CH Robinson’s CEO, Bob Biesterfeld, resigned on Saturday and the company’s chairman, 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 gave no reason for the abrupt transition in its public announcement Tuesday morning. The logistics and shipping giant has retained Russell Reynolds, a leading national executive search firm, to find a permanent replacement.
Jack Atkins, an analyst at Stephens Inc., said pressure on the company̵[ads1]7;s top executive has been mounting for some time.
“Our view is that this transition has been building over the past few months,” Atkins wrote in a note to investors on Tuesday.
With Anderson’s appointment as interim CEO, Jodee Kozlak was named independent chairman. Anderson thanked Biesterfeld for his “significant contributions” during his three years as CEO.
The company’s fall has been bumpy as the pandemic’s supply chain disruption settles into a new normal. CH Robinson announced in November that it would lay off 650 workers, or 3.6% of its workforce, following disappointing third-quarter results.
Biesterfeld said in July that the company would see lower demand from rising inflation rates and changes in 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 CH Robinson and this exceptional team,” Biesterfeld said in a press release. “I am proud of all 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 am confident that CH Robinson’s industry-leading people and culture will continue to ensure that the company is well positioned for the future.”
Biesterfeld, a Minnesota native and Winona State graduate, has been with CH Robinson since 1999 and has held leadership positions in the company’s largest businesses including North American Surface Transportation and Robinson Fresh before being named CEO in May 2019.
One of Biesterfeld’s major initiatives as CEO was to double the pace of technology investments to build on its advantages against other third-party logistics firms. In 2019, he announced that CH Robinson would invest $1 billion in technology over the next five years.
But the company has faced pressure from an activist investor recently. Ancora Holdings Group gained two seats on CH Robinson’s board in February and later signed a standstill agreement due to expire on 5 January.
Ancora nominated Henry Maier, the retired president and CEO of FedEx Ground, and Henry “Jay” Winship, founder, president and managing member of Pacific Point Capital to the board.
In mid-December, CH Robinson also made another board change by adding Jim Barber, the former COO of United Parcel Service. Barber has 35 years of experience in the transport industry.
Atkins said disappointing third-quarter results, reported in November, “and what appeared to be a very challenging earnings backdrop for the company,” likely contributed to the CEO’s decision.
Anderson was appointed to the CH Robinson board in January 2012 and has served as chairman since 2020. He was CEO of Patterson Cos. from 2010 to 2017.
“I am honored to assume the role of interim CEO and am committed to ensuring that this will be a seamless transition for all CH Robinson stakeholders,” Anderson said in the release. “Now is the right time for CH Robinson to accelerate our strategic initiatives and the Board is focused on identifying a CEO who can execute on the opportunities that lie ahead for Robinson. I look forward to working closely with our talented people to continue to improve clients our. and carrier experience, and scale our digital processes to drive sustainable growth.”
According to the SEC filing on Tuesday, Anderson will not be a candidate for the permanent CEO role. But if the search firm wants to quickly move on to the next CEO, it doesn’t have to look far. Board members Maier and Barber each have 35 or more years in the transport industry.
A new managing director in CH Robinson faces increased competition in the logistics area. While Robinson is the largest third-party logistics firm, the industry is fragmented with many small competitors and a growing number of technology-backed startups.
Morningstar analyst Matthew Young estimates that CH 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 that competition is increasing. “We expect competition to slowly become more organized 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 outlook. “We believe the issues here are bigger than one person and will take some time to fix,” Atkins wrote.
“Additionally, the CEO transition may raise cultural issues, as we believe that Mr. Biesterfeld was highly respected internally,” he added.
Shares of CH Robinson were trading at $89.22, down 2.6% in Tuesday morning trading.