C.H. Robinson posts strong
Q1 results
If the first-quarter results reported by 3PL giant C.H.
Robinson Worldwide Inc. are any indication, the specter of
tightening truck capacity is no longer an abstract notion.
Eden Prairie, Minn.-based Robinson posted strong revenue
and volume figures across its multimodal product line, with
transportation revenues up 24.3 percent year over year, and
truckload volumes up 22 percent in the same period. Total
revenues rose 22. 9 percent to $2.07 billion.
At the same time, its transportation “net” revenues, which
back out transportation costs, declined 4. 3 percent, Robinson
said. Net revenues for Robinson’s truck services—by far the
largest component of its business—declined by 5. 7 percent
year over year. Meanwhile, the company’s margins on its net
transportation revenue declined to 17. 4 percent from 22. 9
percent in 2009’s first quarter. The company attributed the
decline to higher transportation and fuel costs, as well as
lower prices charged to customers. Excluding the impact of
changes in fuel prices, Robinson said the truckload rates it
charges customers declined 3 percent year over year.
John P. Wiehoff, Robinson’s chairman and CEO, said on
April 21 the dual trends of strong volume growth and
reduced margins “continued into the first three weeks of
April,” with the company’s net revenue so far that month
running comparable to the first-quarter trends.
Analysts said the trend toward tighter capacity had been
expected, and they lauded Robinson for effectively managing
through the headwinds. Many expect larger shippers to begin
accepting price hikes in the year’s second half, which should
then help lift margins of companies like Robinson.
Evan Armstrong, president of Armstrong & Associates, a
research and consulting firm that closely follows the 3PL sector, said Robinson’s carriers have been hiking rates faster than
the company can pass them on. Armstrong said it would take
about six months from the time Robinson absorbs the higher rates from carriers to when shippers feel the impact.
Today’s standard shipper-carrier contracts are one year in
duration and have no volume or capacity commitments,
Armstrong said. Shippers balking at paying higher rates later
in the year may find their carriers or 3PLs refusing to handle
their cargo, he said. Non-contract or “spot” rates are already
rising, Armstrong said.
Tightening capacity “may be a rude awakening for shippers
who think they are going to pay the rates they were getting
before,” during times of economic weakness, he said.
Robinson is the nation’s largest 3PL based on total revenues, according to Armstrong data. Robinson’s influence in
the marketplace means that the current trends affecting its
business will spill over to the 3PL sector as a whole,
Armstrong said.
short takes
Associated Material Handling recently partnered with Northern Illinois University’s
Executive M.B.A. program to serve as the real-world company for the school’s Project
Consulting class. Over the course of the three-week project, 33 students studied the material
handling industry and developed a comprehensive business strategy for two of Associated’s
operating divisions. ... Dematic has expanded its
Technical Support Call Center services with new
capabilities that include self-service access to the
tech support database and a new alert monitoring service. The new self-service portal allows
Dematic system users to obtain access to their
records in the call center database, including system description, the date the system came
online, software configuration with revision level,
and warranty status. … Intelligrated has expanded its On TimeParts program, a one-stop shop for
genuine replacement and upgrade parts regardless of OEM. Enhancements to the program
include upgrades to its online store
( www.ontimeparts.com), an expanded catalog of
over 50,000 part numbers, and extended live
support hours. … RWI Transportation, an asset-based logistics company that provides regional
and national truckload, LTL, expedited, and warehousing services, has opened a new office in
Denver. … Third-party logistics service provider
Trinity Transport Inc. has established Trinity
Customized Logistics to provide tailored solutions to shippers in the retail and manufacturing
industries. … Houser Transport Inc. of Vale, N.C.,
has acquired half of Furniture Tech’s, a third-party
logistics warehouse and home delivery firm
headquartered in Ontario, Calif. Furniture Tech’s
will become a division of Houser Transport. …
Damco has moved its Midwest regional office to
a new location in Itasca, Ill. The move allows
Damco to consolidate the Midwest divisions of
its ocean, air, supply chain management, and
customs house brokerage businesses in a single
building. … RedPrairie has established operations in Africa with a head office located in
Johannesburg, South Africa. … Nuvera Fuel Cells
has received two technical research awards from
the U.S. Department of Energy to explore ways to
increase the durability and performance of fuel
cell stacks. … Descartes has completed its acquisition of Porthus, a Belgium-based global trade
management software specialist.
