(Registrant’s telephone number, including area code): ~~(206)~~ (206) 674-3400

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 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, smaller reporting company, or an 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.

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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

At ~~November 4, 2022,~~August 3, 2023, the number of shares outstanding of the issuer’s common stock was ~~159,136,384~~147,897,176.


	September 30, 2022			December 31, 2021			June 30, 2023			December 31, 2022
Assets:
Current Assets:
Cash and cash equivalents	$	2,154,534		$	1,728,692		$	1,698,587		$	2,034,131
Accounts receivable, less allowance for credit loss of $9,760 at September 30, 2022 and $6,686 at December 31, 2021		2,748,322			3,810,286
Accounts Receivable, less allowance for credit loss of $5,802 at June 30, 2023 and $9,466 at December 31, 2022								1,423,622			2,107,645
Deferred contract costs		499,935			987,266			175,723			257,545
Other		184,765			108,801			184,614			118,696
Total current assets		5,587,556			6,635,045			3,482,546			4,518,017
Property and equipment, less accumulated depreciation and amortization of $548,585 at September 30, 2022 and $541,677 at December 31, 2021		480,941			487,870
Property and equipment, less accumulated depreciation and amortization of $590,490 at June 30, 2023 and $567,758 at December 31, 2022								494,539			501,916
Operating lease right-of-use assets		486,980			459,158			514,958			507,503
Goodwill		7,927			7,927			7,927			7,927
Deferred federal and state income taxes, net		27,295			729			43,550			37,449
Other assets, net		16,827			19,200			20,520			17,622
Total assets	$	6,607,526		$	7,609,929		$	4,564,040		$	5,590,434
Liabilities:
Current Liabilities:
Accounts payable		1,544,757			2,012,461			815,514			1,108,996
Accrued liabilities, primarily salaries and related costs		404,207			403,625			422,134			479,262
Contract liabilities		594,244			1,142,026			218,561			323,101
Current portion of operating lease liabilities		88,535			82,019			99,962			95,621
Federal, state and foreign income taxes		74,507			86,166			22,936			47,075
Total current liabilities		2,706,250			3,726,297			1,579,107			2,054,055
Noncurrent portion of operating lease liabilities		409,883			385,641			426,829			422,844
Commitments and contingencies
Shareholders’ Equity:
Preferred stock, none issued		—			—			—			—
Common stock, par value $0.01 per share. Issued and outstanding: 159,128 shares at September 30, 2022 and 167,210 shares at December 31, 2021		1,591			1,672
Common stock, par value $0.01 per share. Issued and outstanding: 147,222 shares at June 30, 2023 and 154,313 shares at December 31, 2022								1,472			1,543
Additional paid-in capital		118			3,160			—			139
Retained earnings		3,738,600			3,620,008			2,752,461			3,310,892
Accumulated other comprehensive loss		(258,129	)		(130,414	)		(198,001	)		(202,553	)
Total shareholders’ equity		3,482,180			3,494,426			2,555,932			3,110,021
Noncontrolling interest		9,213			3,565			2,172			3,514
Total equity		3,491,393			3,497,991			2,558,104			3,113,535
Total liabilities and equity	$	6,607,526		$	7,609,929		$	4,564,040		$	5,590,434


	Three months ended September 30,					Nine months ended September 30,				Three months ended June 30,						Six months ended June 30,
	2022			2021		2022		2021		2023			2022			2023			2022
Revenues:
Airfreight services	$	1,480,955		$	1,628,115	$	4,682,076	$	4,477,599	$	751,171		$	1,602,566		$	1,656,074		$	3,201,121
Ocean freight and ocean services		1,684,579			1,598,597		5,420,471		3,651,059		593,801			1,759,646			1,291,108			3,735,892
Customs brokerage and other services		1,196,612			1,092,549		3,527,209		2,998,516		894,780			1,241,100			1,885,159			2,330,597
Total revenues		4,362,146			4,319,261		13,629,756		11,127,174		2,239,752			4,603,312			4,832,341			9,267,610
Operating Expenses:
Airfreight services		1,104,812			1,244,381		3,459,861		3,335,253		525,027			1,212,503			1,191,049			2,355,049
Ocean freight and ocean services		1,343,355			1,254,334		4,345,963		2,859,020		405,807			1,402,365			889,489			3,002,608
Customs brokerage and other services		746,106			686,775		2,345,508		1,837,134		488,349			826,080			1,057,747			1,599,402
Salaries and related		499,341			519,611		1,546,503		1,452,902		428,558			508,222			878,406			1,047,162
Rent and occupancy		52,715			46,730		155,241		137,376		58,205			51,598			115,837			102,526
Depreciation and amortization		15,187			12,753		42,416		38,415		15,506			14,254			30,767			27,229
Selling and promotion		6,239			4,237		16,174		10,479		6,314			5,887			12,698			9,935
Other		67,468			60,803		223,425		170,798		63,489			76,421			131,882			155,957
Total operating expenses		3,835,223			3,829,624		12,135,091		9,841,377		1,991,255			4,097,330			4,307,875			8,299,868
Operating income		526,923			489,637		1,494,665		1,285,797		248,497			505,982			524,466			967,742
Other Income (Expense):
Interest income		7,835			2,462		12,447		6,596		17,792			2,720			36,567			4,612
Interest expense											(395	)		(58	)		(3,040	)		(561	)
Other, net		98			733		7,731		6,382		289			164			8,768			8,194
Other income, net		7,933			3,195		20,178		12,978		17,686			2,826			42,295			12,245
Earnings before income taxes		534,856			492,832		1,514,843		1,298,775		266,183			508,808			566,761			979,987
Income tax expense		120,694			132,922		368,975		333,941		70,390			126,582			144,970			248,281
Net earnings		414,162			359,910		1,145,868		964,834		195,793			382,226			421,791			731,706
Less net (losses) earnings attributable to the noncontrolling interest		(47	)		842		7,745		2,174		(1,007	)		4,421			(1,020	)		7,792
Net earnings attributable to shareholders	$	414,209		$	359,068	$	1,138,123	$	962,660	$	196,800		$	377,805		$	422,811		$	723,914
Diluted earnings attributable to shareholders per share	$	2.54		$	2.09	$	6.84	$	5.61	$	1.30		$	2.27		$	2.75		$	4.31
Basic earnings attributable to shareholders per share	$	2.56		$	2.12	$	6.90	$	5.68	$	1.31		$	2.29		$	2.78		$	4.35
Weighted average diluted shares outstanding		163,250			171,565		166,398		171,549		151,563			166,474			153,516			167,980
Weighted average basic shares outstanding		162,029			169,633		164,944		169,398		150,435			165,092			152,291			166,423


	Three months ended September 30,						Nine months ended September 30,						Three months ended June 30,						Six months ended June 30,
	2022			2021			2022			2021			2023			2022			2023			2022
Operating Activities:
Net earnings	$	414,162		$	359,910		$	1,145,868		$	964,834		$	195,793		$	382,226		$	421,791		$	731,706
Adjustments to reconcile net earnings to net cash from operating activities:
Provisions for losses on accounts receivable		5,570			3,739			9,917			6,028
Deferred income tax (benefit) expense		(3,070	)		(7,658	)		(14,928	)		2,343
Provisions for (recoveries) losses on accounts receivable														(167	)		4,763			905			4,347
Deferred income tax benefit														(3,560	)		(8,622	)		(1,524	)		(11,858	)
Stock compensation expense		14,175			15,204			51,296			57,298			18,595			25,518			31,083			37,121
Depreciation and amortization		15,187			12,753			42,416			38,415			15,506			14,254			30,767			27,229
Other, net		1,435			626			144			1,523			2,564			(1,746	)		3,723			(1,291	)
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable		634,421			(714,300	)		880,364			(1,377,997	)
(Decrease) increase in accounts payable and accrued expenses		(350,922	)		436,343			(343,902	)		769,525
Decrease (increase) in deferred contract costs		226,087			(328,932	)		437,155			(550,572	)
(Decrease) increase in contract liabilities		(249,895	)		381,192			(488,826	)		635,286
(Decrease) increase in income taxes payable, net		(31,397	)		33,378			(78,568	)		32,022
(Increase) decrease in other, net		(5,369	)		(14,884	)		2,040			(15,208	)
Decrease in accounts receivable														174,321			378,291			682,927			245,943
(Decrease) increase in accounts payable and accrued liabilities														(149,986	)		(133,171	)		(352,909	)		7,020
Decrease in deferred contract costs														18,166			37,138			85,787			211,068
Decrease in contract liabilities														(23,803	)		(45,574	)		(108,250	)		(238,931	)
Decrease in income taxes payable, net														(93,817	)		(93,430	)		(93,726	)		(47,171	)
Decrease (increase) in other, net														4,834			(1,001	)		4,284			7,409
Net cash from operating activities		670,384			177,371			1,642,976			563,497			158,446			558,646			704,858			972,592
Investing Activities:
Purchase of property and equipment		(15,928	)		(9,870	)		(68,498	)		(24,800	)		(10,481	)		(38,158	)		(20,607	)		(52,570	)
Other, net		(590	)		(157	)		(645	)		(53	)		(794	)		(134	)		(219	)		(55	)
Net cash from investing activities		(16,518	)		(10,027	)		(69,143	)		(24,853	)		(11,275	)		(38,292	)		(20,826	)		(52,625	)
Financing Activities:
Payments from borrowing on lines of credit		(21,117	)		(1,045	)		(29,601	)		(2,570	)
Proceeds from borrowing on lines of credit		—			8,524			56,545			10,138
Payments on borrowings on lines of credit														(5,743	)		(5,382	)		(32,145	)		(8,484	)
Proceeds from borrowings on lines of credit														7,054			33,953			18,549			56,545
Proceeds from issuance of common stock		61,885			56,965			73,318			99,433			9,176			5,682			18,464			11,433
Repurchases of common stock		(469,041	)		(76,595	)		(1,018,106	)		(225,064	)		(687,689	)		(549,065	)		(901,191	)		(549,065	)
Dividends paid		—			—			(109,828	)		(98,387	)		(102,263	)		(109,828	)		(102,263	)		(109,828	)
Payments for taxes related to net share settlement of equity awards		—			(4	)		(19,333	)		(15,172	)		(12,056	)		(11,851	)		(19,501	)		(19,333	)
Distribution to noncontrolling interest		(543	)		(1,631	)		(543	)		(1,631	)
Net cash from financing activities		(428,816	)		(13,786	)		(1,047,548	)		(233,253	)		(791,521	)		(636,491	)		(1,018,087	)		(618,732	)
Effect of exchange rate changes on cash and cash equivalents		(47,487	)		(7,573	)		(100,443	)		(13,076	)		(7,857	)		(46,518	)		(1,489	)		(52,956	)
Change in cash and cash equivalents		177,563			145,985			425,842			292,315			(652,207	)		(162,655	)		(335,544	)		248,279
Cash and cash equivalents at beginning of period		1,976,971			1,674,121			1,728,692			1,527,791			2,350,794			2,139,626			2,034,131			1,728,692
Cash and cash equivalents at end of period	$	2,154,534		$	1,820,106		$	2,154,534		$	1,820,106		$	1,698,587		$	1,976,971		$	1,698,587		$	1,976,971
Taxes Paid:
Income taxes	$	150,960		$	104,617		$	465,711		$	295,153		$	173,670		$	236,791		$	244,456		$	314,751

