UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K
(Mark One)

/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 1995

/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________ to _______________

Commission File Number: 0-13468

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.
(Exact name of registrant as specified in its charter)

Washington 91-1069248
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)

19119 - 16th Avenue South, Seattle, Washington 98188
(Address of principal executive offices) (Zip Code)

(206) 246-3711
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common Stock,
par value
$.01 per share

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 /X/ No / /

Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. / /

At March 11, 1996, the aggregate market value of the registrant's Common
Stock held by non-affiliates of the registrant was approximately $ 306,722,894.

At March 11, 1996, the number of shares outstanding of registrant's
Common Stock was 12,038,687.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the definitive proxy statement for the Registrant's 1996
Annual Meeting of Shareholders to be held on May 8, 1996 are incorporated by
reference into Part III of this Form 10-K. Portions of the Annual Report to
Shareholders for the year ended December 31, 1995 are incorporated by
reference into Part I, Part II and Part IV of this Form 10-K.

Page 1 of 52 pages.

The Exhibit Index appears on page 22.

PART I

ITEM 1 - BUSINESS

Expeditors International of Washington, Inc. (the "Company") is engaged
in the business of providing global logistics services. The Company offers
its customers a seamless international network supporting the movement and
strategic positioning of goods. The Company's services include the
consolidation or forwarding of air and ocean freight. In each U.S. office,
and in many overseas offices, the Company acts as a customs broker. The
Company also provides additional services including distribution management,
vendor consolidation, cargo insurance, purchase order management and
customized logistics information. The Company does not compete for domestic
freight, overnight courier or small parcel business and does not own aircraft
or steamships.

The Company, including its majority owned subsidiaries, operates full
service offices (-) in the major cities identified below. Full service
offices have also been established in locations where the Company maintains
unilateral control over assets and operations and where the existence of the
parent subsidiary relationship is maintained by means other than record
ownership of voting stock (#). See Notes 1(a) and 1(j) to the Consolidated
Financial Statements for discussion of reclassification of the Taiwan
exclusive agency and consolidation as a result of unilateral control over
assets and operations. In other cities, the Company contracts with
independent agents to provide required services and has established over 120
such entities world-wide. Agent locations where Company employees perform
sales and customer service functions are identified below as international
service centers (*). In each case, the opening date for the full service
office or international service center is set forth in parenthesis.

NORTH AMERICA SOUTH AMERICA FAR EAST
- ------------- ------------- --------

UNITED STATES CANADA BRAZIL CHINA
- - Seattle (5/79) - Toronto (5/84) - Sao Paulo (9/95) - Beijing (7/94)
- - Chicago (7/81) - Vancouver (9/95) - Rio de Janeiro (9/95) - Guangzhou (4/94)
- - San Francisco (7/81) - Campinas (9/95) - Dalian (7/94)
- - New York (11/81) MEXICO - Shanghai (7/94)
- - Los Angeles (5/82) - Mexico City (6/95) CHILE - Shenzen (7/94)
- - Atlanta (8/83) - Santiago (2/95) - Quingdao (7/94)
- - Boston (11/85) - Tianjin (7/94)
- - Miami (3/86) - Xi'an (7/94)
- - Minneapolis (7/86) - Xiamen (7/94)
- - Denver (2/88)
- - Detroit (7/88) HONG KONG (9/81)
- - Portland (7/88)
- - Cincinnati (8/89) INDONESIA
- - Cleveland (7/90) # Jakarta (12/90)
- - Phoenix (7/91) # Surabaya (2/92)
- - Louisville (10/91)
- - St. Louis (4/92) JAPAN
- - Houston (4/92) * Tokyo (3/91)
- - Baltimore (4/92)
- - Dallas (5/92) MALAYSIA
- - Columbus (6/92) - Penang (11/87)
- - Charlotte (7/92) - Kuala Lumpur (6/90)
- - Newark (9/94)
- - Philadelphia (3/95) SINGAPORE (9/81)
- - Charleston (6/95)
- - Memphis (8/95) TAIWAN
- - Salt Lake City (11/95) # Taipei (9/81)
# Kaohsiung (9/81)
PUERTO RICO # Taichung (9/81)
- - San Juan (5/95)
THAILAND
- Bangkok (9/94)

EUROPE AUSTRALASIA NEAR/MIDDLE EAST AFRICA
- ------ ----------- ---------------- ------

AUSTRIA AUSTRALIA BANGLADESH EGYPT
- - Salzburg (11/95) - Sydney (8/88) * Dacca (6/89) - Cairo (2/95)
- - Vienna (11/95) - Melbourne (8/88) * Chittagong (8/93) - Alexandria (2/95)
- Brisbane (10/93)
BELGIUM - Perth (12/94) INDIA SOUTH AFRICA
- - Brussels (7/90) * New Delhi (1/94) - Johannesburg (3/94)
- - Antwerp (4/91) NEW ZEALAND - Durban (3/94)
- Auckland (8/88) KUWAIT
FINLAND # Kuwait City (12/91)
- - Helsinki (4/94)
LEBANON
GERMANY * Beirut (4/93)
- - Frankfurt (4/92)
- - Munich (4/92) SAUDI ARABIA
- - Dusseldorf (4/92) # Riyadh (7/92)
- - Stuttgart (4/92) # Jeddah (7/92)
- - Hamburg (1/93)
SRI LANKA
GREECE # Colombo (3/93)
* Athens (1/91)
TURKEY
ITALY * Istanbul (5/91)
- - Milan (4/93)
- - Verona (4/93) U.A.E.
* Dubai (10/92)
NETHERLANDS * Abu Dhabi (1/94)
- - Amsterdam (6/94)
- - Rotterdam (3/95)

PORTUGAL
- - Lisbon (10/91)
- - Oporto (10/91)

SPAIN
- - Barcelona (1/94)
- - Madrid (1/94)

SWEDEN
- - Stockholm (1/94)
- - Goteborg (1/94)

UNITED KINGDOM
- - London (4/86)
- - Manchester (11/88)
- - Birmingham (3/90)
- - Glasgow (4/92)
- - Bedford (6/94)

The Company was incorporated in the State of Washington in May 1979.
Its executive offices are located at 19119 - 16th Avenue South, Seattle,
Washington, and its telephone number is (206) 246-3711.

