As COVID-19 hit the world in 2020, the global shipping and logistics industries underwent massive disruptions and changes. With lockdowns forcing people indoors throughout 2020 and continuing in 2021, demand increased and logistics players, shippers, and freight brokers, among others, experienced increased revenues. But this trend shifted in 2022, as inflationary pressures and the Russia-Ukraine conflict influenced consumer behavior. Demand declined in the last few months of 2022.
As we start 2023, demand seems to have slipped further. So much so that Bob Biesterfeld was fired as chief executive of C.H. Robinson Worldwide Inc., sending America’s largest freight broker by revenue into a search for new leadership amid falling freight demand and growing competition from digital upstarts.
C.H. Robinson appointed Scott Anderson, the chair of the company’s board, as interim CEO, effective Sunday, a day after Mr. Biesterfeld was terminated from the business after 3½ years at the helm. Mr. Anderson, 56, stepped down as chair, a position he has held since 2020. The freight brokerage company has retained executive search firm Russell Reynolds Associates Inc. to help with the search for a new permanent CEO.
While the company hasn’t released any updates, sources report that former CFO Andrew Clarke would “seriously consider” an offer for the position. Mr. Anderson doesn’t plan to be considered as a candidate for the permanent position, according to the Securities and Exchange Commission filing.
C.H. Robinson is by far the largest player in the US freight brokerage market, one that matches freight shippers with available trucks. It reported $23.1 billion in gross revenue in 2021, its last full reporting year, and its gross domestic revenue of $15.6 billion that year was nearly twice that of its nearest competitor, Cincinnati-based Total Quality Logistics LLC, according to research firm Armstrong & Associates Inc.
Key Takeaways
C.H. Robinson’s expansion, thanks to strong shipping demand early in the Covid-19 pandemic, has waned in recent months, and the company pulled back on hiring after profit growth retreated in the second half of the year as inflationary pressures and the war in Ukraine left global shipping demand sagging. According to experts, these inflationary pressures and decreases in demand are probably concerning to the C.H. Robinson top brass.
The termination of CEO Bob Biesterfeld came as a surprise to many. But analysts indicate that the industry can probably expect challenging near-term results due to sharp weakness in forwarding rates and a slowdown in truckload freight. Robinson under Mr. Biesterfeld’s leadership was more focused on cutting costs and focusing on its digital brokerage platform. The company board may have felt a change in leadership would help the organization weather oncoming storms in 2023. While Mr. Biesterfeld’s departure seems to be driven by business results, major logistics players like C.H. Robinson also has to deal with increasing competition in the market.
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