Business Memo – Domestic U.S. And Global Logistics News

KN Simon

Business Memo – Domestic U.S. And Global Logistics News

C.H. Robinson Worldwide Sees Higher Volume, Tighter Margins

C.H. Robinson Worldwide, Inc. is among the biggest logistic company in the world (Sharma, 2017). The company subsidiary in the United States had a revenue of $13.7 billion in the year 2016 (Sharma, 2017). However, the company operates in other countries with its offices based in North and South America, Asia, Europe, Australia and New Zealand (Sharma, 2017). The headquarters of the company is in Eden, Minnesota, United States. The company offers diverse services such as custom brokerages, airfreight, ocean freight, transportation management, and warehousing. The company has various segments that offer specialized services to their customers. The common segments are; global clearing and forwarding, Robinson Fresh, North America surface transportation and other corporate. Robinson fresh, which is prominent, segments deals with the transportation, buying and selling of perishable and fresh commodities and food worldwide. C.H. Robison has a well-established global network that enables it to provide transportation and effective supply chain across the globe. The company has more than twelve thousand employees and serves over sixty-six thousands transportation companies. In the year 2016, C.H. Robinson managed to handle more than 15.6 million shipment and more than fifty million customers. Transportation only accounts for more than 90% of its revenue in 2016.

In the last quarter of 2016, the business reports positive capacity growth, despite constraints in compression of North America truckload market. The company realizes an intense financial trend in the fourth quarter of the year 2016. The gross revenue of the company increased while the net revenue drops by 1.6%. The operating revenue decreased by 10% because of streamlining the operating cost in many segments. The formal operating segments that operate in C.H. Robinson they were developed in the fourth quarter of 2016. The revenue for each segment was tracked down and labeled. The North American surface transportation revenue declined by 8.8% whiles its operating income decline by 14.3%. Global forwarding and clearance segment revenue increased by 27.5% while it is operating cost also increased by 31%. Robison Fresh performed poorly in the last quarter of 2016 due to low-cost food prices. Its revenue decreased by 7.2% while operating cost decreased by 19.2%   

The management of the C.H. Robinson, headed by their CEO John Wiehoff is certain that the company will perform better the first half of 2017. Despite the challenge of truckload margin compression, there is persistence good volume expansion. The company expects good bids and pricing activities in the upcoming months. The management is certain that the company will perform better after adapting to the new market condition and advanced information technology. The company management is confident that the company will do better as a result of the implementation of outsourcing strategy this year. The outsourcing enables the company to be sustainable and still earn profits for a long time, improve the supply chain, adapt quickly to market trends and expansion, and reduce the operating cost. Good price expected and volume expansion will make the company perform better in future since the revenue will eventually rise. Before the year end, the company is expecting to increase on net revenue earned in 2016 as well as improving the operating cost of most of its segment. 

References

Sharma, A. (2017, February 06). C.H. Robinson Worldwide Sees Higher Volume, Tighter Margins. Retrieved from https://www.fool.com/investing/2017/02/06/chrobinson-worldwide-sees-higher-volume-tighter-m.aspx

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