For information concerning the amount of revenues, operating income,
identifiable assets, capital expenditures and depreciation and amortization
attributable to the geographic areas in which the Company conducts its
business, see Note 7 to the Consolidated Financial Statements.

Beginning in 1981, the Company's primary business focus was on
airfreight shipments from the Far East to the United States and related
customs brokerage and import services. In the mid-1980's, the Company began
to expand its service capabilities in export airfreight, ocean freight and
distribution services. Today the Company offers a complete range of global
logistics services to a diversified group of customers, both in terms of
industry specialization and geographic location. As opportunities for
profitable growth arise, the Company plans to create new offices. While the
Company has historically expanded through organic growth, the Company has
also been open to growth through acquisition of, or establishing joint
ventures with, existing agents or others within the industry.

Airfreight Services

Airfreight services accounted for approximately 47, 48, and 54 percent
of the Company's 1995, 1994, and 1993 consolidated revenues net of freight
consolidation expenses ("net revenues"), respectively. When performing
airfreight services, the Company typically acts either as a freight
consolidator or as an agent for the airline which carries the shipment. When
acting as a freight consolidator, the Company purchases cargo space from
airlines on a volume basis and resells that space to its customers at lower
rates than the customers could obtain directly from airlines. When moving
shipments between points where the volume of business does not facilitate
consolidation, the Company receives and forwards individual shipments as the
agent of the airline which carries the shipment. Whether acting as an agent
or consolidator, the Company offers its customers knowledge of optimum
routing, familiarity with local business practices, knowledge of export and
import documentation and procedures, the ability to arrange for ancillary
services, and assistance with space availability in periods of peak demand.

In its airfreight forwarding operations, the Company procures shipments
from its customers, determines the routing, consolidates shipments bound for
a particular airport distribution point, and selects the airline for
transportation to the distribution point. At the distribution point, the
Company or its agent arranges for the consolidated lot to be broken down into
its component shipments and for the transportation of the individual
shipments to their final destinations.

The Company estimates its average airfreight consolidation weighs
approximately 3,500 to 4,500 pounds and includes merchandise from several
shippers. Because shipment by air is relatively expensive compared with
ocean transportation, air shipments are generally characterized by a high
value-to-weight ratio, the need for rapid delivery, or both.

The Company typically delivers shipments from a Company warehouse at the
origin to the airline after consolidating the freight into containers or onto
pallets. Shipments normally arrive at the destination distribution point
within forty-eight hours after such delivery. During peak shipment periods,
cargo space available from the scheduled air carriers can be limited and
backlogs of freight shipments may occur. When these conditions exist, the
Company will, on occasion, charter aircraft to meet customer demand.

The Company consolidates individual shipments based on weight and volume
characteristics in cost-effective combinations. Typically, as the weight or
volume of a shipment increases, the cost per pound/kilo or cubic
inch/centimeter charged by the Company decreases. The rate charged by
airlines to forwarders and others also generally decrease as the weight or
volume of the shipment increases. As a result, by aggregating shipments and
presenting them to an airline as a single shipment, the Company is able to
obtain a lower rate per pound/kilo or cubic inch/centimeter than that which
it charges to its customers for the individual shipment, while generally
offering the customer a lower rate than could be obtained from the airline
for an unconsolidated shipment.

The Company's net airfreight forwarding revenues from a consolidated
shipment includes the differential between the rate charged to the Company by
an airline and the rate which the Company charges to its customers,
commissions paid to the Company by the airline carrying the freight and fees
for ancillary services. Such ancillary services provided by the Company
include preparation of shipping and customs documentation, packing, crating
and insurance services, negotiation of letters of credit, and preparation of
documentation to comply with local export laws. When the Company acts as an
agent

for an airline handling an unconsolidated shipment, its net revenues are
primarily derived from commissions paid by the airline and fees for ancillary
services paid by the customer.

The Company does not own aircraft and does not plan to do so.
Management believes that the ownership of aircraft would subject the Company
to undue business risks, including large capital outlays, increased fixed
operating expenses, problems of fully utilizing aircraft and competition with
airlines. Because the Company relies on commercial airlines to transport its
shipments, changes in carrier policies and practices such as pricing, payment
terms, scheduling, and frequency of service may affect its business.

The Company also performs breakbulk services which involve receiving and
breaking down consolidated airfreight lots and arranging for distribution of
the individual shipments. Breakbulk service revenues also include
commissions from non-exclusive agents for airfreight shipments.

Customs Brokerage and Import Services

Customs brokerage and import services accounted for approximately 33,
35, and 29 percent of the Company's 1995, 1994, and 1993 consolidated net
revenues, respectively. As a customs broker, the Company assists importers
to clear shipments through customs by preparing required documentation,
calculating and providing for payment of duties on behalf of the importer,
arranging for any required inspections by governmental agencies, and
arranging for delivery. The Company also provides other services at
destination including temporary warehousing, inland transportation, inventory
manipulation and management, cargo insurance and product distribution.

