William B. Cassidy, Senior Editor | Jul 25, 2012 12:45PM EDT
C.H. Robinson Worldwide was stuck between a truck and a hard place in the second quarter, with net trucking revenue dropping 5 percent to $312.6 million.
That’s a sign its trucking suppliers held a firm line on rates, and that the third-party logistics giant wasn’t able to adjust its own pricing as quickly.
Excluding fuel surcharges, C.H. Robinson’s truckload pricing rose 1 percent in the quarter, while its truckload transportation costs rose about 3 percent.
Overall, total revenue climbed 9.2 percent year-over-year in the quarter to almost $3 billion at the Minneapolis-based $10.3 billion logistics giant.
But total net revenue, after transportation costs, only increased 1.8 percent to $425.5 million, a sign that transportation is increasingly expensive for third parties.
Net revenue from trucking, intermodal and air cargo dropped, while ocean shipping, logistics services, sourcing and payment services all increased net revenue.
C.H. Robinson’s net profit rose 3.2 percent from a year ago to $114.6 million. For the first six months of 2012, net profit was up 6.3 percent to $221.1 million.
In the first quarter, C.H. Robinson's profit rose 10 percent to $107 million. Total revenue rose 7.9 percent to $2.6 billion.
Truck freight volumes remained solid in the second quarter, as shippers turned to the non-asset third-party transport operator to secure truck capacity.
Truckload volumes were up 10 percent from a year ago and less-than-truckload volumes increased 17 percent, pushing up LTL revenue 12 percent.
From July 1 through July 23, truckload volumes per day increased 11 percent, while total net revenue per business day declined 1.5 percent, C.H. Robinson said.
Those volume increases are higher than in the first quarter or the fourth quarter of 2011, when truckload volumes rose 8 percent and 7 percent, respectively.
Intermodal volumes also grew, but intermodal net revenue dropped 7.8 percent year-over-year to $10 million due to “decreased net revenue margin.”
C.H. Robinson plans to add 500 new intermodal containers to its intermodal service by the end of the third quarter, replacing 350 leased containers.
The strongest gains for the quarter came from “other logistics services,” namely warehousing, customers, small parcel and transportation management services.
That business segment increased net revenue 26.7 percent to $18.8 million, driven by higher revenue from customs and transportation management.
Contact William B. Cassidy at wcassidy@joc.com. Follow him on Twitter at @wbcassidy_joc