C.H. Robinson’s chief executive, Bob Biesterfeld, resigned on Saturday and the company’s board chair, Scott Anderson, is now interim CEO.
A filing with the Securities and Exchange Commission Tuesday noted specifically 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 Russell Reynolds, a leading national executive search firm, to find a permanent replacement.
Jack Atkins, an analyst with Stephens Inc., said pressure on the company’s top leader has been increasing for a while.
“Our sense is that this transition has been building in recent months,” Atkins wrote in a note to investors on Tuesday.
With Anderson’s appointment as interim CEO, Jodee Kozlak was named independent chair of the board. Anderson thanked Biesterfeld for his “important contributions” over his three years as CEO.
The company’s fall has been bumpy as the supply chain disruption of the pandemic settles into a new normal. C.H. Robinson announced in November it would lay off 650 workers, or 3.6% of its workforce, after sagging third quarter results.
Biesterfeld said in July the company would see lower demand as rising inflation rates change consumer habits. Slowing retail and housing markets, he said, would slow demand in the second half of the year.
“It has been a privilege to lead C.H. Robinson and this exceptional team,” Biesterfeld said in a news release. “I am proud of all that we have achieved together, and it has been a pleasure working with so many talented members of the team throughout the organization during my tenure as CEO. I am confident that C.H. Robinson’s industry leading people and culture will continue to ensure that the company is well-positioned for the future.”
One of Biesterfeld’s big initiatives as CEO was to double the pace of its technology investments to build on its advantages against other third party logistics firms. In 2019, he announced C.H. Robinson would invest $1 billion in technology over the next five years.
But the company has faced pressure from an activist investor recently. Ancora Group gained two seats on C.H. Robinson’s board of directors in February and later signed a standstill agreement.
Atkins said disappointing third-quarter results, reported in November, “and what was looking to be a very challenging earnings backdrop for the company,” likely contributed to the CEO decision.
Anderson was appointed to the C.H. Robinson board in January 2012 and has been chair since 2020. He was chief executive of Patterson Cos. from 2010 to 2017.
“I am honored to take on the role of Interim CEO and am committed to ensuring this will be a seamless transition for all C.H. Robinson stakeholders,” Anderson said in the release. “Now is the right time for C.H. Robinson to accelerate our strategic initiatives and the Board is focused on identifying a CEO successor who can execute on the opportunities ahead for Robinson. I look forward to working closely with our talented employees to continue to improve our customer and carrier experience, and scale our digital processes to foster sustainable growth.”
According to the SEC filing on Tuesday, interim CEO Anderson will not be a candidate for the permanent role.
A new CEO at C.H. Robinson faces increased competition in the logistics space. While Robinson is the largest third-party logistics firm, the industry is fragmented with many small competitors and an increasing number of technology-backed startups.
Morningstar analyst Matthew Young estimates that C.H. Robinson has 17% of the truck brokerage industry in the U.S. thanks to the large network of shippers and carriers it works with but notes competition is increasing. “We expect the competition to slowly become more organized as the industry consolidates,” Young wrote in a research note.
Given the near term and long term challenges that C.H. Robinson faces, Atkins is hesitant on C.H. Robinson’s immediate prospects. “We think the issues here are bigger than one person and will take a while to fix,” Atkins wrote.
“Additionally, the CEO transition could raise cultural issues as we believe Mr. Biesterfeld was highly respected internally,” he added.