Plus: U.S. to temporarily allow highway sales of dyed diesel; Persian Gulf oil producers pay millions to move crude through Hormuz
America’s largest freight broker C.H. Robinson Worldwide is buying rival RXO in a stock-and-cash transaction valued at $5.8 billion. C.H. Robinson CEO Dave Bozeman told the WSJ Logistics Report Paul Berger that the acquisition will expand expedited and last-mile delivery services. The deal will generate about $300 million in annual savings within two years. Shares of RXO surged over 20% on Monday, while C.H. Robinson’s dropped nearly 11%.
Eden Prairie, Minn.-based C.H. Robinson has been one of the leading logistics firms to employ AI to manage cargo, using fewer workers during a prolonged freight sector downturn. The company’s labor expenses in the second quarter were 25% lower than the same period in 2022 on a 36% reduction in head count, according to UBS analysts. C.H. Robinson says gaining access to RXO’s data set will improve the speed and precision of its AI models.
Robinson and RXO reported combined gross domestic transportation-management revenue last year of $17.4 billion, or almost 14% of the market, according to Armstrong & Associates. The deal is expected to close in the first half of next year and will create a logistics company with an enterprise value of more than $25 billion.
The U.S. will temporarily permit the highway use of dyed diesel, a tax-exempt fuel typically used for farming, the Journal’s Collin Eaton writes. President Trump’s executive order aimed at bringing diesel prices down will defer a federal tax of 24.4 cents a gallon on the fuel through the end of the year. The administration is putting pressure on its allies abroad, too. The G-7 on Friday agreed to release 100 million barrels of crude oil and fuel from their emergency stocks. They also declined to restrict exports of diesel and other products, an option Trump had said he was considering as a way to keep more fuel in the U.S.
Source: Wall Street Journal US Business · Summarized by HeadlinesBriefing