C H ROBINSON WORLDWIDE INC
For the period ended Jun 30, 2024. Filed Aug 2, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 2, 2024
CHRW$125.33-2.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-03.
0001043277-24-000026
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-02.
0001043277-24-000042
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 72 previous paragraphs and 91 current paragraphs.
35 unchanged; 33 reworded; 19 added; 4 removed; 0 previous and 4 current paragraphs rearranged.
Tables are not compared: 8 previous and 8 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (19)
Current report
C.H. Robinson Worldwide, Inc. (“C.H. Robinson,” “the company,” “we,” “us,” or “our”) is one of the original logistics leaders. Companies around the world look to us to reimagine supply chains, advance freight technology, and solve logistics challenges—from the simple to the most complex. Through our unmatched expertise, unrivaled scale, and tailored solutions, we ensure the seamless delivery of goods across industries and continents via truckload, less-than-truckload, ocean, air, and beyond. As a responsible global citizen, we make supply chains more sustainable and proudly contribute millions to the causes that matter most to our employees.
Current report
The global forwarding market has continued to add carrier capacity in 2023 and into 2024. Despite new capacity entering the market, it hasn’t been sufficient to meet the growing demand due to the necessity of re-routing and longer transit times caused by the Red Sea conflict. In addition to the Red Sea conflict, there are increasing challenges related to container shortages and worsening port congestion impacting the market in certain parts of the world. At the same time, there are indications that shippers may be accelerating the timing of traditional peak season volume in light of these challenges, macroeconomic and geopolitical uncertainty, as well as the potential for labor issues at the U.S. East Coast ports, which are further straining available carrier capacity. Consequently, ocean freight rates have significantly increased in the second quarter of 2024 compared to the prior year. These ongoing global disruptions, coupled with the ongoing macroeconomic and geopolitical uncertainty, will likely continue to impact ocean freight pricing in the near term, although the extent of which remains uncertain. The challenges facing the ocean freight market are leading to increased ocean freight conversions to air freight, which, alongside elevated e-commerce demand out of North Asia, have tightened air freight capacity, and led to sharp increases in the cost of air freight in certain trade lanes.
Current report
Subsequent to June 30, 2024, we entered into an agreement to sell our Europe Surface Transportation business. The sale will include all assets and liabilities of the business other than our proprietary technology platform. The assets and liabilities of the Europe Surface Transportation disposal group will be presented as held for sale beginning in the third quarter of 2024 and adjusted to fair market value, less costs to sell, which will result in a loss on sale compared to carrying value in the third quarter of 2024.
Current report
•Other selling, general, and administrative (“SG&A”) expenses decreased 4.8 percent to $148.1 million with reductions across several expense categories.
Current report
•Income from operations increased 34.3 percent to $178.1 million, due to the increase in adjusted gross profits and decrease in operating expenses.
Current report
Consolidated Results of Operations—Six Months Ended June 30, 2024, Compared to the Six Months Ended June 30, 2023
Current report
Total revenues and direct costs. Total transportation revenues and direct costs decreased driven by lower pricing and purchased transportation costs in truckload services, partially offset by higher pricing and purchased transportation costs in ocean services in addition to volume increases in all of our global forwarding transportation services. The decline in truckload pricing and purchased transportation costs has been driven by the ongoing surface transportation soft market conditions as the market has remained in a prolonged stage of oversupplied carrier capacity during the six months ended June 30, 2024. The higher pricing and purchased transportation costs in ocean services were driven by the ongoing disruptions, including the Red Sea conflict, which have significantly impacted carrier capacity and resulted in increased ocean freight rates in the six months ended June 30, 2024. Our sourcing total revenue and direct costs increased driven by higher average pricing with retail customers and increased case volume with foodservice customers.
Current report
Gross profits and adjusted gross profits. Our transportation adjusted gross profits decreased due to lower adjusted gross profit per transaction in truckload and air services. These decreases were partially offset by increased ocean shipments and higher adjusted gross profit per transaction and increased volume in LTL services. The lower adjusted gross profit per transaction in truckload was driven by the continued soft market conditions in the surface transportation market which have suppressed freight rates in the six months ended June 30, 2024. Ocean shipments increased driven by the improving demand for ocean freight compared to the weak demand experienced in the prior year. Sourcing adjusted gross profits increased driven by an increase in integrated supply chain solutions for retail customers and foodservice customers.
Current report
Operating expenses. Personnel expenses decreased primarily due to cost optimization efforts including lower average employee headcount, primarily offset by higher variable compensation including stock-based compensation expense as the prior year period included an accrual reversal related to certain performance-based awards. Other SG&A expenses increased primarily due to a higher provision for credit losses as the prior year benefited from a reduction to the allowance for credit losses.
Current report
In addition to the above, our personnel expenses for the six months ended June 30, 2024, included $17.4 million of severance and related personnel expenses. We also incurred $10.7 million of restructuring related other SG&A expenses in the six months ended June 30, 2024. These expenses were both associated with our 2024 Restructuring Program. Our personnel expenses for the six months ended June 30, 2023, included $16.7 million of severance and related personnel expenses. We also incurred $1.1 million of restructuring related other SG&A expenses in the six months ended June 30, 2023. These expenses were both associated with our 2022 Restructuring Program. Refer to Note 13, Restructuring, for further discussion related to our 2024 and 2022 Restructuring Programs.