	Common Stock
For the three months ended September 30, 2022 and 2021	Shares			Par value			Additional paid-in capital			Retained earnings			Accumulated other comprehensive loss			Total shareholders’ equity			Noncontrolling interest			Total equity
Balance at June 30, 2022		162,931		$	1,629		$	137		$	3,717,316		$	(193,834	)	$	3,525,248		$	10,015		$	3,535,263
																									Common Stock
For the three months ended June 30, 2023 and 2022																									Shares			Par value			Additional paid-in capital			Retained earnings			Accumulated other comprehensive loss			Total shareholders’ equity			Noncontrolling interest			Total equity
Balance at March 31, 2023																										152,712		$	1,527		$	-		$	3,336,140		$	(190,498	)	$	3,147,169		$	3,199		$	3,150,368
Shares issued under employee stock plans, net of tax withholding for net settlement		726			7			61,877			—			—			61,884			—			61,884			510			5			(2,886	)		—			—			(2,881	)		—			(2,881	)
Shares repurchased under provisions of stock repurchase plan		(4,529	)		(45	)		(76,071	)		(392,925	)		—			(469,041	)		—			(469,041	)		(6,000	)		(60	)		(16,615	)		(677,310	)		—			(693,985	)		—			(693,985	)
Stock compensation expense		—			—			14,175			—			—			14,175			—			14,175			—			—			18,595			—			—			18,595			—			18,595
Net earnings		—			—			—			414,209			—			414,209			(47	)		414,162			—			—			—			196,800			—			196,800			(1,007	)		195,793
Other comprehensive loss		—			—			—			—			(64,295	)		(64,295	)		(212	)		(64,507	)		—			—			—			—			(7,503	)		(7,503	)		(20	)		(7,523	)
Dividends and dividend equivalents paid		—			—			—			—			—			—			—			—			—			—			906			(103,169	)		—			(102,263	)		—			(102,263	)
Distribution to noncontrolling interest		—			—			—			—			—			—			(543	)		(543	)
Balance at September 30, 2022		159,128		$	1,591		$	118		$	3,738,600		$	(258,129	)	$	3,482,180		$	9,213		$	3,491,393
Balance at June 30, 2023																										147,222		$	1,472		$	—		$	2,752,461		$	(198,001	)	$	2,555,932		$	2,172		$	2,558,104

Balance at June 30, 2021		169,169		$	1,692		$	79,357		$	3,104,471		$	(106,066	)	$	3,079,454		$	4,197		$	3,083,651
Balance at March 31, 2022																										167,477		$	1,675		$	13,343		$	3,965,803		$	(137,429	)	$	3,843,392		$	5,939		$	3,849,331
Shares issued under employee stock plans, net of tax withholding for net settlement		836			8			56,953			—			—			56,961			—			56,961			454			4			(6,173	)		—			—			(6,169	)		—			(6,169	)
Shares repurchased under provisions of stock repurchase plan		(613	)		(6	)		(76,589	)		—			—			(76,595	)		—			(76,595	)		(5,000	)		(50	)		(33,401	)		(515,614	)		—			(549,065	)		—			(549,065	)
Stock compensation expense		—			—			15,204			—			—			15,204			—			15,204			—			—			25,518			—			—			25,518			—			25,518
Net earnings		—			—			—			359,068			—			359,068			842			359,910			—			—			—			377,805			—			377,805			4,421			382,226
Other comprehensive loss		—			—			—			—			(16,734	)		(16,734	)		(174	)		(16,908	)		—			—			—			—			(56,405	)		(56,405	)		(345	)		(56,750	)
Dividends and dividend equivalents paid		—			—			—			—			—			—			—			—			—			—			850			(110,678	)		—			(109,828	)		—			(109,828	)
Distributions to noncontrolling interest		—			—			—			—			—			—			(1,631	)		(1,631	)
Balance at September 30, 2021		169,392		$	1,694		$	74,925		$	3,463,539		$	(122,800	)	$	3,417,358		$	3,234		$	3,420,592
Balance at June 30, 2022																										162,931		$	1,629		$	137		$	3,717,316		$	(193,834	)	$	3,525,248		$	10,015		$	3,535,263

	Common Stock																								Common Stock
For the nine months ended September 30, 2022 and 2021	Shares			Par value			Additional paid-in capital			Retained earnings			Accumulated other comprehensive loss			Total shareholders’ equity			Noncontrolling interest			Total equity
For the six months ended June 30, 2023 and 2022																									Shares			Par value			Additional paid-in capital			Retained earnings			Accumulated other comprehensive loss			Total shareholders’ equity			Noncontrolling interest			Total equity
Balance at December 31, 2022																										154,313		$	1,543		$	139		$	3,310,892		$	(202,553	)	$	3,110,021		$	3,514		$	3,113,535
Shares issued under employee stock plans, net of tax withholding for net settlement																										868			9			(1,046	)		—			—			(1,037	)		—			(1,037	)
Shares repurchased under provisions of stock repurchase plans																										(7,959	)		(80	)		(31,424	)		(877,731	)		—			(909,235	)		—			(909,235	)
Stock compensation expense																										—			—			31,083			—			—			31,083			—			31,083
Net earnings																										—			—			—			422,811			—			422,811			(1,020	)		421,791
Other comprehensive income (loss)																										—			—			—			—			4,552			4,552			(322	)		4,230
Dividends and dividend equivalents paid																										—			—			1,248			(103,511	)		—			(102,263	)		—			(102,263	)
Balance at June 30, 2023																										147,222		$	1,472		$	—		$	2,752,461		$	(198,001	)	$	2,555,932		$	2,172		$	2,558,104

Balance at December 31, 2021		167,210		$	1,672		$	3,160		$	3,620,008		$	(130,414	)	$	3,494,426		$	3,565		$	3,497,991			167,210			1,672			3,160			3,620,008			(130,414	)		3,494,426			3,565			3,497,991
Shares issued under employee stock plans, net of tax withholding for net settlement		1,447			14			53,970			—			—			53,984			—			53,984			721			7			(7,907	)		—			—			(7,900	)		—			(7,900	)
Shares repurchased under provisions of stock repurchase plans		(9,529	)		(95	)		(109,472	)		(908,539	)		—			(1,018,106	)		—			(1,018,106	)		(5,000	)		(50	)		(33,401	)		(515,614	)		—			(549,065	)		—			(549,065	)
Stock compensation expense		—			—			51,296			—			—			51,296			—			51,296			—			—			37,121			—			—			37,121			—			37,121
Net earnings		—			—			—			1,138,123			—			1,138,123			7,745			1,145,868			—			—			—			723,914			—			723,914			7,792			731,706
Other comprehensive loss		—			—			—			—			(127,715	)		(127,715	)		(1,554	)		(129,269	)		—			—			—			—			(63,420	)		(63,420	)		(1,342	)		(64,762	)
Dividends and dividend equivalents paid		—			—			1,164			(110,992	)		—			(109,828	)		—			(109,828	)		—			—			1,164			(110,992	)		—			(109,828	)		—			(109,828	)
Distribution to noncontrolling interest		—			—			—			—			—			—			(543	)		(543	)
Balance at September 30, 2022		159,128		$	1,591		$	118		$	3,738,600		$	(258,129	)	$	3,482,180		$	9,213		$	3,491,393

Balance at December 31, 2020		169,294		$	1,693		$	157,496		$	2,600,201		$	(99,753	)	$	2,659,637		$	3,590		$	2,663,227
Shares issued under employee stock plans, net of tax withholding for net settlement		2,136			21			84,240			—			—			84,261			—			84,261
Shares repurchased under provisions of stock repurchase plans		(2,038	)		(20	)		(225,044	)		—			—			(225,064	)		—			(225,064	)
Stock compensation expense		—			—			57,298			—			—			57,298			—			57,298
Net earnings		—			—			—			962,660			—			962,660			2,174			964,834
Other comprehensive loss		—			—			—			—			(23,047	)		(23,047	)		(899	)		(23,946	)
Dividends and dividend equivalents paid		—			—			935			(99,322	)		—			(98,387	)		—			(98,387	)
Distributions to noncontrolling interest		—			—			—			—			—			—			(1,631	)		(1,631	)
Balance at September 30, 2021		169,392		$	1,694		$	74,925		$	3,463,539		$	(122,800	)	$	3,417,358		$	3,234		$	3,420,592
Balance at June 30, 2022																										162,931		$	1,629		$	137		$	3,717,316		$	(193,834	)	$	3,525,248		$	10,015		$	3,535,263

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 condensed consolidated statements of earnings: 1) airfreight services, 2) ocean freight and ocean services, and 3) customs brokerage and other services.

