Expeditors (EXPD) investor relations material

Key trends in sustainable logistics

• Industry focus has shifted from ambition to practical execution of sustainability in supply chains, with a strong emphasis on decarbonization and real-world impact at scale.

• Smart Freight Week highlighted a consensus on zero emission trucking as the primary path forward, with hydrogen and CNG largely dismissed.

• European regulations, such as Regulation 1610 and AFIR, are driving rapid adoption of electric trucks and infrastructure, including mandatory charging stations and toll exemptions for electric vehicles.

• Cost parity between electric and diesel trucks is approaching, especially in key European corridors, with forecasts of thousands of heavy-duty electric trucks soon to be deployed.

• Infrastructure investment and grid capacity are critical, with warnings about future electricity shortages and the need for early action to secure supply.

Economic and regulatory drivers

• EU regulations will impose significant fines on truck manufacturers for exceeding CO2 targets, doubling the cost of diesel trucks by 2030 and incentivizing electric adoption.

• New road tolls and air pollution surcharges are being implemented, with electric trucks often exempt, making them more economically attractive.

• Cities like Paris and Amsterdam plan to ban diesel trucks from city centers, further accelerating the shift to electric vehicles.

• HVO biofuel is now widely available in Europe, offering up to 90% emissions reduction but at a 10-15% cost premium, seen as a transitional rather than permanent solution.

• ETS2 and RED III regulations will increase diesel costs and require higher biofuel blending, making diesel less competitive over time.

Infrastructure and operational considerations

• Depot and highway charging costs vary widely, with depot charging (especially with solar) significantly cheaper than highway fast charging.

• Upgrading warehouse infrastructure for truck charging can be costly and time-consuming, but partnerships with energy providers can offset capital expenses.

• Opening charging infrastructure to third parties can reduce costs and increase resilience against energy price volatility.

• Electric trucking is already cost-competitive in some corridors, with 38% of transport potentially at parity with diesel and only a small premium for green transport.