Current report
Interest and other income/expense, net. Interest and other income/expense, net primarily consisted of interest expense of $45.0 million, which decreased $1.8 million driven by lower average debt balances compared to the prior year. The six months ended June 30, 2024, included a net $4.4 million favorable impact from foreign currency revaluation and realized foreign currency gains and losses. The prior year included a net $6.0 million unfavorable impact from foreign currency revaluation and realized foreign currency gains and losses primarily due to the impacts on intercompany assets and liabilities. The six months ended June 30, 2023, also included a $3.8 million foreign currency loss related to our operations in Argentina that were divested in the prior year.
Current report
Total revenues and direct costs. NAST total revenues and direct costs decreased driven by lower pricing and purchased transportation costs in truckload services. The decline in truckload pricing and purchased transportation costs has been driven by the ongoing surface transportation soft market conditions as the market remained in a prolonged stage of oversupplied carrier capacity during the six months ended June 30, 2024. Partially offsetting this decline was an increase in volumes for both truckload and LTL services.
Current report
Gross profits and adjusted gross profits. NAST adjusted gross profits decreased primarily due to lower adjusted gross profit per transaction in truckload services. The lower adjusted gross profit per transaction was driven by the continued soft market conditions in the surface transportation market which have suppressed freight rates in the six months ended June 30, 2024. Our average truckload linehaul rate per mile charged to our customers, which excludes fuel surcharges, decreased approximately 5.0 percent. Our truckload linehaul cost per mile, excluding fuel surcharges, decreased approximately 5.5 percent. The decrease in truckload adjusted gross profits was partially offset by an increase in LTL volumes. NAST other adjusted gross profits decreased, primarily driven by a decline in warehousing and intermodal adjusted gross profits.
Current report
Operating expenses. NAST personnel expense increased driven by an increase in variable compensation, including stock-based compensation expense as the prior year period included an accrual reversal related to certain performance-based awards. This was partially offset by cost optimization efforts, including lower average employee headcount. NAST other SG&A expenses decreased primarily due to lower allocated corporate expenses.
Current report
Total revenues and direct costs. Global Forwarding total revenues and direct costs increased driven by higher pricing and purchased transportation costs and increased volume in ocean services compared to the prior year. The global forwarding market continued to be impacted by re-routing and longer transit times caused by the Red Sea conflict and experienced increasing challenges in the second quarter of 2024 related to container shortages and worsening port congestion in certain parts of the world. These challenges combined with improving demand have significantly increased ocean freight rates in the second quarter of 2024 compared to the prior year. In addition, the disruptions facing the global forwarding market have resulted in an increase in air freight tonnage, driven by ocean freight conversions in many trade lanes. These ocean freight conversions coupled with increased e-commerce demand out of North Asia have led to sharp increases to the price and cost of air freight in certain trade lanes compared to the prior year.
Current report
Operating expenses. Personnel expenses decreased primarily due to cost optimization efforts, including lower average employee headcount. This decrease was partially offset by an increase in variable compensation, including stock-based compensation expense as the prior year period included an accrual reversal related to certain performance-based awards. Global Forwarding other SG&A expenses decreased driven by lower allocated corporate expenses.
Current report
In addition to the above, Global Forwarding personnel expenses for the second quarter of 2024 included $2.2 million of severance and related personnel expenses. We also incurred $1.3 million of restructuring related other SG&A expenses in the second quarter of 2024. These expenses were both associated with our 2024 Restructuring Program. Personnel expenses for the second quarter of 2023 included $0.7 million of severance and related personnel expenses associated with our 2022 Restructuring Program. Refer to Note 13, Restructuring, for further discussion related to our 2024 and 2022 Restructuring Programs.
Current report
Restructuring expenses. Personnel expenses in the second quarter of 2024 included $2.5 million of severance and related personnel expenses. We also incurred $0.6 million of restructuring related other SG&A expenses in the second quarter of 2024. These expenses were both associated with our 2024 Restructuring Program. Personnel expenses in the second quarter of 2023 included $12.1 million of severance and related personnel expenses. We also incurred $1.0 million of restructuring related other SG&A expenses in the second quarter of 2023. These expenses were both associated with our 2022 Restructuring Program. Refer to Note 13, Restructuring, for further discussion related to our 2024 and 2022 Restructuring Programs.
Current report
Restructuring expenses. Personnel expenses in the six months ended June 30, 2024 included $4.2 million of severance and related personnel expenses. We also incurred $3.5 million of restructuring related other SG&A expenses in the six months ended June 30, 2024. These expenses were both associated with our 2024 Restructuring Program. Personnel expenses in the six months ended June 30, 2023 included $13.3 million of severance and related personnel expenses. We also incurred $1.0 million of restructuring related other SG&A expenses in the six months ended June 30, 2023. These expenses were both associated with our 2022 Restructuring Program. Refer to Note 13, Restructuring, for further discussion related to our 2024 and 2022 Restructuring Programs.
Removed paragraphs (4)
Previous report
C.H. Robinson Worldwide, Inc. (“C.H. Robinson,” “the company,” “we,” “us,” or “our”) is one of the world's largest logistics platforms. We bring together customers, carriers, and suppliers to connect and grow supply chains. We are grounded in our customer promise to use our technology, which is built by and for supply chain experts and powered by our information advantage, to deliver smarter solutions. These global solutions, combined with the expertise of our people, deliver value–from improved cost reductions and reliability to sustainability and visibility–that our customers and carriers can rely on.