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. 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 satisfied nearly all performance obligations for the contract liabilities recorded as of ~~June 30, 2022.~~March 31, 2023.

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. 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 ~~we do~~the Company does not issue a ~~HAWB,~~House Airway Bill (HAWB), a ~~HOBL~~House Ocean Bill of Lading (HOBL) or a House Seaway Bill or otherwise act solely as an agent for the shipper, only the commissions and fees earned for such services are included in revenues. In these transactions, the Company is not a principal and ~~report~~reports only the commissions and fees earned in ~~revenue.~~revenues.

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 in the condensed 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.

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 ~~significan~~tsignificant enough to affect expected credit losses. The Company has recorded an allowance for credit loss in the amounts of $~~9,760~~5,802 as of ~~September~~June 30, ~~2022~~2023 and ~~$6,686~~$9,466 as of December 31, ~~2021.~~ 2022. Additions and write-offs have not been significant in the periods presented.

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, accrual of costs related to ancillary services the Company performs, typically at the destination location, self-insured liabilities, accrual of various tax liabilities ~~including estimates associated with the U.S. enacted Tax Cuts~~ and ~~Jobs Act (the 2017 Tax Act),~~ accrual of loss contingencies, ~~including estimates for potential claims as a result of the downtime caused by the cyber-attack,~~ calculation of share-based compensation expense and estimates related to determining the lease term and discount rate when measuring ROU assets and lease liabilities. In 2022, ancillary services include additional estimated costs for demurrage charges incurred as a result of downtime caused by the cyber-attack. See Note 9 for further information on estimates related to the cyber-attack. Actual results could be materially different from the estimated provisions and accruals recorded.

The Company is subject to taxation in various states and many foreign jurisdictions including the People’s Republic of China, including Hong Kong, Taiwan, Vietnam, India, Mexico, Canada, Netherlands and the United Kingdom. The Company believes that its tax positions, including intercompany transfer pricing policies, are reasonable and consistent with established transfer pricing methodologies and norms. The Company is under, or may be subject to, audit or examination and assessments by the relevant authorities in respect to these and any other jurisdictions primarily for years 2009 and thereafter. Sometimes audits result in proposed assessments where the ultimate resolution could result in significant additional tax, penalties and interest payments being required. The Company establishes liabilities when, despite its belief that the tax return 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 2023. 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 existing 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 from the amounts recorded. It is reasonably possible that within the next twelve months the Company may undergo further audits and examinations by various tax authorities and possibly may reach resolution related to income 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.

The Company’s consolidated effective income tax rate was 26.4% and 25.6% for the three and six months ended June 30, 2023, as compared to 24.9% and 25.3% in the comparable periods of 2022. For the three and six months ended June 30, 2023 and 2022, there was no BEAT expense and GILTI expense was insignificant. Both periods benefited from U.S. income tax deductions for FDII. For the quarter ended June 30, 2023, the Company was negatively impacted by higher foreign income tax expense that exceeded available U.S. Federal foreign tax credits, principally from withholding taxes related to the Company’s foreign operations. The impact of the 15% corporate alternative minimum tax based on financial statement income (BMT), which became effective in 2023 in the U.S., under the Inflation Reduction Act for the three and six months ended June 2023, was insignificant. Some elements of the recorded impacts of the Inflation Reduction Act could be impacted by further legislative action as well as additional interpretations and guidance issued by the Internal Revenue Service or Treasury which could impact the estimates of the amounts recorded for BMT in the future.

Note 4. 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 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.

The following table reconciles the numerator and the denominator of the basic and diluted per share computations for earnings attributable to shareholders:

	Three months ended September 30,
	Net earnings attributable to shareholders		Weighted average shares		Earnings per share		Three months ended June 30,
2022
							Net earnings attributable to shareholders		Weighted average shares		Earnings per share
2023
Basic earnings attributable to shareholders	$	414,209		162,029	$	2.56	$	196,800		150,435	$	1.31
Effect of dilutive potential common shares		—		1,221		—		—		1,128		—
Diluted earnings attributable to shareholders	$	414,209		163,250	$	2.54	$	196,800		151,563	$	1.30
2021
2022
Basic earnings attributable to shareholders	$	359,068		169,633	$	2.12	$	377,805		165,092	$	2.29
Effect of dilutive potential common shares		—		1,932		—		—		1,382		—
Diluted earnings attributable to shareholders	$	359,068		171,565	$	2.09	$	377,805		166,474	$	2.27



	Nine months ended September 30,						Six months ended June 30,
	Net earnings attributable to shareholders		Weighted average shares		Earnings per share		Net earnings attributable to shareholders		Weighted average shares		Earnings per share
2023
Basic earnings attributable to shareholders							$	422,811		152,291	$	2.78
Effect of dilutive potential common shares								—		1,225		—
Diluted earnings attributable to shareholders							$	422,811		153,516	$	2.75
2022
Basic earnings attributable to shareholders	$	1,138,123	$	164,944	$	6.90	$	723,914		166,423	$	4.35
Effect of dilutive potential common shares	$	—	$	1,454		—		—		1,557		—
Diluted earnings attributable to shareholders	$	1,138,123		166,398	$	6.84	$	723,914		167,980	$	4.31
2021
Basic earnings attributable to shareholders	$	962,660	$	169,398	$	5.68
Effect of dilutive potential common shares	$	—	$	2,151		—
Diluted earnings attributable to shareholders	$	962,660		171,549	$	5.61

Substantially all outstanding potential common shares as of June 30, 2023 were dilutive. For the three and ~~nine~~six months ended ~~September~~June 30, 2022, ~~976~~945 potential ~~common~~ shares were excluded from the computation of diluted earnings per share because the effect would have been antidilutive. ~~Substantially all outstanding potential common shares for the comparative periods in 2021 were dilutive.~~

The Company has a Discretionary Stock Repurchase Plan approved by the Board of Directors that authorizes management to reduce issued and outstanding common ~~stock down to 150,000 shares.~~

~~On May 2, 2022, the~~stock. The Board of Directors last amended the plan on February 20, 2023 to ~~further~~ authorize repurchases down from 150,000to ~~from the previous number of 160,000 to 150,000~~140,000 shares. This authorization has no expiration date. During the ~~nine~~six months ended ~~September~~June 30, ~~2022,~~2023, there were ~~9,529~~7,959 shares repurchased at an average price of ~~$106.84~~$113.23 per share, compared to ~~2,038~~5,000 shares repurchased at an average price of ~~$110.45 per share~~$109.81 during the same ~~periods~~period in ~~2021.~~ 2022.

Accumulated other comprehensive loss consisted entirely of foreign currency translation adjustments, net of related income tax effects, for all the periods presented.

~~On May 2, 2022, the Board of Directors declared a semi-annual dividend of $0.67 per share payable on June 15, 2022 to shareholders of record as of June 1, 2022.~~10

On May ~~4, 2021~~1, 2023, the Board of Directors declared a semi-annual dividend of $~~0.58~~.69 per share payable on June 15, ~~2021~~2023 to shareholders of record as of June 1, ~~2021.~~

2023~~Subsequent to the end of the third quarter of~~. On May 2, 2022 ~~on November 7, 2022,~~, the Board of Directors declared a semi-annual dividend of ~~$0.67~~$.67 per share payable on ~~December~~June 15, 2022 to shareholders of record as of ~~December~~June 1, 2022.

Note 8. Business Segment Information

The Company is organized functionally in geographic operating segments. Accordingly, management focuses its attention on revenues, directly related cost of transportation and other expenses for each of the Company’s three primary sources of revenue, salaries and other operating expenses, operating income, identifiable assets, capital expenditures and equity generated in each of these geographical areas when evaluating the effectiveness of geographic management. 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~~margin..

Financial information regarding the Company’s operations by geographic area is as follows:

