US freight forwarder C.H. Robinson’s airfreight division has performed strongly in 2017 with double-digit growth in tonnage, transactions, and revenue.
This was shown in its quarter two (Q2) results when revenue for airfreight forwarding increased 28.3 per cent to $25.8 million, as figures were boosted by the inclusion of APC Logistics, which it acquired last September.
C.H. Robinson director of air services, Tim Reiff says while it set aggressive goals, performance surpassed projections and it could have predicted how steady the growth in demand would be in the first six months of 2017.
Reiff explains more importantly, it has watched customer acquisition momentum “accelerate” as more US customers search for global forwarding partnerships enabling them to drive their advantages in unique industries.
He notes: “Organisations are trending towards lighter inventories. That requires a fast and incredibly consistent supply chain. In addition, while e-commerce is not exactly a new trend, it continues to reshape the airfreight market. Products are being produced around the globe, and many of those products fly using a direct-to-consumer model.”
The strongest growth sector for C.H Robinson has been those lining up with the evolving consumer and business demands. Electronics, semiconductor, and e-commerce are all experiencing strong growth.
Perishables is important market as the forwarder has a perishable logistics division, Robinson Fresh, which saw flat revenue of $657 million in Q2 and profits declined 10.3 per cent to $60.8 million.
Reiff says: “As globalisation expands, the perishable market is becoming a critical component of today’s airfreight systems. Airlines and forwarders alike are investing more than ever in temperature-controlled infrastructure and processes, as global consumers demand the freshest perishables.
“A significant percentage of the global air capacity is required for seasonal and sometimes unpredictable commodities. The efficient deployment of aircraft to fly perishables is an intricate balance for airlines.”
As for the rest of 2017, Reiff says the airfreight division’s investment strategy will align with C.H. Robinson’s organisational strategy. “We will continue to invest in our people, processes, and technology to ensure our customer and carrier experience is the best,” he adds.
There are challenges and opportunities in the marketplace. “Global demand for high-value products has never been higher. Combine that with the trends of lower inventories and direct-to-consumer logistics systems, and you can see where opportunities exist for airfreight forwarding,” Reiff says.
He adds: “Having said that, the marketplace remains challenging as supply growth slows and global regulations become more complex.”
There are concerns in the US over potential trade policies planned by the Trump administration, but Reiff believes it is important to keep in mind in times of change that trade will continue around the world.
He says: “Global trade drives the world’s economies and will continue to do so – under current or future agreements.
“C.H. Robinson believes in free and fair trade around the world, and we continue to invest in strategic neighbourhoods across the globe.”