Previous report
In the first quarter of 2024, the global forwarding market faced significant disruptions limiting the availability of several of the world’s most significant waterways. These disruptions have resulted in increased re-routing and degrading schedule reliability for ocean shipments. Ocean vessel capacity continues to expand although the challenges presented by these global disruptions have mitigated the impact on ocean freight pricing. The ongoing global disruptions, coupled with emerging geopolitical conflicts and potential shifts in consumer demand, will likely continue to impact ocean freight pricing in the near term. The challenges facing the ocean freight market are leading to increased ocean freight conversions, which alongside elevated e-commerce demand out of North Asia, have led to sharp increases in the cost of air freight in certain trade lanes.
Previous report
•Other selling, general, and administrative (“SG&A”) expenses increased 7.1 percent to $151.5 million, primarily due to favorable credit losses in the prior year and restructuring charges in the current year related to impairment of internally developed software.
Previous report
•Income from operations decreased 21.1 percent to $127.1 million, due to decreased adjusted gross profits.
Reworded paragraphs (33)
Previous wording
The North America surface transportation market continues to gradually move toward a balance of carrier supply and shipper demand. Despite modest decreases in carrier counts, there remains an excess of carrier capacity, leading to continued soft market conditions. The elevated capacity levels that entered the market in the latter half of 2020 and throughout 2021, driven by historically high demand during the COVID-19 pandemic, have contracted more slowly than typical capacity reductions at this stage of recent market cycles. In the current state of the market, subtle volume increases—whether due to seasonality or improving demand—would likely be absorbed by available capacity, resulting in a continuation of soft market conditions in the near term. One of the metrics we use to measure market conditions is the truckload routing guide depth from our Managed Services business. Routing guide depth represents the average number of carriers contacted prior to acceptance when procuring a transportation provider. The average routing guide depth of tender in the first quarter of 2024 remained low at 1.2, essentially in-line with the average routing guide depth experienced throughout 2023. The average routing guide depth in the first quarter of 2024 represents that on average, the first carrier in a shipper's routing guide is accepting the shipment most of the time, resulting in a limited number of shipments reaching the spot market.
Current wording
The North America surface transportation market remains largely unchanged from the first quarter of 2024. The market remains in a prolonged stage of oversupplied carrier capacity leading to continued soft market conditions. The seasonal impacts from the floral and produce season have created regional demand spikes at higher transportation rates slowing the pace of carriers exiting the market even further in the second quarter of 2024 than would be typical at this stage of the market cycle. Aside from these short-term seasonal impacts, shipper demand remains weak, which continues to suppress surface transportation rates at levels near the break-even cost to operate a truck. One of the metrics we use to measure market conditions is the truckload routing guide depth from our Managed Services business. Routing guide depth represents the average number of carriers contacted prior to acceptance when procuring a transportation provider. The average routing guide depth of tender increased each month within the second quarter of 2024 but remained low at 1.2, consistent with the first quarter of 2024 and in-line with the average routing guide depth experienced throughout 2023. The average routing guide depth in the second quarter of 2024 represents that on average, the first carrier in a shipper's routing guide is accepting the shipment most of the time, resulting in a limited number of shipments reaching the spot market.
Previous wording
Our first quarter of 2024 surface transportation results were significantly impacted by the prevailing soft market conditions discussed in the market trends section. These conditions led to most shipments moving under committed pricing agreements and suppressed freight rates for the limited number of shipments reaching the spot market. Consequentially, our surface transportation total revenues and adjusted gross profits decreased in the first quarter of 2024 compared to the same period in 2023. Industry freight volumes decreased in the first quarter of 2024 compared to the same period of 2023. Despite these challenging market conditions, our combined North American Surface Transportation (“NAST”) truckload and less than truckload (“LTL”) volumes increased by 1.5 percent during the first quarter of 2024 compared to the first quarter of 2023. In addition, our combined NAST truckload and LTL volumes along with our adjusted gross profits per transaction showed sequential improvement each month within the first quarter of 2024, driven by our improved execution and pricing discipline within our portfolio. Our average truckload linehaul cost per mile and linehaul rate charged to our customers, excluding fuel surcharges, both decreased approximately 7.5 percent during the first quarter of 2024.
Current wording
Our second quarter of 2024 surface transportation results continued to be impacted by the prevailing soft market conditions discussed in the market trends section. These conditions led to most shipments moving under committed pricing agreements and suppressed freight rates for the limited number of shipments reaching the spot market and negatively impacted our surface transportation total revenues. Despite these challenging market conditions, we were able to improve our adjusted gross profits per transaction in the second quarter of 2024 compared to the same period in 2023 as a result of disciplined pricing and capacity procurement efforts leading to better adjusted gross profits per transaction within our transactional portfolio. Industry freight volumes decreased in the second quarter of 2024 compared to the same period of 2023. Despite these challenging market conditions, our combined North American Surface Transportation (“NAST”) truckload and less than truckload (“LTL”) volumes increased by 1.5 percent during the second quarter of 2024 compared to the second quarter of 2023. Our average truckload linehaul cost per mile, excluding fuel surcharges, decreased approximately 3.5 percent during the second quarter of 2024. Our average truckload linehaul rate charged to our customers, excluding fuel surcharges, decreased approximately 2.0 percent during the second quarter of 2024.
