
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7. We are not dependent on third parties for developing or enhancing our core transportation technology platforms to address our needs or those of our customers. We utilize internally developed and third-party solutions to perform our customs brokerage services, to address country and regional specifications. We continuously monitor emerging technologies for potential applicability to our business. Expeditors also believes that having a single, uniform, globally-connected platform driving logistics operations and providing comprehensive visibility and advanced analytics creates greater efficiency and value, particularly as the value of timely data and insights into that data are increasingly important. We are continually enhancing our systems, including meaningful upgrades to core operating and accounting systems. We are investing in our technology strategy, which includes intentional and critical consideration of how best to implement a range of technology solutions, including artificial intelligence (AI). Due to the significant complexity and activities required to accommodate our customs brokerage and compliance needs, we have chosen to focus on these areas. While we expect to benefit from increased productivity, we also expect to focus on areas to increase value to our customers, making our operations more effective from an operational performance standpoint. We are also focused on accelerating our development and testing processes for solution delivery. We are in the early days in the deployment of AI and we continue to work to see where it can be applied most beneficially. We are dedicated to teaching our employees how to best utilize AI technologies, with groups creating their own agents and using tools in various areas of our business to gain efficiency and improve effectiveness. However, because our customer service, expertise, and knowledge of our customers and their specific needs are critical to our success, we do not anticipate altering customer-facing functions with AI solutions. While we see tremendous potential from these investments, we expect their deployment to be ongoing as our organization learns and further develops our skills and use of such technologies. Tailored Solutions As a non-asset-based logistics services provider, we have considerable flexibility to tailor customer-specific solutions by product and industry. By understanding a customer's logistics and supply chain processes, strategies, and objectives, we identify targeted areas of opportunity for improvement, and deploy the right solutions for that customer. These solutions include our core product offerings of transportation, customs clearance, warehousing and distribution, and order management, along with expertise in supply chain analysis and optimization, trade compliance consulting, cargo insurance, cargo security, and solutions for oversized and heavy-lift freight. Our trained professional employees deliver these services across the globe through our network of district offices using a common technology platform, in conjunction with consistent and efficient operational processes that adhere to the highest standards of compliance and quality, while focusing on the individual needs of each customer. Because Expeditors is in the business of optimizing our customers’ supply chains, we focus our sales and engagement strategies on professionals in logistics and supply chain management roles inside of customer organizations. While we drive our sales strategies at a global level, district management of each office is responsible for its own business development, operations, and service execution. We also employ dedicated account management staff who work with existing customers to improve operations and grow new business opportunities. What Expeditors Ships The goods that Expeditors handles are generally a function of the products that dominate international trade between any particular origin and destination. These goods include products from diverse industries, including technology; cloud & data center services, hyperscalers, semiconductor, personal computers and compute hardware, and industries such as healthcare, automotive, aviation, aerospace, retail and high fashion. In order to meet customers' complex and industry-specific demands, we utilize industry vertical teams throughout our network that focus on providing tailored solutions to different industries. Industry vertical teams work closely with our regional and district resources to grow our business. No single customer accounts for five percent or more of our revenues. Expeditors' Services in Detail The following describes in more detail the operations of each of Expeditors’ services:
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8. Airfreight Services Airfreight services accounted for approximately 36% and 34% of Expeditors' total revenues in 2025 and 2024, respectively. When performing airfreight services, we typically act as a freight consolidator. When acting as a freight consolidator, we purchase cargo capacity from airlines on a volume basis and resell that space to our customers at lower rates than they could obtain directly from airlines on an individual shipment. We then issue a House Airway Bill (HAWB) to our customers as the contract of carriage and separately, we receive a Master Airway Bill from the airline when the freight is physically tendered. When moving shipments between points where the nature or volume of business does not facilitate consolidation, we receive and forward individual shipments directly to the airline that carries the shipment. Whether acting as a consolidator or agent, we offer our customers expertise for optimum routing, familiarity with local business practices, knowledge of export and import documentation and procedures, the ability to arrange for ancillary services, and assistance with securing capacity during periods of high demand. In our airfreight operations, we receive shipments from our customers, determine the routing, consolidate shipments bound for a particular airport distribution point, and select the airline for transportation to the distribution point. At the distribution point, either we or an Expeditors' agent arranges for the consolidated lot to be broken down into its component shipments and for the transportation of the individual shipments to their final destinations. We estimate that our average airfreight consolidation weighs approximately 3,700 pounds and that a typical consolidation includes merchandise from several shippers. Because shipment by air is relatively expensive compared with ocean transportation, air shipments are generally characterized by a high value-to-weight ratio, the need for rapid delivery, or both. At the origin, Expeditors typically delivers shipments from one of our warehouses to the airline after consolidating the freight into containers or onto pallets. Normally that shipment will then arrive at the destination distribution point within 48-72 hours from the point of origin. During periods of high demand, available cargo capacity from the scheduled air carriers can be limited and backlogs of freight shipments may occur. When these conditions exist, we may charter aircraft to meet customer demand. Expeditors consolidates individual shipments based on weight and volume characteristics in cost-effective combinations. Typically, as the weight or volume of a shipment increases, the cost that we charge per pound/kilo or cubic inch/centimeter decreases. The rates charged by airlines also generally decrease as the weight or volume of the shipment increases. As a result, by aggregating shipments and presenting them to an airline as a single shipment, we are able to obtain a lower rate per pound/kilo or cubic inch/centimeter than what is charged for an individual shipment, while generally offering the customer a lower rate than could be obtained directly from the airline for an unconsolidated shipment. Our airfreight revenues less directly related costs of transportation and other expenses for a consolidated shipment capture the differential between the freight rate that the airline charges Expeditors and the rate that we, in turn, charge our customers, in addition to fees that we charge our customers for ancillary services. Such ancillary services we provide include preparation of shipping and customs documentation, packing, crating, insurance services, and the preparation of documentation to comply with local export laws. Expeditors' management believes that owning aircraft would subject us to undue business risks, including large capital outlays, increased fixed operating expenses, exposure to volatile fuel prices and problems of fully utilizing aircraft. Furthermore, we would be in direct competition with our service providers - the airlines. Because we rely on commercial airlines to transport our shipments, our business may be adversely affected by changes in carrier financial stability, policies and practices such as pricing, payment terms, scheduling, capacity and frequency of service. Carriers' financial results will continue to drive their asset acquisition and deployment strategies, which will impact airfreight pricing and capacity. Most of Expeditors' customers are focused on improving supply-chain efficiency, reducing overall logistics costs by negotiating lower rates and utilizing ocean freight whenever possible. We expect these trends to continue in conjunction with carriers' efforts to manage available capacity and the evolution of consumer purchasing behavior, such as online shopping. Changes in available capacity, periods of high or low demand, or other market disruptions has impacted and could continue to impact our sell and buy rates and challenge our ability to maintain historical unitary profitability.
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9. Ocean Freight and Ocean Services Ocean freight services accounted for approximately 25% and 30% of Expeditors' total revenues in 2025 and 2024, respectively. We operate Expeditors International Ocean, Inc. (EIO), an Ocean Transportation Intermediary, sometimes referred to as a Non-Vessel Operating Common Carrier (NVOCC), which specializes in ocean freight services in most major trade routes in the world. EIO provides service to and from any location where we have an office or an agent. Ocean freight services are comprised of three basic services: ocean freight consolidation, direct ocean forwarding and order management. Ocean freight consolidation: As an NVOCC, EIO contracts with ocean shipping lines to obtain transportation for an allocation of containers between various points during a specified time period at an agreed rate. EIO provides full container load services to companies that need access to vessel capacity and flexibility via multiple sailing and service options. Additionally, EIO supports customers that prefer to supplement their carrier strategy with an NVOCC. EIO also leverages the Expeditors global gateway network for the movement of LCL freight for customers needing to ship smaller consignments via ocean. EIO issues a House Ocean Bill of Lading (HOBL) or a House Sea Waybill to customers as the contract of carriage and receives a separate Master Ocean Bill of Lading (MOBL) from the contracted shipping line when freight is physically tendered. Revenues from fees charged to customers for ancillary services that EIO may provide include the preparation of shipping and customs documentation, booking arrangements, management of pick-ups, packing, crating, insurance services, and the preparation of documentation to comply with local export and import laws. We also charter vessels to support our customers’ special projects needs. Direct ocean forwarding: When the customer contracts directly with the ocean carrier, EIO acts as an agent of the customer and derives its revenues from handling fees paid by the customer. In such arrangements, EIO does not issue a HOBL or House Sea Waybill. Rather, the carrier issues a MOBL directly to the customer who employs EIO to create documentation, manage shipment information and arrange various services to facilitate the shipment of goods. The MOBL shows the customer as the shipper or consignee. Order management: Order management provides services that manage consolidation of goods at origin, supplier performance, carrier allocation, carrier performance, container management, document management, delivery management and Order/SKU visibility through our web-based portal. Customers have the ability to monitor and report against near real-time status of orders from the date of creation through final delivery. Item quantities, required ship dates, required delivery dates, commodity descriptions, estimated vs. actual ex-factory dates, container utilization, document creation and visibility are many of the managed functions that are visible and reportable via our web-based portal. Order management is available for various modes of transportation, including ocean, air, truck and rail. Order management revenues are derived from services provided to the shipper, as well as management fees associated with managing order execution against customer specific rules. One basic function of order management involves arranging cargo from many suppliers in a particular origin and “consolidating” these shipments into the fewest possible number of containers to maximize space utilization and minimize cost. Through origin consolidation, customers can reduce the number of containers shipped by putting more product in larger and fewer containers. Expeditors’ pricing is based on annual and ongoing contract negotiations with our global carrier partners. Our pricing model is flexible. We purchase based on customer needs, and our carrier strategy determines our volume and pricing commitments. Fixed pricing arrangements are entered into for a portion of our forecasted commitments, while spot market pricing arrangements are typically negotiated at the regional and local levels. When the market goes through seasonal peaks or significant disruption, the carriers react by altering sailings and adjusting their pricing. This carrier behavior, and the subsequent changes in available capacity, along with fluctuations in demand, creates pricing volatility that could impact Expeditors' ability to maintain historical unitary profitability. We offer our customers multiple sailing options and services globally to meet their changing needs. Maintaining close relationships with our carrier partners allows us to meet our customers’ space needs throughout the year, including during peak periods.
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10. Customs Brokerage and Other Services Customs brokerage and other services accounted for approximately 39% and 36% of Expeditors' total revenues in 2025 and 2024, respectively. As a customs broker, we assist our customers in clearing shipments through customs by preparing and filing required information and documentation, calculating and providing for payment of duties and other taxes on behalf of the customer, arranging required inspections by governmental agencies, and providing import services such as pick up, storage and delivery services, including value-added services, at destinations. We provide customs brokerage services either in conjunction with transportation services or independently. Expeditors supports regulatory compliance and visibility to the supply chain through process and system controls, technology, and licensed and trained professional oversight. We offer a customized, solutions-based approach to our customers, based on the complexity of their business. Our pricing reflects this complexity and scope, in addition to the number of declarations filed. We also provide other value-added services within our network, such as warehousing and distribution, Transcon and consulting services. Expeditors' warehousing and distribution services include inventory management, multi-channel order fulfillment, vendor managed inventory programs, and other industry-specific, value-added services. Our warehousing services are generally offered in facilities utilized by multiple customers so that customers may benefit from cost savings related to shared space, labor, equipment and other efficiencies. Within Transcon, Expeditors offers a wide range of services for both the domestic and intra-continental ground cross- border shipping needs of our customers. These services include cross-border ground, time-definite, less-than-truckload, and full truckload. These solutions are supported by our ground network services, a time-definite platform, that provides door-to-door capacity solutions for our customers. Expeditors responds to customer- driven trade compliance consulting services requests primarily through Tradewin. Fees for these non-transactional services are based upon hourly billing rates and bids for mutually agreed-upon projects.
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11. Human Capital Management Opportunities for employees and positive work environment Expeditors’ most important asset is its employees. The cornerstone of our company culture is the professional growth and development of our employees. From the inception of our company, management has inherently understood that the elements required for a successful global service organization can only be assured through recruiting, developing and ultimately retaining knowledgeable and experienced personnel. We believe that we must perpetuate a consistent global corporate culture that requires: • Total dedication to providing superior customer service; • Compliance with our policies and procedures and government regulations; • A positive, safe work environment that is diverse, inclusive and free from discrimination and harassment; • Ongoing mentoring and development of key employees and management personnel; • Creation of unlimited advancement opportunities for employees dedicated to hard work, personal growth and continuous improvement with a focus on promotion from within; • Training, development and engagement programs that ensure that our employees understand and remain connected to Expeditors culture and strategic initiatives; • Individual commitment to the identification and mentoring of successors for every key position so that when change occurs, a qualified and well-trained internal candidate is ready to step forward; • Continuous identification, design and implementation of system solutions and differentiated service offerings, both technological and otherwise, that place employees in a position to be successful in meeting and exceeding the needs of customers; and • Focus on developing processes and technological solutions that maximize the engagement, efficiency and effectiveness of our employees. We believe in creating and maintaining a positive work environment for employees. That commitment is supported by policies designed to promote fairness and equitable treatment and our supervisors and managers are charged with the responsibility of setting positive examples and providing mentoring with a focus on the importance of compliance. Our culture encourages Expeditors leaders to exemplify our core values at all times. We promote equal employment opportunity and have policies that expressly prohibit unacceptable behaviors, including harassment, intimidation or discrimination of any kind based on race, sex, sexual orientation, gender identity, gender expression, marital status, age, color, religion, creed, national origin, disability, veteran status or any other characteristic protected under applicable law. To protect our employees, we are committed to maintaining secure business operations globally by following our well-established security standards, maintained and deployed by our Health and Safety team, as well as health and safety laws and regulations that may apply to a particular jurisdiction. We have mechanisms in place to report accidents, injuries and unsafe working conditions. As a knowledge-based organization we focus on employees’ professional development through regular performance reviews and training, including mandatory trainings related to compliance; ethics, health and security; specific certifications where required to perform certain duties; supervising skills and development of succession plans of key employees and leaders. Compensation and retention We reinforce these values through a unique compensation system that rewards employees for profitably managing things they can control within our business. This incentive-based compensation system has been in place since we became a publicly traded company. We believe in a “real world” environment where the employees of our operating units are held accountable for the profit implications of their decisions. If these decisions result in operating losses, management generally must make up these losses with future operating profits, in the aggregate, before any cash incentive compensation can be earned. Executive management, in limited circumstances, makes exceptions at the district operating unit level. At the same time, our policies, processes and relevant training focus on such things as cargo management, risk mitigation, compliance, sound business decisions, accounts receivable collection, cash flow and credit soundness in an attempt to help managers avoid the kinds of errors that might end a career. To retain the services of highly qualified, experienced, and motivated employees, we place considerable emphasis on our incentive-based compensation programs and believe they are a true differentiator.
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12. Since our business is service based, we believe that employee retention remains critical to our long-term success. We evaluate our ability to engage and retain employees by monitoring turnover rates, percentage of positions filled internally, and by regularly conducting employee engagement surveys to identify opportunities where we can improve and set improvement plans accordingly. Geographically diverse workforce At December 31, 2025, Expeditors employed approximately 20,000 people, of which approximately 13,000 were employed in international locations. We believe that focus on hiring and developing a diverse and talented workforce coupled with our incentive-based compensation program, enables us to provide exceptional service and superior financial results. We leverage regional and local expertise by staffing our districts principally with local managers and personnel who are from the regions in which they operate and who have extensive experience in logistics, coupled with a deep understanding of their local market. This results in a highly talented, inclusive and multi-cultural global workforce that reflects the diverse regions that we serve. Because our business involves shipments between districts and typically touches more than one geographic area, our success requires a high degree of communication and coordination among our employees globally. District Managers are key individuals in our Company, as sales, operational execution and business decisions necessary to service our customers are the responsibility of management at each district. The vast majority of our employees are based in our operational districts, geographically distributed as shown below. We have summarized below, the number of employees based on individual headcount as of December 31, 2025, including corporate and information services employees. Employee Count as of December 31, 2025 United States 6,800 Other North America 1,600 Latin America 850 North Asia 2,250 South Asia 1,950 Europe 4,250 Middle East, Africa and India 2,100 Total 19,800 Competition The global logistics services industry is intensely competitive and is expected to remain so for the foreseeable future. There are a large number of companies competing in one or more segments of the industry, but the number of firms with a global network that offer a full complement of logistics services is more limited. Certain air and ocean carriers periodically enter into onshore services as they pursue more profitable and less commoditized market segments to provide balance against their incumbent asset-based offerings. Further, there are new technology-based competitors that have entered the industry with substantial capital funding, with the intent to compete on a global level. Some of our competitors have significantly more resources than Expeditors. Depending on the location of the shipper and the importer, Expeditors must compete against both the niche players and larger entities. The industry continues to experience consolidations into larger firms striving for stronger and more complete multinational and multi-service networks. However, regional and local competitors still maintain a strong presence in certain markets. The primary competitive factors in the global logistics services industry continue to be price and quality of service, including reliability, responsiveness, expertise, convenience and scope of operations. Expeditors emphasizes quality customer service, underscored by a strong commitment to compliance, and believes that our prices are market competitive.
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13. Larger customers utilize the services of multiple logistics providers and implement sophisticated and efficient procedures for the management of their logistics and supply chains by embracing strategies such as just-in-time delivery, network optimization, transportation flow optimization, and process improvement. Accordingly, timely and accurate data integrated into customer service capabilities is a significant factor in attracting and retaining customers. Expeditors supports our customers in these strategies through digital products that provide quoting, booking, freight tracing and tracking, customized reporting, data analytics, and solution modeling/simulation/optimization. We can further extend support for these customer strategies through our order management and customs brokerage products and related digital solutions. These digital solutions can be enabled through Electronic Data Interface (EDI), Application Programming Interfaces (API), and browser-based web applications or mobile applications. Supply chain disruptions stemming from various factors, including geopolitical tensions and port labor disruptions impact our customers across different industries. In addition to these factors, recent tariffs and trade policy changes have contributed to supply chain disruptions, prompting many companies to reconsider their sourcing strategies. This environment has accelerated trends towards reshoring and nearshoring. As a result, many companies seek to mitigate risks and implement strategies around supply chain resiliency, agility, sourcing, and inventory optimization. While our customers’ supply chain strategies may evolve, we believe that the industry will remain highly competitive with a mix of large, niche, and new entrants, competing aggressively for customers’ business. Expeditors' management believes that the ability to develop and deliver innovative solutions to meet our customers’ increasingly sophisticated supply chain requirements is a critical factor in our ongoing success. We devote significant resources towards the maintenance and enhancement of technology and digital solutions in order to meet these customer demands. Management believes that our existing systems are competitive with the systems currently in use by other logistics services companies with which we compete. We continue to monitor the evolving features and capabilities of new technologies such as artificial intelligence. Unlike many of our competitors, who have tended to grow by merger and acquisition, Expeditors operates fully integrated transportation, customs brokerage, and accounting systems, running on a common hardware platform, in all districts. Small and middle-tier competitors, in general, do not have the resources available to develop and integrate these customized systems. Historically, growth through aggressive acquisition has proven to be a challenge for many of our competitors and typically involves the purchase of significant “goodwill.” In contrast, Expeditors has pursued a strategy emphasizing organic growth supplemented by select strategic acquisitions. Dependence on Service Providers In addition, 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, ground transportation providers and governmental agencies. The significance of maintaining acceptable working relationships with these entities has gained increased importance as a result of ongoing concerns over terrorism, security, changes in governmental regulations and oversight of international trade. We use a consistent approach in selecting and managing service providers across all of our product offerings, beginning with a rigorous qualification and risk-based diligence process. We select and engage with best-in-class, compliance-focused, efficiently run, growth-oriented partners, based upon defined value elements and are intentional in our relationship and performance management activity, reinforcing success by awarding service providers who consistently achieve at the highest levels with additional business. We also invest in compliance, training, and certifications to ensure that we maintain trusted partner status with those government agencies with which we work, particularly those with operational and regulatory responsibilities. We consider our current working relationships with these entities to be satisfactory. However, changes in the financial stability and operating capabilities and capacity of asset-based carriers, capacity allotments available from carriers, governmental regulation or deregulation efforts, modernization of the regulations governing customs brokerage, and/or changes in governmental restrictions, quota restrictions or trade accords could affect our business in unpredictable ways.
