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Dive Summary:
- CH Robinson Worldwide’s workforce shrank another 13.3% year-over-year in the fourth quarter – the fifth straight quarterly decline – as employee spending fell 15.3% year-over-year. the company said Last week.
- As in previous quarters, the headcount reductions came through attrition, retirements, reorganization and elimination of roles, a company spokesperson said in an email to Trucking Dive. The brokerage employed 2,400 fewer workers in the latest quarter than in the fourth quarter of 2023.
- Across the company productivity has improved as the size of the labor force returned to 2021 levels last year. “I am focused on ensuring that we are ready for the eventual recovery of the charter market with a resilient cost structure that decouples volume growth from headcount growth and drives operating leverage,” President and CEO Dave Bozeman told analysts on the company’s fourth quarter earnings call. .
CH Robinson’s headcount drops sharply in 2023
Average number of brokerage staff per quarter
Dive Insight:
The brokerage leveraged Bozeman’s expertise in supply chain optimization to guide its cost reduction strategy, which it adopted in fall 2022.
CH Robinson does not have a specific headcount it is trying to reach, according to a company spokesperson, although it is focused on meeting productivity improvement goals.
The reductions hit a headcount target the company previously set. The company cut its early 2023 spending guidance and met its forecast by controlling employee costs to under $1.47 billion for the year.
Personnel expenses for the fourth quarter fell to $361.8 million, mainly due to cost optimization initiatives and lower compensation, the company said.
Efficiency initiatives totaled for the year saved the company $346 million, which was more than the $300 million the company projected in April, according to CFO Mike Zechmeister.
“In line with our strategy, we believe these cost savings will improve our operating leverage and help our margins as demand and a more balanced performance in the freight market,” he said.
Zechmeister said the company is seeing results from improved efficiency, which it has achieved through increased use of artificial intelligence and other technologies. For the year, the North American surface transportation division saw a 17% productivity improvement and while Global Forwarding saw a 20% productivity increase.
The company is targeting another 15 percent improvement in its surface transportation and another 10 percent improvement in global shipping by 2024, Zechmeister said. The company will continue to look for ways to eliminate waste in its processes, he said.
“(CH)Robinson is well positioned to further reduce waste and drive structural cost changes that improve our operating leverage and help achieve our long-term operating income margin expectations,” said Zechmeister.