Shippers Scramble To Lock In Low Truck Freight Rates
Retailers and manufacturers rushed to lock in low freight rates in the first quarter as overcapacity in the trucking industry dragged on the profits of transportation companies but bolstered profits for middlemen who arrange shipments, according to The Wall Street Journal.
C.H. Robinson Worldwide, Inc. reported Wednesday net profit of $118.9 million for the first quarter, an increase of 11.7 percent over the first quarter of last year. The company’s total revenue from arranging transportation and logistics services for companies such as Walmart, Coca-Cola Co. and Dollar General Corp. fell 6.8 percent to $3.1 billion in the first quarter from the same period a year ago.
In a conference call with analysts, C.H. Robinson executives said the company received twice as many bids for freight contracts in this year’s first quarter as it usually gets at the start of the year, a sign that shipping customers were trying to bring low spot-market rates into their longer-term contracts. Freight rates for these bids were flat or lower compared with last year.
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