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14. 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. Some of the countries where we maintain offices and/or have agency relationships maintain strict currency control regulations that influence our ability to hedge foreign currency exposure. We try to compensate for these exposures by accelerating international currency settlements among our offices or agents. Historically, our business has not been adversely affected by inflation. 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. Conversely, raising our prices to keep pace with inflationary pressure may result in a decrease in volume and customer demand for our services. As we are not required to purchase or maintain extensive property and equipment and have not otherwise incurred substantial interest rate-sensitive indebtedness, we currently have limited direct exposure to increased interest expense resulting from increases in interest rates. 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. 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. We cannot accurately forecast many of these factors, nor can we estimate accurately the relative influence of any particular factor and, as a result, there can be no assurance that historical patterns will continue in future periods. Government Regulations Transportation and Customs Brokerage With respect to activities in the air transportation industry in the United States, Expeditors is subject to regulation by the Transportation Security Administration (TSA) of the Department of Homeland Security (DHS) as an indirect air carrier. All United States indirect air carriers must maintain prescribed security procedures and are subject to periodic audits by TSA. Our overseas offices and agents are licensed as airfreight forwarders in their respective countries of operation. Each Expeditors office is licensed, or, in the case of our newer offices, has applied for a license as an airfreight forwarder from the International Air Transport Association (IATA), a voluntary association of airlines and air transport related entities that prescribes specific operating procedures for airfreight forwarders acting as agents for its members. The majority of our airfreight forwarding business is conducted with airlines that are IATA members. Expeditors is licensed as an Ocean Transportation Intermediary (OTI) (sometimes referred to as an NVOCC) by the Federal Maritime Commission (FMC). The FMC has established specific qualifications for shipping agents, including certain surety bonding requirements. The FMC is also responsible for the economic regulation of OTI/NVOCC activity originating or terminating in the United States. To comply with these economic regulations, OTI/NVOCCs, such as Expeditors, must file tariffs electronically, establishing the rates to be charged for the movement of specified commodities into and out of the United States. The FMC has the power to enforce these regulations by assessing penalties.
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15. Expeditors is licensed as a customs broker by the Customs and Border Protection (CBP) agency of DHS, nationally and in each U.S. customs district in which we do business. All United States customs brokers must maintain prescribed records and are subject to periodic audits by CBP. In other jurisdictions in which Expeditors performs customs clearance services, we are licensed by the appropriate governmental authority where such license is required to perform these services. Expeditors participates in various governmental supply chain security programs, such as the Air Cargo Advance Screening (ACAS), the Customs Trade Partnership Against Terrorism (CTPAT) in the United States and Authorized Economic Operator (AEO) programs in other countries. Additionally, Expeditors is subject to additional regulatory and licensing requirements in the countries where we operate. Business operations We do not believe the current United States and foreign governmental regulations impose significant economic restraint upon our business operations. In general, Expeditors conducts business activities in each country through a wholly or majority-owned subsidiary corporation that is organized and existing under the laws of that country. However, the regulations of foreign governments can impose barriers to our ability to provide the full range of our business activities in a wholly or majority United States-owned subsidiary. For example, foreign ownership of a customs brokerage business is prohibited in some jurisdictions. Less frequently, the ownership of the licenses required for freight forwarding and/or freight consolidation is restricted to local entities. When we encounter this sort of governmental restriction, we work to establish a legal structure that meets the local regulations’ requirements while also providing the substantive operating and economic advantages available in the absence of such regulation. This can be accomplished by creating a joint venture or exclusive agency relationship with a qualified local entity that holds the required license. Geopolitical risks, along with the continuing global threats from pandemics, terrorism, cyber-attacks, smuggling, wars, and governments’ overriding concern for the safety of passengers and citizens who import and export goods into and out of their respective countries, have resulted in a proliferation of cargo security and other regulations. Many of these regulations are complex and require varying degrees of interpretation. While these regulations have already created a marked difference in the security and other arrangements necessary to move shipments around the globe, regulations are expected to become more stringent in the future. As governments look for ways to tighten border controls and attempt to mitigate criminal elements and potential terror-related incidents, our competitors in the transportation business and we may be required to incorporate security and other procedures within our respective scope of services to a far greater degree than has been required in the past. We believe that increased security and additional requirements may involve further investments in technology and more sophisticated screening procedures being applied to cargo, customers, vendors, and employees. Environmental In the United States, we are subject to Federal, state, and local laws aimed at protecting the environment, including provisions regulating the discharge of materials and emissions into the environment. Similar laws apply in many other jurisdictions in which we operate. Although our current operations have not been significantly affected by compliance with these environmental laws, an increasing number of governments, service providers and customers are becoming sensitive to environmental issues. While further government regulation related to climate change is either under consideration or being implemented by various levels of governments internationally and in the United States, Expeditors is committed to systematic efforts to reduce the impact of our operations on the environment and assisting our customers in their efforts to reduce their carbon footprint. We have employee-led Green Teams which cover most of our local district offices and are responsible for projects focused on environmental sustainability, including reducing waste, energy consumption, and Expeditors' Scope 1 and Scope 2 greenhouse gas (GHG) emissions (as defined by the Greenhouse Gas Protocol, Scope 1 emissions include all direct GHG emissions from sources that are owned or controlled by the company; Scope 2 includes indirect GHG emissions from the generation of purchased electricity, heat or steam consumed by the company). We have voluntarily disclosed our Scope 1 and Scope 2 emissions data to CDP since 2010. We cannot predict what impact future environmental regulations may have on our business. We monitor climate-related risks and opportunities through our engagement with our customers and service providers and through our active participation in key initiatives and organizations focused on climate. For example, we are a SmartWay partner company in the United States. SmartWay is a voluntary public-private program sponsored by the U.S. Environmental Protection Agency (EPA) for tracking, documenting, and sharing information about fuel use and freight emissions across supply chains.
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16. Cargo and Customs Brokerage Liability When acting as an airfreight consolidator, Expeditors assumes a carrier’s liability for lost or damaged shipments. This legal liability is typically limited by contract to the lower of the value of the goods or the released value (26 Special Drawing Rights [SDRs] per kilo unless the customer declares a higher value and pays a surcharge), except in the absence of an appropriate airway bill. The airline that we utilize to make the actual shipment is generally liable to us in the same manner and to the same extent. Generally, when acting solely as the agent of the shipper, we do not assume any contractual liability for loss or damage to shipments tendered to the carrier. When acting as an ocean freight consolidator, Expeditors assumes a carrier’s liability for lost or damaged shipments. This legal liability is typically limited by contract to the lower of the value of the goods or the released value (generally between $500 and 667 SDRs per package or customary freight unit unless the customer declares a higher value and pays a surcharge). The ocean carrier that we utilize to make the actual shipment is generally liable to us in the same manner and to the same extent. Generally, we do not assume liability for lost or damaged shipments in our ocean freight forwarding and customs clearance operations. When providing ground transportation services as a carrier, Expeditors assumes a carrier’s liability for lost or damaged shipments. This legal liability is typically limited by contract to the lower of the value of the goods or the released value (generally between $0.50 per pound and 8.33 SDRs per kilo, although the released value can vary from country to country) unless the customer declares a higher value and pays a surcharge. The ground carrier that we utilize to make the actual shipment is generally liable to us in the same manner and to the same extent. When providing warehousing and distribution services, our legal liability is limited by contract and tariff to an amount generally equal to the lower of the value of the goods or $0.50 per pound with a maximum of $50 per “lot” — which is defined as the smallest unit that the warehouse is required to track. When providing customs brokerage services, Expeditors does not assume liability for lost or damaged shipments because we do not maintain care, custody, or control over the goods in our capacity as a customs broker. Our liability for customs brokerage services is limited by contract to an amount generally equal to the lower of $50 per customs entry or the amount of brokerage fees paid to Expeditors for the customs entry. We maintain cargo legal liability insurance covering claims for losses attributable to missing or damaged shipments for which we are legally liable. Expeditors also maintains legal liability insurance coverage for the property of others that is stored in our warehouse facilities. This insurance coverage is provided by a Vermont, U.S.- based insurance entity wholly owned by Expeditors. The coverage is fronted and re-insured by a global insurance company. The total risk retained by Expeditors in 2025 was $5 million. In certain circumstances, Expeditors will assume additional limited liability in certain cases based on proper risk assessment and mitigation programs. Especially where certain material high value cargo claims are made, Expeditors' limitations of liability may be vigorously challenged by customers and their insurers in a court of law. In addition, we are licensed as an insurance broker through our subsidiary, Expeditors Cargo Insurance Brokers, Inc., and place cargo insurance coverage for various customers. Information about our Executive Officers The following table sets forth the names, ages, and positions of current executive officers of our company. Name Age Position Daniel R. Wall 57 President, Chief Executive Officer and Director Blake R. Bell 54 President, Global Business Development Kelly K. Blacker 53 President, Global Geographies David A. Hackett 53 Senior Vice President and Chief Financial Officer Roberto A. Martinez 45 President, Global Products Courtney A. Hawkins 51 Senior Vice President and Chief Information Officer Gabe O. Schoonover 51 Senior Vice President, Global Enterprise Services and Chief Strategy Officer Jeffrey F. Dickerman 50 Senior Vice President, General Counsel and Corporate Secretary
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17. Daniel R. Wall joined Expeditors in March 1987 and was promoted to District Manager in May 1992 and Global Director - Account Management in March 2002. Mr. Wall was elected Vice President – ECMS (Order Management) in January 2004 and Senior Vice President - Ocean Services in September 2004. Mr. Wall was appointed as President, Global Products in June 2015, and as President, Global Services, effective January 1, 2023. In October 2023, Mr. Wall was named President, Global Geographies and Operations, effective January 1, 2024. On February 17, 2025, the Board of Directors appointed Mr. Wall to President and Chief Executive Officer, effective April 1, 2025. He was also appointed to the Board of Directors, effective April 1, 2025. Blake R. Bell joined Expeditors in September 1995 and was promoted to District Manager in January 2001. Mr. Bell was elected to Regional Vice President in May 2014, and Senior Vice President of Global Transcon in October 2015. On February 17, 2023, Mr. Bell was promoted as President, Global Products and was appointed as President, Global Services, effective January 1, 2024. Effective January 1, 2025, Mr. Bell was appointed President, Global Business Development. Kelly K. Blacker joined Expeditors in 1994 and was promoted to New York Branch Manager in 2001, Columbus District Manager in 2004, Memphis District Manager in 2007, and Atlanta District Manager in 2011. Ms. Blacker was named Regional Vice President of the U.S. Mid-Atlantic region in 2015, and Senior Vice President of Global Air in May 2020. In November 2023, Ms. Blacker was appointed President, Global Products, effective January 1, 2024. In March 2025, Ms. Blacker was appointed President, Global Geographies, effective April 1, 2025. David A. Hackett joined Expeditors in May 2024 as Vice President, Finance. For nearly 16 years, prior to joining Expeditors, Mr. Hackett served in many roles across finance at NIKE, Inc., with seven of these years as a vice president in the finance and strategy function as part of the NIKE Corporate Leadership Team. During his time at NIKE, he led external reporting, was Controller of North America and Vice President of Global Treasury and Financial Risk Management. Prior to NIKE, Mr. Hackett spent nearly nine years in the audit function of a "Big Four" where he was a senior manager and led the audit teams for some of the firm’s largest public clients in the Pacific Northwest. He also obtained his CPA certification in the state of Oregon in 1998. On August 6, 2025, Mr. Hackett was appointed Senior Vice President and Chief Financial Officer, effective October 1, 2025. Roberto A. Martinez joined Expeditors in 2003 in Customs Brokerage as a Customer Service Representative in Laredo, TX, and became a Management Trainee in Dallas, TX in 2004. After graduating from the Management Trainee program, Mr. Martinez became the District Manager in McAllen, TX and then was promoted to El Paso, TX Distribution Manager in 2011, and then to El Paso, TX District Manager in 2013. Mr. Martinez was named Regional Director of Mexico in 2017, was promoted to Regional Vice President, Mexico and Southern Border in 2019, and then promoted to Senior Vice President of The Americas in October 2023. On April 21, 2025, Mr. Martinez was appointed President, Global Products, effective June 1, 2025. Courtney A. Hawkins joined Expeditors as Senior Vice President and Chief Information Officer in September 2024, having previously served as Senior Vice President of Customer & Retail Technology for Starbucks Corporation since 2023. From 2021 to 2023, Ms. Hawkins served as Chief Technology Officer for Zulily, Inc. From 2014 to 2021, Ms. Hawkins served in various technology vice president roles with NIKE, Inc., Starbucks Corporation, and Nordstrom, Inc. Gabe O. Schoonover joined Expeditors in 1995 in the Air Export warehouse in Denver, CO. Over the next 20 years, Mr. Schoonover was promoted to various roles, including Operations Supervisor, Air Export Supervisor, and District Sales Executive. In 2006, he transitioned to corporate roles, holding managerial positions in Transition & Implementation and Transcon, and was appointed Director of Global Transcon in 2016. In 2018, Mr. Schoonover was named Director of Global Product Systems & Development. He was further promoted to Vice President of Global Product Systems & Development in 2019, and to Vice President of Global Innovation & Development in 2025. In September 2025, Mr. Schoonover was appointed Senior Vice President, Global Enterprise Services & Chief Strategy Officer, effective October 1, 2025. Jeffrey F. Dickerman joined Expeditors in October 2004 as Associate Corporate Counsel and became Corporate Counsel in 2007. Mr. Dickerman became Director, Global Legal Services in 2011 and Vice President and Associate General Counsel in 2015. In 2019, Mr. Dickerman became Vice President, Deputy General Counsel. In January 2020, Mr. Dickerman was appointed to Senior Vice President, General Counsel and was appointed Corporate Secretary in May 2020. Prior to joining Expeditors, Mr. Dickerman was an Associate Attorney at Stoel Rives LLP.
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18. Available Information Our internet address is http://www.expeditors.com. We make available free of charge through our internet website Expeditors' annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports as soon as reasonably practicable after such material is electronically filed with or furnished to the Securities and Exchange Commission (SEC). These reports are also available on the SEC's website at https://www.sec.gov. The information contained on or accessible through Expeditors' website is not a part of this Annual Report on Form 10-K. ITEM 1A – RISK FACTORS In addition to the other information set forth in this report, you should carefully consider the following factors, which could materially affect our business, financial condition or results of operations in future periods. The risks described below are not the only risks facing our Company. Additional risks not currently known to us or that we currently deem to be immaterial may also materially adversely affect our business, financial condition or results of operations in future periods. 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. These measures led to threatened or actual retaliatory tariffs on goods made in the United States from several countries, including China and Canada. This created an unpredictable trade environment for shippers to determine if and how to adapt their sourcing patterns given these new and fast-changing regulations. If these conditions result in a significant, short-term or longer-term, decrease or redistribution of international trade volumes, it could negatively affect our business volumes and revenues. 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. Uncertainty and changes to trade volumes could also affect air and ocean freight carriers because they may adjust capacity and transportation schedules, which could result in volatility in available capacity, and average sell and buy rates, all of which could adversely impact our operations and financial results. While some of those volumes are shifting to other routes, as customers look to mitigate their exposure to China-specific tariffs, it is too early to know what the overall decline in volumes might be. 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. Additionally, the increased complexity of trade regulations and customs declaration processes challenges our ability to be in compliance with such ever-changing regulations and may require us to dedicate additional resources to our customs brokerage operations.
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19. 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. 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. Our industry is highly competitive, and failure to compete or respond to customer requirements could damage our business and results of operations. The global logistics services industry is intensely competitive and is expected to remain so for the foreseeable future. There are a large number of companies competing in one or more segments of the industry, but the number of firms with a global network that offer a full complement of logistics services is more limited. Nevertheless, many of these competitors have significantly more resources than Expeditors and may pursue acquisition opportunities and are developing new technologies to gain competitive advantages. Depending on the location of the shipper and the importer, we must compete against niche players, larger entities including carriers, and emerging technology companies. The primary competitive factors are price and quality of service. Many larger customers utilize the services of multiple logistics providers. Customers regularly solicit bids from competitors in order to improve service and to secure favorable pricing and contractual terms such as: longer payment terms; fixed-price arrangements; higher or unlimited liability limits; broad indemnity undertakings; heightened cybersecurity and data privacy obligations; and performance penalties. Increased competition and competitors' acceptance of expanded contractual terms coupled with customers’ dissatisfaction with elevated rates, scarce capacity, and extended transit times could result in loss of business, reduced revenues, reduced margins, higher operating costs or loss of market share, any of which would damage our results of operations, cash flows and financial condition. Operational Risks We are dependent on our personnel and any inability to hire, develop or retain our key employees may have a negative impact on our operations. In the long term, identifying, recruiting, hiring, training, and retaining employees is essential to our ability to operate and deliver our services, our ability to grow and ultimately our future profitability. We require employees to work in the office, while other companies may allow fully or partially remote-work policies. As a result of those individuals who prefer working remotely, we may experience a higher degree of turnover of employees and this could inhibit our ability to identify, recruit, and hire new employees over time. Additionally, we may incur higher compensation-related expense to recruit and retain employees and incur additional significant expense to hire third parties to perform tasks that have historically been performed by our employees. We believe that our compensation programs are among the unique characteristics responsible for differentiating our performance from that of many of our competitors. Significant changes to compensation programs or significant declines in our operating income or operating losses could impact our ability to attract and retain key personnel.
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20. Effective succession planning is an important element of our programs. Failure to ensure an effective transfer of knowledge and smooth transitions involving key employees could adversely affect our business by hindering our ability to execute our business strategies and impacting our level of service. We must continue to develop and retain management personnel to address issues of succession planning. We cannot predict how management’s responses to these challenges will ultimately impact our Company culture, financial position, results of operations and cash flows or our ability to successfully attract and retain key employees in the future. We rely heavily upon the flexibility and sophistication of the technologies used in our core business and failure to properly manage, enhance and update technologies could lead to disruptions in our operations or our ability to remain competitive. 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. Development and maintenance of these systems must be accomplished in a cost-effective manner and support the use of secure protocols, including integration and availability of third- party technology. We are continually improving and enhancing our systems and processes, including meaningful upgrades to core operating and accounting systems. These efforts are inherently complex and, if not managed properly, could lead to disruptions in our operations or our ability to remain competitive. Any significant disruptions or unapproved third-party access to our network and systems continuity could have an adverse impact to our business and financial results. As our employees, our customers and suppliers continue to increase reliance on systems, and as additional features are added, the risks also increase. 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. Potential disruption vectors include equipment or network failures, co ‑ location facility outages, power interruptions, sabotage, government interference, employee error, cyber ‑ attacks or other security breaches, dependencies on third ‑ party technologies, geopolitical events, and natural disasters, any of which could sever connectivity to our global systems or the internet and impede execution of core processes. In such circumstances, we may be compelled to shut down systems to protect the environment, as we did during a cyber-attack in February 2022, leading to lost revenue; shipment ‑ processing delays and other business interruptions; significant remediation and incremental security costs; heightened exposure to fraud; legal claims (including potential breach ‑ of ‑ contract assertions); reporting delays or errors, including interference with regulators. A future cyber-attack may also result in the destruction or exfiltration of our data as well as that of our customers and service providers. We rely on service providers, including air, ocean, ground freight carriers and others and if they have insufficient capacity available relative to market demand or have reduced capacity to provide service, it may adversely impact our business and operating results. 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. The quality and profitability of our services depend upon effective selection and oversight of our service providers. When market demand significantly exceeds available capacity in a given market, we may not always be able to find acceptable transportation or other service solutions to meet our customers’ needs, or the routing and delivery of freight may be subject to delays that are outside of our control. Quality customer service is a key element of the Company’s success, and such challenges in meeting our customers’ needs and requirements may result in loss of business. Major disruptions to carriers’ operations, such as caused by a global health emergency, could place significant stress on our air, ocean and freight ground carriers, as well as other service providers, which may result in reduced carrier capacity or availability, pricing volatility or more limited carrier transportation schedules and other services that we utilize, which could adversely impact our operations and financial results.
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21. Failure to grow and gain profitable market share could adversely impact our ability to remain competitive and could adversely impact our business. Expeditors has historically relied primarily upon organic growth and has tended to avoid growth through acquisition. Future results will depend upon our ability to anticipate and adapt to constantly evolving supply chain requirements and innovations. To continue to grow organically, we must gain profitable market share in a highly competitive environment and successfully develop and market new service offerings. When investment opportunities arise, our success could be dependent on our ability to evaluate and integrate acquisitions. Any disruption of our business caused by a catastrophic event could harm our ability to conduct normal business operations and impact our operating results. A disruption or failure of Expeditors' systems or operations in the event of a major earthquake, weather event, cyber-attack, terrorist attack, strike, civil unrest, mass population dislocation, pandemic or other catastrophic event could cause delays in providing services or performing other mission-critical functions. Our corporate headquarters and certain other critical business operations are in the Puget Sound area of Washington, which is near major earthquake faults. A catastrophic event that results in the destruction or disruption of any of our critical business or information technology systems could harm our ability to conduct normal business operations and our operating results. See “Any significant disruptions to our network and systems continuity could have an adverse impact to our business and financial results” above. We face material risks associated with the handling, transporting, and storing of customer inventory including some products classified as hazardous materials, dangerous goods, and/or high value products. Under some of our agreements, we maintain and transport the inventory of our customers, some of which is classified as hazardous materials, dangerous goods or is high value in nature. Our failure to properly handle and safeguard such inventory exposes us to potential material claims and expenses as well as harm to our business and reputation. Our insurance coverage does not cover all potential losses and significant uninsured losses could adversely impact our financial results. We carry insurance coverage for property damage, personal injury and other insurable events resulting from certain events such as fire, accidents, and other perils under extended coverage policies. Our insurance coverages contain policy specifications and insured limits customarily carried for similar locations, business activities and markets. Though we believe we are adequately insured, certain losses, including losses from floods, earthquakes, acts of war, acts of terrorism or riots, cybersecurity events and pandemics, generally are not insured against or not fully insured against because it is not deemed economically feasible or prudent to do so. In some instances, the value of our customers’ goods stored in a single facility or contained in a single shipment may be high in nature and may exceed our general property damage insurance policy limits. If an uninsured loss or a loss in excess of insured limits occurs with respect to one or more of our facilities in the future, we could experience a significant loss of assets, including customer inventory (inclusive of high value commodities), and future operations could be harmed resulting in a loss of revenues or higher claims and operating expenses. Furthermore, we cannot be sure that the insurance companies will be able to continue to offer products with sufficient coverage at commercially reasonable rates. If we experience a loss that is uninsured or that exceeds insured limits, then we could incur additional expenses or a loss of future revenues from a facility that is damaged. Any such losses or higher insurance costs could adversely affect our business. Difficulty in forecasting timing or volumes of customer shipments or rate changes by carriers could adversely impact our margins and operating results. Expeditors is not aware of any accurate means of forecasting short-term customer requirements. However, long-term customer satisfaction depends upon our ability to meet these unpredictable short-term customer requirements. Personnel costs, our single largest expense, are always less flexible in the very near term as we must staff to meet uncertain demand. As a result, short-term operating results could be disproportionately affected.
