News / 'That's the Expeditors' way' – the latest Q&A soliloquy

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Expeditors’ reputation for staff well-being and retention – which looks set to come under pressure as it faces legal action – has been tentatively addressed in its latest analyst Q&A. 

Expeditors, uniquely for a listed company in the transport & logistics space, does not hold analyst calls, instead it publishes, in this case a month before its results, a Q&A with questions it chooses itself.  

As Loadstar’s DeskOne has exclusively revealed (click on the image below), Expeditors has often promoted its “no layoffs” policy, but according to DeskOne sources, its “behaviour differs internally”, which has led to a number of documented court cases. (Expect more on this soon in Loadstar Premium.)

Source: DeskOne

Among the five answers it published in its 8-K filing yesterday, it responded to a question on headcount. 

“In the third quarter, we handled more shipments per person than we did in the same quarter of 2019. Throughout our organisation, and at all our branches, we are incentivised to maximise the usage of technology and processes to improve the flow of cargo without adding unnecessary headcount.  

“Additionally, we have taken deliberate measures to root out areas of unnecessary, non-operational bloat and re-assign certain individuals to areas where they can be more productive.”   

It added: “We do believe that we are right-sized for our current volumes. As volumes continue to grow, we will need to add staff in the future, however, as we have always said, we think we can continue to drive more productivity, but the productivity gains will be marginal gains.” 

Expeditors also addressed geopolitical risk in its Q&A, explaining that any resolution of the Red Sea conflict would take time – and even if carriers wanted to use the route, insurance companies may not want to cover it.

“Complexity is generally good for Expeditors. But the longer the Red Sea conflict continues, the better the marketplace adjusts to the disruption,” it said.

“It is also important to note that resolution of the Red Sea issues will likely lead to some form of congestion at ports for a period of time. This will be caused by vessels that are sailing around Africa and vessels that transit through the Red Sea arriving at destination ports at the same time. We don’t, and won’t know the impact until the Red Sea safely reopens, which will make additional ocean transportation capacity available and could result in decreases in average sell and buy rates.”

It also published remarks on the possible impact of the new administration in the White House, and the potential for new tariffs.

“Our perspective is that shippers now know what to expect from a Trump administration. Tariffs were certainly a very real issue during [Trump’s] first term, when it often seemed that new rules were being issued nearly every day. But the reality is that many of the tariffs that were implemented during the first Trump administration were continued and, in some cases tightened, under the Biden administration. Historically, complexity has usually been very good for Expeditors. We are experts at helping our customers navigate complex environments.”

In air, it warned that some tradelanes had insufficient capacity

“Air supply and demand really depends on the individual lane. For instance, as more companies look to broaden and diversify their supply chain, demand for air capacity from Vietnam continues to increase at a faster rate than the increase in passenger demand for flights to and from that country. Because so much air cargo now moves in the belly of passenger aircraft, capacity has not kept pace with demand for space coming out of Vietnam. While the supply and demand imbalance in other lanes may not be as unbalanced, in general we do not see an end to tight air capacity any time soon.”

Finally, it commented on changes to “complicated” de minimis exemptions, noting that “certain shippers may be violating the spirit of the de minimis laws”.

It claimed it had intentionally “veered away” from true ecommerce shipments to ensure it was compliant – although most market observers know that ecommerce is generally a small part of most large forwarders’ business. But it added: “Should the de minimis rules change, we believe all shippers will be treated as commercial shippers, and further believe this could create additional business opportunities for us.”

But the real story of Expeditors this year will be the conclusion to the impact of its February 2022 cyber attack on its business, and the decision to shut down operations – with the resultant consequences for staff.

Expeditors is not keen on being in the spotlight – hence the Q&A format – but may find itself caught in it anyway. 

Head of Loadstar Premium Alessandro Pasetti noted: “Expeditors’ transparency is unique in the way it often tells its story without engaging with anybody. Just try to find a contact on the website for IR or PR people.

“That’s the Expeditors’ way, all the way.”