Lower transport rates bolster C.H. Robinson’s first-quarter profit

Lower transport rates bolster C.H. Robinson’s first-quarter profit

C.H. Robinson Worldwide moved more goods in the U.S. by truck in the first quarter, as lower pricing drew freight from intermodal rail back to the highways. North American truckload freight volumes at the largest U.S. third-party logistics provider increased 4 percent from a year ago.

The logistics operator’s profit rose nearly 12 percent, helped by falling rates and fuel costs that decreased C.H. Robinson’s North American truckload costs 7 percent year-over-year. The average truckload rate the freight broker charged its shipper customers dropped 5 percent.

Net revenue, after payments to transportation providers, increased 7.8 percent for truckload, 6.9 percent for less-than-truckload and 16.9 percent for ocean freight, the Eden Prairie, Minnesota-based company, said Tuesday. Total net revenue rose 7.3 percent to $563.3 million.

However, an 11.9 percent decrease in intermodal revenue and 10.8 percent drop in air freight revenue helped draw gross revenue down 6.9 percent to $3.1 billion. C.H. Robinson’s net profit in the first quarter rose 11.7 percent year-over-year to $119 million, the company said.

The lower cost of fuel and excess truck capacity helped the international logistics company and freight broker improve profitability, investment research company Stifel said in a note to investors. C.H. Robinson’s net revenue margin increased 150 basis points to 17.4 percent in the quarter.

Stifel also noted that volume increased in all of the company’s international operations, including air freight, despite the drop in air freight revenue. Higher ocean container and air freight volumes and customs transactions drove total international net revenue up 8.3 percent to $87.8 million.

C.H. Robinson has been expanding its international business, adding global forwarding offices in Asia and Europe last year after acquiring Phoenix International in 2012. The $13.5 billion company increased its international net revenue 8.4 percent to $356.7 million in 2015.

The company is the fourth-largest global third-party logistics provider, following European 3PLs DHL Logistics, Kuehne + Nagel and DB Schenker Logistics, according to SJ Consulting Group data. C.H. Robinson is the 22nd-largest global logistics and transportation company.

On the domestic U.S. front, the company continues to build its LTL business, bolstered by the acquisition of Freightquote.com. A 10 percent increase in volume pushed LTL net revenue up to $91.3 million. LTL brokerage is C.H. Robinson’s second-largest source of revenue.

C.H. Robinson has more than doubled its LTL net revenue over the past five years. “We are the largest non-asset LTL provider in North America by a wide margin,” CEO John Wiehoff said in January. In 2015, the company’s LTL net revenue rose 39.3 percent to $360.7 million.

Contact William B. Cassidy at bill.cassidy@ihs.com and follow him on Twitter: @wbcassidy_joc.