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22. 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. Therefore, the timing of our revenues is, to a large degree, impacted by factors out of our control, such as a sudden change in consumer demand for retail goods, changes in trade tariffs, product launches and/or manufacturing production delays. Additionally, many customers ship a significant portion of their goods at or near the end of a quarter, and therefore, we may not learn of a shortfall in revenues until late in a quarter. To the extent that a shortfall in revenues or earnings was not expected by securities analysts or investors, any such shortfall from levels predicted by securities analysts or investors could have an immediate and adverse effect on the trading price of our stock. We cannot accurately forecast many of these factors, nor can we estimate accurately the relative influence of any particular factor and, as a result, there can be no assurance that historical patterns will continue in future periods. Volatile market conditions can create situations where rate increases charged by carriers and other service providers are implemented with little or no advance notice. We often cannot pass these rate increases on to our customers in the same time frame, if at all. As a result, our yields and margins can be negatively impacted. 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. Our non-asset-based model gives us a flexibility and an ability to change locations, modes, and carriers based on evolving operating conditions. However, such impacts may disrupt our operations by adversely affecting our ability to procure services that meet regulatory or customer requirements, depending on the availability of sufficient appropriate logistics solutions. In addition, the increasing concern over climate change has resulted and may continue to result in more regulations relating to climate change, including regulating greenhouse gas emissions, restrictions on modes of transportation, alternative energy policies and sustainability initiatives, such as the FuelEU Maritime initiative or the EU Emissions Trading System. If, in the United States or in any other jurisdictions in which we operate, legislation or regulations are enacted or promulgated that impose more stringent restrictions and requirements than our current legal or regulatory obligations, we may experience disruptions in, or increases in the costs associated with delivering our services, which may negatively affect our results of operations, cash flows and financial condition. Government Regulation and Tax Risks We are subject to a complex regulatory environment, and failure to comply with and adapt to these regulations could result in penalties or otherwise adversely impact our business. Expeditors is affected by ever increasing regulations from a number of sources in the United States and in foreign locations in which we operate. Many of these regulations are complex and require varying degrees of interpretation, including those related to handling dangerous and hazardous materials, trade compliance, data privacy, environmental, employment, compensation and competition, and may result in unforeseen costs. In reaction to the continuing global terrorist threat, governments around the world are continuously enacting or updating security regulations. These regulations are multi-layered, increasingly technical in nature and characterized by a lack of harmonization of substantive requirements among various governmental authorities. Furthermore, the implementation of these regulations, including deadlines and substantive requirements, can be driven by regulatory urgencies rather than industry's realistic ability to comply. Failure to consistently and timely comply with these regulations, or the failure, breach or compromise of our policies and procedures or those of our service providers or agents, may result in increased operating costs, damage to our reputation, difficulty in attracting and retaining key personnel, restrictions on operations or fines and penalties.
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23. We operate globally and any inability to safeguard our operations or comply with anti-corruption laws and trade compliance regulations would adversely impact our reputation and business. A material portion of Expeditors' revenues and operating income comes from operations conducted outside the United States. To maintain a global service network, we may be required to operate in hostile locations and in dangerous situations. Doing business in foreign locations also subjects us to a variety of risks and considerations not normally encountered by domestic enterprises. In addition, we operate in parts of the world where common business practices could constitute violations of the anti-corruption laws, rules, regulations and decrees of the United States and of other countries in which we conduct business, including the U.S. Foreign Corrupt Practices Act as well as trade and exchange control laws, or laws, regulations and Executive Orders imposing embargoes and sanctions; and anti-boycott laws and regulations. Compliance with these laws, rules, regulations and decrees is dependent on our employees, service providers, agents, third party brokers and customers, whose individual actions could violate these laws, rules, regulations and decrees. Failure to comply could result in substantial penalties and additional expenses, damage to our reputation and restrictions on our ability to conduct business. We are subject to taxation in multiple jurisdictions, and although we believe our tax estimates are reasonable, any adverse determinations in tax audits could negatively impact our financial results. Expeditors is subject to income and non-income taxation in the United States (Federal, state and local) as well as many foreign tax jurisdictions including the People’s Republic of China, including Hong Kong, Taiwan, Vietnam, India, Mexico, Canada, Netherlands and the United Kingdom. In many of these jurisdictions, the tax laws are very complex and are open to different interpretations and applications. Governmental authorities frequently implement new tax laws, including the One, Big, Beautiful Bill Act (Public Law 119-21), (the 2025 Tax Act), enacted in July of 2025 in the U.S., and change their tax rates and rules, including interpretations of those rules. 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. We are continuing to evaluate the impact of these proposed and enacted legislative changes as new guidance becomes available. Some of these legislative changes could impact our effective tax rate and tax liabilities, but we expect the impact to be insignificant because we pay tax at a rate of over 15% in the great majority of countries in which we do business. The timing of the resolution of income and non-income tax examinations can be highly uncertain, and the amounts ultimately paid, if any, upon resolution of the issues raised by the taxing authorities, may differ significantly from the amounts recorded. It is reasonably possible that within the next twelve months we will undergo further audits and examinations by various tax authorities and may reach resolution related to income tax examinations covering one or more jurisdictions and years. In recent years, the United States and other foreign governments have made significant changes to tax laws, and more changes are anticipated in future periods. Often, those changes are subject to the issuance of new regulations and interpretations, which adds complexity and uncertainty in calculating tax liabilities. We are regularly audited by tax authorities, including transfer pricing inquiries. The Indian tax authority (ITA) has asserted that additional tax applies principally related to transfer pricing and transactions between and amongst the Company and its Indian subsidiary and that, an Indian service tax applies to ocean and air imports and exports. We believe that ITA’s positions are without merit, and we have thus far been successful in defending our position in Indian courts. However, if these matters are adversely resolved, we would recognize significant additional tax expense including interest and penalties. Although we believe our tax estimates are reasonable, the final determination of tax audits, including any potential penalties and interest, could be materially different from our tax provisions and accruals and negatively impact our financial results. Current economic and political conditions make tax laws and regulations, or their interpretation and application, in any jurisdiction subject to significant change. Changes in tax laws or statutory tax rates, competing tax regimes, variability in the mix of pretax earnings we generate in the U.S., as compared to other countries, or new taxes in the United States or foreign jurisdictions could result in additional tax liabilities, or increased volatility in our effective tax rate and total tax expense.
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24. General Risks Investigations and litigation could require management time and or to incur substantial legal costs or fines, penalties or damages, any of which could adversely impact on our financial results. As a multinational corporation, Expeditors is subject to formal or informal investigations from governmental authorities or others in the countries in which we do business. In addition, we may become subject to civil litigation with our customers, service providers and other parties with whom we do business. These investigations and litigation may require significant management time and could cause us to incur substantial additional legal and related costs, which may include fines, penalties or damages that could have a materially adverse impact on our financial results. Global health emergencies on the scale of the COVID-19 pandemic may significantly impact worldwide economic conditions and global trade and can have a disruptive effect on our operations, and the operations of our service providers and our customers, which may impact our business. We may be impacted by a global health emergency, similar to the scale of what we experienced during the COVID-19 pandemic. 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. Any significant global health emergency on the scale of the COVID- 19 pandemic could negatively affect our business and our financial results. Such a disruption could also have the effect of heightening many of the other risks described above. We are exposed to risks relating to evaluations of internal control over financial reporting and disclosure controls and procedures. Management is required to assess the effectiveness of internal control over financial reporting and disclosure controls and procedures. If we are unable to maintain effective internal control over financial reporting or disclosure controls and procedures, we may be unable to record, process and report financial information accurately or timely, which could result in misstatements in our financial statements, subject us to litigation or regulatory investigations, require significant management attention and resources, and adversely affect investor confidence in our financial reporting and our stock price. In addition, uncertainties related to the design and operation of controls over operational and financial systems in connection with further development of our IT systems and processes and could further increase these risks. Actions of activist investors could disrupt our business. Public companies have been the target of activist investors. In the event that a third party, such as an activist investor, proposes to change our governance policies, board of directors, or other aspects of our operations or strategy, our review and consideration of such proposals may create a significant distraction for our management and employees. This could negatively impact our ability to execute various strategic initiatives and may require management to expend significant time and resources responding to such proposals. Such proposals may also create uncertainties with respect to our financial position and operations and may adversely affect our ability to attract and retain key employees.
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25. ITEM 1B — UNRESOLVED STAFF COMMENTS Not applicable. ITEM 1C — CYBERSECURITY Risk Management and Strategy We and our customers and suppliers have an increasing reliance on our technology systems and infrastructure. We aim to safeguard the digital infrastructure of Expeditors, enabling the highest levels of customer service while managing and minimizing risk and maintaining global compliance. The cybersecurity and risk management program within Expeditors is defined through strategy, execution, management, and oversight, with continual assessments to verify the program’s overall effectiveness. Identifying and assessing cybersecurity risks and threats is integrated into our overall enterprise risk management program. Our Enterprise Cybersecurity Committee defines the strategy, prioritizes, and sets the expectations for execution of the cybersecurity program, leveraging industry-standard cybersecurity frameworks, including the National Institute of Standards and Technology cybersecurity framework (NIST CSF). Our Cybersecurity and Risk Management program (CSRM) is designed around but not limited to five key pillars: (i) strategic development and continuous iteration of a risk strategy in line with our information services and business goals; (ii) engineering and architecture of cybersecurity preventative and response solutions and capabilities; (iii) governance, risk, and compliance defining policies, standards, and systems of control and measurement in line with industry best practices and regulatory requirements; (iv) cybersecurity operations designed to prepare, identify, contain, eradicate, and recover from cyber-related incidents; and (v) identity and access management defining global practices for access, authentication, and authorization to technology systems. Our Cybersecurity and Global Technology department executes and measures the delivery of the cybersecurity program and incorporates the program into the governance and internal controls framework for our Company. We engage third parties such as consultants, auditors and specialists to support, evaluate, and improve the program, and utilize cybersecurity technologies and services to prevent, identify, detect, respond, and recover from cybersecurity threats and incidents. We also maintain a third party continuous monitoring security program to identify, prioritize, assess, mitigate and remediate third party risks, which is part of our overall cybersecurity risk management framework. The Cybersecurity and Risk Management department is structured under the leadership of the Chief Information Security Officer (CISO), supported by two key directors, one overseeing Cybersecurity and the other leading Risk Management. The Cybersecurity function comprises dedicated teams for Security Operations, and Security Engineering & Architecture, which embed technical resilience and “secure by design” principles across enterprise systems. Complementing this function, the Risk Management organization includes Governance, Risk, and Compliance teams that drive a “compliant by design” approach, ensuring alignment with regulatory frameworks, corporate policies, and industry-specific requirements. Together, these functions operate cohesively to safeguard the organization’s digital assets, ensure operational integrity, and deliver a unified risk governance model. Governance Our Board of Directors provides direct oversight of and evaluates our cybersecurity and risk management posture at least annually. The Board’s oversight is led by James Dubois, former CISO and Chief Information Officer (CIO) with the Microsoft Corporation, who communicates with cybersecurity leadership throughout the year. The Board is provided updates via our Enterprise Risk Management program quarterly, while meeting with the CISO at least annually.
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26. Our Enterprise Risk Management Committee includes a cross-functional team including the Chief Executive Officer, CIO, Chief Financial Officer and the General Counsel as members who are well versed in risk management. In addition, the Enterprise Cybersecurity Committee includes the CIO, CISO, and Vice Presidents who have the relevant risk management and cybersecurity expertise. The Cybersecurity and Information Services department is led by the CISO and includes cyber professionals who have the relevant cybersecurity expertise. The CISO reports to the CIO and has over 20 years of experience, a graduate degree and several certifications in the field of cybersecurity. Material risks are managed and monitored by persons or committees with relevant expertise and experience. The Company maintains a Cybersecurity incident response team and a Business Continuity Plan and has a well-established incident reporting protocol to inform management, the Board of Directors or third parties. ITEM 2 — PROPERTIES Expeditors’ corporate headquarters are located in Bellevue, Washington. We conduct operations in approximately 430 locations worldwide, of which approximately 100 are in the United States and 17 are owned. These owned and leased locations are primarily located close to an airport, ocean port, or on an important border crossing. These facilities are strategically located to cover the geographic areas served by Expeditors. The majority of these facilities contain warehouse facilities. We will from time to time investigate the possibility of building or buying suitable facilities. We believe that current leases can be extended and that suitable alternative facilities are available in the vicinity of each present facility should extensions be unavailable at the conclusion of current leases. ITEM 3 — LEGAL PROCEEDINGS Expeditors is involved in claims, lawsuits, government investigations, income, transfer pricing and indirect tax audits and other legal matters that arise in the ordinary course of business and are subject to inherent uncertainties. Currently, in management's opinion and based upon advice from legal advisors, none of these matters are expected to have a material effect on our operations, cash flows or financial position. In 2025, amounts recorded for claims, lawsuits, government investigations and other legal matters are not significant to our operations, cash flows or financial position. At this time, we are unable to estimate any additional loss or range of reasonably possible losses, if any, beyond the amounts recorded, that might result from the resolution of these matters. ITEM 4 — MINE SAFETY DISCLOSURES Not applicable.
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27. PART II ITEM 5 — MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Expeditors' common stock trades on the New York Stock Exchange under the symbol EXPD. There were 532 registered holders of record as of February 18, 2026. This figure does not include a substantially greater number of beneficial holders of our common stock, whose shares are held of record by banks, brokers and other financial institutions. The Board of Directors declared semi-annual dividends per share during the two most recent fiscal years as follows: June 16, 2025 $ 0.77 December 15, 2025 $ 0.77 June 17, 2024 $ 0.73 December 16, 2024 $ 0.73 ISSUER PURCHASES OF EQUITY SECURITIES (shares in thousands) Period Total number of shares purchased Average price paid per share Total number of shares purchased as part of publicly announced plans Maximum number of shares that may yet be purchased under the plans October 1-31, 2025 — $ — — 4,021 November 1-30, 2025 41 $ 139.38 41 4,153 December 1-31, 2025 280 $ 150.97 280 3,884 Total 321 $ 149.47 321 3,884 1Repurchases are being executed from time to time, subject to general business and market conditions and other investment opportunities, through open market purchases including through a Rule 10b5-1 plan. 2Average price paid per share includes transaction costs associated with the repurchases. In November 2001, under a Discretionary Stock Repurchase Plan, Expeditors' Board of Directors authorized the repurchase of our common stock in the open market to reduce the issued and outstanding stock down to 200 million shares. Subsequently, the Board of Directors has from time to time increased the amount of our common stock that may be repurchased. The Board of Directors last authorized repurchases from 140 million shares of common stock, as of December 31, 2023, down to 130 million on February 19, 2024. The maximum number of shares available for repurchase under this plan will increase as the total number of outstanding shares increases. On February 23, 2026, the Board of Directors authorized a new share repurchase program that permits the repurchase of up to $3 billion of the Company's common stock, effective upon the expiration of the current program, which will occur when the outstanding shares of common stock reach 130 million. (1) (2)
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28. The graph below compares Expeditors International of Washington, Inc.'s cumulative 5-Year total shareholder return on common stock with the cumulative total returns of the S&P 500 index and the Dow Jones Transportation Average. The graph assumes that the value of the investment in our common stock and in each of the indexes (including reinvestment of dividends) was $100 on 12/31/2020 and tracks it through 12/31/2025. Total return assumes reinvestment of dividends in each of the indices indicated. 12/20 12/21 12/22 12/23 12/24 12/25 Expeditors International of Washington, Inc. 100.00 142.52 111.61 138.26 121.85 165.92 Standard and Poor's 500 Index 100.00 128.68 105.36 133.03 166.28 195.98 Dow Jones Transportation Average 100.00 133.21 109.73 132.21 134.16 148.84 The stock price performance included in this graph is not necessarily indicative of future stock price performance.
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29. ITEM 6 — [RESERVED] Not applicable. CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This Annual Report on Form 10-K for the fiscal year ended 2025 contains “forward-looking statements,” as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. From time to time, Expeditors or its representatives have made or may make forward- looking statements, orally or in writing. Such forward-looking statements, including those preceded by, followed by or that include the words or phrases “will likely result”, “are expected to”, "would expect", "would not expect", “will continue”, “is anticipated”, “estimate”, “project”, "provisional", "plan", "believe", "probable", "reasonably possible", "may", "could", "should", "would", "intends", "foreseeable future" or similar expressions are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future are forward- looking statements. Such statements are qualified in their entirety by reference to and are accompanied by the discussion under Risk Factors in Item 1A of certain important factors that could cause actual results to differ materially from such forward-looking statements, as well as those risk factors described from time to time in our future reports filed with the Securities and Exchange Commission. The risks included in Item 1A are not exhaustive. Furthermore, reference is also made to other sections of this report, including but not limited to Business in Item 1, Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7 and Quantitative and Qualitative Disclosures About Market Risk in Item 7A, which include additional factors that could adversely impact Expeditors' business and financial performance. Moreover, Expeditors operates in a very competitive, complex and rapidly changing global environment. New risk factors emerge from time to time and it is not possible for management to predict all of such risk factors, nor can it assess the impact of all of such risk factors on Expeditors' business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. While management believes that these forward-looking statements are reasonable as and when made, forward-looking statements cannot be relied upon as a prediction or guarantee of actual results. Do not place undue reliance on the forward-looking statements, which speak only as of the date of this report. The Company is under no obligation, and Expeditors expressly disclaim any obligation, to update or alter any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. Shareholders should be aware that while Expeditors does, from time to time, communicate with securities analysts, it is against Expeditors' policy to disclose to such analysts any material non-public information or other confidential commercial information. Accordingly, shareholders should not assume that Expeditors agrees with any statement or report issued by any analyst irrespective of the content of such statement or report. Furthermore, Expeditors has a policy against issuing financial forecasts or projections or confirming the accuracy of forecasts or projections issued by others. Accordingly, to the extent that reports issued by securities analysts contain any projections, forecasts or opinions, such reports are not the responsibility of Expeditors.
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30. 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. We do not compete for overnight courier or small parcel business. As a non-asset-based carrier, we do not own or operate transportation assets. We derive our revenues by entering into agreements that are generally comprised of a single performance obligation, which is that freight is shipped for and received by our customer. Each performance obligation is comprised of one or more of the Company's services. We typically satisfy our performance obligations as services are rendered over time. A typical shipment would include services rendered at origin, such as pick-up and delivery to port, freight services from origin to destination port and destination services, such as customs clearance and final delivery. 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. The most significant drivers of changes in gross revenues and related transportation expenses are volume, sell rates and buy rates. Volume has a similar effect on the change in both gross revenues and related transportation expenses in each of our three primary sources of revenue. We generate the major portion of our air and ocean freight revenues by purchasing transportation services on a volume basis from direct (asset-based) carriers and then reselling that space to our customers. The rate billed to our customers (the sell rate) is recognized as revenues and the rate we pay to the carrier (the buy rate) is recognized in operating expenses as the directly related cost of transportation and other expenses. By consolidating shipments from multiple customers and concentrating our buying power, we are able to negotiate favorable buy rates from the direct carriers, while at the same time offering lower sell rates than customers would otherwise be able to negotiate themselves. In most cases we act as an indirect carrier. When acting as an indirect carrier, we issue a House Airway Bill (HAWB), a House Ocean Bill of Lading (HOBL) or a House Sea Waybill to customers as the contract of carriage. In turn, when the freight is physically tendered to a direct carrier, we receive a contract of carriage known as a Master Airway Bill for airfreight shipments and a Master Ocean Bill of Lading (MOBL) for ocean shipments. 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. We also provide other value-added services at destination, such as warehousing and distribution, time-definitive transportation services and consulting.