	UNITED STATES		OTHER NORTH AMERICA		LATIN AMERICA		NORTH ASIA		SOUTH ASIA		EUROPE		MIDDLE EAST, AFRICA AND INDIA		ELIMI- NATIONS			CONSOLI- DATED
For the three months ended September 30, 2022:
																				UNITED STATES		OTHER NORTH AMERICA		LATIN AMERICA		NORTH ASIA		SOUTH ASIA		EUROPE		MIDDLE EAST, AFRICA AND INDIA		ELIMI- NATIONS			CONSOLI- DATED
For the three months ended June 30, 2023:
Revenues	$	1,244,515		140,622		68,057		1,489,331		518,780		637,411		264,518		(1,088	)		4,362,146	$	805,948		110,255		49,972		510,027		199,868		440,916		123,972		(1,206	)		2,239,752
Directly related cost of transportation and other expenses¹	$	742,826		80,116		41,638		1,250,872		416,817		453,248		209,248		(492	)		3,194,273	$	426,121		69,108		29,428		387,973		134,477		288,808		83,890		(623	)		1,419,182
Salaries and other operating expenses²	$	314,442		30,151		15,057		98,758		37,577		109,308		36,181		(524	)		640,950	$	256,277		34,793		16,265		68,290		44,048		125,196		27,820		(616	)		572,073
Operating income	$	187,247		30,355		11,362		139,701		64,386		74,855		19,089		(72	)		526,923	$	123,550		6,354		4,279		53,764		21,343		26,912		12,262		33			248,497
Identifiable assets at period end	$	3,553,279		272,527		137,472		915,895		421,148		1,020,756		322,160		(35,711	)		6,607,526	$	2,553,553		192,362		115,458		495,229		213,026		748,449		258,849		(12,886	)		4,564,040
Capital expenditures	$	9,278		556		419		581		426		3,619		1,049		—			15,928	$	6,623		161		46		352		168		2,336		795		—			10,481
Equity	$	2,430,632		129,346		59,494		304,496		180,855		289,595		140,147		(43,172	)		3,491,393	$	1,873,220		45,252		59,289		220,638		93,476		146,174		158,133		(38,078	)		2,558,104
For the three months ended September 30, 2021:
For the three months ended June 30, 2022:
Revenues	$	1,134,096		116,404		54,303		1,690,381		538,780		564,810		221,777		(1,290	)		4,319,261	$	1,265,363		144,988		66,136		1,582,475		611,246		658,307		275,948		(1,151	)		4,603,312
Directly related cost of transportation and other expenses¹	$	661,515		63,031		34,216		1,417,283		445,970		389,208		174,733		(466	)		3,185,490	$	797,179		85,806		43,298		1,323,354		507,473		464,399		220,162		(723	)		3,440,948
Salaries and other operating expenses²	$	238,943		33,077		14,759		141,109		54,003		126,475		36,598		(830	)		644,134	$	314,726		31,308		14,496		104,896		38,728		115,394		37,258		(424	)		656,382
Operating income	$	233,638		20,296		5,328		131,989		38,807		49,127		10,446		6			489,637	$	153,458		27,874		8,342		154,225		65,045		78,514		18,528		(4	)		505,982
Identifiable assets at period end	$	3,417,496		256,638		110,406		1,558,109		457,615		990,123		328,671		(42,675	)		7,076,383	$	3,681,137		304,799		144,303		1,275,808		554,166		1,081,246		365,532		(45,849	)		7,361,142
Capital expenditures	$	6,001		248		175		435		351		2,254		406		—			9,870	$	26,394		1,038		177		766		436		7,666		1,681		—			38,158
Equity	$	2,451,584		93,084		37,087		368,535		129,941		258,805		123,304		(41,748	)		3,420,592	$	2,435,088		127,428		54,762		307,453		217,437		297,572		134,388		(38,865	)		3,535,263

																				UNITED STATES		OTHER NORTH AMERICA		LATIN AMERICA		NORTH ASIA		SOUTH ASIA		EUROPE		MIDDLE EAST, AFRICA AND INDIA		ELIMI- NATIONS			CONSOLI- DATED

	UNITED STATES		OTHER NORTH AMERICA		LATIN AMERICA		NORTH ASIA		SOUTH ASIA		EUROPE		MIDDLE EAST, AFRICA AND INDIA		ELIMI- NATIONS			CONSOLI- DATED
For the nine months ended September 30, 2022:
For the six months ended June 30, 2023:
Revenues	$	3,751,102		390,220		191,900		4,840,822		1,776,355		1,871,509		811,147		(3,299	)		13,629,756	$	1,751,442		220,105		104,667		1,092,448		423,995		975,380		266,675		(2,371	)		4,832,341
Directly related cost of transportation and other expenses¹	$	2,303,428		230,154		118,793		4,054,319		1,463,173		1,335,267		647,510		(1,312	)		10,151,332	$	966,078		138,313		61,730		840,315		292,100		661,068		179,839		(1,159	)		3,138,284
Salaries and other operating expenses²	$	962,817		86,328		42,654		326,767		121,634		333,971		111,481		(1,893	)		1,983,759	$	523,960		70,617		35,767		139,430		90,846		252,568		57,652		(1,249	)		1,169,591
Operating income	$	484,857		73,738		30,453		459,736		191,548		202,271		52,156		(94	)		1,494,665	$	261,404		11,175		7,170		112,703		41,049		61,744		29,184		37			524,466
Identifiable assets at period end	$	3,553,279		272,527		137,472		915,895		421,148		1,020,756		322,160		(35,711	)		6,607,526	$	2,553,553		192,362		115,458		495,229		213,026		748,449		258,849		(12,886	)		4,564,040
Capital expenditures	$	45,149		2,672		705		1,878		1,152		13,343		3,599		—			68,498	$	12,067		630		276		942		335		5,319		1,038		—			20,607
Equity	$	2,430,632		129,346		59,494		304,496		180,855		289,595		140,147		(43,172	)		3,491,393	$	1,873,220		45,252		59,289		220,638		93,476		146,174		158,133		(38,078	)		2,558,104
For the nine months ended September 30, 2021:
For the six months ended June 30, 2022:
Revenues	$	3,007,053		311,986		146,148		4,208,811		1,306,264		1,576,092		574,469		(3,649	)		11,127,174	$	2,506,587		249,598		123,843		3,351,491		1,257,575		1,234,098		546,629		(2,211	)		9,267,610
Directly related cost of transportation and other expenses¹	$	1,731,032		175,392		86,868		3,471,453		1,051,133		1,072,973		444,132		(1,576	)		8,031,407	$	1,560,602		150,038		77,155		2,803,447		1,046,356		882,019		438,262		(820	)		6,957,059
Salaries and other operating expenses²	$	718,762		90,114		41,871		354,841		146,214		359,338		100,899		(2,069	)		1,809,970	$	648,375		56,177		27,597		228,009		84,057		224,663		75,300		(1,369	)		1,342,809
Operating income	$	557,259		46,480		17,409		382,517		108,917		143,781		29,438		(4	)		1,285,797	$	297,610		43,383		19,091		320,035		127,162		127,416		33,067		(22	)		967,742
Identifiable assets at period end	$	3,417,496		256,638		110,406		1,558,109		457,615		990,123		328,671		(42,675	)		7,076,383	$	3,681,137		304,799		144,303		1,275,808		554,166		1,081,246		365,532		(45,849	)		7,361,142
Capital expenditures	$	11,931		434		300		1,192		1,462		7,908		1,573		—			24,800	$	35,871		2,116		286		1,297		726		9,724		2,550		—			52,570
Equity	$	2,451,584		93,084		37,087		368,535		129,941		258,805		123,304		(41,748	)		3,420,592	$	2,435,088		127,428		54,762		307,453		217,437		297,572		134,388		(38,865	)		3,535,263

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 condensed consolidated statements of earnings.

²Salaries and other operating expenses totals salaries and related, rent and occupancy, depreciation and amortization, selling and promotion and other as shown in the condensed consolidated statements of earnings.

The Company may incur additional expenses which could include third-party expenses, increased information services costs, or indemnities to customers. When the Company’s operating systems were down, many customers worked with other providers to meet their logistics needs, resulting in lower shipment volumes in the first quarter and to a lesser extent in the second quarter for which the financial impact on revenues and operating income cannot be quantified. Such costs and the ongoing impacts from the downtime caused by the cyber-attack are not expected to have further material adverse impact on the Company’s business. The Company is unable to estimate the ultimate direct and indirect financial impacts of this cyber-attack.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Safe Harbor for Forward-Looking Statements Under Private Securities Litigation Reform Act Of 1995; Certain Cautionary Statements

Certain portions of this report on Form 10-Q including the sections entitled "Overview," ~~"Highlights from Third~~"Summary of Second Quarter ~~2022,~~2023," "Industry Trends, Trade Conditions and Competition," "Seasonality," "Critical Accounting Estimates," "Results of Operations," "Income tax expense," "Currency and Other Risk Factors" and "Liquidity and Capital Resources" contain forward-looking statements. Words such as "will likely result," "expects", "are expected to," "would expect," "would not expect," "will continue," "is anticipated," "estimate," "project," "plan," "believe," "probable," "reasonably possible," "may," "could," "should," "would," "intends," "foreseeable future" or similar expressions are intended to identify such forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In addition, any statements that refer to projections of future financial performance, our anticipated growth and trends in the Company's businesses, signs of a slowing economy and drop in demand, ~~the uneven lifting of the Novel Coronavirus (COVID-19) pandemic restrictions around the world, current~~future supply chain and transportation disruptions and other characterizations of ~~future~~disruptive events or circumstances are forward-looking statements. In addition, forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations or projections. These statements must be considered in connection with the discussion of the important factors that could cause actual results to differ materially from the forward-looking statements. Attention should be given to the risk factors identified and discussed in Part I, Item 1A in the Company’s annual report on Form 10-K filed on March ~~15, 2022~~1, 2023 and in Part II, Item 1A in this report. Management believes that these forward-looking statements are reasonable as of this filing date and we do not assume any obligations to update these statements except as required by law.

Expeditors International of Washington, Inc. (herein referred to as "Expeditors," the "Company," "we," "us," "our") 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 ~~wholesale~~volume basis from direct (asset-based) carriers and then reselling ~~those services~~that space to our ~~customers on a retail basis.~~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 Seaway Bill 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 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 destination.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.

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.

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. In accordance with our revenue recognition policy (see Note 1. B to the condensed consolidated financial statements in this report), almost all freight revenue and related expenses are recorded at origin and shipment profits are split between origin and destination offices by recording a commission fee or profit share

In the first quarter of 2022, our company was the subject of a targeted cyber-attack which resulted in having to shut down most of our connectivity, operating and accounting systems globally to manage the safety of our entire global systems environment. We had limited ability to conduct operations for a period of approximately three weeks, including but not limited to arranging for shipments of freight or managing customs and distribution activities for our customers’ shipments. While we continued to navigate residual effects and incorporate learnings from the cyber-attack, our core systems were utilized to deliver our services throughout the second and third quarter. Beyond the loss of revenue and additional expenses incurred in the first half of the year, we do not expect to have further material adverse impact on the Company’s business.

In the third quarter of 2022, the COVID-19 pandemic, including the effect of ongoing quarantine requirements in China and resulting disruptions on supply chains, continued to affect our business operations and financial results. Although we believe these disruptive conditions have diminished, we expect them to continue to some degree at least through 2022.