Previous wording
Our first quarter of 2024 global forwarding results were significantly impacted by the global disruptions discussed in the market trends section. Specifically, we experienced a 23.0 percent increase in air freight tonnage, driven by ocean freight conversions in many trade lanes. These ocean freight conversions were driven by the disruptions affecting the market, which coupled with increased e-commerce demand out of North Asia, held the cost of air freight at elevated levels and led to lower adjusted gross profit per metric ton. Despite the challenges posed by market disruptions, our ocean volumes increased 7.0 percent as the prior year period was significantly impacted by elevated inventory levels and weak consumer demand.
Current wording
Our second quarter of 2024 global forwarding results were significantly impacted by the global disruptions and challenges discussed in the market trends section. We experienced elevated purchased transportation costs for ocean freight in the second quarter of 2024, which resulted in growth in both ocean total revenues and cost of purchased transportation compared to the second quarter of 2023. We experienced a 4.0 percent increase in ocean freight volumes. We also experienced an 11.0 percent increase in air freight tonnage, driven by ocean freight conversions in many trade lanes. These ocean freight conversions were driven by the disruptions affecting the market, which, coupled with increased e-commerce demand out of North Asia, has continued to increase the cost of air freight, and led to lower adjusted gross profit per metric ton.
Previous wording
The following summarizes select first quarter 2024 year-over-year operating comparisons to the first quarter 2023:
Current wording
The following summarizes select second quarter 2024 year-over-year operating comparisons to the second quarter 2023:
Previous wording
•Total revenues decreased 4.3 percent to $4.4 billion, primarily driven by lower pricing in our truckload services, partially offset by higher pricing and increased volume in our ocean services.
Current wording
•Total revenues increased 1.4 percent to $4.5 billion, primarily driven by higher pricing in our ocean services, partially offset by lower pricing in our truckload services.
Previous wording
•Gross profits decreased 4.5 percent to $647.5 million. Adjusted gross profits decreased 4.1 percent to $657.7 million, primarily driven by lower adjusted gross profit per transaction in truckload.
Current wording
•Gross profits increased 3.0 percent to $676.5 million. Adjusted gross profits increased 3.3 percent to $687.4 million, primarily driven by higher adjusted gross profit per transaction in truckload and LTL services.
Previous wording
•Personnel expenses decreased 1.0 percent to $379.1 million, primarily due to cost optimization efforts and lower average employee headcount, which decreased 11.3 percent, partially offset by higher restructuring charges related to workforce reductions.
Current wording
•Personnel expenses decreased 4.3 percent to $361.2 million, primarily due to cost optimization efforts and lower average employee headcount, which decreased 10.0 percent.
Previous wording
•Adjusted operating margin of 19.3 percent declined 420 basis points.
Current wording
•Adjusted operating margin of 25.9 percent increased 600 basis points.
Previous wording
•Interest and other income/expense, net totaled $16.8 million of expense, consisting primarily of $22.1 million of interest expense, which decreased $1.5 million compared to last year, due to a lower average debt balance, and a $3.9 million net gain from foreign currency revaluation and realized foreign currency gains and losses, compared to a $9.6 million net loss in the prior year.
Current wording
•Interest and other income/expense, net totaled $21.5 million of expense, consisting primarily of $22.9 million of interest expense, which decreased $0.3 million compared to last year, due to a lower average debt balance, and a $0.5 million net gain from foreign currency revaluation and realized foreign currency gains and losses, compared to a $3.5 million net gain in the prior year.
Previous wording
•The effective tax rate in the quarter was 15.8 percent compared to 13.5 percent in the first quarter last year.
Current wording
•The effective tax rate in the quarter was 19.4 percent compared to 14.9 percent in the second quarter last year.
Previous wording
•Net income totaled $92.9 million, a decrease of 19.1 percent from a year ago.
Current wording
•Net income totaled $126.3 million, an increase of 29.7 percent from a year ago.
Previous wording
•Diluted earnings per share (EPS) decreased 18.8 percent to $0.78.
Current wording
•Diluted earnings per share (EPS) increased 29.6 percent to $1.05.
Previous wording
•Cash flow from operations decreased $287.9 million in the three months ended March 31, 2024, primarily driven by an increase in net operating working capital.
Current wording
•Cash flow from operations decreased $346.3 million in the six months ended June 30, 2024, primarily driven by an increase in net operating working capital.
Previous wording
Total revenues and direct costs. Total transportation revenues and direct costs decreased primarily due to reduced pricing and lower purchased transportation costs in truckload services. This decline was partially offset by increased volume and higher pricing and purchased transportation costs in ocean services compared to the previous year. The soft market conditions, characterized by weak demand and excess carrier capacity, continue to suppress freight rates in the surface transportation market as discussed in the market and business trends section above. Conversely, the global forwarding market has shown improvement from the weak consumer demand experienced in the prior year, resulting in increased ocean volumes. In addition, the disruptions facing the global forwarding market have led to elevated pricing and purchased transportation costs compared to the prior year. Our sourcing total revenue and direct costs increased, driven by higher average pricing with retail customers and increased case volume with foodservice customers.
Current wording
Total revenues and direct costs. Total transportation revenues and direct costs increased primarily due to increased pricing and purchased transportation costs in ocean services. This increase was partially offset by lower pricing and purchased transportation costs in truckload services compared to the prior year. The global forwarding market continued to be impacted by re-routing and longer transit times caused by the Red Sea conflict and experienced increasing challenges in the second quarter of 2024 related to container shortages and worsening port congestion in certain parts of the world. These challenges combined with improving demand have significantly increased ocean freight rates in the second quarter of 2024 compared to the prior year. The lower pricing and purchased transportation costs in truckload services continue to be driven by the ongoing soft market conditions as the market remains in a prolonged stage of oversupplied carrier capacity as discussed in the market and business trends section above. Our sourcing total revenue and direct costs increased, driven by higher average pricing with retail customers and increased case volume with foodservice customers.