The Company provides customs clearance services in connection with many
of the shipments it handles as a freight forwarder. However, substantial
customs brokerage revenues are derived from customers that elect to use a
competing forwarder. Conversely, shipments handled by the Company as a
forwarder may be processed by another customs broker selected by the customer.

There is currently a noticeable trend, prompted by customer demand, to
quote rates on a door-to-door basis. Management foresees the potential, in
the medium to long-term, for fees normally associated with customs clearance
to be de-emphasized and included as a component of other services offered by
the Company.

Ocean Freight Services

Ocean freight services accounted for approximately 20, 17, and 17
percent of the Company's 1995, 1994, and 1993 consolidated net revenues,
respectively. The Company's revenues as an ocean freight forwarder are
derived from commissions paid by the carrier and revenues from fees charged
to customers for ancillary services which the Company may provide, such as
preparing documentation, procuring insurance, arranging for packing and
crating services, and providing consultation. The Company operates
Expeditors International Ocean ("EIO"), a Non-Vessel Operating Common Carrier
("NVOCC") specializing in ocean freight consolidation from the Far East to
the United States. EIO also provides service, on a smaller scale, to and
from any location where the Company has an office or agent. As an NVOCC, EIO
contracts with ocean shipping lines to obtain transportation for a fixed
number of containers between various points during a specified time period at
an agreed rate. EIO solicits less than container load ("LCL") freight to
fill the containers and charges lower rates than those available directly
from shipping lines. EIO also handles full container loads for customers
that do not have annual shipping volumes sufficient to negotiate comparable
contracts directly with the ocean carriers. The Company does not own vessels
and generally does not physically handle the cargo.

Expeditors Cargo Management Systems ("ECMS") supplies a sophisticated
ocean consolidation service. The Company owns and maintains software that
allows it to sell ECMS to large volume customers that have signed their own
service contracts with the ocean carriers. As an ocean consolidator, ECMS
may obtain LCL freight from several vendors and consolidate this cargo into
full containers. The Company's revenues as an ocean consolidator are derived
from handling LCL cargo at origin and from the fees paid by customers for
access to data captured during the consolidation process.

Marketing and Customers

The Company provides flexible service and seeks to understand the needs
of the customers from point of origin to ultimate destinations. Although the
domestic importer usually designates the logistics company and the services
that will be required, the foreign shipper may also participate in this
selection process. Therefore, the Company coordinates its marketing program
to reach both domestic importers and their overseas suppliers.

The Company's marketing efforts are focused primarily on the traffic,
shipping and purchasing departments of existing and potential customers. The
district manager of each office is responsible for marketing, sales
coordination, and implementation in the area in which he or she is located.
All employees are responsible for customer service and relations.

The Company staffs its offices largely with managers and other key
personnel who are citizens of the nations in which they operate and who have
extensive experience in global logistics. Marketing and customer service
staffs are responsible for marketing the Company's services directly to local
shippers and traffic managers who may select or influence the selection of
the logistics vendor and for ensuring that customers receive timely and
efficient service. The Company believes that its expertise in supplying
solutions customized to the needs of its customers, its emphasis on
coordinating its origin and destination customer service and marketing
activities, and the incentives it gives to its managers have been important
elements of its success.

The goods handled by the Company are generally a function of the
products which dominate international trade between any particular origin and
destination. Shipments of computer components, other electronic equipment,
housewares, sporting goods, machine parts, and toys comprise a significant
percentage of the Company's business. Typical import customers include
computer retailers and distributors of consumer electronics, department store
chains, clothing and shoe wholesalers, manufacturers and catalogue stores.
Historically, no single customer has accounted for five percent or more of
the Company's revenues.

COMPETITION

The global logistics services industry is intensively competitive and is
expected to remain so for the foreseeable future. There are a large number
of companies competing in one or more segments of the industry, but the
number of firms with a global network that offer a full complement of
logistics services is more limited. Depending on the location of the shipper
and the importer, the Company must compete against both the niche players and
larger entities. While there is currently a marked trend within the industry
toward consolidation of the niche players into the larger firms striving for
immediate multinational and multi-service networks, the regional and local
competitors maintain a strong market presence. The U.S. publicly traded
entities most similar to the Company are Air Express International
Corporation, The Harper Group, Inc. and Fritz Companies, Inc.

Historically, the primary competitive factors in the global logistics
services industry have been price and quality of service, including
reliability, responsiveness, expertise, convenience, and scope of operations.

The Company emphasizes quality service and believes that its prices are
competitive with the prices of others in the industry. Recently, larger
customers have exhibited a trend toward the more sophisticated and efficient
procedures for the management of the logistics supply chain by embracing
strategies such as just-in-time inventory management. This trend has made
computerized customer service capabilities a significant factor in attracting
and retaining customers. These computerized customer service capabilities
include customized Electronic Data Interchange, or EDI, and on-line freight
tracing and tracking applications. The customized EDI applications allow the
transfer of key information between the customers' systems and the Company's
systems. Freight tracing and tracking applications allows customers to know
the location, transit time and estimated delivery time of inventory in
transit.

Management believes that the ability to develop and deliver innovative
solutions to meet customers' increasingly sophisticated information
requirements is a critical factor in the ongoing success of the Company.
Accordingly, the Company has devoted a significant amount of resources
towards the maintenance and enhancement of systems that will meet these
customer demands. Management believes that the Company's existing systems
are competitive with the systems currently in use by other logistics services
companies with whom it competes.

