Third-party logistics operator C.H. Robinson expanded its net profit 5.4 percent in the second quarter to $97.2 million as strong growth in international business offset pressures from rising prices in domestic trucking.
Gross revenue soared 27.4 percent to $2.5 million. But net revenue from the company’s core truck brokerage slipped 2.4 percent, with tighter capacity in the truck margin raising costs and cutting into C.H. Robinson’s margins.
Truck volume grew 18 percent over the same quarter a year ago and the pressure on profit margins reflected the difficulty operators in the domestic shipping market are having in keeping up with growing freight demand amid tighter capacity and rising prices.
“Gross margin fluctuations in the past couple of years have had a significant impact on our results,” CEO John Wiehoff said in a conference call with investment analysts.
C.H. Robinson’s truckload costs grew 11.4 percent in the quarter over last year, exluding fuel, while prices it was able to pass along to customers grew 5 percent.
Wiehoff said the truck market pricing accelerated during the quarter, growing 2 percent in April, 5 percent in May and 9 percent in June.
The margin pressure in the domestic market was partly offset by strong expansion in international operations, where the company operates as a forwarder. C.H. Robinson said its ocean freight net revenue grew 11.8 percent while the air forwarding net revenue jumped 45.5 percent. Those segments make up less than 10 percent of the company’s overall net revenue, however.