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31. We manage our company along five geographic areas of responsibility: Americas; North Asia; South Asia; Europe; and Middle East, Africa and India (MAIR). Each area is divided into sub-regions that are composed of operating units with individual profit and loss responsibility. Our business involves shipments between operating units and typically touches more than one geographic area. The nature of the international logistics business necessitates a high degree of communication and cooperation among operating units. Because of this inter-relationship between operating units, it is very difficult to examine any one geographic area and draw meaningful conclusions as to its contribution to our overall success on a stand-alone basis. The following chart shows revenues by geographic areas of responsibility for the years ended December 31, 2025, 2024, and 2023: Our operating units share revenue using the same arms-length pricing methodologies that we use when our offices transact business with independent agents. Certain costs are allocated among the segments based on the relative value of the underlying services, which can include allocation based on actual costs incurred or estimated cost plus a profit margin. Our strategy closely links compensation with operating unit profitability, which includes shared revenues and allocated costs. Therefore, individual success is closely linked to cooperation with other operating units within our network. The mix of services varies by segment based primarily on the import or export orientation of local operations in each of our regions. 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.
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32. Summary of 2025 versus 2024 • Revenues increased 4% as strong demand for most of our services was partially offset by a drop in ocean revenues. • The dynamic environment of changing trade tariffs throughout 2025 resulted in shifts in trade volumes to different locations and importers and exporters managing timing of shipments in anticipation of higher trade tariffs. As a result, carriers had to adapt to changing demand creating volatility in average sell rates and buy rates. • Customs brokerage and other services and airfreight services revenues increased 13% and 9%, respectively. • Growing complexity in customs brokerage due to the dynamic trade environment has resulted in high demand for our brokerage services resulting in growth in revenues from customs declarations fees, as well as increases in the resources to support that activity. • Airfreight services, road freight and warehousing and distribution services (included with customs brokerage and other services) all benefited from strong demand from our technology customers investing in artificial intelligence infrastructure. • Revenue from ocean freight and other services decreased 11% resulting from significant decreases in average ocean sell rates and buy rates due to overall imbalance between demand and available capacity for ocean transportation due to global trade dynamics. • Operating income increased 1% and net earnings to shareholders remained flat, while earnings per share increased 4%. • Cash from operations was $1.0 billion, up from $723 million in 2024. • We returned $875 million to shareholders through common stock repurchases and dividends. 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. International trade is influenced by many factors, including economic and political conditions in the United States and abroad, currency exchange rates, laws and policies relating to tariffs, trade restrictions, foreign investment, and taxation. Governments periodically consider changes to tariffs, and impose trade restrictions and accords. Currently, the United States Government has undertaken a substantial global trade rebalancing effort resulting in significantly higher tariffs on imports. Increased tariffs on certain sectors for Canada, China, and Mexico took effect in the first quarter of 2025. Additionally, reciprocal tariffs on certain countries were expected to take effect in April 2025, and were later postponed to July and August 2025, while trade negotiations by country were taking place. In the third quarter additional tariffs were imposed on imports from most countries including India, Brazil, and Japan. The United States has also imposed significantly higher tariffs on goods made in China. Additionally, sectoral tariffs on steel, aluminum and their derivative products, as well as investigations were launched on other commodities since the second quarter of 2025. These measures have led to threatened or actual retaliatory tariffs and trade actions from several countries, including China and Canada. 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. The potential for further tariff changes and trade restrictions remains high, creating an unpredictable environment for international trade. Changes in import and regulations may further impact the flow of trade and the global economy. 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. The decision also allows for potential refunds; however the process to issue any such refunds is uncertain and likely subject to pending formal implementation, collection instructions and Court of International Trade decisions. We are currently assessing the impact this ruling and resulting tariff changes will have on our customs brokerage services, including post-entry activity. This decision could spur new sectoral tariffs in the United States and introduce additional uncertainty with respect to current and future U.S. trade policy and impact global trade flows. 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.
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33. Doing business in foreign locations also subjects us to a variety of risks and considerations not normally encountered by domestic enterprises. 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. We do not have employees, assets, or operations in Russia, Ukraine, Israel, the Gaza Strip or the West Bank. While limited, any shipment activity is conducted with independent agents in those countries in compliance with all applicable trade sanctions, laws and regulations. We have a branch and employees in Lebanon but no significant assets. 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. We select and engage with best-in-class, compliance-focused, efficiently run, growth-oriented partners, based upon defined value elements and are intentional in our relationship and performance management activity. We consider our current working relationships with these entities to be satisfactory. However, changes in the financial stability; operating capabilities, and the capacity of asset-based carriers; capacity allotments available from carriers; governmental regulation or deregulation efforts; modernization of the regulations governing customs brokerage; and/or changes in governmental restrictions, quota restrictions or trade accords could affect our business in unpredictable ways. 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. The global economic and trade environments remain highly uncertain; including inflation remaining higher than historical levels, volatility in oil prices, high interest rates and the conflicts in the Middle East and Ukraine. In the first quarter of 2025, we saw high demand on exports out of Asia and continued to see high demand on exports out of South Asia in the second quarter 2025, resulting in high average sell and buy rates where demand exceeded carrier capacity. However, softening demand and additional available capacity for ocean freight resulted in declines in ocean sell and buy rates starting in the second quarter. Additional ocean and air transportation capacity will become available as demand softens due to uncertainty in economic and trade regulations and safe passage through the Red Sea resumes. These conditions could result in declines in average sell and buy rates. 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. Additionally, we cannot predict the direct or indirect impact that further changes in purchasing behavior, such as the evolution of international direct e-commerce platforms, could have on our business. 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. Critical Accounting Estimates Our consolidated financial statements and accompanying notes are prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP). Preparing our consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. A summary of our significant accounting policies can be found in Note 1 to the consolidated financial statements in this report. Management believes that the nature of our business is such that there are few complex challenges in accounting for operations. While judgments and estimates are a necessary component of any system of accounting, the use of estimates is limited primarily to accrual of loss contingencies, accrual of various tax liabilities and contingencies, accrual of insurance liabilities for the portion of the related exposure that we have self-insured, and accounts receivable valuation. These estimates, other than the accrual of loss contingencies and tax liabilities and contingencies, are not highly uncertain and have not historically been subject to significant change. Management believes that the methods utilized in all of these areas are non-aggressive in approach and consistent in application, and that there are limited, if any, alternative accounting principles or methods which could be applied to these transactions. While the use of estimates means that actual future results may be different from those contemplated by the estimates, management believes that alternative principles and methods used for making such estimates would not produce materially different results than those reported.
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34. The outcome of loss contingencies, including legal proceedings and claims and government investigations, brought against us are subject to significant uncertainty. An estimated loss from a contingency, including a legal or tax proceeding, claim, government investigation or audit, or a customer claim, is recorded by a charge to income if it is probable that an asset has been impaired, or a liability has been incurred and the amount of the loss can be reasonably estimated. Disclosure of a loss contingency is made if there is at least a reasonable possibility that a significant loss has been incurred. In determining whether a loss should be recorded, management evaluates several factors, including advice from outside legal counsel and qualified tax advisors, in order to estimate the likelihood of an unfavorable outcome and to make a reasonable estimate of the amount of loss or range of reasonably possible loss. Changes in these factors could have a material impact on our financial position, results of operations and operating cash flows for any particular quarter or year. Accounting for income taxes involves significant estimates and judgments. We are subject to taxation in various states and in many foreign jurisdictions including the People’s Republic of China, including Hong Kong, Taiwan, Vietnam, India, Mexico, Canada, Netherlands and the United Kingdom. Management believes that our tax positions, including intercompany transfer pricing policies, are reasonable and are consistent with established transfer pricing methodologies and norms. We are under, or may be subject to, audit or examination and assessments by the relevant authorities in respect of these particular jurisdictions primarily for 2005 and thereafter. Sometimes audits and examinations result in proposed assessments where the ultimate resolution could result in significant additional tax, penalties and interest payments being required. We establish liabilities when, despite our belief that the tax return positions are appropriate and consistent with tax law, we conclude that we may not be successful in realizing the tax position. In evaluating a tax position, we determine whether it is more likely than not that the position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position and in consultation with qualified tax advisors. The total amount of our income and non-income tax contingencies may increase in 2026. In addition, changes in state, federal, and foreign tax laws including transfer pricing and changes in interpretations of these laws may increase our existing tax contingencies. The timing of the resolution of tax examinations can be highly uncertain, and the amounts ultimately paid, if any, upon resolution of the issues raised by the taxing authorities may differ significantly from the amounts recorded. It is reasonably possible that within the next twelve months we may undergo further audits and examinations by various tax authorities, and it is also possible that we may reach resolution related to income tax and non-income tax examinations in one or more jurisdictions. These assessments or settlements could result in changes to our contingencies related to positions on tax filings in future years and may increase the amount of tax expense we recognize as well as the potential for penalties and interest being incurred. Our estimate of any ultimate tax liability contains assumptions based on our experience, judgments about potential actions by taxing jurisdictions as well as judgments about the likely outcome of issues that have been raised by the taxing jurisdiction. Though we believe the estimates and assumptions used to support the evaluation of our tax positions are reasonable, the actual amount of any change could vary significantly depending on the ultimate timing and nature of its resolution. We cannot currently provide an estimate of the range of possible outcomes. As discussed in Note 1.G to the consolidated financial statements, earnings of our foreign subsidiaries are not considered to be indefinitely reinvested outside of the United States. U.S. corporate income tax laws and regulations include a territorial tax framework and provisions for Global Intangible Low-Taxed Income (GILTI) under which taxes on foreign income are imposed on the excess of a deemed return on tangible assets of certain foreign subsidiaries, Base Erosion and Anti-Abuse Tax (BEAT) under which taxes are imposed on certain base eroding payments to affiliated foreign companies as well as U.S. income tax deductions for Foreign-derived intangible income (FDII). Our effective tax rate is significantly impacted by the mix of pretax earnings that we generate in the U.S. as compared to countries in the rest of the world, and the tax rates in effect in those locations relative to the pre-tax earnings generated in those countries and jurisdictions. We believe it is reasonably possible that many countries and jurisdictions will increase their tax rates or otherwise implement tax reforms that would be expected to increase the total tax expense that we will incur in those locations. Our effective tax rate will continue to be impacted by any discrete items for events occurring in a future period or future changes in tax regulations and related interpretations.
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35. Results of Operations This section of this Form 10-K generally discusses year-to-year comparisons between the results of operations for the year ended December 31, 2025 compared to the year ended December 31, 2024. For a discussion of the year ended December 31, 2024 compared to the year ended December 31, 2023, please refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024. The following table shows the revenues, directly related cost of transportation and other expenses for our principal services and our overhead expenses for 2025, 2024 and 2023. The table, chart and the accompanying discussion and analysis should be read in conjunction with the consolidated financial statements and related notes thereto in Part II, Item 8 of this report. Percentage change In thousands 2025 2024 2023 2025 vs. 2024 Airfreight services: Revenues $ 3,982,882 $ 3,669,673 $ 3,246,527 9% Expenses 2,979,993 2,731,552 2,347,293 9% Ocean freight and ocean services: Revenues 2,814,960 3,148,514 2,363,243 (11)% Expenses 2,029,847 2,356,952 1,634,947 (14)% Customs brokerage and other services: Revenues 4,271,167 3,782,328 3,690,340 13% Expenses 2,392,241 2,098,214 2,071,760 14% Overhead expenses: Salaries and related costs 1,915,932 1,762,654 1,700,516 9% Other 698,450 609,820 605,661 15% Total overhead expenses 2,614,382 2,372,474 2,306,177 10% Operating income 1,052,546 1,041,323 939,933 1% Other income, net 41,517 53,477 75,095 (22)% Earnings before income taxes 1,094,063 1,094,800 1,015,028 — Income tax expense 282,015 283,167 263,249 — Net earnings 812,048 811,633 751,779 — Less net earnings (losses) attributable to the noncontrolling interest 1,716 1,560 (1,104) 10% Net earnings attributable to shareholders $ 810,332 $ 810,073 $ 752,883 —
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36. Airfreight services: 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. Tonnage increased in all regions, with the largest increases coming from exports out of South Asia and North Asia due to strong demand in the first half of 2025 in anticipation of higher tariffs going into effect and demand from technology customers in the second half of the year. Average sell rates increased most significantly in South Asia and Europe due to shifts in demand and limited capacity in those regions during part of the year, driven by tariff-related trade impacts. South Asia revenues and expenses increased 20% and 21%, respectively, in 2025 as compared with 2024 due to a 15% increase in tonnage and higher average sell and buy rates. Demand in South Asia remained strong as a result of manufacturing relocations in that region. North Asia revenues and expenses increased 11% and 12%, respectively, in 2025 as compared with 2024 due to a 10% increase in tonnage and higher average sell and buy rates driven by high demand from international direct e-commerce in the first quarter and increased market demand, in part from technology customers investing in artificial intelligence infrastructure. 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.
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37. 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. As shippers and carriers react to these volatile conditions, it may negatively affect demand for airfreight services which could significantly reduce our volumes and average sell and buy rates in the future. Though we are unable to predict how these uncertainties and any future disruptions may affect our operations or financial results prospectively, these conditions could result in decreases in our revenues, expenses and operating income. Ocean freight and ocean services: Ocean freight consolidation, direct ocean forwarding, and order management are the three basic services that constitute and are collectively referred to as ocean freight and ocean services. Ocean freight and ocean services revenues and expenses decreased 11% and 14%, respectively, in 2025, as compared with 2024. The largest component of our ocean freight and ocean services revenue is derived from ocean freight consolidation, which represented 66% and 71% of ocean freight and ocean services revenue in 2025 and 2024, respectively. In 2025 ocean freight consolidation revenues and expenses decreased by 17% and 19% respectively, as compared with 2024, primarily due to 18% and 20% decreases in average sell and buy rates, respectively, offset by a 1% increase in containers shipped. Average sell and buy rates dropped by 37% and 39%, respectively, in the second half of 2025 as compared to the same period in the prior year. Average sell and buy rates dropped by 41% and 42% in the fourth quarter as compared to the same period in 2024. 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. Rate declines could continue in 2026 if demand softens and additional vessels are brought into service and passage through the Red Sea resumes. Containers shipped grew modestly in 2025, up 1% for the full period. Shippers accelerated shipments in the first half of the year in anticipation of tariff changes, but volumes softened from August onward. Declines in North Asia to the United States shipments were mitigated by increases on other routes. North Asia ocean freight and ocean services revenues and expenses decreased 23% and 26%, respectively, in 2025, compared to 2024 primarily due to 21% and 23% decreases in average sell and buy rates, respectively, and 6% decrease in containers shipped. This was mainly due to customers relocating sourcing out of China to other regions and softening of the retail sector. Order management revenues and expenses increased 5% and 4%, respectively, in 2025, due to higher volumes from new and existing customers. Direct ocean freight forwarding revenues and expenses increased 4% and 5%, respectively, due to higher forwarding volumes and increased ancillary services, mostly in the United States and South Asia. 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. Further, carriers have added new vessels which increased capacity and substantially decreased average sell and buy rates. While some volumes are shifting to other routes and as customers look to mitigate their exposure to U.S./China-specific tariffs, it is too early to know what the overall impact on volumes might be. If safe passage through the Red Sea resumes, additional capacity will become available due to shorter transit times. These conditions could further depress sell and buy rates and cause further decreases in our revenues and operating income, depending on how carriers adapt to conditions and manage available capacity. 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. North America and Europe revenues increased 14% and 13%, respectively, and expenses increased 14% and 15%, respectively, in 2025 as compared with 2024, primarily as a result of higher shipment volumes.
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38. Import services, including charges at ports such as detention, drayage, terminal charges and delivery increased significantly in 2025 because of higher volumes. Road freight and warehousing and distribution services benefited from high demand from our technology customers. 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. Should international trade slow or there is substantial removal of tariffs, our revenues and operating income could be negatively impacted. 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. We hired employees in operations to support the added complexity and higher demand for customs brokerage services, primarily in North America, and support the growth in volumes transacted in certain services and regions such as South Asia and Europe. We also continued to hire IT personnel to support essential investments which further strengthens our critical information systems. Historically, the relatively consistent relationship between salaries and operating income has been the result of a compensation philosophy that has been maintained since the inception of our company: offer a modest base salary and the opportunity to share in a fixed and determinable percentage of the operating profit of the business unit controlled by each key employee. Using this compensation model, changes in individual incentive compensation occur in proportion to changes in our operating income, creating an alignment between branch and corporate performance and shareholder interests. Our management compensation programs have always been incentive-based and performance driven. Bonuses to field and executive management in 2025 increased 5% when compared to 2024 primarily due to growth in operating income at individual business units. Generally no management bonuses can be paid unless the relevant business unit is, from inception, cumulatively profitable. Any operating losses must be offset in their entirety by operating profits before management is eligible for a bonus. Executive management, in limited circumstances, makes exceptions at the branch operating unit level. Since the most significant portion of management compensation comes from the incentive bonus programs, we believe that this cumulative feature is a disincentive to excessive risk taking by our managers. The outcome of any higher risk transactions, such as overriding established credit limits, would be known in a relatively short time frame. Management believes that when the potential and certain impact on the bonus is fully considered in light of the short operating cycle of our services, the potential for short-term gains that could be generated by engaging in risky business practices is sufficiently mitigated to discourage excessive and inappropriate risk taking. Management believes that both the stability and the long-term growth in operating income and net earnings are a result of the incentives inherent in our compensation programs. Other overhead expenses increased 15% in 2025, as compared with 2024. 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. We will also continue to make important investments in people, processes and technology, as well as to invest in our strategic efforts to drive organic growth. Other income, net: The decrease in other income and expense is primarily the result of lower interest income due to a decline in interest rates.
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39. Income tax expense: Our consolidated effective income tax rate was 25.8% and 25.9% in 2025 and 2024. In 2025 and 2024, we benefited from U.S. Federal tax credits totaling $31.0 million and $32.5 million, respectively principally because of withholding taxes related to our foreign operations, as well as U.S. income tax benefits for FDII of $21.1 million and $21.6 million, respectively. These amounts were offset by the effect of higher foreign tax rates of the Company's international subsidiaries, when compared to the U.S. Federal income tax rate of 21%. We have not incurred any significant expenses for any period presented for either the 15% corporate alternative minimum tax (CAMT) nor for the global minimum tax regime (also known as Pillar Two). On July 4, 2025, the United States enacted into law the 2025 Tax Act. The 2025 Tax Act provides for several corporate tax changes including, but not limited to, restoring an election to recognize full expensing of domestic research and development costs, restoring immediate deductibility of certain capital expenditures, and changes to the computations of U.S. taxation on international earnings. Elements of enacted tax laws and regulations could be impacted by further legislative action as well as additional interpretations and guidance issued by the Internal Revenue Service or the U.S. Department of the Treasury and by similar governmental bodies in jurisdictions outside of the U.S. Such changes could impact the estimates of the amounts the Company has recorded. Our effective tax rate is subject to variation and the effective tax rate may be more or less volatile based on the amounts of pre-tax income. Total consolidated foreign income tax expense is composed of the income tax expense of our non-U.S. subsidiaries as well as income based withholding taxes paid by our non-U.S. subsidiaries on behalf of its parent for intercompany payments, including the remittance of dividends, some of which do not qualify for tax credits under U.S. income tax laws and regulations. The tax benefit associated with non-qualified stock option and restricted stock unit grants is recorded when the related compensation expense is recorded (excess tax benefits are recorded upon the exercise of non-qualified stock options and vesting of restricted stock units and performance share units), while the tax benefit received for employee stock purchase plan shares cannot be anticipated and are therefore recognized if and when a disqualifying disposition occurs. Currency and Other Risk Factors The nature of our worldwide operations necessitates transacting 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. Some of the countries where we maintain offices and/or have agency relationships maintain strict currency control regulations that influence our ability to hedge foreign currency exposure. Historically, derivative financial instruments have not been used to manage foreign currency risk. In lieu of the use of foreign currency derivatives we instead try to compensate for these exposures by accelerating international currency settlements among our offices and agents. In the future, we may enter into foreign currency hedging transactions to manage our foreign currency risk. There are also regulatory or commercial limitations on our ability to move money freely which could be impacted by inter-governmental disputes or new trade restrictions. We had no foreign currency derivatives outstanding at years ended December 31, 2025 and 2024. Net foreign currency transactional losses were approximately $28 million in 2025, and net foreign currency transactional gains were approximately $12 million in 2024. The net impact of foreign exchange rate fluctuation on the translation of our foreign operations, as included in other comprehensive income, was an income of $49 million in 2025 and a loss of $41 million in 2024, net of taxes. Historically, our business has not been adversely affected by inflation. 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. Conversely, raising our prices to keep pace with inflationary pressure may result in a decrease in volume and customer demand for our services. As we are not required to purchase or maintain extensive property and equipment and have not otherwise incurred substantial interest rate-sensitive indebtedness, we currently have limited direct exposure to increased interest expense resulting from increases in interest rates. 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.
