MINNEAPOLIS based CH Robinson Worldwide’s third quarter profit fell 7.5 per cent year on year to US$129 million, drawn on revenues of $3.4 billion, a decrease of 1.9 per cent.
“Despite the decrease in some of our key financial metrics in the third quarter, we feel confident that we are making good progress on our long-term plans,” said CH Robinson chairman and CEO John Wiehoff.
“We are adapting to the market conditions by achieving profitable volume growth and continuing to focus on improving our customers’ supply chain outcomes,” he said.
The decline in turnover contrasted with volume growth of 18 per cent in air freight and of five per cent in ocean freight.
The bankruptcy of Hanjin Shipping in September had triggered an increase in ocean capacity costs and pressurised margins on fixed price business, the US forwarding and transport group said.
CFO Andrew Clarke said that ocean net revenues were down 3.1 per cent, air net revenues decreased 1.7 per cent, while turnover from customs services grew 2.6 per cent.
“Ocean shipments increased five per cent in the quarter and pricing continues to be down with total revenue per shipment off double digits in the ocean service line,” Mr Clarke noted.
“The pricing environment, especially in the transpacific lane did change in September as the result of the Hanjin bankruptcy filing. Hanjin is not a core carrier for Robinson so we were able to provide great service to our customers.
“I think what surprised us and the rest of the industry was the degree to which the remaining carriers raised their rates over the short term, sometimes as much as $750 to $900 per container.
“This situation did pressure our ocean margins in September and it took a few weeks for our account managers to revise pricing with customers,” Mr Clarke said.