As ocean business grows, C.H. Robinson charts new trade lanes

C.H. Robinson Worldwide, the largest U.S. truck broker, is finding its sea legs. The logistics operator says it wants to expand its ocean forwarding business to new markets.

“We do feel like there is great opportunity for us to continue to expand globally and to really focus on some significant trade lanes,” CEO John Wiehoff told analysts Feb. 4.

Historically, C.H. Robinson’s ocean business has focused on Asia to U.S. trade, he said.

“Asia to Europe is a core corridor or trade lanes where we think we can have some meaningful growth this year,” Wiehoff said in a conference call transcribed by Seeking Alpha.

Historically, C.H. Robinson’s ocean business has focused on Asia to U.S. trade, he said.

“There is great opportunity to grow in that lane, but in addition focus more on Asia to Europe and North America to Europe,” he said. “We think there might be some opportunities to look at some of the trade lanes where there would be more export activity out of Europe.”

In addition, “there are air opportunities in a number of lanes that we can grow in.”

Two years after the acquisition of ocean and air freight forwarder Phoenix International, C.H. Robinson’s ocean forwarding revenue surged in the second half of 2014, climbing 15.5 percent year-over-year in the third quarter and 22.8 percent in the fourth quarter.

Those gains in revenue defied tough year-over-year comparisons with last quarters of 2013, when C.H. Robinson was enjoying the full revenue benefit of the Phoenix acquisition. The company’s ocean forwarding revenue rose 121 percent in 2013 to $187.7 million.

In 2014, the fourth-largest global logistics operator increased ocean forwarding revenue another 11.1 percent to $208.4 million, C.H. Robinson said Feb. 4. That’s 11 percent of the $13.4 billion company’s net transportation revenue, up from 5.6 percent in 2012.

Growth on the ocean side of C.H. Robinson’s global forwarding business outpaced air freight revenue, which increased 7.9 percent to $19.4 million in the fourth quarter. Customs brokerage revenue increased 16.8 percent year-over-year in the quarter to $10.8 million.

C.H. Robinson attributed its second-half surge in ocean freight forwarding to higher container volumes and pricing, which in turn drove up fourth-quarter net revenue margin. The surge also followed the completion of the integration of Phoenix into C.H. Robinson.

The former Phoenix and C.H. Robinson global forwarding teams aggressively cross-sold services in 2014, their second year of integration. “I feel really good about the first two years of integration and our success in growing our global forwarding business,” Wiehoff said.

Further work needs to be done to integrate technology and improve business processes to optimize forwarding for shippers, he said. “The more effective we can be at consolidating (ocean)  freight and routing things properly, there will be more margin opportunity.”

http://www.joc.com/international-logistics/logistics-providers/ocean-business-grows-ch-robinson-charts-new-trade-lanes_20150205.html

Penulis: Syarif Bahreisy © 2015

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