Strong Q1 at C.H. Robinson highlights growth in flat market

Overall revenues at C.H. Robinson’s Global Forwarding unit were up 8.3 percent, year-over-year, for the first quarter of 2016, to reach US$878 million, but the airfreight forwarding division’s net revenues suffered a 10.8 percent drop. However, when swelling ocean revenues are taken into account, the company’s combined net profit for Q1 rose 11.7 percent, y-o-y, to $119 million.

C.H. Robinson blamed the lower air revenues on rapidly falling prices, but during an investor’s conference call, the logistics firm added that air volumes were still up significantly. “Rates are down, and they’re volatile,” said company CFO Andrew Clarke. “So we’re quoting rates to remain competitive in that marketplace.” Robinson’s air shipment count was up 13 percent during the first quarter of 2016, according to Clarke. Reiterating the current market defined by anemic global growth, Clarke described the company’s volume growth as “flat-out taking market share,” given that Robinson’s business with its existing customers is “flat.”

Moving forward, C.H. Robinson CEO John Wiehoff was bearish on the prospects of global growth rates picking up, and told analysts that the company will focus on expanding and optimizing its global network, and will also consider new “high filter” acquisitions.

Wiehoff added, “We do have plans to open offices in Europe and Asia that will expand our geographic footprint. There are other parts of the world where we don’t have a presence and work through agents that we think we can continue to grow, as well as optimizing.”

Citing the successful integration of previous acquisitions, Wiehoff noted the importance of “business model fit and the cultural compatibility of the types of organizations” in considering new acquisitions. He added, “we continue to feel that we will be able to add value in the future by finding the right selective M&A deals that come to us with the right level of compatibility and fit into our network.”