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CH Robinson, one of the US’s largest freight companies, today reported double-digit increases in second-quarter revenues, despite a decline in its largest business area, trucking.
Strong results from its ocean and air freight forwarding divisions meant that total group revenue for the quarter increased 12.4% year-on-year to $3.7bn, but operating profit declined 3.4% to $574m.
Chairman and chief executive John Wiehoff said: “Our results were significantly impacted by truckload margin compression. Purchased transportation costs increased significantly during the quarter, while much of our customer pricing is committed at relatively flat prices.
“We have a strong history of honouring our customer contracts while adjusting to the market conditions, and I’m confident we will adapt and execute those changes in the months to come. We continue to execute against our long-term strategic initiatives to grow and diversify.
“The global forwarding business delivered solid results in the second quarter, with both double-digit net revenue and operating income growth.”
It appears to be a story told across non-asset freight companies this quarter: freight rates may be up, but many shippers are simply refusing to pay the increases.
Its transport segment overall – comprising truckload, less-than-truckload and intermodal operations – saw revenues increase 10.3% to $2.38bn, but operating profit declined 9.8% to $360m, mainly due to a near 15% decline in full-truckload income.
Meanwhile, global forwarding revenue increased 48.2% to $529m and operating profit 24.5% to $121m, mainly as a result of volume increases, as well as the inclusion of APC logistics, which it acquired last September and which it said contributed 12% of ocean freight profits, 11% of air freight profits and 24% of profits from customs brokerage services.
Revenue from ocean freight increased 22.3% to $73.4m and by 28.3% in air freight forwarding, to $25.8m.
Finally, its perishable logistics division, Robinson Fresh, delivered flat revenue of $657m. Profits declined 10.3% to $60.8m as costs increased by some 15% year-on-year. The division comprises fresh product sourcing on behalf of retailers and chilled transport services.
Sourcing saw flat volumes and lower revenues due to a decline in commodity pricing.
Mr Weihoff told analysts the company would “temper” its staff-hiring plans due to the second-quarter margin pressure, which he said had been brought on by a “challenging pricing environment” that had combined with fierce competition from other forwarders and truck brokerage firms.
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