The significant impacts are discussed within “Results of Operations” and summarized below.

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. Periodically, governments consider a variety of changes to tariffs and impose trade restrictions and accords. Currently, the United States and China have increased concerns affecting certain imports and exports and have implemented additional tariffs. We cannot predict the outcome of changes in tariffs, or interpretations, and trade restrictions and accords and the effects they will have on our business. As governments implement restrictions on imports and exports, manufacturers may change sourcing patterns, to the extent possible, and, over time, may shift manufacturing to other countries. 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 lanes in which we conduct business and the future impact that these events may have on international trade, oil prices and security costs. We do not have employees, assets, or operations in Russia or Ukraine. ~~Any~~While very limited, any shipment activity is conducted with independent agents in those countries in compliance with all applicable trade sanctions, laws and ~~is inconsequential to the Company.~~regulations.

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, reinforcing success by awarding service providers who consistently achieve at the highest levels with additional business. 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. Many air carriers are recovering from significant cash flow challenges and record operating losses incurred in 2020 and 2021 as a result of travel restrictions resulting in cancellation of flights. Uncertainty over recovery of demand for trans-pacific passenger air travel, in particular business travel, compared to pre-pandemic levels may impact air carriers’ operations and financial stability long term. 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 uncertain, including ~~the ongoing impacts of the pandemic,~~ higher inflation and oil prices, rising interest rates and the conflict in Ukraine. Starting in the second quarter of 2022 and continuing inthrough the ~~third quarter,~~first half of 2023, we saw a slowdown in the global economy and a softening of customer demand resulting in declines in average buy and sell ~~rates compared to the previous quarter.~~ ~~Until supply chain congestion,~~rates. As demand softened and port congestions cleared, shortages of labor ~~truck, rail~~ and equipment ~~shortages and COVID 19-related restrictions fully subside, we expect a continued high level of volatility~~eased resulting in excess carrier capacity over demand. These conditions could result in further declines in average sell and buy ~~and sell rates.~~rates in 2023. We also expect that pricing volatility will continue as carriers adapt to lower demand, changing fuel prices and react to governmental trade policies and other regulations. Additionally, we cannot predict the direct or indirect impact that further changes in and purchasing behavior, such as online shopping, could have on our business. InSome customers have begun shifting manufacturing to other countries in response to governments implementing higher tariffs on imports, ~~as well as responses~~ to ~~the pandemic’s~~reduce their supply chain risks, and in response to pandemic disruptions, ~~some customers have begun shifting manufacturing to other countries~~ which could negatively impact us.

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 ~~continue to~~ be impacted ~~in 2022~~ by ~~the downtime caused by the cyber-attack, impacts of~~ a slowing ~~economy and the continued effects of the pandemic.~~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 and inter-governmental disputes and a myriad of other similar and subtle forces. In addition, this historical quarterly trend has been influenced by the growth and diversification of our international network and service offerings.

A significant portion of our revenues is derived from customers in the retail and technology industries whose shipping patterns are tied closely to consumer demand, 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, disruptions in supply-chains 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.

The preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States requires us to make estimates and judgments. We base our estimates on historical experience and on

assumptions that we believe are reasonable. Our critical accounting estimates are discussed in Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" section of our annual report on Form 10-K for the year ended December 31, ~~2021,~~2022, filed on March ~~15, 2022~~1, 2023 to the critical accounting estimates previously disclosed in that report.

The following table shows the revenues, the directly related cost of transportation and other expenses for our principal services and our overhead expenses for the three and ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, including the respective percentage changes comparing ~~2022~~2023 and ~~2021.~~2022.

The table and the accompanying discussion and analysis should be read in conjunction with the condensed consolidated financial statements and related notes thereto in this quarterly report.


	Three months ended September 30,						Nine months ended September 30,					Three months ended June 30,						Six months ended June 30,
(in thousands)	2022			2021		Percentage change	2022		2021		Percentage change	2023			2022		Percentage change	2023			2022		Percentage change
Airfreight services:
Revenues	$	1,480,955		$	1,628,115	(9)%	$	4,682,076	$	4,477,599	5%	$	751,171		$	1,602,566	(53)%	$	1,656,074		$	3,201,121	(48)%
Expenses		1,104,812			1,244,381	(11)		3,459,861		3,335,253	4		525,027			1,212,503	(57)		1,191,049			2,355,049	(49)
Ocean freight services and ocean services:
Revenues		1,684,579			1,598,597	5		5,420,471		3,651,059	48		593,801			1,759,646	(66)		1,291,108			3,735,892	(65)
Expenses		1,343,355			1,254,334	7		4,345,963		2,859,020	52		405,807			1,402,365	(71)		889,489			3,002,608	(70)
Customs brokerage and other services:
Revenues		1,196,612			1,092,549	10		3,527,209		2,998,516	18		894,780			1,241,100	(28)		1,885,159			2,330,597	(19)
Expenses		746,106			686,775	9		2,345,508		1,837,134	28		488,349			826,080	(41)		1,057,747			1,599,402	(34)
Overhead expenses:
Salaries and related costs		499,341			519,611	(4)		1,546,503		1,452,902	6		428,558			508,222	(16)		878,406			1,047,162	(16)
Other		141,609			124,523	14		437,256		357,068	22		143,514			148,160	(3)		291,184			295,647	(2)
Total overhead expenses		640,950			644,134	—		1,983,759		1,809,970	10		572,072			656,382	(13)		1,169,590			1,342,809	(13)
Operating income		526,923			489,637	8		1,494,665		1,285,797	16		248,497			505,982	(51)		524,466			967,742	(46)
Other income, net		7,933			3,195	148		20,178		12,978	55		17,686			2,826	526		42,295			12,245	245
Earnings before income taxes		534,856			492,832	9		1,514,843		1,298,775	17		266,183			508,808	(48)		566,761			979,987	(42)
Income tax expense		120,694			132,922	(9)		368,975		333,941	10		70,390			126,582	(44)		144,970			248,281	(42)
Net earnings		414,162			359,910	15		1,145,868		964,834	19		195,793			382,226	(49)		421,791			731,706	(42)
Less net (losses) earnings attributable to the noncontrolling interest		(47	)		842	(106)		7,745		2,174	256		(1,007	)		4,421	(123)		(1,020	)		7,792	(113)
Net earnings attributable to shareholders	$	414,209		$	359,068	15%	$	1,138,123	$	962,660	18%	$	196,800		$	377,805	(48)%	$	422,811		$	723,914	(42)%

InAirfreight services revenues and expenses decreased 53% and 57%, respectively, during the ~~third quarter~~three months ended June 30, 2023, as compared with the same period in 2022, due to 49% and 52% decreases in average sell and buy rates, respectively, and a 15% decrease in tonnage. Airfreight services revenues and expenses decreased 48% and 49%, respectively, during the six months ended June 30, 2023, as compared with the same period in 2022, due to 46% decreases in both average sell and buy rates and an 11% decrease in tonnage. Average sell rates decreased as a result of ~~2022,~~lower buy rates driven by declining market rates. Buy rates declined as supply chain congestion cleared, shippers are shifting back to using ocean shipments and available capacity now exceeds pre-pandemic levels while demand ~~for airfreight services~~ continued to soften but remained high relative to available capacity compared to pre-pandemic levels, which resulted in sustained high average buy and sell rates. Continued restrictions from the pandemic, such as ongoing quarantine requirements in China, have resulted in airlines not increasing passenger flight schedules to pre-pandemic levels, which limited available belly space for cargo. Additionally, capacity was further limited due to the conflict in Ukraine and the related route restrictions in Asia and Europe lanes and sanctions on Russian carriers. In order to execute and meet the transportation needs of our customers, we continued to purchase capacity in advance and on the spot market.soften. Volumes were lower in ~~2022~~2023 as a result of softening demand and ~~compared to strong volumes~~uncertainty in the ~~same period in 2021 from customers converting to air shipments due to ocean port congestion.~~economy.

Airfreight services revenues and expenses decreased 9% and 11%, respectively, during the three months ended September 30, 2022, as compared with the same period in 2021, due to a 13% decrease in tonnage partially offset by 4% and 2% increases in averageAverage sell and buy rates ~~respectively.~~decreased in all regions with most significant decreases on exports out of North Asia and South Asia in the first half of 2023 due to excess available capacity over demand. Tonnage decreased in almost all regions due to softening demand ~~from slowing economies,~~ with the largest decreases coming from exports out of North Asia. Compared to the same quarter in 2021, average sell rates increased as a result of increased buy rates due to imbalances in available capacity relative to demand and increased fuel costs.

Airfreight services revenues and expenses increased 5% and 4%, respectively, during the nine months ended September 30, 2022, as compared with the same period in 2021, due to 25% and 23% increases in average sell and buy rates, respectively, partially offset by a 16% decrease in tonnage. Average sell rates increased as a result of increased buy rates due to imbalances in available capacity relative to demand and increased fuel costs. Average sell and buy rates increased in all regions with most significant increases on exports out of North Asia and South Asia. Tonnage decreased due to COVID-19 related lockdowns in China, softening demand and downtime caused by the cyber-attack with the largest decreases coming from exports out of North Asia, declining 22% and ~~South Asia. Though we continued to process air shipments on a limited basis~~20% during the ~~downtime caused by the cyber-attack, our volumes were negatively affected. Subsequent~~three and six months ended June 30, 2023, respectively. Compared to the ~~downtime in March, our volumes began~~first quarter 2023, airfreight services revenues and expenses declined 17% and 21%, respectively, primarily due to ~~recover as customers gradually returned but were negatively affected through the second quarter.~~

~~These conditions including the impact of rising jet fuel costs create a high degree of volatility in~~lower average buy rates and sell rates and are expected to continue at least through the end of 2022. Furthermore, transpacific passenger flights are not expected to return to pre-pandemic levels and further disruptions in the ocean market mayrates. Air carriers continue to ~~impact~~add flights to meet growing passenger travel demand ~~for airfreight.~~ and freighter capacity remains high creating a supply and demand imbalance which results in continued pressure on rates.

