Global logistics operator CH Robinson has recorded worse results in 2020, despite the company’s solid fourth quarter and strong growth in international transport.
The US logistics company’s revenue rose 5.9% year-on-year to $16.2bn.
The fourth-quarter results contributed to the higher revenues. Revenue in the last three months of 2020 increased by 19.9% compared to the same period in 2019. Revenue growth was driven by the higher ocean and air freight rates and the acquisition of Prime Distribution Services. CH Robinson bought the retail consolidation and distribution services company for $225m in early 2020.
While in the North American market, revenue growth in 2020 was negligible (up 0.3% year-on-year), in the global market CH Robinson scored an increase of 33% over the 2019 result.
However, despite these seemingly good results, CH Robinson’s operating profit fell by 14.8% to $673.3m last year. The main reason for the fall was lower gross profit ($2.4 billion, down 7%) than a year earlier due to lower performance in the road transport sector. This loss was only partially offset by the benefits of the Prime Distribution Services acquisition and the gains from ocean and air freight.
The drop was primarily due to the company’s underperformance in its home continent of North America. Operating profit in North America fell from $722.8m to $508.5m in 2020. Although the ratio for the company’s international operations more than doubled last year (from $80.3m in 2019 to $175.5m), it failed to impact operating profit company-wide. In fact, operations in North America account for 75% of the company’s total operating profit.
The company’s net profit reached $506.4m in 2020, down 12.2% year-on-year. As in the case of revenue, the strong fourth quarter with a year-on-year increase in net profit of 49% (!) did not save the result for the year as a whole.
Bob Biesterfeld, CEO of CH Robinson, foresees another difficult year, especially in the road transport segment.
“The shortage of drivers and capacity availability is making the market difficult and we expect this situation to continue for most of 2021,” Biesterfeld said.
Photo credit @ CH Robinson