"We are pleased that in a tough freight environment, our people continued to do a good job finding opportunities in the marketplace," said John P. Wiehoff, chairman and chief executive officer of C.H. Robinson. "While the environment is still challenging and our truckload gross profit margins continue to be compressed in the first part of July, we continue to feel very positive about our long-term growth strategy and our business model."
Total Transportation gross profits increased 9.7 percent to $297.5 million in the second quarter of 2008 from $271.1 million in the second quarter of 2007. The company's Transportation gross profit margin decreased to 15.4 percent in 2008 from 17.9 percent in 2007 due to gross profit margin declines in most of its transportation modes.
The company's truck gross profits consist of truckload and less-than-truckload services. Its truck gross profit growth of 8.3 percent in the second quarter of 2008 was driven by volume growth, offset by declines in truckload gross profit margins. Truckload volumes increased approximately 11 percent. Including fuel, truckload rates increased approximately 14 percent; excluding estimated impacts of fuel, underlying linehaul rates were consistent with the second quarter of 2007. The company's truckload gross profit margins declined due to higher fuel prices and increased cost of capacity. LTL shipments increased approximately 21 percent. LTL gross profit margins were consistent with the second quarter of 2007.
The company's intermodal gross profit increase of 5.0 percent in the second quarter was driven by volume growth, offset slightly by a decline in gross profit margins. The gross profit margin decline was due to increased fuel prices.
The increase of 30 percent in ocean transportation gross profits in the second quarter of 2008 was driven by volume growth and price increases.
In the air transportation business, approximately two-thirds of the gross profit growth of 18.1 percent in the second quarter of 2008 was driven by the company's domestic air business, which includes its acquisition of LXSI Services Inc. a year ago.
For the second quarter, operating expenses increased 8.6 percent to $196.7 million in 2008 from $181.1 million in 2007. This was due to an increase of 3.7 percent in personnel expenses and an increase of 25.8 percent in selling, general, and administrative expenses.