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C.H. Robinson Worldwide experienced a drop in second-quarter profit and a smaller dip in revenue as it dealt with the economic effects of the COVID-19 pandemic.
The logistics and shipping company, based in Eden Prairie, Minn., said net income fell 14.9% to $143.9 million in the second quarter compared with $169.2 million in the same period a year earlier. Diluted earnings per share dipped to $1.06 from $1.22.
Revenue fell 7.2% to $3.6 billion compared with $3.9 billion in the 2019 period. C.H. Robinson attributed the decline to lower pricing in its truckload and less-than-truckload businesses.
“We are well-positioned to weather the economic uncertainty in the months ahead and emerge stronger from this difficult time,” C.H. Robinson CEO Bob Biesterfeld said in a July 29 conference call with industry analysts.
He said the company achieved solid performance from all business segments despite “unprecedented volatility.”
The North American Surface Transportation segment, the company’s largest, suffered from a tough pricing environment. Revenue in the segment fell 13.8% to $2.5 billion from the prior-year period.
Excluding the impact of declining diesel fuel prices, the average North America truckload rate per mile the company charged customers dropped about 5.5%. At the same time, the truckload transportation cost per mile decreased by 2%. The segment’s operating profit fell 33.2% to $136.8 million.
C.H. Robinson experienced large swings in year-over-year changes in truckload volume and demand depending on the industry and how it was impacted by COVID-19. It saw a combined volume growth of 10% in the retail, food and beverage, technology, paper and health care industries. But that was offset by combined truckload volume declines of more than 20% in industries such as automotive, manufacturing, chemicals and energy, Biesterfeld said.
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C.H. Robinson’s Global Forwarding segment expanded during the quarter, logging gains in revenue, operating profit and market share. Revenue grew 19.5% to $707.8 million. Operating profit rose 120.8% to $58.8 million. The increases came from higher pricing in air shipments due to reduced air cargo capacity, increased charter flights and larger shipment sizes.
The company said it plans to continue only modest capital spending, with expenditures totaling $10.3 million in the quarter. It forecast full-year 2020 capital expenditures at the low end of a $60 million to $70 million range, with the majority dedicated to technology.
“Our technology initiatives also continue to drive increases in automation. A few examples of this include a 56% increase in fully automated truckload bookings compared to the second quarter of last year,” Biesterfeld said.
Technology also helped smooth the company’s shift to a remote workforce without disruption as the pandemic set in, he said. C.H. Robinson is now evaluating both its real estate footprint and travel expenses considering how well the company operates remotely, he said.
Some cost savings made in reaction to the pandemic also will become permanent. The company has brought back about half the workers it furloughed in April but has laid off the remainder.
“We’ve learned a lot as we’ve managed through the pandemic about how to be more agile, how to work differently, how to collaborate and communicate more effectively and how to serve our customers and carriers in new ways,” Biesterfeld said.
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