CH Robinson CEO Bob Biesterfeld resigned on Saturday and the company’s chairman of the board, Scott Anderson, is now the 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 transportation giant has hired Russell Reynolds, one of the nation’s top executive search firms, to find a permanent replacement.
Jack Atkins, an analyst at Stephens Inc., said the pressure on the company’s top leader has been mounting for a while.
“Our feeling 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 chair of the board. Anderson thanked Biesterfeld for his “significant contributions” during his three years as CEO.
The company’s downfall has been bumpy as supply chain disruption from the pandemic settles into a new normal. CH Robinson announced in November that lay off 650 workersor 3.6% of its workforce, after falling third-quarter results.
Biesterfeld said in July that the company would see lower demand due to rising inflation rates and changing consumer habits. The slowdown in the housing and retail markets, he said, would reduce 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 accomplished together, and it has been a pleasure working 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 holds leadership positions in the company’s largest businesses, including North American Surface Transportation and Robinson Fresh, before being named CEO in May. of 2019.
One of Biesterfeld’s big initiatives as CEO was to double the pace of his technology investments to take advantage of 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 has recently faced pressure from an activist investor. Ancora Holdings Group won two seats on the board of CH Robinson of directors in February and then signed a suspension agreement that expires on January 5.
Ancora nominated Henry Maier, retired FedEx Ground Chairman and CEO, and Henry “Jay” Winship, founder, Chairman and Managing Member of Pacific Point Capital to the board of directors.
In mid-December CH Robinson also made another plate change adding Jim Barber, the former COO of United Parcel Service. Barber has 35 years of experience in the transportation 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 chief executive’s decision.
Anderson was appointed to the board of CH Robinson in January 2012 and has been 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 this is a smooth transition for all of CH Robinson’s stakeholders,” Anderson said in the statement. “Now is the right time for CH Robinson to accelerate our strategic initiatives and the Board is focused on identifying a successor to the CEO who can execute on the opportunities ahead for Robinson. I look forward to working closely with our talented employees to continue to improve our customers”. and operator experience, and scale our digital processes to foster sustainable growth.”
According to Tuesday’s SEC filing, Anderson will not be a candidate for the permanent chief executive job. 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 transportation industry.
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 technology-backed startups.
Morningstar analyst Matthew Young estimates that CH Robinson has 17% of the trucking brokerage industry in the US thanks to the large network of shippers and carriers it works with, but notes that competition is increasing. . “We expect competition to slowly organize as the industry consolidates,” Young wrote in a research note.
Given the short- and long-term challenges facing CH Robinson, Atkins is dubious about CH Robinson’s immediate prospects. “We believe the problems here are bigger than one person and will take a while to fix,” Atkins wrote.
“In addition, the CEO transition could raise cultural issues, as we believe Mr. Biesterfeld was highly respected internally,” he added.
CH Robinson shares were trading at $89.22, down 2.6% in Tuesday morning trading.