Eden Prairie-based C.H. Robinson's CEO departs abruptly

C.H. Robinson's chief executive, Bob Biesterfeld, resigned on Saturday in what the company called an "involuntary termination by the company without cause" in a federal filing.

The company's board chair, Scott Anderson, is now interim CEO, the company said on Tuesday.

The Eden Prairie-based company offered no reason for the abrupt transition with its public announcement Tuesday morning. The logistics and freight giant has retained Russell Reynolds, a leading national executive search firm, to find a permanent replacement.

Jack Atkins, an analyst with Stephens Inc., said pressure on the company's top leader has been increasing for a while.

"Our sense is that this transition has been building in recent months," Atkins wrote in a note to investors on Tuesday.

The company's fall has been bumpy as the supply chain disruption of the pandemic settles into a new normal. C.H. Robinson announced in November it would lay off 650 workers, or 3.6% of its workforce, after sagging third quarter results.

Biesterfeld said in July the company would see lower demand from rising inflation rates and changes in consumer habits. Slowing retail and housing markets, he said, would slow demand in the second half of the year.

"It has been a privilege to lead C.H. Robinson and this exceptional team," Biesterfeld said in a news release. "I am proud of all that we have achieved together, and it has been a pleasure working with so many talented members of the team throughout the organization during my tenure as CEO. I am confident that C.H. Robinson's industry leading people and culture will continue to ensure that the company is well-positioned for the future."

With Anderson's appointment as interim CEO, Jodee Kozlak was named independent chair of the board. Anderson thanked Biesterfeld for his "important contributions" over his three years as CEO.

Biesterfeld, a Minnesota native and Winona State graduate, has been with C.H. Robinson since 1999 and before being named CEO in May 2019 held leadership positions in the company's biggest businesses, North American Surface Transportation and Robinson Fresh.

One of Biesterfeld's big initiatives as CEO was to double the pace of the company's technology investments to build on its advantages against other third-party logistics firms. In 2019, he announced C.H. Robinson would invest $1 billion in technology over the next five years.

But the company has faced pressure from an activist investor recently. Ancora Holdings Group gained two seats on C.H. Robinson's board of directors in February and later signed a standstill agreement that is set to expire Jan. 5.

Ancora nominated Henry Maier, the retired CEO of FedEx Ground, and Henry "Jay" Winship, founder, president and managing member of Pacific Point Capital, for those board seats.

In mid-December, C.H. Robinson also made another board change: adding Jim Barber, the former chief operating officer of United Parcel Service. Barber has 35 years' experience in the transportation industry.

Atkins, the Stephens Inc. analyst, said disappointing third-quarter results, reported in November, "and what was looking to be a very challenging earnings backdrop for the company," likely contributed to the CEO decision.

Anderson was appointed to the C.H. Robinson board in January 2012 and has been chair since 2020. He was chief executive of Patterson Cos. from 2010 to 2017.

Anderson said in the news release he was "committed to ensuring this will be a seamless transition."

"Now is the right time for C.H. Robinson to accelerate our strategic initiatives, and the board is focused on identifying a CEO successor who can execute on the opportunities ahead for Robinson," he said. "I look forward to working closely with our talented employees to continue to improve our customer and carrier experience, and scale our digital processes to foster sustainable growth."

According to the SEC filing on Tuesday, Anderson will not be a candidate for the permanent CEO role. But if the search firm wants to move quickly on the next CEO it doesn't have to look far. Board members Maier, age 68, and Barber, age 62, each have 35 or more years in the transportation industry.

C.H. Robinson is the largest third-party logistics firm, with over $23 billion in annual revenue. The industry is fragmented. Besides many small competitors, there are also an increasing number of technology-backed startups.

Morningstar analyst Matthew Young estimates that C.H. Robinson has 17% of the truck brokerage industry in the U.S. thanks to the large network of shippers and carriers it works with but notes competition is increasing.

"We expect the competition to slowly become more organized as the industry consolidates," Young wrote in a research note.

Given the challenges C.H. Robinson faces, Atkins is hesitant on the company's immediate prospects.

"We think the issues here are bigger than one person and will take a while to fix," Atkins wrote. "Additionally, the CEO transition could raise cultural issues as we believe Mr. Biesterfeld was highly respected internally."

Shares of C.H. Robinson closed Tuesday at $90.28, down 1.4%. Over the previous 52 weeks, the stock has ranged between $86.57 and $121.23 a share.