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40. Liquidity and Capital Resources Our principal source of liquidity is cash and cash equivalents and cash generated from operating activities. Net cash provided by operating activities for the year ended December 31, 2025 was $1.0 billion, as compared with $723 million for 2024. This $284 million increase is primarily due to collection of accounts receivable when compared to 2024. At December 31, 2025, working capital was $1,683 million, including cash and cash equivalents of $1,314 million. Other than our recorded lease liabilities, we had no long-term obligations or debt at December 31, 2025. Management believes that our current cash position and operating cash flows will be sufficient to meet our capital and liquidity requirements for at least the next 12 months and thereafter for the foreseeable future, including meeting any contingent liabilities related to standby letters of credit and other obligations. As a customs broker, we make significant short-term cash advances for a select group of our credit-worthy customers. These cash advances are for customer obligations such as the payment of duties and taxes to customs authorities in various countries throughout the world. 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. Cash advances are a “pass through” and are not recorded as a component of revenue and expense, except for fees associated with this service charged to customers. The billings of such advances to customers are accounted for as a direct increase in accounts receivable from the customer and a corresponding increase in accounts payable to governmental customs authorities. As a result of these “pass through” billings, the conventional Days Sales Outstanding or DSO calculation does not directly measure collection efficiency. For customers that meet certain criteria, we have agreed to extend payment terms beyond our customary terms. Management believes that it has established effective credit control procedures, and historically has experienced relatively insignificant collection problems. Our business historically has been subject to seasonal fluctuations, and this is expected to continue in the future. Cash flows fluctuate as a result of this seasonality. Historically, the first quarter shows an excess of customer collections over customer billings. This results in positive cash flow. The increased activity associated with periods of higher demand (typically commencing late second or early third quarter and continuing well into the fourth quarter) causes an excess of customer billings over customer collections. This cyclical growth in customer receivables consumes available cash. However, there is no assurance that this seasonal trend will occur in the future. Cash used in investing activities for the year ended December 31, 2025 was $45 million, as compared with $41 million in 2024. Capital expenditures were $53 million in 2025 compared to $40 million in 2024. Capital expenditures in 2025 were primarily related to continuing investments in building and leasehold improvements and technology and facilities equipment. Total anticipated capital expenditures in 2026 are currently estimated to be approximately $100 million. This includes investments in technology infrastructure, leasehold and building improvements and routine capital expenditures. Cash used in financing activities during the year ended December 31, 2025 was $802 million as compared with $1,025 million in 2024. We have a Discretionary Stock Repurchase Plan under which management is allowed to repurchase shares to reduce the issued and outstanding stock to 130 million shares of common stock. A new repurchase program has been adopted as authorized by the Board of Directors in February 2026, as described in Part II, Item 5 of this report. We use the proceeds from stock option exercises, employee stock purchases and available cash to repurchase our common stock on the open market to reduce outstanding shares. During 2025 and 2024, we used cash to repurchase 5.6 million shares of common stock at an average price of $118.01 per share and 7.1 million shares of common stock at an average price of $119.47 per share, respectively. In addition, during 2025 and 2024, we paid cash dividends of $1.54 and $1.46 per share, respectively. We follow established guidelines relating to credit quality, diversification and maturities of our investments to preserve principal and maintain liquidity. Historically, our investment portfolio has not been adversely impacted by disruptions occurring in the credit markets. However, there can be no assurance that our investment portfolio will not be adversely affected in the future. We cannot predict what further impact ongoing uncertainties in the global economy, inflation, future interest rates, and political conflicts and uncertainty may have on our operating results, freight volumes, pricing, amounts advanced on behalf of our customers, changes in consumer demand, carrier stability and capacity, customers’ abilities to pay or changes in competitors' behavior.
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41. We maintain international unsecured bank lines of credit for short-term working capital purposes. A few of these credit lines are supported by standby letters of credit issued by a United States bank or guarantees issued by the Company to the foreign banks issuing the credit line. At December 31, 2025, borrowings under these credit lines were $30 million and we were contingently liable for $81 million from standby letters of credit and guarantees. The standby letters of credit and guarantees primarily relate to obligations of our foreign subsidiaries for credit extended in the ordinary course of business by direct carriers, primarily airlines, and for duty and tax deferrals available from governmental entities responsible for customs and value-added-tax (VAT) taxation. The total underlying amounts due and payable for transportation and governmental excises are properly recorded as obligations in the accounting records of the respective foreign subsidiaries, and there would be no need to record additional expense in the unlikely event the parent company is required to perform. We have lease arrangements primarily for office and warehouse space in all districts where we conduct business. As of December 31, 2025, we had fixed lease payment obligations of $733 million, with $139 million payable within 12 months. We typically enter into unconditional purchase obligations with asset-based providers (generally short-term in nature) reserving space on a guaranteed basis. The pricing of these obligations varies to some degree with market conditions. We only enter into agreements that management believes we can fulfill. In the regular course of business, we also enter into agreements with service providers to maintain or operate equipment, facilities or software that can be longer than one year. We also regularly have contractual obligations for specific projects related to improvements of our owned or leased facilities and information technology infrastructure. Purchase obligations outstanding as of December 31, 2025 totaled $192 million. Our foreign subsidiaries regularly remit dividends to the U.S. parent company after evaluating their working capital requirements and funds necessary to finance local capital expenditures. In some cases, our ability to repatriate funds from foreign operations may be subject to foreign exchange controls, or could be impacted by inter- governmental disputes or new trade restrictions. At December 31, 2025, cash and cash equivalent balances of $515 million were held by our non-United States subsidiaries, of which $5 million was held in banks in the United States. Earnings of our foreign subsidiaries are not considered to be indefinitely reinvested outside of the United States. As of December 31, 2025, we did not have any material off-balance-sheet arrangements, as defined in Item 303(a)(2) of SEC Regulation S-K. ITEM 7A — QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We are exposed to market risks in the ordinary course of our business. These risks are primarily related to foreign exchange risk and changes in short-term interest rates. The potential impact of our exposure to these risks is presented below: Foreign Exchange Risk We conduct business in many different countries and currencies. Our business often results in billings issued in a country and currency that differs from that where the expenses related to the service are incurred. In the ordinary course of business, we create numerous intercompany transactions and may have receivables, payables and currencies that are not denominated in the local functional currency. This brings foreign exchange risk to our earnings. 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. Foreign exchange rate translation sensitivity analysis can be quantified by estimating the impact on our earnings as a result of hypothetical changes in the value of the U.S. dollar, our functional currency, relative to the other currencies in which we transact business. 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. This analysis does not take into account changes in shipping patterns based upon this hypothetical currency fluctuation. For example, a weakening in the U.S. dollar would be expected to increase exports from the United States and decrease imports into the United States over some relevant period of time, but the exact effect of this change cannot be quantified without making speculative assumptions.
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42. Historically, derivative financial instruments have not been used to manage foreign currency risk. Net foreign currency transactional losses were approximately $28 million in 2025 and net foreign currency transactional gains were $12 million in 2024. The net impact of foreign exchange rate fluctuation on the translation of our foreign operations, as included in other comprehensive income, was an income of $49 million in 2025 and a loss of $41 million in 2024, net of taxes. In lieu of the use of foreign currency derivatives, we instead follow a policy of accelerating international currency settlements to manage foreign exchange risk relative to intercompany billings. As of December 31, 2025, we had approximately $185 million of net unsettled intercompany transactions. The majority of intercompany billings are resolved within 30 days. 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. A hypothetical change in the interest rate of 10 basis points at December 31, 2025 would not have a significant impact on our earnings. In management’s opinion, there has been no material change in our interest rate risk exposure between 2025 and 2024.
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43. ITEM 8 — FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The following documents are filed on the pages listed below, as part of Part II, Item 8 of this report. Document Page 1 Financial Statements and Reports of Independent Registered Public Accounting Firm: Reports of Independent Registered Public Accounting Firm F-1 through F-4 Consolidated Financial Statements: Balance Sheets as of December 31, 2025 and 2024 F-5 Statements of Earnings for the Years Ended December 31, 2025, 2024 and 2023 F-6 Statements of Comprehensive Income for the Years Ended December 31, 2025, 2024 and 2023 F-7 Statements of Equity for the Years Ended December 31, 2025, 2024 and 2023 F-8 Statements of Cash Flows for the Years Ended December 31, 2025, 2024 and 2023 F-9 Notes to Consolidated Financial Statements F-10 through F-26
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44. ITEM 9 — CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. ITEM 9A — CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures Under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in the Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of December 31, 2025. Based upon this evaluation, and as a result of actions taken to remediate the previously reported material weaknesses, the Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of December 31, 2025. Accordingly, management believes that the consolidated financial statements included in this Annual Report on Form 10-K fairly present, in all material respects, our financial position, results of operations, and cash flows as of and for the periods presented, in accordance with U.S. GAAP. Management Report on Internal Control Over Financial Reporting Management is responsible for establishing and maintaining adequate internal control over financial reporting as required by the Sarbanes-Oxley Act of 2002 and as defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Our system of internal control over financial reporting is designed to provide reasonable assurance to our management and Board of Directors regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP. Internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that receipts and expenditures are being made only in accordance with authorizations of management and our Board of Directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements. Management, including the Chief Executive Officer and Chief Financial Officer, under the oversight of our Board of Directors, assessed the effectiveness of the Company's internal control over financial reporting, as of December 31, 2025. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control — Integrated Framework (2013). Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate. Based on this assessment, management has concluded that, as of December 31, 2025, our internal control over financial reporting was effective. Remediation of Previously Reported Material Weaknesses A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. As previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024, we identified material weaknesses in our internal controls over financial reporting in the areas of logical access and change management to certain IT systems. These control deficiencies related to personnel without specific training and experience to fulfill internal control responsibilities related to information technology general controls over systems and processes resulting in an ineffective design of controls necessary to ensure the reliability of information used in financial reporting.
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45. In light of the previously reported material weaknesses, management performed additional analysis and other procedures to ensure that our consolidated financial statements were prepared in accordance with U.S. GAAP. The control deficiencies did not result in any identified misstatements to the consolidated financial statements, and there were no changes to previously released financial results. With respect to the previously reported material weaknesses, management with the oversight of the Audit Committee of the Board of Directors, completed the remediation plan described in our prior filings. Key actions include: • Engaged PwC US Consulting, LLP to assist management with our entity-wide risk assessment, assessment of control design, and remediation process; • Maintained a continuous process of ongoing entity wide risk assessments to identify relevant process risk points, IT systems and the information used in the operation of controls; • Hired additional qualified personnel to support the remediation process and the design and implementation of IT controls; • Implemented additional third-party industry-standard software solutions that aid in tracking changes to databases and related applications and improve controls over system access and monitoring; • Implemented systems, procedures, and controls designed to strengthen IT change management and logical access processes; and • Conducted ongoing training of personnel to fulfill internal control responsibilities relative to information technology. Changes in Internal Controls Except for remediation of the material weaknesses noted above, there were no changes in our internal control over financial reporting that occurred during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. An internal control system, no matter how well-conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of such internal controls are met. Further, the design of an internal control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all internal control systems, no evaluation of controls can provide absolute assurance that all of our control issues and instances of fraud, if any, have been detected.
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46. ITEM 9B — OTHER INFORMATION During the quarter ended December 31, 2025, none of our directors or Section 16 officers adopted, or terminated any Rule 10b5 ‑ 1 or non ‑ Rule 10b5 ‑ 1 trading arrangement, as defined in Item 408(a) of Regulation S ‑ K. ITEM 9C — DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS Not applicable. PART III ITEM 10 — DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE The information required by this item is set forth below or incorporated by reference to information under the caption “Proposal No. 1: Election of Directors” and to the information under the caption “Board Operations" in Expeditors' definitive Proxy Statement for its annual meeting of shareholders to be held on May 5, 2026. See also Part I - Item 1 – Information about our Executive Officers. Audit Committee and Audit Committee Financial Expert Expeditors' Board has a separately-designated standing Audit Committee established in accordance with Section 3(a)(58)(A) of the Exchange Act. The members of the Audit Committee are Brandon S. Pedersen, James M. Dubois, and Olivia D. Polius. Expeditors' Board has determined that Brandon S. Pedersen, Chair of the Audit Committee, and Olivia D. Polius, are the audit committee financial experts as defined by Item 407(d)(5) of Regulation S-K under the Exchange Act and that each member of the Audit Committee is independent under the NYSE independence standards applicable to audit committee members. Code of Ethics and Governance Guidelines Expeditors has adopted a Code of Business Conduct that applies to all Expeditors employees including, of course, its principal executive officer and principal financial and accounting officer. The Code of Business Conduct is posted with the governance documents on Expeditors' website at https://investor.expeditors.com. Expeditors will post any amendments to the Code of Business Conduct at that location. In the unlikely event that the Board of Directors approves any sort of waiver to the Code of Business Conduct for Expeditors' executive officers or directors, information concerning such waiver will also be posted at that location. No such waivers have been granted. ITEM 11 — EXECUTIVE COMPENSATION The information required by this item is incorporated by reference to information under the captions “Director Compensation Program” and “Compensation Discussion and Analysis” in Expeditors' definitive Proxy Statement for its annual meeting of shareholders to be held on May 5, 2026. ITEM 12 — SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The information required by this item is incorporated by reference to information under the captions “Shareholder Engagement & Stock Ownership Information” in Expeditors' definitive Proxy Statement for its annual meeting of shareholders to be held on May 5, 2026.
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47. Securities Authorized for Issuance under Equity Compensation Plans The following table provides information as of December 31, 2025, regarding compensation plans under which equity securities of Expeditors are authorized for issuance. (a) (b) (c) Plan Category Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (1) Weighted- Average Exercise Price of Outstanding Options, Warrants and Rights (2) Number of Securities Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) (3) Equity Compensation Plans Approved by Security Holders 1,120,821 $ 47.35 4,099,757 Equity Compensation Plans Not Approved by Security Holders — — — Total 1,120,821 $ 47.35 4,099,757 (1) Represents shares issuable upon exercise of outstanding stock options, vesting of outstanding restricted stock units and performance stock units that will vest if target levels are achieved under the Omnibus Incentive Plan. (2) The weighted average exercise price does not take into account the shares issuable upon vesting of outstanding restricted stock units and performance stock units, which have no exercise price. (3) Includes 3,421,226 available for issuance under the employee stock purchase plan and 678,531 available for future grants of equity awards under the Amended and Restated 2017 Omnibus Incentive Plan. ITEM 13 — CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE The information required by this item is incorporated by reference to information under the captions “Certain Relationships and Related Transactions” in Expeditors' definitive Proxy Statement for its annual meeting of shareholders to be held on May 5, 2026. ITEM 14 — PRINCIPAL ACCOUNTING FEES AND SERVICES The information required by this item is incorporated by reference to information under the caption “Relationship with Independent Registered Public Accounting Firm” in Expeditors' definitive Proxy Statement for its annual meeting of shareholders to be held on May 5, 2026.
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48. PART IV ITEM 15 — EXHIBITS, FINANCIAL STATEMENT SCHEDULES Page (a) 1. FINANCIAL STATEMENTS Reports of Independent Registered Public Accounting Firm F-1 through F-4 Consolidated Balance Sheets as of December 31, 2025 and 2024 F-5 Consolidated Statements of Earnings for the Years Ended December 31, 2025, 2024 and 2023 F-6 Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2025, 2024 and 2023 F-7 Consolidated Statements of Equity for the Years Ended December 31, 2025, 2024 and 2023 F-8 Consolidated Statements of Cash Flows for the Years Ended December 31, 2025, 2024 and 2023 F-9 Notes to Consolidated Financial Statements F-10 through F-26 2. FINANCIAL STATEMENT SCHEDULES Schedules are omitted because of the absence of conditions under which they are required or because the required information is given in the consolidated financial statements or notes thereto. 3. EXECUTIVE COMPENSATION PLANS AND ARRANGEMENTS The following list is a subset of the list of exhibits described below and contains all compensatory plans, contracts or arrangements in which any director or executive officer of Expeditors is a participant, unless the method of allocation of benefits thereunder is the same for management and non-management participants: (1) Form of Employment Agreement executed by Daniel R. Wall, Expeditors' President and Chief Executive Officer. See Exhibit 10.24. (2) Form of Employment Agreement executed by Jeffrey S. Musser, Expeditors' former President and Chief Executive Officer. See Exhibit 10.23. (3) Form of Employment Agreement executed by Dave A. Hackett, Expeditors' Chief Financial Officer. See Exhibit 10.28. (4) Form of Employment Agreement executed by Bradley S. Powell, Expeditors' former Chief Financial Officer. See Exhibit 10.25. (5) Form of Employment Agreement (Blake R. Bell). See Exhibit 10.26. (6) Form of Employment Agreement (Kelly K. Blacker). See Exhibit 10.27. (7) Form of Employment Agreement (Roberto A. Martinez). See Exhibit 10.29. (8) Expeditors' 2008 Executive Incentive Compensation Plan. See Exhibit 10.35. (9) Expeditors' 2002 Amended and Restated Employee Stock Purchase Plan. See Exhibit 10.42. (10) Expeditors' 2015 Stock Option Plan. See Exhibit 10.65. (11) Form of Stock Option Agreement used in connection with options granted under Expeditors' 2015 Stock Option Plan. See Exhibit 10.66. (12) Expeditors' 2016 Stock Option Plan. See Exhibit 10.67. (13) Form of Stock Option Agreement used in connection with options granted under Expeditors' 2016 Stock Option Plan. See Exhibit 10.68. (14) Expeditors' Amended and Restated 2017 Omnibus Incentive Plan. See Exhibit 10.69 (15) Form of Executive Restricted Stock Unit Award Agreement used in connection with executive restricted stock units granted under Expeditors' Amended and Restated 2017 Omnibus Incentive Stock Plan. See Exhibit 10.70 (16) Form of Performance Share Award Agreement used in connection with performance share units granted under Expeditors' Amended and Restated 2017 Omnibus Incentive Stock Plan. See Exhibit 10.72 (17) Incentive Compensation Recovery Policy. See Exhibit 97
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49. (b) EXHIBITS Exhibit Number Exhibit 3.1 Expeditors' Restated Articles of Incorporation and the Articles of Amendment as amended. (Incorporated by reference to Exhibit 3.1 to Form 10-K, filed on or about February 23, 2018.) 3.2 Expeditors' Amended and Restated Bylaws. (Incorporated by reference to Exhibit 3.2 to Form 8-K, filed on or about November 9, 2022.) 4.1 Description of Registrant’s Securities. (Incorporated by reference to the Company’s Form 10-K for the year ended December 31, 2019, filed on or about February 21, 2020.) 10.23 Form of Employment Agreement executed by Jeffrey S. Musser, Expeditors' President and Chief Executive Officer dated December 31, 2008. (Incorporated by reference to Exhibit 10.23 to Form 10-K, filed on or about February 26, 2015.) 10.24 Form of Employment Agreement executed by Daniel R. Wall, Expeditors' President and Chief Executive Officer dated April 30, 2025. (Incorporated by reference to Exhibit 10.24 to Form 10-Q, filed on or about May 8, 2025.) 10.25 Form of Employment Agreement executed by Bradley S. Powell, Expeditors' Chief Financial Officer, dated May 21, 2025. (Incorporated by reference to Exhibit 10.25 to Form 8-K, filed on or about May 21, 2025.) 10.26 Form of Employment Agreement (Blake R. Bell; Incorporated by reference to Exhibit 10.26 to Form 8-K, filed on or about May 21, 2025. 10.27 Form of Employment Agreement (Kelly K. Blacker; Incorporated by reference to Exhibit 10.27 to Form 8-K, filed on or about May 21, 2025.) 10.28 Form of Employment Agreement executed by David A. Hackett, Expeditors' Chief Financial Officer, dated August 22, 2025. (Incorporated by reference to Exhibit 10.25 to Form 10-Q, filed on or about November 6, 2025.) 10.29 Form of Employment Agreement (Roberto A. Martinez; Incorporated by reference to Exhibit 10.29 to Form 8-K, filed on or about February 19, 2026.) 10.35 Expeditors' 2008 Executive Incentive Compensation Plan. (Incorporated by reference to Appendix C of Expeditors' Notice of Annual Meeting of Shareholders and Proxy Statement pursuant to Regulation 14A filed on or about March 21, 2008.) 10.42 Expeditors' Amended and Restated 2002 Employee Stock Purchase Plan. (Incorporated by reference to Appendix B of Expeditors' definitive proxy statement pursuant to Regulation 14A filed on March 26, 2024.) 10.65 Expeditors' 2015 Stock Option Plan. (Incorporated by reference to Appendix A of Expeditors' Notice of Annual Meeting of Shareholders and Proxy Statement pursuant to Regulation 14A filed on or about April 9, 2015.) 10.66 Form of Stock Option Agreement used in connection with options granted under Expeditors' 2015 Stock Option Plan. (Incorporated by reference to Appendix B of Expeditors' Notice of Annual Meeting of Shareholders and Proxy Statement pursuant to Regulation 14A filed on or about April 9, 2015.) 10.67 Expeditors' 2016 Stock Option Plan. (Incorporated by reference to Appendix A of Expeditors' Notice of Annual Meeting of Shareholders and Proxy Statement pursuant to Regulation 14A filed on or about March 24, 2016.)