Previous wording
Gross profits and adjusted gross profits. Our transportation adjusted gross profits decreased driven by lower adjusted gross profits per transaction and a slight volume decline in truckload services, and to a lesser extent lower adjusted gross profits in other logistic services. The lower adjusted gross profit per transaction in truckload services was driven by the weak demand and excess capacity in the surface transportation market discussed in the market trends and business trends sections above, which have continued to suppress freight rates in the first quarter of 2024. Despite the challenging market conditions, our combined NAST truckload and LTL volumes, along with our adjusted gross profits per transaction, showed sequential improvement each month within the first quarter of 2024, driven by improved execution and pricing discipline within our portfolio. Sourcing adjusted gross profits increased, driven by integrated supply chain solutions for retail customers.
Current wording
Gross profits and adjusted gross profits. Our transportation adjusted gross profits increased driven by higher adjusted gross profits per transaction in truckload and LTL services, and to a lesser extent, higher adjusted gross profit per shipment and increased volume in ocean services. The increased adjusted gross profit per transaction in truckload and LTL services was driven by improved execution and disciplined pricing and capacity procurement efforts within our transactional portfolio during the second quarter of 2024 compared to the prior year. Despite the challenging surface transportation market conditions, our combined NAST truckload and LTL volumes increased by 1.5 percent during the second quarter of 2024 compared to the second quarter of 2023. Sourcing adjusted gross profits increased, driven by integrated supply chain solutions for retail and foodservice customers.
Previous wording
Operating expenses. Personnel expenses decreased primarily driven by cost optimization efforts, including lower average employee headcount. These reductions were partially offset by an increase in stock-based compensation expense as the prior year period included an accrual reversal related to certain performance-based awards. Other SG&A expenses increased primarily due to higher credit losses. This increase was driven by a decrease in the allowance for credit losses in the prior year period.
Current wording
Operating expenses. Personnel expenses decreased primarily driven by cost optimization efforts, including lower average employee headcount. These reductions were partially offset by an increase in variable compensation including stock-based compensation expense as the prior year period included an accrual reversal related to certain performance-based awards. Other SG&A expenses decreased due to reductions in several expense categories.
Previous wording
In addition to the above, our personnel expenses for 2024 included $7.9 million of severance and related personnel expenses. We also incurred a $5.0 million impairment loss in other SG&A expenses primarily related to capitalized internally developed software. These expenses were both associated with our 2024 Restructuring Program. Our personnel expenses for 2023 included $3.6 million of severance and related personnel expenses associated with our 2022 Restructuring Program. Refer to Note 13, Restructuring, for further discussion related to our 2024 and 2022 Restructuring Programs.
Current wording
In addition to the above, our personnel expenses for the second quarter of 2024 included $9.5 million of severance and related personnel expenses. We also incurred $5.7 million of restructuring related other SG&A expenses in the second quarter of 2024. These expenses were both associated with our 2024 Restructuring Program. Our personnel expenses for the second quarter of 2023 included $13.1 million of severance and related personnel expenses. We also incurred $1.0 million of restructuring related other SG&A expenses in the second quarter of 2023. These expenses were both associated with our 2022 Restructuring Program. Refer to Note 13, Restructuring, for further discussion related to our 2024 and 2022 Restructuring Programs.
Previous wording
Interest and other income/expense, net. Interest and other income/expense, net primarily consisted of interest expense of $22.1 million. Interest expense decreased $1.5 million during the first quarter of 2024, due to a lower average debt balance. The current year included a $3.9 million net gain from foreign currency revaluation and realized foreign currency gains and losses, compared to a $9.6 million net loss in the prior year.
Current wording
Interest and other income/expense, net. Interest and other income/expense, net primarily consisted of interest expense of $22.9 million. Interest expense decreased $0.3 million during the second quarter of 2024, due to a lower average debt balance. The current year included a $0.5 million net gain from foreign currency revaluation and realized foreign currency gains and losses, compared to a $3.5 million net gain in the prior year. The second quarter of 2023 also included a $2.1 million foreign currency loss related to our operations in Argentina that were divested in the prior year.
Previous wording
Provision for income taxes. Our effective income tax rate was 15.8 percent for the first quarter of 2024 compared to 13.5 percent for the first quarter of 2023. The effective income tax rate for the first quarter of 2024 was lower than the statutory federal income tax rate primarily due to the tax impact of U.S. tax credits and incentives, which reduced the effective tax rate by 7.8 percentage points. These impacts were partially offset by a higher tax rate on state income taxes, net of federal benefit, which increased the effective income tax rate by 2.8 percentage points during the first quarter of 2024. The effective income tax rate for the first quarter of 2023 was lower than the statutory federal income tax rate primarily due to the tax benefits of share-based payment awards, which reduced the effective tax rate by 5.6 percentage points, and U.S. tax credits and incentives, which decreased the effective income tax rate by 3.8 percentage points. These impacts were partially offset by a higher tax rate on state income taxes, net of federal benefit, which increased the effective income tax rate by 2.3 percentage points during the first quarter of 2023.
