C.H. Robinson posts record Q1 profits amid global volatility

The first quarter was a favorable backdrop for 3PLs: expensive, complex, confusing and unpredictable. Global Forwarding revenues nearly doubled, growing by 89.8% compared to the first quarter of 2021. Meanwhile in North America Surface Transportation (NAST), Robinson captured big rate increases without having to chase extra freight.

In his outlook, CEO Bob Biesterfeld cited economic uncertainty stemming from war in Ukraine, energy prices and inflation, but said that Robinson’s technology, product-led organization and flexible, global asset-light operating model performed well through the cycle. 

While both revenue and gross profit increased, so did operating expenses, inflating by 17% y/y.

Robinson’s NAST segment accounted for more than 60% of the company’s revenue in the quarter, down by nearly 6 percentage points from a year ago. NAST revenues grew by 28.1% in the first quarter, eclipsing the $4 billion mark for the first time, reaching $4.1 billion. The revenue surge was primarily driven by higher pricing in both truckload and LTL and growth in truckload volumes. Overall NAST volumes edged up by 1% y/y in the quarter.

NAST adjusted gross profit increased by 20.2% to $506.1 million, the highest level since the fourth quarter of 2018. NAST adjusted gross profit margin declined by 100 basis points (bps) year-over-year to 12.4% but was a sequential increase of 20 bps from the fourth quarter.

Adjusted gross profit on the truckload segment of NAST increased 19.5% y/y, thanks largely to a 15% increase in adjusted gross profit per load and 4% growth in shipments. The average truckload linehaul rate per mile charged to customers increased by 20.5% year-over-year, while the average cost per mile increased by 21%.

LTL adjusted gross profit increased by 25.5% y/y as adjusted gross profit per order increased 27% y/y, offsetting the 1% y/y decline in LTL volumes.

NAST operating expenses increased by 13.9% in the quarter, with the company citing higher salaries, incentive compensation and technology expenses. The average headcount increased by 12.4% y/y to 7,348, an 8.6% increase from the fourth quarter.

Global Forwarding continued to be an area where Robinson focused efforts. The company grew revenue by 89.8% y/y, climbing to $2.2 billion, 32% of the company’s total revenue. Adjusted gross profit in the quarter increased 50.2% to $321.8 million. 

The company was able to expand adjusted gross profit on the ocean and in the air. Ocean adjusted gross profit increased 63.5% y/y, as adjusted gross profit per shipment increased by 52.5% and volumes increased by 7%. Adjusted gross profit in the air increased by a more modest 33.9% y/y, thanks to a 10% increase in metric tons shipped and a 21.5% increase in adjusted gross profit per metric ton. 

Operating expenses in the Global Forwarding segment increased by 24.7% y/y, following similar trends of higher salaries, incentive compensation and technology expenses. Headcount in the segment increased by 18.5% y/y and 10.6% sequentially to 5,610.

All other corporate results, which include Robinson Fresh, Managed Services and Other Surface Transportation, experienced year-over-year growth as well. The combined revenues increased by 16.1% y/y to $506.7 million. Adjusted gross profit for Robinson Fresh increased 22.3% to $30.5 million, Managed Services increased 9.9% to $28.1 million and Other Surface Transportation increased 19.4% to $19.7 million.