Developing these systems has added a considerable indirect cost to the
services provided to customers. Small and middle-tier competitors, in
general, do not have the resources available to develop these customized
systems. As a result, there is a significant amount of consolidation
currently taking place in the industry. Management expects that this trend
toward consolidation will continue for the short to medium term.
Historically, growth through aggressive acquisition has proven to be a
challenge for many of the Company's competitors and typically involves the
purchase of significant "goodwill." As a result, the Company has pursued a
strategy emphasizing organic growth supplemented by certain strategic
acquisitions.

The Company's ability to attract, retain, and motivate highly qualified
personnel with experience in global logistics services is an essential, if
not the most important, element of its ability to compete in the industry.
To this end, the Company has adopted incentive compensation programs which
make percentages of branch revenues or profits available to managers for
distribution among key personnel. The Company believes that these incentive
compensation programs, combined with its experienced personnel and its
ability to coordinate global marketing efforts, provide it with a distinct
competitive

advantage and accounts for historical growth that competitors have matched
only through acquisition.

Currency and Other Risk Factors

The nature of the Company's worldwide operations necessitate the Company
dealing with a multitude of currencies other than the U.S. dollar. This
results in the Company being exposed to the inherent risks of the
international currency markets and governmental interference. Many of the
countries where the Company maintains offices and/or agency relationships
have strict currency control regulations which influence the Company's
ability to hedge foreign currency exposure. The Company tries to compensate
for these exposures by accelerating international currency settlements among
these offices or agents.

In addition, the Company's ability to provide service to its customers
is highly dependent on good working relationships with a variety of entities
including airlines, steamship lines and governmental agencies. The Company
considers its current working relationships with these entities to be good.
However, changes in space allotments available from carriers, governmental
deregulation efforts, "modernization" of the regulations governing customs
clearance, and/or changes in governmental quota restrictions could affect the
Company's business in unpredictable ways.

Seasonality

Historically, the Company's operating results have been subject to
seasonal trends when measured on a quarterly basis. The first quarter has
traditionally been the weakest and the third quarter has traditionally been
the strongest. This pattern is the result of, or is influenced by, numerous
factors including climate, national holidays, consumer demand, economic
conditions and a myriad of other similar and subtle forces. In addition,
this historical quarterly trend has been influenced by the growth and
diversification of the Company's international network and service offerings.
The Company cannot accurately forecast many of these factors nor can the
Company estimate accurately the relative influence of any particular factor
and, as a result, there can be no assurance that historical patterns, if any,
will continue in future periods.

A significant portion of the Company's revenues are derived from
customers in 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 the
Company's revenues are, to a large degree, impacted by factors out of the
Company's control, such as shifting consumer demand for retail goods 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, the Company 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, any shortfall from levels predicted by
securities analysts could have an immediate and adverse effect on the trading
price of the Company's stock.

Environmental

In the United States, the Company is subject to Federal, state and local
provisions regulating the discharge of materials into the environment or
otherwise for the protection of the environment. Similar laws apply in many
foreign jurisdictions in which the Company operates. Although current
operations have not been significantly affected by compliance with these
environmental laws, governments are becoming increasingly sensitive to
environmental issues, and the Company cannot predict what impact future
environmental regulations may have on its business. The Company does not
anticipate making any material capital expenditures for environmental control
purposes during the remainder of the current or succeeding fiscal years.

Employees

At February 29, 1996, the Company employed approximately 2,465 people,
1,190 in the United States and 40 in the balance of North America, 20 in
South America, 340 in Europe, 735 in the Far East & Australasia, 25 in the
Near/Middle East and 115 in Africa. Approximately 250 of the Company's
employees are engaged principally in sales and marketing and customer
service, 1,585 in operations and 630 in finance and administration. The
Company is not a party to any collective bargaining agreement and considers
its relations with its employees to be satisfactory.

In order to retain the services of highly qualified, experienced, and
motivated employees, the Company places considerable emphasis on its
incentive compensation programs and stock option plans.

Executive Officers of the Registrant

The following table sets forth the names, ages, and positions of current
executive officers of the Company.

NAME AGE POSITION

Peter J. Rose 53 Chairman and Chief Executive Officer and director
Kevin M. Walsh 45 President and Chief Operating Officer and director
James L.K. Wang 48 Executive Vice President and director
Glenn M. Alger 39 Senior Vice President
William J. Coogan 41 Senior Vice President-Ocean
Rommel C. Saber 38 Senior Vice President-Air Export
Michael R. Claydon 48 Director-Europe
Timothy C. Barber 36 Vice President-Sales and Marketing
R. Jordan Gates 40 Chief Financial Officer and Treasurer
Jeffrey J. King 41 Vice President-General Counsel and Secretary
David M. Lincoln 37 Vice President-Systems Management
Charles J. Lynch 35 Corporate Controller

Peter J. Rose has served as a director and Vice President of the Company
since July 1981. Mr. Rose was elected a Senior Vice President of the Company
in May 1986, Executive Vice President in May 1987, President and Chief
Executive Officer in October 1988, and Chairman and Chief Executive Officer
in May 1991.

Kevin M. Walsh has served as a director and Vice President of the
Company since July 1981. Mr. Walsh was elected a Senior Vice President of
the Company in May 1986, Executive Vice President in December 1989, and
President and Chief Operating Officer in May 1991.