Current wording
Provision for income taxes. Our effective income tax rate was 19.4 percent for the second quarter of 2024 compared to 14.9 percent for the second quarter of 2023. The effective income tax rate for the second quarter of 2024 was lower than the statutory federal income tax rate primarily due to the tax impact of U.S. tax credits and incentives, which reduced the effective tax rate by 5.0 percentage points. These impacts were partially offset by a higher tax rate on foreign earnings, which increased the effective income tax rate by 2.7 percentage points during the second quarter of 2024. The effective income tax rate for the second quarter of 2023 was lower than the statutory federal income tax rate primarily due to foreign tax credits, which decreased the effective income tax rate by 6.2 percentage points, and U.S. tax credits and incentives, which decreased the effective income tax rate by 3.9 percentage points. These impacts were partially offset by a higher tax rate on state income taxes, net of federal benefit, which increased the effective income tax rate by 2.4 percentage points during the second quarter of 2023.
Previous wording
Total revenues and direct costs. NAST total revenues and direct costs decreased primarily due to reduced pricing and lower purchased transportation costs in truckload services. The soft market conditions, characterized by weak demand and excess carrier capacity, continue to suppress freight rates in the surface transportation market as discussed in the market and business trends section above. Partially offsetting the decline was an increase of 1.5 percent in combined NAST truckload and LTL volumes.
Current wording
Total revenues and direct costs. NAST total revenues and direct costs decreased primarily due to lower pricing and purchased transportation costs in truckload services. The lower pricing and purchased transportation costs in truckload services continue to be driven by the ongoing soft market conditions as the market remains in a prolonged stage of oversupplied carrier capacity as discussed in the market and business trends section above. Partially offsetting these declines were higher pricing and purchased transportation costs in LTL services and volume increases in both LTL and truckload services.
Previous wording
Gross profits and adjusted gross profits. NAST adjusted gross profits decreased due to lower pricing in truckload services, resulting in lower adjusted gross profits per transaction. The lower adjusted gross profit per transaction was driven by the soft market conditions discussed in the market trends and business trends sections above, resulting in lower pricing and limited spot market opportunities at attractive rates in the first quarter of 2024. Our average truckload per mile linehaul cost and linehaul rate charged to customers, which excludes fuel surcharges, both decreased approximately 7.5 percent in the first quarter of 2024 compared to the first quarter of 2023. Despite the challenging market conditions our combined NAST truckload and LTL volumes, along with our adjusted gross profits per transaction, showed sequential improvement each month within the first quarter of 2024, driven by improved execution and pricing discipline within our portfolio. NAST other adjusted gross profits decreased, primarily driven by a decline in intermodal adjusted gross profits per transaction and decreased intermodal and warehousing adjusted gross profits. These decreases were partially offset by an increase in LTL volumes.
Current wording
Gross profits and adjusted gross profits. NAST adjusted gross profits increased due to higher adjusted gross profit per transaction and an increase in volume in truckload and LTL services. The higher adjusted gross profit per transaction was driven by improved execution and disciplined pricing and capacity procurement efforts within our transactional portfolio. Our average truckload linehaul rate per mile charged to our customers, which excludes fuel surcharges, decreased approximately 2.0 percent in the second quarter of 2024 compared to the second quarter of 2023. Our truckload linehaul cost per mile, excluding fuel surcharges, decreased approximately 3.5 percent in the second quarter of 2024 compared to the second quarter of 2023. NAST other adjusted gross profits decreased, primarily driven by a decline in warehousing and intermodal adjusted gross profits.
Previous wording
Operating expenses. NAST personnel expenses were essentially flat compared to the prior year. Cost optimization efforts, including lower average headcount in addition to lower commission expenses, were mostly offset by an increase in stock-based compensation expense. The prior year period included an accrual reversal related to certain performance-based awards. NAST other SG&A expenses decreased primarily due to lower allocated corporate expenses, which were partially offset by a benefit in the prior year from lower credit losses.
Current wording
Operating expenses. NAST personnel expenses increased driven by an increase in variable compensation, including stock-based compensation expense as the prior year period included an accrual reversal related to certain performance-based awards. This was partially offset by cost optimization efforts, including lower average employee headcount. NAST other SG&A expenses decreased primarily due to lower allocated corporate expenses.
Previous wording
In addition to the above, NAST personnel expenses for 2024 included $3.0 million of severance and related personnel expenses. We also incurred a $1.9 million impairment loss in other SG&A expenses related to capitalized internally developed software. These expenses were both associated with our 2024 Restructuring Program. Refer to Note 13, Restructuring, for further discussion related to our 2024 Restructuring Program.
Current wording
In addition to the above, NAST personnel expenses in the second quarter of 2024 included $4.8 million of severance and related personnel expenses. We also incurred $3.8 million of restructuring related other SG&A expenses in the second quarter of 2024. These expenses were both associated with our 2024 Restructuring Program. Refer to Note 13, Restructuring, for further discussion related to our 2024 Restructuring Program.
Previous wording
Restructuring expenses. Personnel expenses in 2024 included $1.7 million of severance and related personnel expenses. We also incurred a $2.9 million impairment loss in other SG&A expenses related to capitalized internally developed software. These expenses were both associated with our 2024 Restructuring Program. Personnel expenses in 2023 included $1.2 million of severance and related personnel expenses associated with our 2022 Restructuring Program. Refer to Note 13, Restructuring, for further discussion related to our 2024 and 2022 Restructuring Programs.
