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Sources: Clarke would seriously consider C.H. Robinson CEO job

Andrew Clarke, the former CFO at brokerage giant C.H. Robinson Worldwide Inc., would seriously consider an offer from the board to return to the company as CEO following last week’s abrupt firing of president and CEO Bob Biesterfeld, according to sources familiar with the situation.

Clarke, who served as the Eden Prairie, Minnesota-based company’s CFO from 2015-19, would consider it a “fascinating opportunity” to assume the helm of the nation’s largest broker and $25 billion company, said one of the sources who all spoke on condition of anonymity. Another source speculated, though, that Clarke, 52, is kept so busy with multiple business interests that, although he may be the best person for the job, he wouldn’t find an offer to run Robinson to be that attractive.

Between 30 to 40 people inside Robinson (NASDAQ: CHRW) have contacted Clarke, urging him to return should the board extend an offer, a source said. No formal offer has yet been made.

C.H. Robinson Worldwide has retained a search firm to find a replacement for Biesterfeld, who was fired Jan. 3. Chairman Scott Anderson is serving as interim CEO. No president was selected.

Clarke, who had been a top candidate to succeed retiring John Wiehoff as Robinson’s CEO, left Robinson in March 2019 after the board instead chose Biesterfeld. Biesterfeld and Clarke didn’t see eye to eye once Biesterfeld was installed, and Clarke left the company soon after.

Clarke, known as a progressive leader and an expert in the practice of change management, is chairman of Ports America, a ports operator, and Rock-it Cargo, which focused for years on moving musical concert sets and has since expanded into other areas of entertainment logistics. He also sits on the board of Arrive Logistics, an Austin, Texas-based broker, where he had served as chairman.

Clarke has support from industry veterans like Satish Jindel, founder and president of consultancy ShipMatrix Inc. Clarke’s background is also in line with the consensus belief that Robinson cannot go outside the industry for CEO because it will create even more confusion within the company that already exists.

On the other side is Brittain Ladd, a leading e-commerce logistics and fulfillment consultant. Ladd said in a LinkedIn post last week that Robinson should acquire freight forwarder Flexport, or engineer a merger of equals, and consider appointing newly minted co-CEO Dave Clark to run the combined company. Clark had built Inc.’s (NASDAQ: AMZN) transportation and logistics operations.

Ladd said in a separate email that Clarke’s hiring would be a “safe bet” and signal that Robinson was satisfied with making “incremental improvements,” neither of which is what the company should be striving for at this point in its 117-year history.

Robinson has struggled in recent months amid concerns about increased competition from the likes of the new broker RXO Inc. (NYSE: RXO). However, it has lost market share in general in what has been an historically strong environment for contract brokerage, where Robinson generates most of its revenue.

Robinson also overspent significantly on personnel to support load-matching technology that executives thought would disrupt traditional brokerage but that instead hasn’t generated the returns on investment expected. One of the sources criticized Robinson for investing $1 billion in IT projects, including the much publicized Navisphere load-matching platform that never lived up to expectations.

Bisterfeld “bought into the digital disruption” theory that would eventually cost him his job, a source said.

The key to Robinson’s turnaround is to put the company’s immense power back in the hands of its divisions and away from corporate, per a source. The divisions have had corporate allocations — a term to describe the practice of funneling money from divisions into a central location to support corporate activities — “rammed down their throats,” said a source, noting that practice has to end or be dramatically scaled back.

Robinson’s structural problems have been amplified by a sharp drop in volumes and freight rates that exceeded even management’s downbeat projections. A subpar third quarter, along with Biesterfeld’s comments that he underestimated the speed and severity of the downturn, was the catalyst to his departure.

In response to concerns that it had hired too much for areas like IT and human resources, the company said in November that it would lay off 650 people, or about 6% of its workforce. The original head-count reduction of 1,000 to 1,200 had been subsequently winnowed down to its final offer, a source said. 

“There’s more people in corporate today than there’s ever been,” a source said.

Tom Wadewitz, analyst at UBS, said in a note last week that Robinson would have to reduce head count at its core North American Transportation (NAST) unit and its “other and corporate” unit by much more than 10% if it hopes to achieve the $175 million in gross cost savings the company promised when it published its third-quarter results. The “corporate and other” unit includes the Robinson Fresh perishables business, managed transportation unit and European surface transportation business.