Freight broker C.H. Robinson Worldwide Inc.’s fresh produce-related revenue rose 5% during the third quarter, the first increase in a year, with recently-launched value-added services.
Those additions help offset the loss of Wal-Mart Stores business that pressured results earlier this year.
Sales from C.H. Robinson’s sourcing unit, which includes the buying and selling of fresh produce on behalf of customers, rose to $399.2 million in the three months ended Sept. 30 from $380.1 million during the same period a year earlier, the Eden Prairie, Minn.-based company said in an Oct. 25 statement.
The increase was “primarily driven by a change in our mix of business due to an increase in value-added services,” according to the statement from the company. C.H. Robinson also expects to boost produce-related revenue following the acquisition of Timco Worldwide, Inc., a Davis, Cal.-based melon supplier. The acquisition closed Sept. 26.
“We are excited about the positive progress our sourcing division made during the third quarter,” Jim Lemke, a senior vice president with C.H. Robinson, said in an e-mail.
“The development of our value-added services, such as supply chain and inventory management, direct-store deliveries and forecasting, continues to benefit our customers,” Lemke said. “In addition, we continue to look for new ways to grow our business and are optimistic about the longer-term opportunities with our current and future customers.”
Wal-Mart recently restructured its fresh produce supply network, buying more fruits, vegetables and other foods directly from growers rather than intermediaries. That contributed to an average drop of 11% in C.H. Robinson’s sourcing revenue over the three quarters prior to the most-recent. Wal-Mart largely completed the restructuring earlier this year, C.H. Robinson said previously.
C.H. Robinson had previously posted an increase in sourcing revenue during the third quarter of 2010, with a rise of 0.1%.
Sourcing accounts for about 15% of total revenue for C.H. Robinson, which, since its founding in 1905 as a produce merchant, has grown into one of the world’s largest logistics services companies, with total revenue of nearly $9.3 billion last year.
C.H. Robinson’s revenue grew this year as demand for shipping increased and the company offset rising fuel costs through higher trucking rates.
During the third quarter, C.H. Robinson’s transportation revenue rose 13%, to $2.28 billion. Net trucking revenue rose 13%, while net revenue in ocean transportation increased 4.8%. The company posted net income of $114.3 million, up 11% from the third quarter of 2010.
In trading Oct. 25, C.H. Robinson shares fell $1.47 to $74.88, up 19% from a 12-month closing low of $62.95 Aug. 10.