James L.K. Wang has served as a director and the Managing Director of
Expeditors International Taiwan Ltd., the Company's former exclusive Taiwan
agent, since September 1981. Mr. Wang's employment agreement with the
Company has been assigned to the Company's current exclusive Taiwan agent,
E.I. Freight (Taiwan), Ltd. In October 1988, Mr. Wang became a director of
the Company and its Director-Far East. In January 1996, Mr. Wang was elected
to the office of Executive Vice President.

Glenn M. Alger joined the Company in July 1981 as a Regional Manager.
Mr. Alger was elected Vice President in October 1988, Senior Vice President
and Regional Manager in January 1992, and Senior Vice President in January
1993.

William J. Coogan was employed as New York Ocean Manager of EIO when it
was acquired by the Company in May 1985. Mr. Coogan was promoted to East
Coast Regional Sales Manager of the Company in June 1986, District Manager of
the Company's New York office in July 1988, and Senior Vice President of EIO
in April 1989. Mr. Coogan was elected Senior Vice President - Ocean in
February 1993.

Rommel C. Saber joined the Company as Director-Middle/Near East in
February 1990 and was elected Senior Vice President-Sales and Marketing in
January 1993. In September 1993, Mr. Saber was elected Senior Vice
President-Air Export.

Michael R. Claydon joined the Company as Director-Europe in October
1987.

Timothy C. Barber joined the Company in May 1986 as Import Manager in
the Seattle office. Mr. Barber was promoted to District Manager in January
1987 and Regional Vice President in January 1993. Mr. Barber was elected
Vice President-Sales and Marketing in September 1993.

R. Jordan Gates joined the Company as its Controller-Europe in February
1991. Mr. Gates was elected Chief Financial Officer and Treasurer of the
Company in August 1994.

Jeffrey J. King joined the Company in October 1990 as Director-Taxation
and Legal Services and was elected Vice President-General Counsel in May
1992. In August 1994, Mr. King was elected Vice President-General Counsel
and Secretary.

David M. Lincoln joined the Company as its Controller-U.S. Operations in
March 1984. Mr. Lincoln served as

Corporate Controller of the Company from May 1986 to January 1991, and was
elected Vice President-Systems Management in December 1989.

Charles J. Lynch joined the Company as its Senior Accountant in
September 1984. Mr. Lynch was promoted to Assistant Controller in July 1985
and Controller-Domestic Operations in January 1989. Mr. Lynch was elected
Corporate Controller in January 1991.

Regulation

With respect to Company's activities in the air transportation industry
in the United States, it is subject to regulation by the Department of
Transportation ("DOT") as an indirect air carrier. The Company's overseas
offices and agents are licensed as airfreight forwarders in their respective
countries of operation. The Company is licensed in each of its offices or in
the case of its newer offices, has made application for a license, as an
airfreight forwarder by the International Air Transport Association ("IATA").
IATA is a voluntary association of airlines which prescribes certain
operating procedures for airfreight forwarders acting as agents for its
members. The majority of the Company's airfreight forwarding business is
conducted with airlines which are IATA members.

The Company is licensed as a customs broker by the Customs Service of
the Department of the Treasury in each U.S. customs district in which it does
business. All U.S. customs brokers are required to maintain prescribed
records and are subject to periodic audits by the Customs Service. In other
jurisdictions in which the Company performs clearance services, the Company
is licensed by the appropriate governmental authority.

The Company is licensed as an ocean freight forwarder by the Federal
Maritime Commission ("FMC"). The FMC has established certain qualifications
for shipping agents, including certain surety bonding requirements. The FMC
also is responsible for the economic regulation of NVOCC activity originating
or terminating in the United States. To comply with these economic
regulations, vessel operators and NVOCCs, such as EIO, are required to file
tariffs electronically which establish the rates to be charged for the
movement of specified commodities into and out of the U.S. The FMC has the
power to enforce these regulations by assessing penalties.

The Company does not believe that current U.S. and foreign governmental
regulation impose significant economic restraint upon its business
operations. In general, the Company conducts its business activities in each
country through a majority owned subsidiary corporation that is organized and
existing under the laws of that country. However, the regulations of foreign
governments can impose barriers to the Company's ability to provide the full
range of its business activities in a wholly or majority U.S. owned
subsidiary. For example, foreign ownership of a customs brokerage business
is prohibited in some jurisdictions and less frequently the ownership of the
licenses required for freight forwarding and/or freight consolidation is
restricted to local entities. When the Company encounters this sort of
governmental restriction, it works to establish a legal structure that meets
the requirements of the local regulations while also giving the Company the
substantive operating and economic advantages that would be available in the
absence of such regulation. This can be accomplished by creating a joint
venture or exclusive agency relationship with a qualified local entity that
holds the required license. In cases where the Company has unilateral
control over the assets and operations of the local entity, notwithstanding
the lack of technical majority ownership of common stock, the Company
consolidates the accounts of the local entity. In such cases, consolidation
is necessary to fairly present the financial position and results of
operations of the Company because of the existence of the parent-subsidiary
relationship by means other than record ownership of voting common stock.

Cargo Liability

When acting as an airfreight consolidator, the Company assumes a
carrier's liability for lost or damaged shipments. This legal liability is
typically limited by contract to the lower of the transaction value or the
released value ($9.07 per pound unless the customer declares a higher value
and pays a surcharge), except if the loss or damage is caused by willful
misconduct or in the absence of an appropriate air waybill. The airline
which the Company utilizes to make the actual shipment is generally liable to
the Company in the same manner and to the same extent. When acting solely as
the agent of the airline or shipper, the Company does not assume any
contractual liability for loss or damage to shipments tendered to the
airline.

