CH Robinson chief executive Bob Biesterfeld resigned on Saturday and the company’s chairman of the board, Scott Anderson, is now interim CEO.
A filing with the Securities and Exchange Commission on Tuesday specifically noted that Biesterfeld’s departure is considered an “involuntary termination by the company without cause.”
The Eden Prairie-based company offered no reason for the abrupt transition with its public announcement Tuesday morning. The logistics and freight giant has retained the services of Russell Reynolds, one of the nation’s leading executive search firms, to find a permanent replacement.
Jack Atkins, an analyst at Stephens Inc., said pressure on the company’s top executive has been mounting for some time.
“Our sense is that this transition has been building over the past few months,” Atkins wrote in a note to investors Tuesday.
With Anderson’s appointment as interim CEO, Jodee Kozlak was named independent chair of the board. Anderson thanked Biesterfeld for his “significant contributions” during his three years as CEO.
The company’s downfall has been a bumpy one as the pandemic’s supply chain disruption settles into a new normal. CH Robinson announced in November that he dismiss 650 workersor 3.6% of its workforce, after results at half mast in the third quarter.
Biesterfeld said in July the company would see a drop in demand as rising inflation rates change consumer habits. Slowing retail and housing markets, he said, would dampen demand in the second half.
“It has been a privilege to lead CH Robinson and this outstanding team,” Biesterfeld said in a press release. “I am proud of all that we have achieved together, and it has been a pleasure to work with so many talented team members across the organization during my tenure as CEO. I believe the people and culture of CH Robinson, at the forefront of the industry, will continue to ensure that the company is well positioned for the future.
One of Biesterfeld’s big initiatives as CEO has been to double the pace of its technology investments to leverage its advantages over other third-party logistics companies. In 2019 he announced that CH Robinson invest $1 billion in technology over the next five years.
But the company recently came under pressure from an activist investor. Ancora Group secured two board seats from CH Robinson in February and subsequently signed a standstill agreement.
Atkins said disappointing third-quarter results, released in November, “and what appeared to be a very challenging earnings environment for the business,” likely contributed to the CEO’s decision.
Anderson was appointed to the CH Robinson Board of Directors in January 2012 and has served as its Chairman since 2020. He served as General Manager of Patterson Cos. from 2010 to 2017.
“I am honored to take on the role of interim CEO and am committed to ensuring that this transition is a smooth one for all CH Robinson stakeholders,” Anderson said in the statement. “Now is the time for CH Robinson to accelerate our strategic initiatives and the Board is focused on identifying a successor to the CEO who can seize the opportunities ahead for Robinson. I look forward to working closely working with our talented employees to continue to improve our customer and carrier experience, and evolve our digital processes to drive sustainable growth.
According to Tuesday’s SEC filing, interim CEO Anderson will not be running for the permanent position.
A new CEO at CH Robinson faces increased competition in the logistics space. Although Robinson is the largest third-party logistics company, the industry is fragmented with many smaller competitors and a growing number of tech-backed startups.
Morningstar analyst Matthew Young estimates that CH Robinson holds 17% of the U.S. truck brokerage industry thanks to the vast network of shippers and carriers he works with, but notes that competition is growing. “We expect competition to slowly build up as the industry consolidates,” Young wrote in a research note.
Given the short-term and long-term challenges facing CH Robinson, Atkins is hesitant about CH Robinson’s immediate prospects. “We believe the issues here are bigger than one person and will take some time to resolve,” Atkins wrote.
“Additionally, the CEO transition could raise cultural issues because we believe Mr. Biesterfeld was highly respected internally,” he added.
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