Look no further than C.H. Robinson for evidence that the logistics industry is in disarray. The Eden Prairie-based company reported this week that third quarter profits were down 64%.
"As has been well documented by many industry participants and observers, global freight demand continued to be weak in the third quarter," said Dave Bozeman, C.H. Robinson's chief executive, in a earnings call.
C.H. Robinson is one of the largest third-party logistics companies in the world. It buys freight capacity on trucks, ships and cargo flights and resells them to shipping customers. But the industry currently has an oversupply of truckload capacity paired with lower freight demand.
Bozeman said C.H. Robinson is positioning itself as the partner customers can count on during the ups and downs of the industries and continues to make its operations more efficient and cost-effective to weather the current disruption.
"This has taken on greater importance to shippers who had exposure to transportation providers whose business models were not financially viable," Bozeman said Wednesday.
The trucking and logistics industry has been in flux all year. C.H. Robinson's quarterly revenue was $4.3 billion, down 28%.
The Seattle-based digital freight business, Convoy Inc., a private company that counted billionaires Jeff Bezos and Bill Gates as significant investors, shut down last week. In August the 99-year-old trucking firm Yellow Corp. filed for chapter 11 bankruptcy.
C.H. Robinson may see marginal gains from the demise of Convoy and Yellow, but the company also is seeing more competition from new entrants to the market.
