News / CH Robinson reports growth in surface transport, but air freight volumes fall

01/05/2019

CH Robinson issued a strong, if dull (and sometimes inaccurate), set of results yesterday, showing growth in its key North American Surface Transportation (NAST) division.

While total revenues fell 4.4% to $3.8bn, net revenues rose 8.4% to $678.8m, while income from operations went up 17.2% to $224.6m. Cashflow increased 28% to $256.9m.

NAST saw revenue fall, driven, it said, by decreased pricing, but enjoyed net revenue up 11% to $486m, while income from operations rose 17% to $211m.

Truckload and LTL saw revenue rises but intermodal net revenues fell 3.9%. For the first time, Robinson Fresh has been included in the NAST results after the struggling division was merged.

While the Global Forwarding division saw total revenue fall, again driven by lower pricing, net revenue rose 3.4% to $127m. Volumes in ocean were flat, but net revenues rose 4% due to margin expansion, said the company.

Along with intermodal, the only transport sector where net revenues fell was air freight, which shrank 4.5% to $27.5m – according to one of CH Robinson’s charts.

However, another chart claims air net revenues rose 0.4% to $26m. Either way, air freight volumes were down and that offset improved margins.

Customs – in the news following Amazon’s foray into the sector – rose 5.9% to $21.8m.

Income from operations increased 73% to $14.2m, while operating margin expanded 450 basis points to 11.2% in the quarter.

Costs, meanwhile, fell as the company looked to be more efficient. Purchased transport fell 6%, implying, as it notes on Loadstar Premium today, that it is squeezing its suppliers. CHR’s staff headcount shrank slightly across all business segments, driving down operating expenses.

Bob Biesterfeld, chief operating officer, noted that the company would continue to focus on costs.

“We expect to continue to expand market share in 2019 and beyond, and we will continue to automate core processes and reduce our cost to sell and cost to serve, while also providing excellent service to our customers and carriers.

“We are firmly dedicated to operating margin expansion and believe our continued investments in technology will help enable us to achieve this objective. We are also committed to strong cash returns to shareholders and expect to deliver annual double-digit growth in earnings per share over the long term.”

You can see the results here.