The ~~continued~~historically high average buy and sell rates ~~have significantly~~caused by the pandemic and unprecedented supply chain disruptions which contributed to the growth in our revenues, expenses and operating income ~~compared to 2021. These unprecedented operating conditions~~ in 2021 and ~~in the first half of~~ 2022 ~~are not expected to be sustained long-term.~~have largely dissipated as supply chains operations normalized. Buy rates and sell rates have been declining since the second quarter of ~~2022. Should customer~~2022 and are expected to further decline in 2023. Additionally, uncertainty in the economy including inflationary pressure and rising interest rates together with the attractiveness of declining ocean transportation rates are expected to continue to negatively affect demand ~~decrease~~for airfreight services which could further ~~and rates return to pre-pandemic levels, it will~~reduce our volumes. These conditions could result in ~~a significant~~further decrease in our revenues, expenses and operating income. We are unable to predict how these uncertainties and any future disruptions will affect our future operations or financial results.

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 ~~increased 5%~~decreased 66% and ~~48%~~65%, respectively, while expenses ~~increased 7%~~decreased 71% and ~~52%~~70%, respectively, for the three and ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 as compared with the same ~~periods~~period in ~~2021.~~2022. The largest component of our ocean freight and ocean services revenue is derived from ocean freight consolidation, which represented ~~86%~~68% and ~~80%~~ 87% of ocean freight and ocean services revenue for the ~~nine~~six months ended ~~September~~June 30, 2023 and 2022, ~~and 2021,~~ respectively.

Ocean freight consolidation revenues and expenses ~~increased 8%~~decreased 74% and 9%77%, respectively for the three months ended ~~September~~June 30, ~~2022,~~2023, as compared with the same period in ~~2021,~~2022, primarily due to ~~20%~~71% and ~~21% increases~~73% decreases in average sell and buy rates, respectively, ~~partially offset by~~and a ~~10%~~13% decrease in containers shipped. Ocean freight consolidation revenues and expenses ~~increased 60%~~decreased 73% and ~~61%~~76%, respectively, for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023, as compared with the same period in ~~2021,~~2022, primarily due to ~~a 74% increase~~66% and 70% decreases in ~~both~~ average sell and buy rates, ~~partially offset by an 8%~~respectively, and a 19% decrease in containers shipped. ~~Rising~~High fuel prices, congestion at ports due to labor, truck and equipment shortages and disrupted sailing schedules resulted in ~~continued~~ high average buy rates in ~~2022. While~~ the ~~ability to secure necessary capacity from ocean carriers~~first half of 2022.

Starting in the second half of 2022, as demand softened, port congestion cleared and ~~major port congestions have eased, availability~~shortages of labor and equipment at ports eased, this resulted in available capacity from carriers that exceeded demand. These factors drove a sharp decline in average buy rates starting in the fourth quarter of 2022 which continued through the first half of 2023. Compared to the first quarter 2023, ocean freight consolidation revenues and ~~rail heads remains challenging in certain locations.~~

expenses decreased 21% and 20%, respectively, due to declining average rates. Average sell and buy rates decreased to adjust to market conditions. Containers shipped ~~were lower in all regions, most significantly in North Asia~~decreased as ~~a result of COVID-19 related lockdowns in China. A slowdown in international trade~~compared to 2022 as demand softened, customer inventory levels remained high and ~~a buildup of retail inventories~~there are uncertainties in the ~~United States resulted in softening demand which negatively affected containers shipped compared to historically~~global economy. We also experienced exceptionally high volumes in ~~the three and nine months ended September 30, 2021. Europe and Middle East~~2022 from customers transferring from direct carrier shipping due to lack of available capacity.

North Asia ocean freight and ocean services revenues ~~increased 26%~~decreased 75% and ~~47%~~76%, respectively, while directly related expenses ~~increased 32%~~decreased 78% and ~~54%~~79%, respectively, for the three and six months ended ~~September~~June 30, ~~2022~~2023, primarily due to ~~higher~~decreases in average sell and buy rates, and ~~buy rates. North Asia~~decreases in containers shipped of 14% and 24%, respectively. South Asia ocean freight and ocean services revenues ~~increased~~40%decreased 79% and ~~62%~~78%, respectively, while directly related expenses ~~increased 42%~~decreased 83% and ~~66%, respectively,~~82% for the ~~nine~~three and six months ended ~~September~~June 30, ~~2022~~2023, primarily due to ~~higher~~decreases in average sell and buy rates, and ~~buy rates.~~decreases in containers shipped of 21% and 24%, respectively.

Direct ocean freight forwarding revenues ~~increased 10%~~decreased 6% and 7%1%, respectively, while expenses ~~increased 11%~~decreased 12% and 9%8%, for the three and six months ended June 30, 2023, principally due to lower volumes and decreases in ancillary services costs. As congestion at ports cleared, costs declined. Order management revenues decreased 32% and 36% while expenses decreased 36% and 43%, respectively for the three and ~~nine~~six months ended ~~September~~June 30, ~~2022 principally~~2023, due to increased ancillary services provided at higher rates. Order management revenues decreased 23% and 5%, respectively, while expenses decreased 27% and 2%, respectively, for the three and nine months ended September 30, 2022, mainly due to lowerdecreases in volumes from customers as demand softened, retail ~~customers, including those that advanced holiday related shipments~~inventory levels remained high and also due to ~~the first half of the year, and the impact of downtime and~~ lost customers caused by the cyber-attack. Our ability to provide order management services in the first ~~quarter~~half of 2022 was significantly affected by limited system connectivity during the downtime caused by the cyber-attack.

~~Although~~The historically high average buy and sell rates caused by the pandemic and unprecedented supply chain disruptions which contributed to the growth in our revenues, expenses and operating income in 2021 and 2022 have significantly declined as supply chains operations normalized. Buy rates and sell rates started declining in the second half of 2022, decreased sharply beginning in the fourth quarter of 2022 and through the first half of 2023. As global economic conditions ~~are slowing~~slow and carriers add capacity, we expect available capacity to exceed demand and further depress sell and buy rates have been declining since the second quarter of 2022, we expect ocean carriers to continue to manage available capacity. Until supply-chain congestion, labor, rail, truck and equipment shortages and COVID 19-related restrictions fully subside, we expect a high level of volatility in ~~average buy and sell rates.~~2023. We also expect that pricing volatility will continue as carriers adapt to ~~increases~~fluctuations in fuel prices and customers react to governmental trade policies and other regulations. The high average buy and sell rates have significantly contributed to the growth in our revenues and expenses in the nine months ended September 30, 2022. Should customer demand or rates further decrease from these levels, or if we are unable to secure sufficient capacity from carriers, it willregulations, which could result in ~~a significant~~further decrease in our revenues, expenses and operating income.

Customs brokerage and other services revenues ~~increased 10%~~decreased 28% and ~~18%, respectively,~~19% and expenses ~~increased 9%~~decreased 41% and ~~28%,~~34% for the three and ~~nine~~six months ended ~~September~~June 30, ~~2022,~~2023, respectively, as compared with the same periods in ~~2021,~~2022, primarily due to ~~higher charges on import services~~declining shipments from a slowdown in the economy. Expenses also decreased due to ~~supply chain congestion and costs related~~the impact of the cyber-attack which resulted in additional expenses in the first half of 2022. Compared to the ~~downtime caused by the cyber-attack. Revenues~~first quarter of 2023, customs brokerage and other services revenues and expenses ~~for import services increased significantly~~declined 10% and 14%, respectively, primarily due to ~~high drayage, storage, delivery, demurrage,~~lower volumes.

During the three and detention costs incurred at destinations caused by supply chains congestion, shortages in warehousing space and delays in retrieving and delivering cargo and were partially offset by a decrease in revenue from customs clearance due to fewer shipments. Additionally, six months ended 2022, as a result of our inability to timely process and move shipments ~~through~~though ports during the downtime caused by the cyber-attack, ~~downtime,~~ we directly incurred approximately ~~$55~~$20 million and $62 million, respectively, in incremental demurrage charges ~~for~~that were not recoverable from the ~~nine months ended September 30,~~customers. Additionally, import services including charges at ports such as detention, drayage, terminal charges and delivery decreased significantly in 2023 as congestion at ports cleared compared to high levels in the first half of 2022. We expect import services revenues and expenses will decline further in the remainder of 2023.

Road freight, warehousing and distribution services declined also ~~grew~~ due to ~~higher~~lower volumes and ~~higher~~decreased trucking, storage and labor costs. While customers continue to value our brokerage services due to changing tariffs and increasing complexity in the declaration process, some customers opt to using multiple customs brokerage service providers to reduce their risk. Customers continue to seek knowledgeable customs brokers with sophisticated computerized capabilities critical to an overall logistics management program that are necessary to rapidly respond to changes in the regulatory and security environment. Additionally, as ~~supply-chains congestion subsides and~~ international trade slows, volumes shipped and pricing could befurther negatively ~~affected resulting in lower~~impact our revenues and expenses.

North America revenues ~~increased 13%~~decreased 34% and 25%, respectively, and directly related expenses ~~increased 13%~~decreased 51% and ~~39%~~43%, respectively, for the three and ~~nine~~six months ended ~~September~~June 30, ~~2022, respectively,~~2023, as compared with the same ~~periods~~period in ~~2021,~~ 2022, primarily as a result of ~~higher~~declining shipments and significant decrease in detention, drayage, terminal charges ~~on import services due to port congestion. Additionally, $51~~and delivery charges including $21 million and $58 million, respectively, in incremental demurrage charges related to the downtime caused by the cyber-attack ~~also contributed to the increase in expenses for the nine months ended September 30, 2022.~~incurred.