When acting as an ocean freight consolidator, the Company assumes a
carrier's liability for lost or damaged shipments. This liability is
typically limited by contract to the lower of the transaction value or the
released value ($500 per package or customary freight unit unless the
customer declares a higher value and pays a surcharge). The steamship line
which the Company utilizes to make the actual shipment is generally liable to
the Company in the same manner and to the same extent.

In its ocean freight forwarding and customs clearance operations, the Company
does not assume cargo liability.

When providing warehouse and distribution services, the Company limits
its legal liability by contract and tariff to an amount generally equal to
the lower of fair value or fifty cents per pound with a maximum of fifty
dollars per "lot" - which is defined as the smallest unit that the warehouse
is required to track. Upon payment of a surcharge for warehouse and
distribution services, the Company will assume additional liability.

The Company maintains marine cargo insurance covering claims for losses
attributable to missing or damaged shipments for which it is legally liable.
The Company also maintains insurance coverage for the property of others
which is stored in Company warehouse facilities.

ITEM 2 - PROPERTIES

The Company owns a 27,200 square foot office facility near
Seattle-Tacoma International Airport, an 80,000 square foot office and
warehouse facility on a ten-acre parcel near O'Hare International Airport in
Chicago, a 5,500 square foot office facility in the Tsim Sha Tsui East
district of Kowloon, Hong Kong, and a 10,900 square foot office facility in
Taipei, Taiwan. The Company also owns a 23,400 square foot office and
warehouse facility on a long-term renewable land lease at the Brussels Cargo
facility in Brussels, Belgium. The Company has entered into a contract to
purchase a 150,000 square foot warehouse with a long term land lease in
Nassau County, New York. As of the date hereof, the Company could terminate
each of the purchase contracts without financial obligation.

The Company leases and maintains 23 additional offices and satellite
locations in the United States and 59 offices throughout the world, each
located close to an airport or ocean port. The majority of these facilities
contain warehouse facilities. Lease terms are either on a month-to-month
basis or terminate at various times through 2007. As an office matures, the
Company will investigate the possibility of building or buying suitable
facilities. Lease payments currently aggregate approximately $470,000 per
month. See Note 5 to the Company's Consolidated Financial Statements. The
Company believes that current leases can be extended and that suitable
alternative facilities are available in the vicinity of each present facility
should extensions be unavailable at the conclusion of current leases.

ITEM 3 - LEGAL PROCEEDINGS

The Company is ordinarily involved in claims and lawsuits which arise in
the normal course of business, none of which currently, in management's
opinion, will have a significant effect on the Company's financial condition.

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Inapplicable.

PART II

ITEM 5 - MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS

The information required by this item is included on page 64 of the
Company's Annual Report to Shareholders for the year ended December 31, 1995
and is incorporated herein by reference.

ITEM 6 - SELECTED FINANCIAL DATA

The information required by this item is included on page 1 of the
Company's Annual Report to Shareholders for the year ended December 31, 1995
and is incorporated herein by reference.

ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

The information required by this item is included on pages 57 through 61
of the Company's Annual Report to Shareholders for the year ended December
31, 1995 and is incorporated herein by reference.

ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The information required by this item is included on pages 40 through 56
of the Company's Annual Report to Shareholders for the year ended December
31, 1995 and is incorporated herein by reference. See also Item 14.

ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

Inapplicable.

PART III

ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information required by this item is incorporated by reference to
information under the caption "Proposal 1 - Election of Directors" and to the
information under the caption "Section 16(a) Reporting Delinquencies" in the
Company's definitive Proxy Statement for its annual meeting of shareholders
to be held on May 8, 1996. See also Part I - Item 1 - Executive Officers of
the Registrant.

ITEM 11 - EXECUTIVE COMPENSATION

The information required by this item is incorporated by reference to
information under the caption "Executive Compensation" in the Company's
definitive Proxy Statement for its annual meeting of shareholders to be held
on May 8, 1996.

ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information required by this item is incorporated by reference to
information under the captions "Voting Securities and Principal Holders" and
"Proposal 1 - Election of Directors" in the Company's definitive Proxy
Statement for its annual meeting of shareholders to be held on May 8, 1996.

ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by this item is incorporated by reference to
information under the caption "Executive Compensation" and "Certain
Transactions" in the Company's definitive Proxy Statement for its annual
meeting of shareholders to be held on May 8, 1996.

PART IV

ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a)(1) FINANCIAL STATEMENTS

The Financial Statements and Independent Auditors' Report are included
in the Company's 1995 Annual Report to Shareholders (pages 40 through 56) and
are incorporated in this Annual Report on Form 10-K as Exhibit 13.1.

Location in
Location in this Report
Annual Report on Form 10-K
------------- ------------
Consolidated Balance Sheets, December 31, 1995 and 1994 40 27

Consolidated Statements of Earnings for each of the years
ended December 31, 1995, 1994, and 1993 42 29

Consolidated Statements of Shareholders' Equity for each of
the years ended December 31, 1995, 1994, and 1993 43 30

Consolidated Statements of Cash Flows for each of the years
ended December 31, 1995, 1994, and 1993 44 31

Notes to Consolidated Financial Statements 46 33

Independent Auditors' Report 56 43

(a)(2) FINANCIAL STATEMENT SCHEDULES
Location in
this Report
on Form 10-K
------------
Independent Auditors' Report 20

Schedule II - Valuation and Qualifying Accounts for the years ended 21
December 31, 1995, 1994, and 1993

All other schedules are omitted because they are not required, not
applicable, or the required information is included in the consolidated
financial statements or notes thereto.