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50. 10.68 Form of Stock Option Agreement used in connection with options granted under Expeditors' 2016 Stock Option Plan. (Incorporated by reference to Appendix B of Expeditors' Notice of Annual Meeting of Shareholders and Proxy Statement pursuant to Regulation 14A filed on or about March 24, 2016.) 10.69 Expeditors' Amended and Restated 2017 Omnibus Incentive Plan. (Incorporated by reference to Appendix B of Expeditors' Notice of Annual Meeting of Shareholders and Proxy Statement pursuant to Regulation 14A filed on or about March 24, 2020.) 10.70 Form of Executive Restricted Stock Unit Award Agreement used in connection with executive restricted stock units granted under Expeditors' Amended and Restated 2017 Omnibus Incentive Plan. (Incorporated by reference to Exhibit 10.70 to Form S-8 filed on or about May 16, 2017.) 10.72 Form of Performance Share Award Agreement used in connection with performance share units granted under Expeditors' Amended and Restated 2017 Omnibus Incentive Plan. (Incorporated by reference to Exhibit 10.72 to Form 10-Q filed on or about August 7, 2019.) 19.1 Company Trading Standard (Incorporated by reference to Exhibit 19.1 to Form 10-K filed on or about February 21, 2025.) 21.1 Subsidiaries of the registrant. 23.1 Consent of Independent Registered Public Accounting Firm. 31.1 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2 Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 97 Incentive Compensation Recovery Policy (Incorporated by reference to Exhibit 97 to Form 10-K filed on or about February 23, 2024.) 101.INS Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. 101.SCH Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents 104 The cover page from the Company’s Yearly Report on Form 10-K for the year ended December 31, 2025, has been formatted in Inline XBRL.
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51. ITEM 16 — FORM 10-K SUMMARY None. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Date: February 25, 2026 EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. By: /s/ David A. Hackett David A. Hackett Senior Vice President and Chief Financial Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on February 23, 2026. Signature Title /s/ Daniel R. Wall President, Chief Executive Officer and Director (Daniel R. Wall) (Principal Executive Officer) /s/ David A. Hackett Senior Vice President and Chief Financial Officer (David A. Hackett) (Principal Financial and Accounting Officer) /s/ Robert P. Carlile Chairman of the Board and Director (Robert P. Carlile) /s/ Glenn M. Alger Director (Glenn M. Alger) /s/ James M. DuBois Director (James M. DuBois) /s/ Mark A. Emmert Director (Mark A. Emmert) /s/ Diane H. Gulyas Director (Diane H. Gulyas) /s/ Brandon S. Pedersen Director (Brandon S. Pedersen) /s/ Liane J. Pelletier Director (Liane J. Pelletier) /s/ Olivia D. Polius February 24, 2026 Director (Olivia D. Polius)
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52. EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS COMPRISING ITEM 8 ANNUAL REPORT ON FORM 10-K TO SECURITIES AND EXCHANGE COMMISSION FOR THE YEARS ENDED DECEMBER 31, 2025, 2024, AND 2023
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F-1 Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors Expeditors International of Washington, Inc.: Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of Expeditors International of Washington, Inc. and subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of earnings, comprehensive income, equity, and cash flows for each of the years in the three-year period ended December 31, 2025, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 25, 2026 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Assessment of gross unrecognized tax benefits As discussed in Note 7 to the consolidated financial statements, the Company is under, or may be subject to, audit or examination and assessments by relevant tax authorities in many jurisdictions. The Company estimates additional tax expense, as well as interest and penalties that could arise from certain tax audits. We identified the assessment of certain gross unrecognized tax benefits as a critical audit matter. Complex auditor judgement was required in evaluating the Company’s interpretation of tax law and its estimate of the ultimate resolution of tax positions. The primary procedures we performed to address this critical audit matter included the following. We tested certain internal controls over the Company’s unrecognized tax benefit process. This included controls related to the interpretation of tax
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F-2 law and its application in the liability estimation process. Since tax law is complex and often subject to interpretations, we involved tax professionals with specialized skills and knowledge, who assisted in: • evaluating the Company’s interpretation of tax laws • assessing transfer pricing positions for compliance with applicable laws and regulations • inspecting settlement documents with applicable taxing authorities and appeals documents with applicable tax courts • assessing the expiration of statutes of limitations • comparing historical gross unrecognized tax benefits to actual results upon conclusion of tax audits or expiration of the statute of limitations • performing an independent assessment of the Company’s tax positions and comparing the results to the Company’s assessment. In addition, we assessed the responses received directly from the Company’s external legal counsel regarding tax positions for which they had been engaged. /s/ KPMG LLP We have served as the Company's auditor since 1982. Seattle, Washington February 25, 2026
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F-3 Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors Expeditors International of Washington, Inc.: Opinion on Internal Control Over Financial Reporting We have audited Expeditors International of Washington, Inc. and subsidiaries' (the Company) internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2025 and 2024, the related consolidated statements of earnings, comprehensive income, equity, and cash flows for each of the years in the three-year period ended December 31, 2025, and the related notes (collectively, the consolidated financial statements), and our report dated February 25, 2026 expressed an unqualified opinion on those consolidated financial statements. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management Report on Internal Control Over Financial Reporting.Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
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F-4 Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ KPMG LLP Seattle, Washington February 25, 2026
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F-5 Consolidated Balance Sheets In thousands, except per share data December 31, 2025 2024 Assets: Current Assets: Cash and cash equivalents $ 1,314,285 $ 1,148,320 Accounts receivable, net 2,021,889 1,997,840 Deferred contract costs 283,281 349,343 Other 136,167 164,272 Total current assets 3,755,622 3,659,775 Property and equipment, net 462,122 449,404 Operating lease right-of-use assets 550,162 551,652 Goodwill 7,927 7,927 Deferred income tax asset, net 101,671 70,671 Other assets, net 16,134 15,029 Total assets $ 4,893,638 $ 4,754,458 Liabilities: Current Liabilities: Accounts payable $ 1,123,429 $ 1,036,749 Accrued expenses, primarily salaries and related costs 448,055 451,921 Contract liabilities 358,386 441,927 Current portion of operating lease liabilities 110,891 106,736 Federal, state and foreign income taxes payable 32,046 29,140 Total current liabilities 2,072,807 2,066,473 Noncurrent portion of operating lease liabilities 459,698 462,201 Deferred income tax liability, net 3,040 — Commitments and contingencies Shareholders’ Equity: Preferred stock, par value $0.01 per share, authorized 2,000 shares; none issued — — Common stock, par value $0.01 per share authorized 640,000. Issued and outstanding: 133,884 shares and 138,003 shares at December 31, 2025 and 2024, respectively 1,339 1,380 Additional paid-in capital — — Retained earnings 2,538,455 2,455,132 Accumulated other comprehensive loss (184,161) (233,500) Total shareholders’ equity 2,355,633 2,223,012 Noncontrolling interest 2,460 2,772 Total equity 2,358,093 2,225,784 Total liabilities and equity $ 4,893,638 $ 4,754,458 See accompanying notes to consolidated financial statements.
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F-6 Consolidated Statements of Earnings In thousands, except per share data Years ended December 31, 2025 2024 2023 Revenues: Airfreight services $ 3,982,882 $ 3,669,673 $ 3,246,527 Ocean freight and ocean services 2,814,960 3,148,514 2,363,243 Customs brokerage and other services 4,271,167 3,782,328 3,690,340 Total revenues 11,069,009 10,600,515 9,300,110 Operating Expenses: Airfreight services 2,979,993 2,731,552 2,347,293 Ocean freight and ocean services 2,029,847 2,356,952 1,634,947 Customs brokerage and other services 2,392,241 2,098,214 2,071,760 Salaries and related costs 1,915,932 1,762,654 1,700,516 Rent and occupancy costs 263,891 241,013 232,358 Depreciation and amortization 56,769 61,090 67,760 Selling and promotion 40,099 33,331 27,913 Other 337,691 274,386 277,630 Total operating expenses 10,016,463 9,559,192 8,360,177 Operating income 1,052,546 1,041,323 939,933 Other Income: Interest income 35,715 46,706 70,451 Other, net 5,802 6,771 4,644 Other income, net 41,517 53,477 75,095 Earnings before income taxes 1,094,063 1,094,800 1,015,028 Income tax expense 282,015 283,167 263,249 Net earnings 812,048 811,633 751,779 Less net earnings (losses) attributable to the noncontrolling interest 1,716 1,560 (1,104) Net earnings attributable to shareholders $ 810,332 $ 810,073 $ 752,883 Diluted earnings attributable to shareholders per share $ 5.95 $ 5.72 $ 5.01 Basic earnings attributable to shareholders per share $ 5.97 $ 5.75 $ 5.05 Weighted average diluted shares outstanding 136,249 141,722 150,186 Weighted average basic shares outstanding 135,810 140,992 149,141 See accompanying notes to consolidated financial statements.
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F-7 Consolidated Statements of Comprehensive Income In thousands Years ended December 31, 2025 2024 2023 Net earnings $ 812,048 $ 811,633 $ 751,779 Other comprehensive income (loss), net of tax: Foreign currency translation adjustments, net of tax expense (benefit) of $1,315 in 2025, ($2,573) in 2024, and ($5,205) in 2023 49,156 (41,294) 10,238 Other comprehensive income (loss), net of tax 49,156 (41,294) 10,238 Comprehensive income 861,204 770,339 762,017 Less comprehensive income (loss) attributable to the noncontrolling interest 1,533 1,709 (1,362) Comprehensive income attributable to shareholders $ 859,671 $ 768,630 $ 763,379 See accompanying notes to consolidated financial statements.
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F-8 Consolidated Statements of Equity In thousands, except per share data Years ended December 31, 2025 2024 2023 Total Shareholders' Equity, Beginning of Period $ 2,223,012 $ 2,390,350 $ 3,110,021 Common Stock Par Value Beginning of period 1,380 1,439 1,543 Shares issued under employee stock plans, net 15 12 17 Shares repurchased (56) (71) (121) End of period 1,339 1,380 1,439 Additional Paid-In Capital Beginning of period — — 139 Shares issued under employee stock plans, net 77,809 53,897 65,366 Shares repurchased (147,903) (119,288) (125,153) Stock compensation expense 69,231 64,364 58,399 Dividend equivalents paid 863 1,027 1,249 End of period — — — Retained Earnings Beginning of period 2,455,132 2,580,968 3,310,892 Shares repurchased (518,709) (730,795) (1,279,529) Net earnings 810,332 810,073 752,883 Dividend and dividend equivalents paid ($1.54, $1.46, $1.38) (208,300) (205,114) (203,278) End of period 2,538,455 2,455,132 2,580,968 Accumulated Other Comprehensive Loss Beginning of period (233,500) (192,057) (202,553) Other comprehensive income (loss) 49,339 (41,443) 10,496 End of period (184,161) (233,500) (192,057) Total Shareholders' Equity End of period 2,355,633 2,223,012 2,390,350 Noncontrolling Interest Beginning of period 2,772 1,063 3,514 Net earnings (losses) 1,716 1,560 (1,104) Other comprehensive (loss) income (183) 149 (258) Distribution to noncontrolling interest (1,845) — (1,089) End of period 2,460 2,772 1,063 Total Equity End of period $ 2,358,093 $ 2,225,784 $ 2,391,413 Common Shares Outstanding Beginning of period 138,003 143,866 154,313 Shares issued under employee stock plans, net 1,488 1,194 1,699 Shares repurchased (5,607) (7,057) (12,146) End of period 133,884 138,003 143,866 See accompanying notes to consolidated financial statements.
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F-9 Consolidated Statements of Cash Flows In thousands Years ended December 31, 2025 2024 2023 Operating Activities: Net earnings $ 812,048 $ 811,633 $ 751,779 Adjustments to reconcile net earnings to net cash from operating activities: Provisions for losses on accounts receivable 3,597 3,447 3,943 Deferred income tax benefit (13,712) (5,138) (22,916) Stock compensation expense 69,231 64,364 58,399 Depreciation and amortization 56,769 61,090 67,760 Other, net 15,154 (3,359) 8,461 Changes in operating assets and liabilities: Decrease (increase) in accounts receivable 41,802 (531,616) 573,724 Increase (decrease) in accounts payable and accrued expenses 20,589 259,310 (300,345) Decrease (increase) in deferred contract costs 81,152 (147,685) 36,952 (Decrease) increase in contract liabilities (100,166) 179,553 (40,076) Increase (decrease) in income taxes payable, net 27,099 26,388 (77,298) (Increase) decrease in other, net (7,062) 5,374 (7,192) Net cash from operating activities 1,006,501 723,361 1,053,191 Investing Activities: Purchase of property and equipment (53,101) (40,466) (39,314) Other, net 8,398 (57) (119) Net cash from investing activities (44,703) (40,523) (39,433) Financing Activities: Proceeds from borrowings on lines of credit 5,590 15,000 32,199 Payments on borrowings on lines of credit (9,303) (35,058) (38,143) Proceeds from issuance of common stock 88,177 69,257 84,889 Repurchases of common stock (667,306) (855,061) (1,392,886) Dividends paid (207,437) (204,087) (202,029) Payments for taxes related to net share settlement of equity awards (10,353) (15,348) (19,506) Distribution to noncontrolling interest (1,845) — (1,089) Net cash from financing activities (802,477) (1,025,297) (1,536,565) Effect of exchange rate changes on cash and cash equivalents 6,644 (22,104) 1,559 Change in cash and cash equivalents 165,965 (364,563) (521,248) Cash and cash equivalents at beginning of period 1,148,320 1,512,883 2,034,131 Cash and cash equivalents at end of period $ 1,314,285 $ 1,148,320 $ 1,512,883 Supplemental Cash Flow Information: Cash paid for income taxes $ 265,035 $ 257,170 $ 356,380 See accompanying notes to consolidated financial statements.
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F-10 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. | Basis of Presentation Expeditors International of Washington, Inc. (the "Company”) is a non-asset-based provider of global logistics services operating through a worldwide network of offices and exclusive or non-exclusive agents. The Company serves a worldwide, diverse clientele in the technology sector, including cloud & data center services; hyperscalers; semiconductor; personal computers and compute hardware, and industries such as healthcare, automotive, aviation, aerospace, retail and high fashion. International trade is influenced by many factors, including economic and political conditions in the United States and abroad, currency exchange rates, laws and policies relating to tariffs, trade restrictions, foreign investments and taxation. Periodically, governments consider a variety of changes to tariffs and trade restrictions and accords. The Company cannot predict the outcome of ongoing proposals or negotiations, nor can the Company predict the effects adoption of any such proposal will have on the Company’s business. Doing business in foreign locations also subjects the Company to a variety of risks and considerations not normally encountered by domestic enterprises. In addition to being influenced by governmental policies and inter- governmental disputes concerning international trade, the Company’s business may also be affected by political developments and changes in government personnel or policies as well as economic turbulence, natural disasters and pandemics, political unrest and security concerns in the nations and on the shipping routes in which it does business and the future impact that these events may have on international trade, oil prices and security costs. The consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission in accordance with accounting principles generally accepted in the United States (U.S. GAAP). The consolidated financial statements include the accounts of the Company and its subsidiaries stated in U.S. dollars, the Company’s reporting currency. In addition, the consolidated financial statements also include the accounts of operating entities where the Company maintains a parent-subsidiary relationship through unilateral control over assets and operations together with responsibility for payment of all liabilities, notwithstanding a lack of technical majority ownership of the subsidiary's common stock. All significant intercompany accounts and transactions have been eliminated in consolidation. All dollar amounts in the notes are presented in thousands except for per share data or unless otherwise specified. B. | Cash Equivalents All highly liquid investments with a maturity of three months or less at date of purchase are considered to be cash equivalents. C. | Allowance for Credit Losses A valuation allowance reduces the accounts receivable balance for credit losses expected to be incurred over the assets' contractual term. The Company’s trade accounts receivable present similar credit risk characteristics and the allowance for credit loss is estimated on a collective basis, using a credit loss-rate method that uses historical credit loss information and considers the current economic environment. Additional allowances may be necessary in the future if changes in economic conditions are significant enough to affect expected credit losses. The Company has recorded an allowance for credit loss in the amounts of $7,241 and $6,878 as of December 31, 2025 and 2024, respectively. Additions and write-offs have not been significant in the periods presented.
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F-11 D. | Long-Lived Assets, Depreciation and Amortization Property and equipment are recorded at cost and are depreciated or amortized on the straight-line method over the shorter of the assets’ estimated useful lives or lease terms. Useful lives for major categories of property and equipment are as follows: Buildings and land improvements 30 to 40 years Building improvements 3 to 10 years Furniture, fixtures, equipment and purchased software 3 to 10 years Expenditures for maintenance, repairs, and replacements of minor items are charged to expenses as incurred. Major upgrades and improvements that extend the life of the asset are capitalized. Upon disposition, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss is included in income for the period. For the years ended December 31, 2025 and 2024, the Company performed the required goodwill annual impairment test during the fourth quarter and determined that no impairment had occurred. E. | Leases The Company determines if an arrangement is a lease at inception. Right-of-use (ROU) assets represent the Company's right to use an underlying asset for the lease term, and lease liabilities represent the Company's obligation to make lease payments arising from the lease. All ROU assets and lease liabilities are recognized at the commencement date at the present value of lease payments over the lease term. ROU assets are adjusted for lease incentives and initial direct costs. The lease term includes renewal options exercisable at the Company's sole discretion when the Company is reasonably certain to exercise that option. As the Company's leases generally do not have an implicit rate, the Company uses an estimated incremental borrowing rate based on market information available at the commencement date to determine the present value. Certain of our leases include variable payments, which may vary based upon changes in facts or circumstances after the start of the lease. The Company excludes variable payments from ROU assets and lease liabilities to the extent not considered fixed, and instead expenses variable payments as incurred. Lease expense is recognized on a straight-line basis over the lease term and is included in rent and occupancy expenses on the consolidated statement of earnings. Additionally, the Company elected to apply the short-term lease exemption for leases with a non-cancelable period of twelve months or less and has chosen not to separate non-lease components from lease components and instead to account for each as a single lease component. F. | Revenues and Revenue Recognition The Company provides global logistics services, including 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 logistics solutions. As a non-asset-based carrier, the Company does not own transportation assets. The Company derives its revenues by entering into agreements that are generally comprised of a single performance obligation, which is that freight is shipped for and received by the customer. Each performance obligation is comprised of one or more of the Company’s services. The Company's three principal services are the revenue categories presented in the Consolidated Statements of Earnings: 1) airfreight services, 2) ocean freight and ocean services, and 3) customs brokerage and other services. The most significant drivers of changes in gross revenues and related transportation expenses are volume, sell rates and buy rates. Volume has a similar effect on the change in both gross revenues and related transportation expenses in each of the Company's three primary sources of revenue. The major portion of the Company's air and ocean freight revenues are generated by purchasing transportation services on a volume basis from direct (asset-based) carriers and then reselling that space to customers on a retail basis. The rate billed to our customers (the sell rate) is recognized as revenues and the rate we pay to the carrier (the buy rate) is recognized in operating expenses as the directly related cost of transportation and other expenses.
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F-12 Revenue is recognized upon transfer of control of promised services to customers, which occurs over time. The Company has determined that in general each shipment transaction or service order constitutes a separate contract with the customer. However, when the Company provides multiple services to a customer, different contracts may be present for different services. The Company combines the contracts, which form a single performance obligation, and accounts for the contracts as a single contract when certain criteria are met. The Company typically satisfies its performance obligations as services are rendered over time. A typical shipment would include services rendered at origin, such as pick-up and delivery to port, freight services from origin to destination port and destination services, such as customs clearance and final delivery. The Company measures the performance of its obligations as services are completed over the life of a shipment, including services at origin, freight and destination. This method of measurement of progress depicts the pattern of the Company's actual performance under the contracts with the customer. There are no significant judgments involved in measuring the progress of the performance obligations. Amounts allocated to the services for each performance obligation are typically based on standalone selling prices. The Company does not have significant variable consideration in its contracts. Taxes assessed concurrently with a specific revenue-producing transaction that are collected by the Company from a customer are excluded from revenues. Typically, the transaction price for each of the Company's services are quoted as separate components; however, customers on occasion will request an all-inclusive rate for a set of services known in the industry as “door-to-door service.” This means that the customer is billed a single rate for all services from pickup at origin to delivery at destination. In these instances, the transaction price is allocated to each service on a relative selling price basis. The Company fulfills nearly all of its performance obligations within a one to two month-period and contracts with customers have an original expected duration of less than one year. The Company generally has an unconditional right to consideration when the services are initiated or soon thereafter. The amount due from the customer is recorded as accounts receivable. The amounts related to services that are not yet completed at the reporting date are presented as contract liabilities, with corresponding direct costs to fulfill the performance obligation that will be satisfied in the future presented as deferred contract costs. The Company generally does not incur incremental costs to obtain the contract with the customer. The Company may incur costs to fulfill the contract with the customers, such as set-up costs. However, the amount incurred is insignificant to the Company’s consolidated financial statements. The Company evaluates whether amounts billed to customers should be reported as revenues on a gross or net basis. Generally, revenue is recorded on a gross basis when the Company is primarily responsible for fulfilling the promise to provide the services, when it assumes the risk of loss, when it has discretion in setting the prices for the services to the customers, and when the Company has the ability to direct the use of the services provided by the third party. In most cases the Company acts as an indirect carrier. When acting as an indirect carrier, the Company issues a House Airway Bill (HAWB), a House Ocean Bill of Lading (HOBL) or a House Sea Waybill to customers as the contract of carriage. In turn, when the freight is physically tendered to a direct carrier, the Company receives a contract of carriage known as a Master Airway Bill for airfreight shipments and a Master Ocean Bill of Lading for ocean shipments. When revenue is recorded on a net basis, the amounts earned are determined using a fixed fee, a per unit of activity fee or a combination thereof. For revenues earned in other capacities, for instance, when the Company does not issue a HAWB, a HOBL, or a House Sea Waybill or otherwise act solely as an agent for the shipper, only the commissions and fees earned for such services are included in revenues. The Company disaggregates its revenues by its three primary service categories in the consolidated financial statements: airfreight, ocean freight and ocean services and customs brokerage and other. Revenues by geographic location are presented within business segment information in Note 10. G. | Income Taxes Income taxes are accounted for under the asset and liability method of accounting. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributed to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, the tax effect of loss carryforwards and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established when necessary to reduce deferred tax assets to amounts expected to be realized.
