CH Robinson optimizes with tech, reducing costs for shippers, CEO says

CH Robinson optimizes with tech, reducing costs for shippers, CEO says

August 29, 2023

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Dive Brief:

  • Leaning on technology to automate internal processes contributed toward 12% year-to-date productivity gains in C.H. Robinson Worldwide’s largest segment, North American Surface Transportation, the company reported during its earnings call Aug. 2.
  • The 3PL is maximizing worker efficiency in shipments handled per person per day through technology, part of sweeping cost-cutting changes that began in Q4 of last year, CFO Mike Zechmeister said.
  • The company projects NAST shipments handled per person are on track to hit the company’s target goal of 15% improvement by Q4, executives said. The segment overall represents about 60% of C.H. Robinson’s annual business.

Dive Insight:

Recently appointed CEO Dave Bozeman said during the call that the company’s initiatives to reduce costs will benefit shippers.

“Shippers are looking for stable and innovative logistics,” Bozeman told analysts. “[C.H.] Robinson has shown the strength of its model through cycles.”

Bozeman’s background in logistics management was among the reasons the company hired him. Since taking over in late June, Bozeman said he has focused on seeking ways to reduce waste and encourage faster decision making.

C.H. Robinson reported its end of Q2 headcount was down 13.1% YoY to 15,763, Zeichmeister told analysts. The company’s headcount at the end of Q1 was 16,400, which was 1,000 fewer compared to its total at the end of Q4. 

Headcount reductions led to an 18.8% reduction in operations expenses during Q2, the company reported.

Fewer people escalated the company’s reliance on technology. COO Arun Rajan said the company has been using machine learning and artificial intelligence to improve outcomes for customers and carriers.

“Our early testing and results from generative AI are promising, and we’re excited about the potential for this technology to be an accelerant to automation and productivity improvements and to magnify our information advantage,” Rajan said.

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