(a)(3) EXECUTIVE COMPENSATION PLANS AND ARRANGEMENTS

The following list is a subset of the list of exhibits described below
and contains all compensatory plans, contracts or arrangements in which any
director or executive officer of the Company is a participant, unless the
method of allocation of benefits thereunder is the same for management and
non-management participants:

(1) Form of Employment Agreement executed by the Company's
Chairman and Chief Executive Officer. See Exhibit 10.23.

(2) Form of Employment Agreement executed by the Company's
President and Chief Operating Officer and certain of the
Company's executive officers. See Exhibit 10.24.

(3) Form of Employment Agreement executed by certain of the
Company's Principal foreign employees. See Exhibit 10.2.

(4) Form of Employment Agreement executed by the Company's
Director - Europe. See Exhibit 10.3.

(5) The Company's Amended 1985 Stock Option Plan. See Exhibit
10.4.

(6) Form of Stock Option Agreement used in connection with
options granted under the Company's Amended 1985 Stock
Option Plan. See Exhibit 10.5.

(7) The Company's Restated and Amended 1988 Employee Stock
Purchase Plan. See Exhibit 10.20.

(8) Form of Stock Purchase Agreement used in connection with
options granted under the Company's Restated and Amended
1988 Employee Stock Purchase Plan. See Exhibit 10.7.

(9) The Company's 1993 Directors' Non-Qualified Stock Option
Plan. See Exhibit 10.8.

(10) Form of Stock Option Agreement used in connection with
options granted under the Company's 1993 Directors' Non-
Qualified Stock Option Plan. See Exhibit 10.9.

(b)REPORTS ON FORM 8-K

No reports on Form 8-K were filed during the last quarter of the period
covered by this Annual Report on Form 10-K.

Exhibit
Number Exhibit
-------

3.1 The Company's Restated Articles of Incorporation and the Articles
of Amendment thereto dated December 9, 1993. (Incorporated by
reference to Exhibit 3.1 to Form 10-K, filed on or about March
31, 1995.)

3.2 The Company's Amended and Restated Bylaws. (Incorporated by
reference to Exhibit 3.2 to Form 10-K, filed on or about March
28, 1994.)

10.2 Form of Employment Agreement executed by certain of the Company's
Principal foreign employees. (Incorporated by reference to
Exhibit 10.18 to Registration Statement No. 2-91224, filed on
May 21, 1984.)

10.3 Form of Employment Agreement executed by the Company's Director -
Europe. (Incorporated by reference to Exhibit 10.7 to Form 10-K,
filed on or about March 28, 1991.)

10.4 The Company's Amended 1985 Stock Option Plan. (Incorporated by
reference to Exhibit 10.14 to Form 10-K, filed on or about March
28, 1991.)

10.5 Form of Stock Option Agreement used in connection with options
granted under the Company's Amended 1985 Stock Option Plan.
(Incorporated by reference to Exhibit 10.15 to Form 10-K, filed on
or about March 28, 1991.)

10.7 Form of Stock Purchase Agreement used in connection with options
granted under the Company's Restated and Amended 1988 Employee
Stock Purchase Plan. (Incorporated by reference to Exhibit 10.36
to Form 10-K, filed on or about March 28, 1989.)

10.8 The Company's 1993 Directors' Non-Qualified Stock Option Plan.
(Incorporated by reference to Exhibit 10.8 to Form 10-K, filed on
or about March 28, 1994.)

10.9 Form of Stock Option Agreement used in connection with options
granted under the Company's 1993 Directors' Non-Qualified Stock
Option Plan. (Incorporated by reference to Exhibit 10.9 to Form
10-K, filed on or about March 28, 1994.)

10.17 Exclusive Agency Agreement, dated as of January 1, 1991, between
E.I. Freight (Taiwan) Ltd. and EI Freight (H.K.) Limited.
(Incorporated by reference to Exhibit 10.17 to Form 10-K, filed
on or about March 28, 1994.)

10.18 Plan and Agreement of Reorganization, dated as of January 1,
1984, between the Company and the individual shareholders of Fons
Pte. Ltd. (Incorporated by reference to Exhibit 2.5 to
Registration Statement No. 2-91224, filed on May 21, 1984.)

10.19 Plan and Agreement of Reorganization, dated as of January 1,
1984, among the Company, EIO Investment Ltd., Wong Hoy Leung,
Chiu Chi Shing, and James Li Kou Wang. (Incorporated by
reference to Exhibit 2.6 to Registration Statement No. 2-91224,
filed on May 21, 1984.)

10.20 The Company's Restated and Amended 1988 Employee Stock Purchase
Plan. (Incorporated by reference to Exhibit 4.1 to Registration
Statement No. 33-81460, filed on July 12, 1994.)

Exhibit
Number Exhibit
-------

10.21 Credit Agreement Between the Company and Seattle-First National
Bank dated June 6, 1994 with respect to the Company's $10,000,000
unsecured line of credit together with the Revolving Note due
March 31, 1995. (Incorporated by reference to Exhibit 10.21 to
Form 10-K, filed on or about March 31, 1995.)

10.22 Loan Modification Agreement Between the Company and Seattle-First
National Bank dated March 28, 1995 amending the maturity date of
the Revolving Note and extending the loan commitment to March 31,
1996. (Incorporated by reference to Exhibit 10.22 to Form 10-K,
filed on or about March 31, 1995. Superseded by Exhibit 10.26 to
this Report.)