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F-13 The Company uses a two-step approach to recognizing and measuring uncertain income tax positions (tax contingencies). The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not the position will be sustained on audit, including resolution of related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount which is more than 50% likely of being realized upon ultimate settlement. The Company considers many factors when evaluating its tax positions and estimating our tax benefits, which may require periodic adjustments and which may not match the ultimate future outcome. The Company recognizes interest expense related to unrecognized tax benefits or underpayment of income taxes in interest expense included in other income (expense) and recognizes penalties in other operating expenses. U.S. corporate income tax laws and regulations include a territorial tax framework and provisions for Global Intangible Low-Taxed Income (GILTI) under which taxes on foreign income are imposed on the excess of a deemed return on tangible assets of certain foreign subsidiaries, Base Erosion and Anti- Abuse Tax (BEAT) under which taxes are imposed on certain base eroding payments to affiliated foreign companies as well as U.S. income tax deductions for Foreign-derived intangible income (FDII). The Company treats BEAT and GILTI as discrete adjustments as components of current income tax expense. Earnings of the Company's foreign subsidiaries are not considered to be indefinitely reinvested outside of the United States. H | Net Earnings Attributable to Shareholders per Common Share Diluted earnings attributable to shareholders per share is computed using the weighted average number of common shares and dilutive potential common shares outstanding. Dilutive potential common shares represent outstanding stock options, stock purchase rights and unvested restricted stock units. Basic earnings attributable to shareholders per share is calculated using the weighted average number of common shares outstanding without taking into consideration dilutive potential common shares outstanding. I. | Stock Plans The Company maintains several equity incentive plans under which the Company has granted stock options, director restricted stock, restricted stock units (RSUs), performance stock units (PSUs) and employee stock purchase rights to employees or directors. The Company recognizes stock compensation expense based on the fair value of awards granted to employees and directors under the Company’s Amended and Restated 2017 Omnibus Plan and employee stock purchase rights plans. This expense, adjusted for expected performance and forfeitures, is recognized in net earnings on a straight-line basis over the service periods as salaries and related costs on the consolidated statements of earnings. Expense for PSUs is recognized over the service period when it is probable the performance goal will be achieved and based on the most probable outcome of performance conditions at the reporting date. RSUs and PSUs awarded to certain employees meeting specific retirement eligibility criteria at the time of grant are expensed immediately, as there is no substantive service period associated with those awards. J. | Foreign Currency Foreign currency amounts attributable to foreign operations have been translated into U.S. dollars using year-end exchange rates for assets and liabilities, historical rates for equity, and weighted average rates for revenues and expenses. Currency fluctuations are a normal operating factor in the conduct of the Company’s business and foreign exchange transaction gains and losses are included in revenues and operating expenses. Also, the Company is exposed to foreign currency exchange fluctuations on monetary assets and liabilities denominated in currencies that are not the local functional currency. Foreign exchange gains and losses on such balances are recognized in net earnings within customs brokerage and other services costs. Net foreign currency transactional losses in 2025 were $28,233, net foreign currency transactional gains in 2024 were $11,556, and net foreign currency transactional losses in 2023 were $14,943. The Company follows a policy of accelerating international currency settlements to manage its foreign exchange exposure. Historically, derivative financial instruments have not been used to manage foreign currency risk. Accordingly, the Company may enter into foreign currency hedging transactions only in limited locations where there are regulatory or commercial limitations on the Company’s ability to move money freely. The Company had no foreign currency derivatives outstanding at December 31, 2025 and 2024.
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F-14 K. | Comprehensive Income Comprehensive income consists of net earnings and other gains and losses affecting equity that, under U.S. GAAP, are excluded from net earnings. For the Company, these consist of foreign currency translation gains and losses, net of related income tax effects and comprehensive income or loss attributable to the noncontrolling interests. Upon the complete or substantially complete liquidation of the Company's investment in a foreign entity, cumulative translation adjustments are recorded as reclassification adjustments in other comprehensive income and recognized in net earnings. Accumulated other comprehensive loss consisted entirely of foreign currency translation adjustments, net of related income tax effects, as of December 31, 2025 and 2024. L. | Segment Reporting The Company is organized functionally in geographic operating segments. Accordingly, when evaluating the operating effectiveness of geographic segments, management focuses its attention on revenues, directly related cost of transportation and other expenses for each of the Company’s three primary sources of revenues as well as salaries and related costs, other operating expenses, depreciation and amortization, operating income, identifiable assets, capital expenditures, and equity generated in each of these geographical areas when evaluating the effectiveness of geographic management. The President and Chief Executive Officer was determined to be the Chief Operating Decision Maker (CODM), as in his capacity he is responsible for setting company strategies and initiatives, establishing company policies, allocating company resources and assessing the performance of the Company’s business segments. Operating income is the primary measure of business segments' profit or loss that is most consistent with the measurement principles of U.S. GAAP and no items below operating income are allocated to segments. The CODM uses operating income to review financial performance, progress of the Company's strategic initiatives and to determine compensation of segment managers. Transactions among the Company’s various offices are conducted using the same arms-length pricing methodologies the Company uses when its offices transact business with independent agents. Certain costs are allocated among the segments based on the relative value of the underlying services, which can include allocation based on actual costs incurred or estimated cost plus a profit margin. There were no significant changes to allocate or measure expenses used to determine segment profit or loss. M. | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of the assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. The Company uses estimates primarily in the following areas: accounts receivable valuation, measurement of progress towards completion of revenue-related performance obligations, accrual of costs related to ancillary services the Company performs, typically at the destination location, self-insured liabilities, accrual of various tax liabilities, accrual of loss contingencies, calculation of share-based compensation expense and estimates related to determining the lease term and discount rate when measuring ROU assets and lease liabilities. N. | Recent Accounting Pronouncements Improvements to Income Tax Disclosures The Company prospectively adopted the FASB’s ASU No. 2023-09 Income Taxes (Topic 740) Improvements to Income Tax Disclosures (ASU 2023- 09), for the 2025 annual period beginning January 1, 2025, which requires the disclosure, on an annual basis, of a tabular rate reconciliation using both percentages and currency amounts, broken out by nature and jurisdiction to the extent those items exceed a specified threshold. In addition, disclosure is required of income taxes paid, net of refunds received, disaggregated by federal, state/local, and foreign and by jurisdiction if the amount is at least 5% of total income tax payments, net of refunds received. The Company has applied this ASU prospectively by providing the new disclosures for the period ended December 31, 2025 and continuing to provide the pre-ASU disclosures for the prior periods.
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F-15 Disaggregation of Income Statement Expenses In November 2024, the FASB issued ASU 2025-01 Disaggregation of Income Statement Expenses (Subtopic 220-40) Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (ASU 2025-01) which requires disaggregated disclosures of certain costs and expenses on the income statement on an annual and interim basis. This standard will become effective for the Company on January 1, 2027 with early adoption permitted. The amendment can be applied either on a prospective or retrospective basis. The Company expects this ASU to only impact its disclosures with no impacts to its consolidated financial statements, cash flows and financial condition. Targeted Improvements to the Accounting for Internal-Use Software In September 2025, the FASB issued ASU 2025-06 Targeted Improvements to the Accounting for Internal-Use Software (Subtopic 350-40) Intangibles —Goodwill and Other—Internal-Use requires entities to start capitalizing software costs when management has authorized and committed to funding the project, and it is probable that the project will be completed and used as intended. This standard will become effective for the Company on January 1, 2028 with early adoption permitted. The amendment can be applied either on a prospective or retrospective basis. The Company is currently evaluating the impact of the adoption of this ASU. NOTE 2. FAIR VALUE OF FINANCIAL INSTRUMENTS The Company’s financial instruments, other than cash, consist primarily of cash equivalents, accounts receivable, accounts payable and accrued expenses. The carrying value of these financial instruments approximates their fair value. Cash and cash equivalents consist of the following: December 31, 2025 December 31, 2024 Cost Fair Value Cost Fair Value Cash and cash equivalents: Cash and overnight deposits $ 551,899 $ 551,899 $ 623,561 $ 623,561 Corporate commercial paper 700,978 701,591 498,185 498,742 Time deposits and money market funds 61,408 61,408 26,574 26,574 Total cash and cash equivalents $ 1,314,285 $ 1,314,898 $ 1,148,320 $ 1,148,877 The fair value of corporate commercial paper and time deposits is based on the use of market interest rates for identical or similar assets (Level 2 fair value measurement). NOTE 3. PROPERTY AND EQUIPMENT The components of property and equipment are as follows: 2025 2024 Land $ 146,824 $ 140,421 Buildings and leasehold improvements 537,356 517,179 Furniture, fixtures, equipment and purchased software 422,151 404,915 Construction in progress 6,878 2,422 Property and equipment, at cost 1,113,209 1,064,937 Less accumulated depreciation and amortization 651,087 615,533 Property and equipment, net $ 462,122 $ 449,404
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F-16 NOTE 4. LEASES The Company enters into lease agreements primarily for office and warehouse space in all districts where it conducts business. As of December 31, 2025, all of the Company's leases are operating leases. Lease terms are either on a month-to-month basis or terminate at various times through 2040. The Company also has two long-term operating lease arrangements to use land, for which the usage rights were entirely prepaid. Usage rights for those arrangements are recognized in rent expense over the lease terms up to 2057. Lease cost is recorded under rent and occupancy expenses in the consolidated statements of earnings and is comprised of the following for the year- ended December 31: 2025 2024 2023 Operating lease cost $ 145,772 $ 131,970 $ 123,411 Variable lease cost 54,074 50,614 50,508 Total lease cost $ 199,846 $ 182,584 $ 173,919 Variable lease cost includes short-term lease expenses, which are insignificant. Maturities of lease liabilities as of December 31, 2025 are as follows: 2026 $ 138,158 2027 118,846 2028 99,454 2029 81,613 2030 66,704 Thereafter 178,115 Total minimum lease payments 682,890 Less imputed interest 112,301 Lease liability $ 570,589 As of December 31, 2025, the Company had $51 million in operating lease obligations with maturities through 2036 for several office and warehouse locations not included in the lease liabilities, as the lease had not yet commenced. The weighted-average remaining lease term and weighted-average discount rate are as follows: 2025 2024 Weighted-average remaining lease term (in years) 6.56 6.79 Weighted-average discount rate 5.67% 5.11% Other information related to the Company's operating leases are as follows: 2025 2024 2023 Right-of-use assets obtained in exchange for new operating lease liabilities $ 100,629 $ 154,197 $ 105,888 Cash paid for amounts included in the measurement of lease liabilities $ 141,784 $ 128,481 $ 120,793
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F-17 NOTE 5. SHAREHOLDERS’ EQUITY A. | Stock Repurchase Plan The Company has a Discretionary Stock Repurchase Plan, originally approved by the Board of Directors in November 2001 and amended from time to time, under which management as of December 31, 2025 is authorized to repurchase shares down to 130,000 shares of common stock outstanding. On February 23, 2026, the Board of Directors authorized a new share repurchase program that permits the repurchase of up to $3 billion of the Company's common stock, effective upon the expiration of the current program, which will occur when the outstanding shares of common stock reach 130,000. Cumulative shares of common stock repurchased since inception of the above plan and a previous now expired plan were 162,309. B. | Omnibus Incentive Plan On May 5, 2020, the shareholders approved the Company's Amended and Restated 2017 Omnibus Incentive Plan (Amended 2017 Plan), which made available 5,500 shares of the Company's common stock in aggregate to be issued under any award type allowed by the Amended 2017 Plan. The RSUs granted in 2025, 2024 and 2023 generally vest annually over three years based on continued employment and are settled upon vesting in shares of the Company's common stock on a one-for-one basis. The Amended 2017 Plan also provides for annual equity awards to non-employee directors. The Amended 2017 Plan provides for an annual grant of equity awards to each participant with a fair market value that may not exceed $600, or $800 with respect to the Chairman of the Board. Restricted shares granted to non-employee directors in 2025, 2024 and 2023 vested at the time of grant and there were no unvested restricted shares as of December 31, 2025. In 2025, 15 fully vested restricted shares with a weighted average grant date fair value per share of $106.18 were granted to non- employee directors. The following table summarizes information about RSUs and restricted shares: Number of shares Weighted average grant date fair value Nonvested at December 31, 2024 654 $ 112.36 RSUs granted 400 $ 106.24 RSUs vested (368) $ 110.27 RSUs forfeited (18) $ 112.10 Nonvested at December 31, 2025 668 $ 110.03 In 2025, 2024 and 2023, the Company also awarded 94, 78 and 78 PSUs, respectively, under the Amended 2017 Plan. Nonvested PSUs include performance conditions to be finally measured based on financial results at December 31, 2026 and 2027. The final number of PSUs will be determined using an adjustment factor of up to 2 times or down to 0.5 of the targeted PSU grant, depending on the degree of achievement of the designated performance targets. If the minimum performance thresholds are not achieved, no shares will be issued. Each PSU will convert to one share of the Company's common stock upon vesting. At December 31, 2025, there were 175 shares of nonvested PSUs at target levels, with a weighted-average grant date fair value of $110.14. At December 31, 2025, 149 PSUs with a grant date fair value of $113.24 became vested based on satisfaction of performance goals but had not settled. RSUs and PSUs granted under the Amended 2017 Plan have dividend equivalent rights, which entitle holders of RSUs and PSUs to the same dividend value per share as holders of common stock. Dividend equivalent rights are subject to the same vesting and other terms and conditions as the corresponding unvested RSUs and PSUs and are accumulated and paid in shares when the underlying awards is released. At December 31, 2025, there are approximately 679 shares available for grant under the Amended 2017 Plan.
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F-18 When restrictions on employee RSUs or PSUs lapse the Company derives a tax deduction in certain countries based on the fair market value of the award upon vesting and subject to the limits allowed under each jurisdiction’s tax regulations. Until vesting, a deferred tax asset is recognized and measured based on the fair value of the award at the date of grant (consistent with measurement for stock compensation expense). Any excess or shortfall in the tax deduction resulting from the difference between fair market value of the award between the date of grant and the date of vesting is recognized in income tax expense upon vesting. C. | Stock Option Plans Prior to 2017, the Company granted stock options under stock option plans approved annually by shareholders. Those plans generally allowed for the grant of qualified and non-qualified grants and outstanding options expire no more than ten years from the date of grant. All options were fully vested as of December 31, 2020. No additional shares can be granted under any of the Company's stock option plans other than the Amended 2017 Plan and any outstanding options will expire in May 2026 if not exercised by the holder. Upon the exercise of non-qualified stock options and disqualifying dispositions of incentive stock options, the Company derives a tax deduction measured by the excess of the market value over the option price at the date of exercise or disqualifying disposition. The portion of the benefit from the deduction, which equals the estimated fair value of the options (previously recognized as compensation expense) is recorded as a credit to the deferred tax asset for non-qualified stock options and is recorded as a credit to current tax expense for any disqualified dispositions of incentive stock options. For disqualifying dispositions, when the amount of the tax deduction is less than the cumulative amount of compensation expense recognized for the award, the amount credited to current tax expense is limited to the tax benefit associated with the tax deduction. The following table summarizes information about stock options: Number of shares Weighted average exercise price per share Weighted average remaining contractual life Aggregate intrinsic value Outstanding at December 31, 2024 739 $ 47.35 Options granted — $ — Options exercised (647) $ 47.34 Options canceled — $ — Outstanding at December 31, 2025 92 $ 47.39 0.34 $ 9,353 Exercisable at December 31, 2025 92 $ 47.39 0.34 $ 9,353 D. | Stock Purchase Plan In May 2002, the shareholders approved the Company’s 2002 Employee Stock Purchase Plan (the 2002 Plan), which became effective August 1, 2002. As last amended in May 2024, the Company’s 2002 Plan provides for 19,305 shares of the Company’s common stock to be reserved for issuance upon exercise of purchase rights granted to employees who elect to participate through regular payroll deductions beginning August 1 of each year. The purchase rights are exercisable on July 31 of the following year at a price equal to the lesser of (1) 85% of the fair market value of the Company’s stock on the last trading day in July or (2) 85% of the fair market value of the Company’s stock on the first trading day in August of the preceding year. A total of 15,884 shares have been issued under the 2002 Plan since inception and $28,893 has been withheld from employees at December 31, 2025 in connection with the plan year ending July 31, 2026.
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F-19 E. | Share-Based Compensation Expense The fair value of employee stock purchase rights granted under the 2002 Plan is estimated on the date of grant using the Black-Scholes Model with the following assumptions: For the years ended December 31, 2025 2024 2023 Dividend yield 1.40% 1.20% 1.20% Volatility 26% 20% 28% Risk-free interest rates 4.08% 4.90% 5.37% Expected life (years) 1 1 1 Weighted average fair value $ 27.94 $ 27.97 $ 31.56 The Company’s expected volatility assumptions are based on the historical volatility of the Company’s stock over a period of time commensurate to the expected life. The expected life assumption is based on the one-year offering period. The risk-free interest rate for the expected term of the option is based on the corresponding yield curve in effect at the time of grant for U.S. Treasury bonds having the same term as the expected life of the option. The expected dividend yield is based on the Company’s historical experience. The forfeiture assumption used to calculate compensation expense is primarily based on historical pre-vesting employee forfeiture patterns. The compensation expense for employee RSUs and PSUs is based on the fair market value of the Company’s share of common stock on the date of grant. RSUs and PSUs awarded in 2025, 2024 and 2023 were granted at a weighted-average grant date fair value of $106.24, $114.90 and $113.28, respectively. The total intrinsic value of options exercised during the years ended December 31, 2025, 2024 and 2023 was approximately $50 million, $30 million and $46 million, respectively. As of December 31, 2025, the total unrecognized compensation cost related to stock awards is $55 million and the weighted average period over which that cost is expected to be recognized is 1.6 years. Shares issued as a result of stock option exercises, restricted stock awards, vested RSUs, vested PSUs and employee stock plan purchases are issued as new shares outstanding by the Company.
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F-20 NOTE 6. BASIC AND DILUTED EARNINGS PER SHARE Diluted earnings attributable to shareholders per share is computed using the weighted average number of common shares and dilutive potential common shares outstanding. Dilutive potential shares represent outstanding stock options, including purchase options under the Company's employee stock purchase plan and unvested RSUs. Basic earnings attributable to shareholders per share is calculated using the weighted average number of common shares outstanding without taking into consideration dilutive potential common shares outstanding. The following table reconciles the numerator and the denominator of the basic and diluted per share computations for earnings attributable to shareholders. 2025 2024 2023 Numerator: Net earnings attributable to shareholders $ 810,332 $ 810,073 $ 752,883 Denominator: Weighted-average basic shares outstanding 135,810 140,992 149,141 Effect of dilutive share-based awards 439 730 1,045 Weighted-average diluted shares $ 136,249 $ 141,722 $ 150,186 Basic earnings per share $ 5.97 $ 5.75 $ 5.05 Diluted earnings per share $ 5.95 $ 5.72 $ 5.01 Potential common shares of 308, 696 and 771 were excluded from the computation of diluted earnings per share because the effect would have been antidilutive in 2025, 2024 and 2023, respectively.