Salaries and related costs ~~increased 6%~~decreased 16% for both the ~~nine~~three and six months ended ~~September~~June 30, ~~2022~~2023, as compared with the same ~~period~~periods in ~~2021,~~2022, principally due to ~~increases~~decreases in commissions and bonuses earned from ~~higher~~lower revenues and operating income, ~~and~~coupled with a ~~6% increase~~4% decrease in headcount during the same period to support increased complexity and disruptions in global supply chains. During the three months ended September 30, 2022 salaries and related costs decreased 4% due to decreases in bonus expense offset by a 6% increase in headcount during the same period.headcount.

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. Total bonuses to field and executive management for the ~~nine~~six months ended ~~September~~June 30, ~~2022 were up 4%~~2023, decreased 42% when compared to the same period in ~~2021,~~ 2022, primarily due to ~~an increase~~the decrease in operating ~~income offset by unused bonus allocations and reductions in bonuses awarded to senior management.~~income.

Because our management incentive compensation programs are also cumulative, 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 revenues, operating income and net earnings are a result of the incentives inherent in our compensation programs.

Other overhead expenses ~~increased 14%~~decreased 3% and ~~22%~~ 2% for the three and ~~nine~~six months ended ~~September~~June 30, ~~2022, respectively,~~2023, as compared with the same ~~period~~periods in ~~2021. We~~2022 as higher expenses were offset by decreases from costs incurred ~~$15~~in 2022 as a result of the cyber-attack and lower bad debt expense. During the three and six months ended June 30, 2022 we incurred $6 million and $26 million, respectively, of incremental costs in relation with the ~~cyber-attack in the nine months ended September 30, 2022.~~cyber-attack. These costs ~~comprised of various consulting services including cybersecurity experts, outside legal advisors, and other IT professional expenses; and estimated liabilities~~ ~~for potential shipment-related claims.~~ ~~The remaining~~were insignificant in 2023. These decreases were offset by increases in ~~other overhead expenses are the result of~~ certain operational expenses from renting additional space, ~~bad debt, higher claims~~travel costs and ~~technology and consulting related~~increases from investment in technology-related costs to support our ~~operations~~. ~~During~~operations. So long as the ~~three months ended September 30, 2022, the Company revised earlier estimates of incremental cyber-attack costs downward by $11 million.~~economic environment remains uncertain, we will be focused on aligning headcount and our overhead expenses commensurate with our transactional volumes. We expect to continue to enhance the effectiveness and security of our systems and deploy additional protection technologies and processes 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 explore new areas for profitable growth.

~~Our~~The Company’s consolidated effective income tax rate was ~~22.6%~~26.4% and ~~24.4%~~25.6% for the three and ~~nine~~six months ended ~~September~~June 30, ~~2022,~~2023, as compared to ~~27.0%~~24.9% and ~~25.7%, respectively, for~~25.3% in the ~~same~~comparable periods ~~in 2021.~~of 2022. For the three and six months ended June 30, 2023 and 2022, there was no BEAT expense and GILTI expense was insignificant. Both periods ~~in 2022~~ benefited from U.S. income tax deductions for FDII. For the quarter ended June 30, 2023, the Company was negatively impacted by higher foreign income tax expense that exceeded available U.S. Federal foreign tax credits, principally from withholding taxes related to the Company’s foreign operations. The impact of the 15% corporate alternative minimum tax based on financial statement income (BMT), which became effective in 2023 in the U.S., under the Inflation Reduction Act for the three and ~~nine~~six months ended ~~September 30, 2022 and 2021, there was no BEAT expense and GILTI expense~~June 2023, was insignificant. Some elements of the recorded impacts of the ~~2017 Tax~~Inflation Reduction Act could be impacted by further legislative action as well as additional interpretations and guidance issued by the ~~U.S.~~ Internal Revenue Service ~~and Department~~or Treasury which could impact the estimates of ~~Treasury.~~the amounts recorded for BMT in the future.

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 ~~have~~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 and agents. We may enter into foreign currency hedging transactions where there are regulatory or commercial limitations on our ability to move money freely around the world or the short-term financial outlook in any country is such that hedging is the most time-sensitive way to mitigate short-term exchange losses. Any such hedging activity during the three and ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021~~2022 was insignificant. We had no foreign currency derivatives outstanding at ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021.~~2022. For the three months ended ~~September~~June 30, ~~2022,~~2023, net foreign currency losses were approximately $3 million compared to net foreign currency gains ~~were approximately $9 million compared to less than $1~~of $6 million in the same period in ~~2021.~~2022. During the ~~nine~~six months ended ~~September~~June 30, ~~2022,~~2023, net foreign currency ~~gains~~losses were approximately ~~$17~~$6 million compared to net foreign currency ~~losses~~gains of approximately $1$8 million in the same period in ~~2021.~~2022.

Historically, our business has not been adversely affected by inflation. However, starting in 2021 ~~most~~and continuing in 2022 and 2023, many countries including the United States experienced ~~higher inflation than in recent years.~~increasing levels of inflation. In ~~2021 and continuing into~~ 2022, our business ~~has~~ experienced rising labor costs, significant service provider rate increases, higher rent and occupancy and other expenses. While buy rates for freight transportation capacity started declining in the second half of 2022, purchase prices for labor and other expenditures have continued to increase through the first half of 2023. 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 customer demand. 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 costs resulting from increases in interest rates.

There is uncertainty as to how ~~new~~future regulatory requirements and ~~increases~~volatility in oil prices ~~are expected to~~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.

Our principal source of liquidity is cash and cash equivalents and cash generated from operating activities. Net cash provided by operating activities for the three and ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 was ~~$670~~$158 million and ~~$1,643~~$705 million ~~respectively,~~ as compared with ~~$177~~$559 million and ~~$563~~$973 million for the same periods in ~~2021.~~2022. The ~~increase~~decreases of ~~$493~~$400 million and $268 million for the three and six months ended ~~September~~June 30, ~~2022, was~~2023, respectively, were primarily due to ~~collection of accounts receivable~~lower income and ~~higher net earnings.~~changes to working capital attributable to a slowdown in operations and declining sell and buy rates. At ~~September~~June 30, ~~2022,~~2023, working capital was ~~$2,881~~$1,903 million, including cash and cash equivalents of ~~$2,155~~$1,699 million. Other than our recorded lease liabilities, we had no long-term obligations or debt at ~~September~~June 30, ~~2022.~~

2023. 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 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. Increases in duty rates could result in increases in the amounts we advance on behalf of our customers. Cash advances are a “pass through” and are not recorded as a component of revenue and expense. 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. ~~Our accounts receivable and consequently our customer credit exposure has also increased as a result of historically high freight rates.~~ 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 or to what degree it will continue to be impacted in ~~2022~~2023 by the ~~pandemic, the downtime caused by the cyber-attack and the impacts~~softening of the ~~slowing down~~global economy.

Cash used in investing activities for the three and ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 was ~~$17~~$11 million and ~~$69~~$21 million as compared with ~~$10~~$38 million and ~~$25~~$53 million for the same periods in ~~2021, respectively,~~2022, primarily for capital expenditures. Capital expenditures in the three and ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 were primarily related to continuing investments in building and leasehold improvements and technology and facilities equipment. ~~In the first quarter of 2022 we spent $3 million on capital expenditures for technology equipment and software in relation with the remediation effort for the cyber-attack.~~ Total anticipated capital expenditures in ~~2022~~2023 are currently estimated to be ~~$80~~$70 million. This includes routine capital expenditures, leasehold and building improvements and investments in technology.~~million.~~

Cash used in financing activities during the three and ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 was ~~$429~~$792 million and ~~$1,048~~$1,018 million as compared with ~~cash used in financing activities of~~ ~~$14~~$636 million and ~~$233~~$619 million for the same periods in ~~2021.~~2022. 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 ~~or limit the growth of~~ outstanding shares. During the three and ~~nine~~six months ended ~~September~~June 30, ~~2022,~~2023, we used cash to repurchase ~~4.5~~6 million and ~~9.5~~8 million shares, respectively, of common stock compared to 5 million shares of common stock ~~respectively, compared to 0.6 million and 2.0 million, respectively,~~ during the ~~same periods in 2021.~~ three and six months ended June 30, 2022.

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 ~~growing~~ongoing uncertainties in the global economy, inflation, rising interest rates, and political uncertainty, ~~increase in oil prices, nor the pandemic~~ 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 on changes in competitors' behavior.

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 ~~September~~June 30, ~~2022,~~2023, borrowings under these credit lines were ~~$31~~$45 million and we were contingently liable for ~~$70~~$68 million from standby letters of credit and guarantees. The standby letters of credit and guarantees 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. At of September 30 2022, we had fixed lease payment obligations of $563 million, with $107 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 September 30, 2022 totaled $336 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. At ~~September~~June 30, ~~2022,~~2023, cash and cash equivalent balances of ~~$904~~$583 millionwere held by our non-United States subsidiaries, of which ~~$24~~$6 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.

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:

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, Euro, Mexican Peso, Canadian Dollar and British Pound.

Foreign exchange rate 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 ~~nine~~six months ended ~~September~~June 30, ~~2022,~~2023, would have had the effect of raising operating income by approximately ~~$112 million~~.$30 million. An average 10% strengthening of the U.S. dollar, for the same period, would have the effect of reducing operating income by approximately ~~$92~~$24 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.