Current wording
In addition to the above, NAST personnel expenses in the six months ended June 30, 2024, included $7.8 million of severance and related personnel expenses. We also incurred $5.7 million of restructuring related other SG&A expenses in the six months ended June 30, 2024. These expenses were both associated with our 2024 Restructuring Program. Personnel expenses for the six months ended June 30, 2023, included $1.2 million of severance and related personnel expenses associated with our 2022 Restructuring Program. Refer to Note 13, Restructuring, for further discussion related to our 2024 and 2022 Restructuring Programs.
Previous wording
Gross profits and adjusted gross profits. Global Forwarding adjusted gross profits increased driven by increased volume in ocean services, partially offset by lower adjusted gross profits per shipment in ocean services. Air freight adjusted gross profits decreased slightly as a significant increase in metric tons shipped was more than offset by lower adjusted gross profits per metric ton shipped. The lower adjusted gross profit per metric ton shipped was driven by the elevated cost of air freight due to disruptions facing the market as discussed in the market trends and business trends sections above. Customs adjusted gross profits increased driven by an increase in transaction volumes and higher adjusted gross profits per shipment.
Current wording
Gross profits and adjusted gross profits. Global Forwarding adjusted gross profits increased driven by higher adjusted gross profit per shipment and increased volume in ocean services driven by the challenges facing the global forwarding market resulting in higher pricing. Air freight adjusted gross profits decreased due to lower adjusted gross profits per metric ton shipped driven by the sharp increase to the cost of air freight in the second quarter of 2024. This decrease was partially offset by an increase in metric tons shipped. Customs adjusted gross profits increased driven by an increase in transaction volumes.
Previous wording
Total revenues and direct costs. Global Forwarding total revenues and direct costs increased driven by increased volume and higher pricing and purchased transportation costs in ocean services compared to the previous year. The global forwarding market has shown improvement from the weak consumer demand experienced in the prior year. In addition, the disruptions facing the global forwarding market have resulted in an increase in air freight tonnage, driven by ocean freight conversions in many trade lanes. These ocean freight conversions coupled with increased e-commerce demand out of North Asia have led to sharp increases to the cost of air freight in certain trade lanes compared to the prior year.
Current wording
Total revenues and direct costs. Global Forwarding total revenues and direct costs increased driven by higher pricing and purchased transportation costs in ocean services in addition to volume increases in all of our global forwarding transportation services. The higher pricing and purchased transportation costs in ocean services were driven by the ongoing disruptions, including the Red Sea conflict, which have significantly impacted carrier capacity and resulted in increased ocean freight rates in the six months ended June 30, 2024. In addition, the disruptions facing the global forwarding market have resulted in an increase in air freight tonnage, driven by ocean freight conversions in many trade lanes. These ocean freight conversions coupled with increased e-commerce demand out of North Asia have led to sharp increases to the cost of air freight in certain trade lanes compared to the prior year.
Previous wording
Operating expenses. Personnel expenses increased primarily due to increased variable compensation reflecting the improved results relative to the prior year. This increase was partially offset by cost optimization efforts, including lower average employee headcount. Other SG&A expenses decreased driven by the completion of amortization of intangible assets related to a previously completed acquisition and lower allocated corporate expenses.
Current wording
Operating expenses. Personnel expenses increased primarily due to increased variable compensation reflecting the improved results relative to the prior year. This increase was partially offset by cost optimization efforts, including lower average employee headcount. Other SG&A expenses decreased driven by lower allocated corporate expenses and the completion of amortization of intangible assets related to a previously completed acquisition. These decreases were partially offset by a higher provision for credit losses as the prior year benefited from a reduction to the allowance for credit losses.
Previous wording
In addition to the above, Global Forwarding personnel expenses for 2024 included $3.2 million of severance and related personnel expenses associated with our 2024 Restructuring Program. Personnel expenses for 2023 included $1.5 million of severance and related personnel expenses associated with our 2022 Restructuring Program. Refer to Note 13, Restructuring, for further discussion related to our 2024 and 2022 Restructuring Programs.
Current wording
In addition to the above, Global Forwarding personnel expenses for the six months ended June 30, 2024, included $5.4 million of severance and related personnel expenses. We also incurred $1.6 million of restructuring related other SG&A expenses in 2024. These expenses were both associated with our 2024 Restructuring Program. Personnel expenses for the six months ended June 30, 2023, included $2.2 million of severance and related personnel expenses associated with our 2022 Restructuring Program. Refer to Note 13, Restructuring, for further discussion related to our 2024 and 2022 Restructuring Programs.
Previous wording
Total revenues and direct costs. Total revenues and direct costs increased driven by higher average pricing with retail customers and increased case volume with foodservice customers in our Robinson Fresh business. This increase was partially offset by a modest decline in our European truckload revenues within our Other Surface Transportation business.
Current wording
Total revenues and direct costs. Total revenues and direct costs increased driven by higher average pricing with retail customers and increased case volume with foodservice customers in our Robinson Fresh business. This increase was partially offset by a decline in our European truckload total revenues within our Other Surface Transportation business.
Previous wording
Gross profits and adjusted gross profits. Robinson Fresh adjusted gross profits increased driven by a 1.5% increase in case volume and integrated supply chain solutions for retail customers. Managed Services adjusted gross profits were essentially flat with the prior year. Other Surface Transportation adjusted gross profits decreased primarily due to a decrease in adjusted gross profits per transaction in European truckload, partially offset by an increase in European truckload volumes.