10.23 Form of Employment Agreement executed by the Company's Chairman
and Chief Executive Officer dated November 2, 1994.
(Incorporated by reference to Exhibit 10.23 to Form 10-K, filed
on or about March 31, 1995.)

10.24 Form of Employment Agreement executed by the Company's President
and Chief Operating Officer and certain of the Company's
executive officers dated November 2, 1994. (Incorporated by
reference to Exhibit 10.24 to Form 10-K, filed on or about March
31, 1995.)

10.25 Loan Modification Agreement Between the Company and Seattle-First
National Bank dated August 2, 1995 amending the maximum principal
amount of the Company's unsecured line of credit to $ 15,000,000
and increasing the Company's maximum obligation under the
Revolving Note to $ 15,000,000.

10.26 Loan Modification Agreement Between the Company and Bank of
America NW, N.A. doing business as Seafirst Bank dated March 22,
1996 amending the maturity date of the Revolving Note and
extending the loan commitment to March 31, 1997.

Exhibit
Number Exhibit
------- ---------
11.1 Statement Re: Computation of Per Share Net Earnings.

13.1 Portions of the Company's Annual Report to Shareholders for the
year ended December 31, 1995 incorporated by reference herein.
Filed herewith.

21.1 Subsidiaries of the Registrant.

23. Consent of Independent Certified Public Accountants.

27. Financial Data Schedule (Filed Electronically Only).

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

Date: March 28, 1996.

EXPEDITORS INTERNATIONAL OF
WASHINGTON, INC.

By: /s/ R. JORDAN GATES
-------------------------------------
R. Jordan Gates
Chief Financial Officer and Treasurer

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated on March 28, 1996.

SIGNATURE TITLE
- --------- -----

/s/ Peter J. Rose Chairman of the Board and Chief Executive Officer
- ------------------------- (Principal Executive Officer) and Director
(Peter J. Rose)

/s/ R. Jordan Gates Chief Financial Officer and Treasurer
- ------------------------- (Principal Financial and Accounting Officer)
(R. Jordan Gates)

/s/ Kevin M. Walsh President and Chief Operating Officer and Director
- -------------------------
(Kevin M. Walsh)

/s/ James Li Kou Wang Executive Vice President and Director
- -------------------------
(James Li Kou Wang)

/s/ James J. Casey Director
- -------------------------
(James J. Casey)

/s/ Dan P. Kourkoumelis Director
- -------------------------
(Dan P. Kourkoumelis)

/s/ John W. Meisenbach Director
- -------------------------
(John W. Meisenbach)

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Shareholders
Expeditors International of Washington, Inc.:

Under date of February 16, 1996, we reported on the consolidated balance
sheets of Expeditors International of Washington, Inc. and subsidiaries as of
December 31, 1995 and 1994, and the related consolidated statements of
earnings, shareholders' equity, and cash flows for each of the years in the
three-year period ended December 31, 1995, as contained in the 1995 Annual
Report to Shareholders. These consolidated financial statements and our
report thereon are incorporated by reference in the Annual Report on Form
10-K for the year ended December 31, 1995. In connection with our audits of
the aforementioned consolidated financial statements, we also audited the
related financial statement schedule. This financial statement schedule is
the responsibility of the Company's management. Our responsibility is to
express an opinion on this financial statement schedule based on our audits.

In our opinion, such financial statement schedule, when considered in
relation to the basic consolidated financial statements taken as a whole,
presents fairly, in all material respects, the information set forth therein.

KPMG PEAT MARWICK LLP

/s/ KPMG PEAT MARWICK LLP

Seattle, Washington
February 16, 1996

SCHEDULE II

EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.

VALUATION AND QUALIFYING ACCOUNTS

FOR THE YEARS ENDED DECEMBER 31, 1995, 1994, AND 1993
(in thousands)

Additions
---------------
Balance at Charged to Balance
beginning costs and Deductions - at end
Description of year expenses Other write-offs of year
- ----------- ---------- ---------- ----- ------------ -------

ALLOWANCE FOR
DOUBTFUL ACCOUNTS
RECEIVABLE

1995 $3,310 $ 710 $14 $227 $3,807
------ ------ --- ---- ------
------ ------ --- ---- ------
1994 $2,230 $1,322 $-- $242 $3,310
------ ------ --- ---- ------
------ ------ --- ---- ------
1993 $1,214 $1,583 $-- $567 $2,230
------ ------ --- ---- ------
------ ------ --- ---- ------

INDEX TO EXHIBITS

Location in
Exhibit this Report
Number Description on Form 10-K
- ------- ----------- -----------
10.25 Loan Modification Agreement Between the Company and
Seattle-First National Bank dated August 2, 1995
amending the maximum principal amount of the Company's
unsecured line of credit to $ 15,000,000 and increasing
the Company's maximum obligation under the Revolving
Note to $ 15,000,000. 23

10.26 Loan Modification Agreement Between the Company and
Bank of America NW, N.A. doing business as Seafirst
Bank dated March 22, 1996 amending the maturity
date of the Revolving Note and extending the loan
commitment to March 31, 1997. 24

11.1 Statement Re: Computation of Per Share Net Earnings. 25

13.1 Portions of the Company's Annual Report to
Shareholders for the year ended December 31, 1995
incorporated by reference herein. Filed herewith. 26

21.1 Subsidiaries of the Registrant. 50

23. Consent of Independent Certified Public Accountants. 52

27. Financial Data Schedule (Filed Electronically Only).