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Dive Brief:
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C.H. Robinson Worldwide’s growing use of AI to streamline its shipping fulfillment process resulted in a $657.4 million, 1.5% Q1 gross profit improvement year over year, the brokerage reported on April 30.
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Although Q1 revenue fell 8.3% to $4 billion and the volume of freight handled by it North American Surface Transportation fell 1% YoY, the company reported higher adjusted gross profit per transaction in truckload and LTL services.
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“Through higher productivity and lowering our cost to serve, our NAST operating margin of 34.3% in Q1 increased both year-over-year and sequentially,” Michael Castagnetto, president of North American Surface Transportation said on a call with analysts.
Dive Insight:
C.H. Robinson’s strategy to boost productivity through heightened technology use and incorporating AI into assorted daily tasks is showing results for the brokerage. The company reported its operating expenses fell by 6.5% to $496 million and its personnel costs fell 8.1% to $348.6 million.
In its NAST segment, though market volume declined, Castagnetto said the company’s proprietary technology allowed its freight experts to secure optimal or more profitable freight.
“These digital capabilities … have also enabled us to increase our NAST shipments per person per day at a double-digit pace over the past two years, and this continued in Q1,” he said.
Integrating AI also has led to faster decision making, a necessity in the current business environment where “tariffs and fluid trade policies have created market uncertainty and a lack of clarity,” President and CEO Dave Bozeman said on the call. This has caused shippers to adopt a wait and see approach to determine the impact on consumer spending and global demand, he said.
Nonetheless, the brokerage remains proactive in aiding customers to diversify supply chains, enabling them to source products from multiple countries, Bozeman said. The company’s ability to control costs through operating efficiencies and scale give it the ability to adapt to changing market dynamics and help customers do the same, he said.
“C.H. Robinson is well-versed in navigating tariff changes, and we have proprietary technology that aids us in doing so,” Bozeman said.
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