We currently do not use derivative financial instruments to manage foreign currency risk and only enter into foreign currency hedging transactions in limited locations where regulatory or commercial limitations restrict our ability to move money freely. Any such hedging activity throughout the three and ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021~~2022 was insignificant. For the three months ended ~~September~~June 30, ~~2022,~~2023, net foreign currency losses were approximately $3 million compared to approximately $6 million of net gains during the same period in 2022. During the six months ended June 30, 2023 net foreign currency losses were approximately $6 million compared to net foreign currency gains ~~were~~of approximately ~~$9 million compared to less than $1~~$8 million during the same period in 2021. During the nine months ended September 30, 2022, net foreign currency gains were approximately $17 million compared to foreign currency losses of approximately $1 million during the same period in 2021.2022. We had no foreign currency derivatives outstanding at ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021.~~2022. We instead follow a policy of accelerating international currency settlements to manage foreign exchange risk relative to intercompany billings. As of ~~September~~June 30, ~~2022,~~2023, we had approximately ~~$175~~$37 millionof net unsettled intercompany transactions. ~~In the regular course of business, the~~The majority of intercompany billings are resolved within 30 days.

At ~~September~~June 30, ~~2022,~~2023, we had cash and cash equivalents of ~~$2,155~~$1,699 million of which ~~$985~~$792 million was invested at various short-term market interest rates. ~~Other than our recorded lease liabilities, we~~We had no long-term ~~obligations or~~ debt at ~~September~~June 30, ~~2022.~~2023. A hypothetical change in the interest rate of 10 basis points at ~~September~~June 30, ~~2022~~2023 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 in the ~~third~~second quarter of ~~2022.~~2023.

We carried out an evaluation, under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in the Exchange Act Rule 13a-15(e)) as of the end of the period covered by this report. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this report atdue to a material weakness in internal control over financial reporting that was disclosed in our Annual Report on Form 10-K for the ~~reasonable assurance level.~~year ended December 31, 2022.

As previously described in Part II, Item 9A of our Annual Report on Form 10-K for the year ended December 31, 2022, we began implementing certain enhancements designed to strengthen IT program change management processes and we continue to conduct supplemental lookback review procedures of direct database changes until improvements are fully in place. The weakness will not be considered remediated, until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively. We expect that the remediation of this material weakness will be completed prior to the end of 2023.

~~There~~Except for on-going remediation related to the material weakness identified in the quarter ended December 31, 2022, 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 other than related to the cyber-attack as discussed below.~~reporting.

With respect to the cyber-attack that is discussed in Note 9 to the condensed consolidated financial statements in this report, starting on February 20, 2022, we shut down most of our operating systems globally, including our accounting information systems, to manage the safety of our entire global systems environment. We engaged third-party cybersecurity experts to investigate and assist in the remediation. Our Board of Directors was regularly apprised of, and directors with experience in cybersecurity participated in, the critical investigation and remediation activities. Subsequently, we restored and strengthened the security of our systems and networks and enhanced the continuous monitoring of the entire information security environment. Additionally, we have continued to implement various improvements to our network and processes to mitigate the risk of recurrence and severity of such incidents in the future.

During the disruption caused by the cyber-attack, we deployed interim procedures and controls to maintain our systems of internal control over financial reporting. As a result of this cyber-attack and based on information known at this date, management determined that our disclosure controls and procedures were effective and the cyber-attack did not materially affect, nor was it reasonably likely to affect the effectiveness of the Company’s internal control over financial reporting.

We are developing a new accounting system, which is being implemented on a worldwide basis over the next several years. This system is expected to improve the efficiency of certain financial and transactional processes and reporting. This transition affects the processes that constitute our internal control over financial reporting and requires testing for operating effectiveness. As a result of the pandemic, many of our employees may work remotely on a temporary basis, as necessary due to local conditions and are able to do so within our established internal controls over financial reporting.

Our management has confidence in our internal controls and procedures. Nevertheless, our management, including Expeditors’ Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all errors or intentional fraud. 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.

Expeditors is involved in claims, lawsuits, government investigations 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 and tax advisors, none of these matters are expected to have a significant effect on our operations, cash flows or financial position. As of ~~September~~June 30, ~~2022,~~2023, the amounts ~~accrued~~recorded for ~~these~~ 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~~ ~~including potential claims resulting from the downtime caused by the cyber-attack in February 2022, see further information in Note 9 in the condensed consolidated financial statements in this report~~matters..

In addition to the other information set forth in this report, careful consideration should be given to the risk factors under Item 1A Risk Factors in our Annual Report on Form 10-K filed on March ~~15, 2022.~~1, 2023. There have been no material changes in Expeditors' risk factors from those disclosed under Item 1A Risk Factors in our annual report on Form 10-K filed on March ~~15, 2022,~~1, 2023, except for the following:

Global economic uncertainty impacted trade and could affect demand for our services or the financial stability of our service providers, customers and ~~customers.~~financial institutions.

The global economy entered a recession as a result of the pandemic, which initially affected trade and negatively affected demand for our services for a period of time, before rebounding in 2021. Current and future unfavorableUnfavorable economic conditions, rising interest rates and high inflation ~~and increasing geopolitical risks, such as the conflict in Ukraine,~~ could result in lower freight volumes, reduced sell rates, higher operating expenses and may adversely affect Expeditors' revenues, operating results and cash flows. These conditions, should they occur for an extended period of time, could adversely affect our customers, service providers and ~~service providers.~~the stability of financial institutions. Should our customers’ ability to pay deteriorate, additional credit losses may be ~~incurred~~.incurred.

COVID-19 significantly impacted worldwide economic conditions and global trade and may continue to have a disruptive effect on our operations, and the operations of our service providers and our customers, which may further impact our business.

COVID-19 was declared as a global health emergency and later declared as a global pandemic by the World Health Organization. As a result, throughout 2020 and 2021 and continuing into 2022, governments have implemented travel restrictions, mandated lockdowns and other precautionary measures that resulted in significant business and supply chain disruptions and has had direct impacts on international trade. This crisis has largely abated but is expected to continue affecting our business in many aspects. Governments have designated our operations as essential business and we activated our business continuity plan to be able to conduct operations. Our facilities and employees in most parts of the world have returned to normal working conditions. Certain pandemic related constraints continue to impact operations including reduced flight schedules from pre-pandemic levels and new regulations, which limited available belly space for cargo, congestion at ports and railheads resulting from labor and equipment shortages and insufficient warehousing space at destinations. While we believe these constraints are not long-term in nature, they can temporarily impact our ability to move increased air and ocean volumes in these capacity-constrained regions. These freight market conditions have created and continue to create pricing volatility that challenges Expeditors’ ability to maintain historical unitary profitability. Many of our customers are experiencing disruptions in their revenues and cash flows and have incurred higher operating expenses as a result of supply chain cost increases and other inflationary pressures. This has caused some customers to renegotiate contractual terms, increasing our accounts receivable collection and extended liability risks. Such conditions could result in the loss of business and additional credit losses in the future if our customers’ ability to pay deteriorates. Although we are monitoring the situation, we cannot predict for how long, or the ultimate extent to which the pandemic and related precautionary measures may disrupt our operations. Any significant disruption resulting from this on a large scale or over an extended period of time would negatively affect our business and our financial results. Throughout 2021 and into 2022, transportation rates rose to historically high levels. We believe that as Covid-19 disruptions recede, and passenger air travel rebounds, supply chain congestion will continue to improve. This will result in additional transportation capacity becoming available. Rates will likely continue to decline as this occurs. On a limited basis, we have entered in to fixed-rate buy agreements to secure space in the air and ocean markets. Future declines of sell rates will negatively affect our operating income and cash flows. 24

Item 2. Unregistered Sales of Equity Securities, ~~and~~ Use of Proceeds, and Issuer Purchases of Equity Securities

In November 2001, Expeditors' Board of Directors authorized a Discretionary Stock Repurchase Plan for the purpose of repurchasing 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~~On February 20, 2023, the Board of Directors last authorized repurchases from ~~160~~150 million shares of common stock down to ~~150~~140 million shares of common ~~stock on May 2, 2022.~~ stock. The maximum number of shares available for repurchase under this plan will increase as the total number of outstanding shares increases. This authorization has no expiration date.

Pursuant to the requirements 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.


Washington		91-1069248
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification Number)

1015 Third Avenue, Seattle, Washington		98104
(Address of principal executive offices)		(Zip Code)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	EXPD	NASDAQ Global Select Market


	September 30, 2022				December 31, 2021				June 30, 2023				December 31, 2022
	Cost		Fair Value		Cost		Fair Value		Cost		Fair Value		Cost		Fair Value
Cash and Cash Equivalents:
Cash and overnight deposits	$	1,169,248	$	1,169,248	$	1,241,565	$	1,241,565	$	906,927	$	906,927	$	1,038,903	$	1,038,903
Corporate commercial paper		952,613		953,391		423,261		423,279		769,027		769,964		977,887		978,325
Time deposits		32,673		32,673		63,866		63,866
Time deposits and money market funds										22,633		22,633		17,341		17,341
Total cash and cash equivalents	$	2,154,534	$	2,155,312	$	1,728,692	$	1,728,710	$	1,698,587	$	1,699,524	$	2,034,131	$	2,034,569

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
July 1-31, 2022		-		-		-		13,595
August 1-31, 2022		2,158		105.03		2,158		11,484
September 1-30, 2022		2,371		102.23		2,371		9,128
Total		4,529	$	103.56		4,529		9,128


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
April 1-30, 2023		-		-		-		12,793
May 1-31, 2023		5,000	$	114.42		5,000		8,171
June 1-30, 2023		1,000		115.57		1,000		7,222
Total		6,000	$	114.61		6,000		7,222


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐


Exhibit Number		Description
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 Document

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104		The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended ~~September~~June 30, ~~2022,~~2023, has been formatted in Inline XBRL.


		EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

~~November~~August 8, ~~2022~~2023		/s/ JEFFREY S. MUSSER
		Jeffrey S. Musser, President, Chief Executive Officer and Director

~~November~~August 8, ~~2022~~2023		/s/ BRADLEY S. POWELL
		Bradley S. Powell, Senior Vice President and Chief Financial Officer