Current wording
Gross profits and adjusted gross profits. Robinson Fresh adjusted gross profits increased due to an increase in integrated supply chain solutions for retail and foodservice customers. Managed Services adjusted gross profits were essentially flat with the prior year. Other Surface Transportation adjusted gross profits decreased due to a decrease in adjusted gross profits per transaction in European truckload and a decrease in European truckload volumes.
Previous wording
Cash and cash equivalents totaled $121.8 million as of March 31, 2024, and $145.5 million as of December 31, 2023. Cash and cash equivalents held outside the United States totaled $118.1 million as of March 31, 2024, and $142.8 million as of December 31, 2023.
Current wording
Cash and cash equivalents totaled $113.2 million as of June 30, 2024, and $145.5 million as of December 31, 2023. Cash and cash equivalents held outside the United States totaled $108.2 million as of June 30, 2024, and $142.8 million as of December 31, 2023.
Previous wording
Cash flow from operating activities. Our operating cash flows benefited in the prior year from declining freight rates in ocean and truckload services, which resulted in a decrease in net operating working capital and drove strong operating cash flow. In the current year, freight rates in ocean services have increased resulting in an increase in net operating working capital driving a decline in operating cash flows in the three months ended March 31, 2024, compared to the three months ended March 31, 2023. We continue to closely monitor credit and collections activities and the quality of our accounts receivable balance to minimize risk as well as work with our customers to facilitate the movement of goods across their supply chains while also ensuring timely payment.
Current wording
Cash flow from operating activities. Our operating cash flows benefited in the prior year from declining freight rates in ocean and truckload services, which resulted in a decrease in net operating working capital and drove strong operating cash flow. In the current year, freight rates in ocean services have increased resulting in an increase in net operating working capital driving a decline in operating cash flows in the six months ended June 30, 2024, compared to the six months ended June 30, 2023. We continue to closely monitor credit and collections activities and the quality of our accounts receivable balance to minimize risk as well as work with our customers to facilitate the movement of goods across their supply chains while also ensuring timely payment.
Previous wording
Cash used for financing activities. Net borrowing on debt in the three months ended March 31, 2024 were to fund our working capital needs. Net repayments on debt in the three months ended March 31, 2023 were primarily to reduce the current portion of our debt outstanding. No shares were repurchased during the first quarter of 2024. The number of shares we repurchase, if any, during future periods will vary based on our cash position, other potential uses of our cash, and market conditions. Over the long term, we remain committed to our quarterly dividend and share repurchases to enhance shareholder value. Such repurchases, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions, and other factors. We may seek to retire or purchase our outstanding Senior Notes through open market cash purchases, privately negotiated transactions or otherwise.
Current wording
Cash used for financing activities. Net borrowing on debt in the six months ended June 30, 2024, were to fund our working capital needs. Net repayments on debt in the six months ended June 30, 2023, were primarily to reduce the current portion of our debt outstanding. No shares were repurchased in the six months ended June 30, 2024. The number of shares we repurchase, if any, during future periods will vary based on our cash position, other potential uses of our cash, and market conditions. Over the long term, we remain committed to our quarterly dividend and share repurchases to enhance shareholder value. Such repurchases, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions, and other factors. We may seek to retire or purchase our outstanding Senior Notes through open market cash purchases, privately negotiated transactions or otherwise.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
Provision for income taxes. Our effective income tax rate was 17.9 percent for the six months ended June 30, 2024, and 14.1 percent for the six months ended June 30, 2023. The effective income tax rate for the six months ended June 30, 2024, was lower than the statutory federal income tax rate primarily due to the tax impact of U.S. tax credits and incentives which reduced the effective tax rate by 6.2 percentage points. These impacts were partially offset by state income tax expense, net of federal benefit, and a higher tax rate on foreign earnings, which increased the effective income tax rate by 2.3 percentage points and 1.8 percentage points, respectively. The effective income tax rate for the six months ended June 30, 2023 was lower than the statutory federal income tax rate primarily due to U.S. tax credits and incentives, the tax impact of share-based payment awards, and the impact of foreign tax credits, which reduced the effective tax rate by 3.9 percentage points, 3.5 percentage points, and 3.3 percentage points, respectively. These impacts were partially offset by state income tax expense, net of federal benefit, which increased the effective income tax rate by 2.3 percentage points.
Current report — wording carried from elsewhere
Gross profits and adjusted gross profits. Global Forwarding adjusted gross profits increased driven by increased ocean shipments due to improving demand for ocean freight compared to the weak demand experienced in the prior year. Air freight adjusted gross profits decreased due to lower adjusted gross profits per metric ton shipped, which was partially offset by an increase in metric tons shipped. The lower adjusted gross profit per metric ton shipped was driven by sharp increases to the cost of air freight in certain trade lanes compared to the prior year discussed above. Customs adjusted gross profits increased driven by an increase in transaction volume.
Current report — wording carried from elsewhere
Total revenues and direct costs. Total revenues and direct costs increased driven by higher average pricing with retail customers and increased case volume with foodservice customers in our Robinson Fresh business. This increase was partially offset by a decline in our European truckload total revenues within our Other Surface Transportation business.
Current report — wording carried from elsewhere
Gross profits and adjusted gross profits. Robinson Fresh adjusted gross profits increased due to an increase in integrated supply chain solutions for retail and foodservice customers. Managed Services adjusted gross profits were essentially flat with the prior year. Other Surface Transportation adjusted gross profits decreased primarily due to a decrease in adjusted gross profits per transaction in European truckload.