C.H. Robinson lifts quarterly earnings as freight costs outpace customer rates

C.H. Robinson reported higher third-quarter earnings as its North American brokerage business increased revenue and improved operating margins, FreightWaves reported. Adjusted diluted earnings per share rose 28.6% from a year earlier to $1.80. The results combined stronger annual pricing with productivity gains, although truckload transport costs increased faster than the rates charged to customers.

Operating revenue in North American Surface Transportation, or NAST, which includes the company’s traditional brokerage operations, climbed 29.1% year on year. C.H. Robinson attributed the increase to higher prices and volumes across truckload and less-than-truckload services. The segment’s adjusted gross profit increased 16.6%, while operating income rose 17.9%. Its adjusted operating margin widened by 110 basis points to 40.3%, according to figures reported by FreightWaves.

The sequential comparison was more mixed as freight rates softened. NAST revenue fell 6.16% from the second quarter, but adjusted gross profit increased 10.31% and operating income rose 7.43%. In truckload, average customer linehaul rates per mile, excluding fuel, were 31.5% above year-earlier levels. Costs per mile on the same basis increased 33.5%, which the report said reduced truckload gross profits. Separately, the company reported a 17% annual increase in adjusted gross profit per truckload shipment, attributing that improvement to disciplined revenue management despite sharply higher spot-market costs.

Less-than-truckload operations delivered an 8% annual increase in adjusted gross profit. The company cited a 4% improvement in adjusted gross profit per order alongside volume growth of 3.5%. Staffing continued to decline, though more slowly than in the preceding two quarters. NAST headcount fell 1.7% from the previous quarter after two consecutive reductions exceeding 4%, while total company headcount dropped 2%.

Chief executive Dave Bozeman linked productivity improvements to the replacement of manual processes with increasingly automated workflows in NAST and Global Forwarding. Both businesses again reached their mid-cycle operating-margin targets, he said in the earnings statement. FreightWaves also reported that the almost $6 billion acquisition of rival RXO was announced shortly after the quarter ended and did not affect the quarterly financial performance.