Their stock jumped nearly 15% after the earnings report. Plus, there are 3,420 fewer brokerages compared to August 2023, Fastline Cargo has filed for Chapter 11 bankruptcy, and more.
Good Morning & Happy Friday. Today we take a look at the year-over-year decline in operating freight brokerages and C.H. Robinson's surprising Q2 earnings.
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Question of the Day: There has been a __% year-over-year decline in operating freight brokerages. Find out below.
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📉 Freight Brokerages Closing at a Steady Decline. The freight brokerage saw 284 brokerages close in July 2024 alone. This represents a 11.5% decrease year-over-year, with 3,420 fewer brokerages than August 2023. The trend is attributed to the post-pandemic surge of inexperienced operators attracted by high rates. Many lacked the expertise for long-term sustainability. Industry expert Kevin Hill (Bush Pass Research), suggests this decline is part of a natural weeding-out process. With 13.8% fewer brokerages than two years ago, the industry continues to consolidate, potentially benefiting well-established firms.
🚛 Fastline Cargo's Bankruptcy. Fastline Cargo, a New Jersey trucking company, has filed for Chapter 11 bankruptcy. With assets and liabilities between $1-10 million, the company faces significant challenges. FLC's safety record is concerning, with higher-than-average out-of-service rates for both trucks and drivers. The company is seeking approval to pay $80,000 in pre-petition wages and pursuing post-petition financing. CEO Amanjot Kaur and COO Amritraj Singh must address substantial debts, including $2.2 million owed to Fulton Bank. Already having their first court date Thursday Aug. 1, this story is still developing.
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C.H. Robinson, the second largest logistics provider after Amazon, has posted strong Q2 2024 earnings, surprising analysts and investors for the second consecutive quarter. This positive news comes on the heels of the company's announcement to sell its European Surface Transportation (EST) business to Sennder.
Key Highlights:
Total revenue: $4.48 billion (slightly below forecasts)
Adjusted Gross Profits: $687M (+3.3 Y/Y)
Income from Ops: $178M (+34.3% Y/Y)
Net Income/Share: $1.05 (+29.6% Y/Y)
Employee headcount: Down 10% year-over-year
Turnaround in Action
CEO Dave Bozeman, who took the helm in June 2023, appears to be making some nice moves with his new operating model. The North American Surface Transportation (NAST) segment showed particular strength:
Truckload gross profits: Up 4.75%
LTL gross profits: Up 5.9%
Ocean gross profits: Up 7.9%
Surprising Stat: Truckload operations gained market share for the fourth consecutive quarter.
New Operating Model
Bozeman highlighted the company's "balanced scorecard" approach:
"These metrics may be related to driving growth, meeting customer expectations, optimizing AGP, optimizing cost, managing our talent, improving our cash conversion cycle through a regular cadence of operating reviews," Bozeman explained.
Industry Reaction
The industry applauded C.H. Robinson's moves and speculated whether the company would continue to sustain upward trends.
Some called out the "growth" as number manipulation through headcount reduction rather than "true" operational strategy. However, others say that finding ways to cut down on inefficiency is just a part of business.
Market Response
C.H. Robinson's stock price surged approximately 15% in after-hours trading following the earnings release.
Looking Ahead
While the company shows signs of improvement, challenges remain. Michael Castagnetto, NAST President, noted: "From a market balance perspective, we continue to be in a drawn-out stage of capacity oversupply."
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I’m Adriana, a writer and editor at FreightCaviar. I’ve covered everything from freight tech to industry lawsuits and market shifts, helping scale us to almost 14K subscribers. My goal: to make logistics stories digestible, clear, and fun to read.
Hello! I'm Jerome FreightCaviar! I’m into the politics of freight and the impact it will have worldwide. I'm always eager to learn more. Follow me on X @JeromeFreightC
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