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F-21 NOTE 7. TAXES Income Taxes Income tax expense (benefit) includes the following components: Federal State Foreign Total 2025 Current $ 73,566 $ 25,520 $ 196,641 $ 295,727 Deferred (11,069) 360 (3,003) (13,712) $ 62,497 $ 25,880 $ 193,638 $ 282,015 2024 Current $ 64,040 $ 35,032 $ 189,233 $ 288,305 Deferred (2,746) (2,392) — (5,138) $ 61,294 $ 32,640 $ 189,233 $ 283,167 2023 Current $ 87,461 $ 24,481 $ 174,223 $ 286,165 Deferred (20,795) (2,121) — (22,916) $ 66,666 $ 22,360 $ 174,223 $ 263,249 The components of earnings before income taxes are as follows: 2025 2024 2023 United States $ 543,918 $ 514,125 $ 512,682 Foreign 550,145 580,675 502,346 $ 1,094,063 $ 1,094,800 $ 1,015,028
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F-22 On January 1, 2025, the Company prospectively adopted ASU 2023-09. Following the new ASU required disclosures for the year ended December 31, 2025, the reconciling items between the income tax expense computed by applying the U.S. Federal income tax rate of 21% and reported income tax expense are as follows: 2025 Amount Percent US federal statutory income tax rate $ 229,753 21% Domestic state and local income taxes, net of federal effect 20,446 1.9% Foreign tax effects: People's Republic of China Statutory tax rate difference between China and United States 3,781 0.3% Chinese withholding taxes on income to non-residents 12,184 1.0% Other foreign jurisdictions 65,241 6.0% Effect of changes in tax laws or rates enacted in the current period — — Effect of cross-border tax laws: Foreign-derived intangible income (21,107) (1.9)% Other 1,429 0.1% Tax credits: Foreign tax credits (30,056) (2.7)% Other (989) (0.1)% Changes in valuation allowances (96) — Nontaxable or nondeductible items 2,858 0.3% Worldwide changes in unrecognized tax benefits — — Other adjustments (1,429) (0.1)% Effective Tax Rate $ 282,015 25.8% 1State taxes in California, Illinois, New York and Pennsylvania made up the majority (greater than 50 percent) of the tax effect in this category. The components of income taxes paid are as follows: Income taxes paid (net of refunds) exceeded 5 percent of total income taxes paid (net of refunds) in the following jurisdictions: 2025 Federal $ 45,347 State 30,977 Foreign: People's Republic of China 52,495 Taiwan 17,391 Mexico 15,637 Vietnam 14,431 Other foreign 88,757 Total $ 265,035 1
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F-23 Prior to the adoption of ASU 2023-09, for the years ending December 2024 and 2023, income tax expense differs from amounts computed by applying the U.S. Federal income tax rate of 21% as a result of the following: 2024 2023 Computed “expected” tax expense $ 229,908 $ 213,156 Increase (decrease) in income taxes resulting from: Effect of foreign taxes 22,146 27,711 State income taxes, net of Federal income tax benefit 25,787 17,665 Nondeductible executive compensation 4,327 4,965 Stock compensation expense, net 2,215 (1,321) Other, net (1,216) 1,073 $ 283,167 $ 263,249 In 2025, 2024 and 2023, the Company benefited from U.S. Federal tax credits totaling $31.0 million, $32.5 million and $24.1 million, respectively, principally because of withholding taxes related to the Company's foreign operations, as well as U.S. income tax benefits for FDII of $21.1 million, $21.6 million, $16.2 million, respectively. These amounts were offset by the effect of higher foreign tax rates of the Company's international subsidiaries, when compared to the U.S. Federal income tax rate of 21%, as well as certain expenses that are no longer deductible under the 2017 Tax Act, including certain executive compensation in excess of amounts allowed. For the years 2025, 2024, and 2023 there was no BEAT expense and GILTI expense was insignificant. The tax effects of temporary differences and tax credits that give rise to deferred tax assets and deferred tax liabilities are as follows: Years ended December 31, 2025 2024 Deferred Tax Assets: Deductible stock compensation expense, net $ 7,737 $ 6,243 Operating lease liabilities 138,375 95,895 Capitalized R&D expenses 66,563 54,969 Accrued third party obligations, deductible for taxes upon economic performance 17,557 6,382 Excess of financial statement over tax depreciation 14,410 13,679 Foreign currency translation adjustments 15,630 17,198 Retained liability for cargo claims 1,465 1,391 Provision for credit losses on accounts receivable 3,255 1,672 Other 3,826 — Total gross deferred tax assets 268,818 197,429 Deferred Tax Liabilities: Unremitted foreign earnings, net of related foreign tax credits 38,507 36,583 Operating lease assets 131,680 90,175 Total gross deferred tax liabilities 170,187 126,758 Net deferred tax assets $ 98,631 $ 70,671 Based on management’s review of the Company’s tax positions, the Company had no significant unrecognized tax benefits as of December 31, 2025 and 2024. On July 4, 2025, the United States enacted into law the 2025 Tax Act which provides for several corporate tax changes including, but not limited to, restoring an election to recognize full expensing of domestic research and development costs, restoring immediate deductibility of certain capital expenditures, and changes to the computations of U.S. taxation on international earnings. The 2025 Tax Act does not have a material impact to consolidated tax expense and cash flows for 2025.
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F-24 Elements of enacted tax laws and regulations could be impacted by further legislative action as well as additional interpretations and guidance issued by the Internal Revenue Service or the U.S. Department of the Treasury and by similar governmental bodies in jurisdictions outside of the U.S. Such changes could impact the estimates of the amounts the Company has recorded. The Company is subject to taxation in various states and many foreign jurisdictions around the world. The Company believes that its tax positions, including intercompany transfer pricing policies, are reasonable and consistent with established tax laws and regulations. The Company is under, or may be subject to, audit or examination and assessments by relevant authorities for years 2005 and thereafter where the ultimate resolution could require significant additional tax, penalties and interest payments. The Indian tax authority (ITA) has asserted that additional income tax applies on transactions between and amongst the Company and its Indian subsidiary, as well as additional service tax applicable to ocean and air imports and exports. We believe that ITA’s positions are without merit and we have thus far been successful in defending our position in Indian courts. However, if these matters are adversely resolved, we would recognize significant additional tax expense, including interest and penalties. The Company establishes liabilities when, despite its belief that the tax filing positions are appropriate and consistent with tax law, it concludes that it may not be successful in realizing the tax position. In evaluating a tax position, the Company determines whether it is more likely than not that the position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position and in consultation with qualified legal and tax advisors. The total amount of the Company’s tax contingencies may increase in the future. In addition, changes in state, federal, and foreign tax laws, including transfer pricing and changes in interpretations of these laws may increase the Company’s tax contingencies. The timing of the resolution of income tax examinations can be highly uncertain, and the amounts ultimately paid including interest and penalties, if any, upon resolution of the issues raised by the taxing authorities may differ significantly from the amounts recorded. It is reasonably possible that within the next twelve months the Company or its subsidiaries will undergo further audits and examinations by various tax authorities and possibly may reach resolution related to income tax and indirect tax examinations in one or more jurisdictions. These assessments or settlements could result in changes to the Company’s contingencies related to positions on tax filings in future years. The estimate of any ultimate tax liability contains assumptions based on experiences, judgments about potential actions by taxing jurisdictions as well as judgments about the likely outcome of issues that have been raised by the taxing jurisdiction. The Company cannot currently provide an estimate of the range of possible outcomes. Any interest and penalties expensed in relation to the underpayment of income taxes were insignificant for the years ended December 31, 2025, 2024, and 2023. The Company has no liability as of December 31, 2025, for the 15% corporate alternative minimum tax (CAMT), which became effective in 2023 in the U.S. under the Inflation Reduction Act. For the year ended December 31, 2025 and 2024, the amount of Pillar Two income tax expense was insignificant. Other Taxes The Company is subject to multiple examinations for value added, service, payroll, or other non-income taxes in various jurisdictions. In certain cases, the Company has received assessments from the authorities. Possible losses or range of possible losses associated with these matters are either immaterial or remote. If certain matters or a group of matters were to be decided adversely to the Company, it could result in a charge that might be material to the results of operations. NOTE 8. COMMITMENTS A. | Unconditional Purchase Obligations The Company enters into short-term unconditional purchase obligations with asset-based providers reserving space on a guaranteed basis. The pricing of these obligations varies to some degree with market conditions. Historically, the Company has met these obligations in the normal course of business within one year. In the regular course of business, the Company also enters into agreements with service providers to maintain or operate equipment, facilities or software that can be longer than one year. We also regularly have contractual obligations for specific projects related to improvements of our owned or leased facilities and information technology infrastructure. Purchase obligations outstanding as of December 31, 2025 totaled $192 million.
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F-25 B. | Employee Benefits The Company has employee savings plans under which the Company provides a discretionary matching contribution. In 2025, 2024 and 2023, the Company’s contributions under the plans were $24,572, $23,507 and $24,241, respectively. C. | Credit Arrangements Certain of the Company’s foreign subsidiaries maintain bank lines of credit for short-term working capital purposes. A few of these credit lines are supported by standby letters of credit issued by a United States bank or guarantees issued by the Company to the foreign banks issuing the credit line. At December 31, 2025, and 2024 borrowings under these credit lines were $30,263 and $30,660, respectively. At December 31, 2025, the Company was contingently liable for approximately $80,719 under outstanding standby letters of credit and guarantees. At December 31, 2025, the Company was in compliance with all restrictive covenants of these credit lines and the associated credit facilities. The standby letters of credit and guarantees relate to obligations of the Company’s foreign subsidiaries for credit extended in the ordinary course of business by direct carriers, primarily airlines, and for duty and tax deferrals available from governmental entities responsible for customs and value- added-tax (VAT) taxation. The total underlying amounts due and payable for transportation and governmental excise taxes are properly recorded as obligations in the books of the respective foreign subsidiaries, and there would be no need to record additional expense in the unlikely event the parent company were to be required to perform. NOTE 9. CONTINGENCIES The Company is involved in claims, lawsuits, government investigations, income, transfer pricing and indirect tax audits and other legal matters that arise in the ordinary course of business and are subject to inherent uncertainties. Currently, in management's opinion and based upon advice from legal advisors, none of these matters are expected to have a material effect on the Company's operations, cash flows or financial position. As of December 31, 2025, amounts recorded for claims, lawsuits, government investigations and other legal matters are not significant to the Company's operations, cash flows or financial position. At this time, the Company is unable to estimate any additional loss or range of reasonably possible losses, if any, beyond the amounts recorded, that might result from the resolution of these matters.
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F-26 NOTE 10. BUSINESS SEGMENT INFORMATION Financial information regarding 2025, 2024 and 2023 operations by the Company’s designated geographic areas is as follows: UNITED STATES OTHER NORTH AMERICA LATIN AMERICA NORTH ASIA SOUTH ASIA EUROPE MIDDLE EAST, AFRICA AND INDIA ELIMINATIO NS CONSOLIDAT ED 2025 Revenues $3,583,826 470,612 262,439 2,737,513 1,555,189 1,829,248 638,771 (8,589) 11,069,009 Directly related cost of transportation and other expenses $1,880,586 295,043 158,309 2,210,147 1,214,598 1,183,664 465,596 (5,862) 7,402,081 Salaries and related costs $1,066,878 83,591 44,769 159,947 118,522 361,448 80,777 - 1,915,932 Other operating expenses $116,151 62,799 37,548 150,287 102,798 174,995 56,636 (2,764) 698,450 Operating income $520,211 29,179 21,813 217,132 119,271 109,141 35,762 37 1,052,546 Identifiable assets at period end $2,681,989 163,328 101,107 460,856 379,262 818,822 299,375 (11,101) 4,893,638 Capital expenditures $28,391 845 863 6,015 4,437 6,356 6,194 - 53,101 Depreciation and amortization $32,085 2,001 993 5,076 2,599 11,246 2,769 - 56,769 Equity $1,574,358 37,914 37,821 219,503 145,078 271,816 167,652 (96,049) 2,358,093 2024 Revenues $3,251,998 429,280 214,999 2,934,353 1,391,131 1,700,919 683,191 (5,356) 10,600,515 Directly related cost of transportation and other expenses $1,733,087 248,425 126,413 2,383,627 1,098,448 1,092,478 506,482 (2,242) 7,186,718 Salaries and related costs $974,911 79,481 38,337 158,201 106,183 329,757 75,784 - 1,762,654 Other operating expenses $64,558 59,863 31,454 154,322 84,267 166,119 52,371 (3,134) 609,820 Operating income $479,442 41,511 18,795 238,203 102,233 112,565 48,554 20 1,041,323 Identifiable assets at period end $2,565,372 171,872 104,172 582,331 338,759 753,064 270,356 (31,468) 4,754,458 Capital expenditures $24,249 2,393 487 1,250 4,239 5,977 1,871 - 40,466 Depreciation and amortization $36,240 2,120 1,104 5,032 2,016 11,277 3,301 - 61,090 Equity $1,500,901 43,155 42,535 228,747 119,823 174,536 156,748 (40,661) 2,225,784 2023 Revenues $3,311,327 436,331 197,344 2,180,808 865,261 1,808,624 505,194 (4,779) 9,300,110 Directly related cost of transportation and other expenses $1,809,526 270,080 117,376 1,700,025 612,606 1,200,753 345,873 (2,239) 6,054,000 Salaries and related costs $946,527 76,398 37,689 145,166 95,895 329,403 69,438 - 1,700,516 Other operating expenses $91,470 66,839 31,906 127,908 79,875 163,932 46,272 (2,541) 605,661 Operating income $463,804 23,014 10,373 207,709 76,885 114,536 43,611 1 939,933 Identifiable assets at period end $2,595,576 174,509 109,380 449,529 237,470 721,259 256,199 (20,113) 4,523,809 Capital expenditures $23,845 1,247 442 1,534 971 7,830 3,445 - 39,314 Depreciation and amortization $44,039 1,879 1,123 4,597 1,940 11,313 2,869 - 67,760 Equity $1,774,874 19,222 54,581 158,329 103,573 167,141 154,038 (40,345) 2,391,413 1Directly related cost of transportation and other expenses totals operating expenses from airfreight services, ocean freight and ocean services and customs brokerage and other services as shown in the consolidated statements of earnings. 2Other operating expenses totals rent and occupancy, depreciation and amortization, selling and promotion and other as shown in the consolidated statements of earnings. Other than the United States, only the People’s Republic of China, including Hong Kong, represented more than 10% of the Company’s total revenue, total operating income, total identifiable assets or equity in any period presented as noted in the table below. 2025 2024 2023 Revenues 19% 22% 18% Operating income 15% 17% 17% Identifiable assets at year end 7% 10% 8% Equity 8% 9% 5% 1 2 1 2 1 2
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F-27 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. ANNUAL REPORT ON FORM 10-K FOR FISCAL YEAR ENDED December 31, 2025 EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. EXHIBITS Exhibit Number Description 21.1 Subsidiaries of the Registrant 23.1 Consent of Independent Registered Public Accounting Firm 31.1 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 31.2 Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 101.INS Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. 101.SCH Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents 104 The cover page from the Company’s Yearly Report on Form 10-K for the year ended December 31, 2025, has been formatted in Inline XBRL
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EXHIBIT 21.1 SUBSIDIARIES OF THE REGISTRANT Subsidiary (1) State or Country of Organization Beijing Kang Jie Kong International Cargo Agent Co., Ltd. People's Republic of China Cargo Signal Solutions, LLC Washington E.I. Freight (U.S.A.), Inc. Illinois EIF Sdn Bhd Malaysia Expeditors (Bangladesh), Ltd. Bangladesh Expeditors (China) Co., Ltd. People's Republic of China Expeditors (Malaysia) Sdn Bhd Malaysia Expeditors (Portugal) Transitarios Internacionais, Lda. Portugal Expeditors (Thailand) Ltd. (2) Thailand Expeditors Aduanas Peru S.A.C. Peru Expeditors Argentina S.A. Argentina Expeditors Assurance of Vermont, Inc. Vermont Expeditors Cambodia Ltd. Cambodia Expeditors Canada, Inc. Canada Expeditors Cargo Insurance Brokers Agente de Seguros, S.A. de C.V. Mexico Expeditors Cargo Insurance Brokers B.V. Netherlands Expeditors Cargo Insurance Brokers, Inc. Washington Expeditors Chile Transportes Internacionales Limitada Chile Expeditors de Colombia Ltda. Colombia Expeditors Denmark ApS Denmark Expeditors Dominicana SAS Dominican Republic Expeditors Egypt S.A.E. Egypt Expeditors Finland Oy Finland Expeditors Guatemala S.A. Guatemala Expeditors Hong Kong Limited China Expeditors International - Lebanon (s.a.l.) Lebanon Expeditors International (India) Pvt. Ltd. India Expeditors International (NZ) Ltd. New Zealand Expeditors International (Puerto Rico) Inc. Puerto Rico Expeditors International (UK) Ltd. United Kingdom Expeditors International B.V. Netherlands Expeditors International Bahrain (WLL) Bahrain Expeditors International Cargo Co. Ltd. Saudi Arabia Expeditors International CR s.r.o. Czech Republic Expeditors International de Mexico, S.A. de C.V. Mexico Expeditors International de Uruguay S.A. Uruguay Expeditors International do Brasil Ltda. Brazil Expeditors International E.I. (Switzerland) Sagl Switzerland
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Expeditors International España, S.A. Spain Expeditors International Forwarding and Clearing (Abu Dhabi) LLC United Arab Emirates Expeditors International Forwarding and Clearing, LLC United Arab Emirates Expeditors International France S.A.S. France Expeditors International GmbH Germany Expeditors International Hellas A.E. Greece Expeditors International Hungary Kft Hungary Expeditors International Italia srl Italy Expeditors International-Jordan Jordan Expeditors International Company W.L.L. (3) Kuwait Expeditors International Norway AS Norway Expeditors International NV Belgium Expeditors International Ocean, Inc. Delaware Expeditors International Pakistan (Private) Limited (4) Pakistan Expeditors International Pty. Limited Australia Expeditors International Romania S.R.L. Romania Expeditors International SA (Proprietary) Limited South Africa Expeditors International Sverige AB Sweden Expeditors International Tasimacilik ve Ticaret As (5) Türkiye Expeditors International Trading (Shanghai) Co., Ltd. People's Republic of China Expeditors Ireland Limited Ireland Expeditors Japan KK Japan Expeditors Korea Ltd. South Korea Expeditors Lithuania, UAB Lithuania Expeditors LLC Oman Expeditors Mar y Tierra S.A. Costa Rica Expeditors Panama Logistics Services, Inc. Panama Expeditors Peru SAC Peru Expeditors Philippines, Inc. Philippines Expeditors Polska Sp. z o. o. Poland Expeditors Qatar LLC (4) Qatar Expeditors Singapore Pte Ltd Singapore Expeditors Speditionsges.m.b.H. Austria Expeditors Taiwan Co., Ltd. Taiwan Expeditors TradeWin, LLC Washington Expeditors Vietnam Company Limited Vietnam PT Expeditors Indonesia Indonesia
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(1) For purposes of this list, if Expeditors owns directly or indirectly a controlling interest in the voting securities of any entity or if Expeditors has unilateral control over the assets and operations of any entity, such entity is deemed to be a subsidiary. Except as otherwise noted, Expeditors has 100% controlling interest in subsidiary operations. With respect to certain companies, shares of voting securities in the names of nominees and qualifying shares in the names of directors are included in Expeditors' ownership percentage. The names of other subsidiaries have been omitted from the above list because, considered in the aggregate, they would not constitute a significant subsidiary. Each subsidiary does business in its own name and in the name of Expeditors. (2) Expeditors has 99.5% controlling interest in subsidiary. (3) Expeditors has 49% controlling interest in subsidiary. (4) Expeditors has 80% controlling interest in subsidiary. (5) Expeditors has 75% controlling interest in subsidiary.
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EXHIBIT 23.1 CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We consent to the incorporation by reference in the registration statement (No. 33-67066) on Form S-1 and the registration statements (Nos. 333-204753, 333-211424, 333-218037, 333-231516, 333-238225 and 333-279360) on Form S-8 of our reports dated February 25, 2026, with respect to the consolidated financial statements of Expeditors International of Washington, Inc. and subsidiaries and the effectiveness of internal control over financial reporting. /s/ KPMG LLP Seattle, Washington February 25, 2026
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EXHIBIT 31.1 CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Daniel R. Wall, certify that: 1. I have reviewed this annual report on Form 10-K of Expeditors International of Washington, Inc.; 2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report; 3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d- 15(f)) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this annual report based on such evaluation; and d) Disclosed in this annual report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: February 25, 2026 /s/ DANIEL R. WALL Daniel R. Wall President, Chief Executive Officer and Director
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EXHIBIT 31.2 CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, David A. Hackett, certify that: 1. I have reviewed this annual report on Form 10-K of Expeditors International of Washington, Inc.; 2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report; 3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d- 15(f)) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this annual report based on such evaluation; and d) Disclosed in this annual report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: February 25, 2026 /s/ DAVID A. HACKETT David A. Hackett Senior Vice President and Chief Financial Officer
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EXHIBIT 32 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Annual Report of Expeditors International of Washington, Inc. (the “Company”) on Form 10-K for the fiscal year ended December 31, 2025, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, Daniel R. Wall, President, Chief Executive Officer and Director of the Company, and David A. Hackett, Senior Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: 1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. February 25, 2026 /s/ Daniel R. Wall Daniel R. Wall President, Chief Executive Officer and Director February 25, 2026 /s/ David A. Hackett David A. Hackett Senior Vice President and Chief Financial Officer