Expeditors (EXPD) Status Update summary

Air cargo market dynamics and capacity trends

• Global air cargo capacity grew 4% year-over-year, but Trans-Pacific freighter capacity declined 3% in both directions, while Asia-Europe capacity increased significantly, especially via Middle East hubs.

• E-commerce volumes have shifted away from the U.S. due to the end of de minimis exemptions, with capacity redirected to Europe, Latin America, and intra-Asia markets.

• Passenger versus freighter mix varies by region, with Asia-North America heavily reliant on freighters, and transatlantic routes dominated by passenger wide-bodies.

• New freighter deliveries are delayed, with most new capacity not expected until 2027-2028, leading to an aging fleet and increased maintenance needs.

• Demand grew 6.7% in early 2025 but is forecast to slow to 3-4% for the rest of the year; rates have declined on major lanes, especially Trans-Pacific eastbound.

Shifting trade flows and regional impacts

• Capacity and demand are shifting from China-U.S. to Europe and ASEAN markets, with Vietnam emerging as a major U.S. exporter, especially in tech sectors.

• ASEAN-U.S. air cargo flows have grown, while intra-Asia flows from ASEAN to China-Hong Kong have declined.

• Infrastructure investment in Vietnam is accelerating to support export growth, particularly in airport and road upgrades.

• Carriers are adjusting hub allocations and flight patterns to match evolving demand, with India also seen as a growth market.

Macroeconomic and geopolitical outlook

• Cost pressures are rising globally, with consumers expected to feel the impact, and GDP growth slowing in advanced and developing economies.

• Tariffs and trade barriers are driving up effective rates, with U.S. average tariffs at their highest in a century, impacting inflation and supply chains.

• Investment is diversifying away from China and the U.S., with increased flows into ASEAN, Middle East, and Africa, reflecting new supply chain strategies.

• Geopolitical tensions (U.S.-China, Russia-Ukraine, South China Sea) are pushing companies toward regionalized supply chains and self-contained trade blocs.

• Ongoing uncertainty around trade agreements and enforcement, especially regarding transshipments and tariff deadlines, is likely to persist.