Freight Broker C.H. Robinson Digs in Against Activist Investor

“We’re going to take our time,” C.H. Robinson interim Chief Executive

Scott Anderson,

who most not too long ago served as the corporate’s chairman, mentioned of the seek for a everlasting substitute for

Bob Biesterfeld,

who was ousted as CEO on New Year’s Eve. 

Ancora, which owns 1.9% of C.H. Robinson and has two representatives on the board, launched a marketing campaign in early 2022 to have the corporate, which counted $24.7 billion in gross revenues final 12 months, focus extra tightly on its core home operations and challenges by digital-focused upstart firms.

C.H. Robinson executives mentioned on the Wednesday earnings name that the worldwide forwarding arm, which strikes freight by air and ocean, is crucial to the corporate’s success.

Michael Zechmeister,

C.H. Robinson’s chief monetary officer, mentioned greater than half of the corporate’s revenues are generated by clients who use each the corporate’s world forwarding and its home unit, which strikes freight by truck, rail and air. He mentioned revenues from clients utilizing forwarding providers mixed with different providers grew at a 4% greater compound annual progress price than revenues from shippers utilizing single providers. 

“We believe in the ability to leverage both of those businesses, and that’s our plans going forward,” Mr. Zechmeister mentioned.

Fourth-quarter income on the forwarding arm fell 53% to $1 billion and the working revenue plunged 81% to $28.2 million. 

C.H. Robinson is by far the most important participant in the U.S. home freight brokerage market that matches freight shippers with out there vehicles. It can also be among the many high two U.S.-based firms in the worldwide forwarding market that transports cargo by air and ocean.

The Eden Prairie, Minn.-based firm is struggling as freight volumes and charges drop from document highs through the Covid-19 pandemic. The firm not too long ago laid off 650 employees, 3% of its world workforce, as a part of cost-cutting measures designed to ship annualized financial savings of $150 million. 

The firm general recorded a 14% enhance in gross earnings in 2022 of $3.6 billion. But earnings fell in the second half of the 12 months when freight demand softened as shoppers pulled again spending on items.

Revenues dropped 22% 12 months over 12 months in the fourth quarter of 2022 to $5.1 billion and working revenue fell 43% to $164 million.

Several analysts issued experiences following the earnings name expressing frustration the corporate wasn’t transferring extra shortly to vary its enterprise technique or to interchange its CEO. Bascombe Majors, an analyst at Susquehanna Financial Group, wrote on Thursday that C.H. Robinson seemed to be “in limbo.” 

Acquisition-focused Danish forwarder DSV A/S was reported final 12 months by Reuters to be a potential purchaser of C.H. Robinson’s forwarding operation. Chief Executive

Jens Bjørn Andersen

mentioned on a Thursday earnings name that the corporate remains to be in search of acquisitions. 

Cleveland-based Ancora in the previous has taken small stakes in underperforming firms and launched public campaigns calling for changes to boards and govt management in addition to the sale of property. It is energetic throughout a swath of industries, with stakes in firms starting from struggling retailer

Bed Bath & Beyond Inc.

to packaging producer

Berry Global Group Inc.

In the logistics sector, the agency launched a campaign in 2021 focusing on expedited trucking firm

Forward Air Corp.

Ancora launched a proxy combat on the Greeneville, Tenn.-based firm and pushed executives to shortly refocus on Forward Air’s expedited less-than-truckload enterprise, which consolidates small shipments in a single trailer. The enterprise has since develop into extra worthwhile.

Write to Paul Berger at paul.berger@wsj.com