EDEN PRAIRIE, Minn. — In a Jan. 31 statement released by C.H. Robinson Worldwide Inc., the company’s fourth-quarter and year-end financial results for 2023, company officials described the results as “disappointing.” Performance across all metrics was down for both the quarter and the year as a whole.
“Our fourth quarter results did not meet our expectations as we continue to battle through a poor demand and pricing environment. Weak freight demand in an elongated market trough, combined with excess carrier capacity, continued to result in a very competitive market,” said Dave Bozeman, president and CEO of C.H. Robinson.
“With this environment in play, we targeted more truckload volume in the spot market, where we could capture more profit due to seasonal market tension,” he continued. “This led to a sequential improvement in our overall truckload profit per load in October and November. However, in December, our profit per load declined as the cost of purchased transportation moved seasonally higher.
Despite the challenges of the past year, Bozeman says he is excited about the company’s prospects for 2024.
“We share the sentiment of some of our peers, in that we’re happy to say goodbye to 2023. And although 2024 still presents some of the same challenges and headwinds, I’m excited about the work that we’re doing to reinvigorate Robinson’s winning culture and unlock the power of our portfolio,” he said. “I continue to see an opportunity for the company to reach its full potential and create more shareholder value by improving our value proposition, increasing our market share, accelerating growth, further reducing our structural costs, and improving our efficiency, operating margins and profitability.”
Revenues for the company’s truckload segment totaled $3 billion, a decrease of 15.8% from 2022. According to the Jan. 31 statement, that decrease was primarily driven by lower truckload pricing, reflecting an oversupply of truckload capacity compared to soft freight demand.
Truckload adjusted gross profits decreased 24.3% in the quarter to $380.2 million. Adjusted gross profits in truckload decreased 30.8% due to a 29.5% decrease in adjusted gross profit per shipment and a 1.5% decline in truckload shipments.
The average truckload linehaul rate per mile charged to customers, which excludes fuel surcharges, decreased approximately 13.5% in the quarter compared to the prior year, while truckload linehaul cost per mile, excluding fuel surcharges, decreased approximately 10.5%, resulting in a 28% decrease in truckload adjusted gross profit per mile.
Less-than-truckload (LTL) adjusted gross profits decreased 9% compared to 2022, as adjusted gross profit per order decreased 8.5% and LTL shipments decreased 0.5%. NAST (North American surface transportation) overall volume growth was down 1% for the quarter. Operating expenses decreased 16.3%, primarily due to cost optimization efforts, including lower average employee headcount, lower variable compensation, and lower technology expenses. NAST average employee headcount was down 15.8% in the quarter. Income from operations decreased 41.0% to $96.0 million, and adjusted operating margin declined 720 basis points to 25.2%.
Despite the disappointing numbers for 2023, Bozeman is optimistic about the company’s prospects.
“I’m confident that together we will win for our customers, carriers, employees and shareholders, and I’m incredibly excited about our future,” Bozeman stated.
Since retiring from a career as an outdoor recreation professional from the State of Arkansas, Kris Rutherford has worked as a freelance writer and, with his wife, owns and publishes a small Northeast Texas newspaper, The Roxton Progress. Kris has worked as a ghostwriter and editor and has authored seven books of his own. He became interested in the trucking industry as a child in the 1970s when his family traveled the interstates twice a year between their home in Maine and their native Texas. He has been a classic country music enthusiast since the age of nine when he developed a special interest in trucking songs.
