C.H. Robinson Worldwide moved more freight in the first quarter, but higher trucking costs bit into the non-asset logistics company’s truckload net margin.
The $10.3 billion logistics company increased its net profit 9.8 percent year-over-year to $106.5 million, while total revenue rose 7.9 percent to $2.6 billion.
Net trucking revenue rose 7.1 percent to $315.4 million for the quarter, with truckload volume rising 8 percent and less-than-truckload volume 13 percent.
However, truckload costs increased 2 percent while the pricing C.H. Robinson charged shippers edged up only 1 percent, shrinking its truckload margin.
“We are in a part of the cycle where the tightening market causes our net revenue margin to decrease,” CEO John P. Wiehoff said in an analyst conference call.
“The truckload market is tightening” in terms of capacity, he said, “and that caused truckload pricing to rise.” Higher fuel prices also affected C.H. Robinson’s margin.
Intermodal volumes also increased, Wiehoff said, but net intermodal revenue only rose 1.2 percent to $9.7 million as “margin compression” offset volume gains.
C.H. Robinson’s intermodal length of haul shortened with more volume growth coming from the Eastern U.S. rail networks, Wiehoff told investment analysts.
Ocean transportation net revenue increased 1.2 percent to $15.8 million, while air transportation net revenue decreased 3.4 percent to $8.9 million in the quarter.
Revenue from transportation management, customs and warehousing and other logistics services increased 24.2 percent to $17.5 million, the company said.