Lower gross profit margins in truckload partially offset by higher profits in air and ocean
C.H. Robinson Worldwide, Inc. has reported financial results for the quarter ended December 31, 2020. In Q4, 2020, total revenues increased by 19.9% to US$4.5 billion, driven primarily by higher pricing and higher volume across most service lines. Gross profits increased by 10.5% to US$636.1 million. Adjusted gross profits increased 10.7% to US$640.6 million, primarily driven by higher pricing and higher volume in the Global Forwarding business segment and contributions from the acquisition of Prime Distribution Services.
Operating expenses decreased by 1.9% to US$433.8 million, primarily due to cost savings initiatives. Personnel expenses increased by 3.4% to US$309.3 million, compared to Q4, 2019, which included a reduction in incentive compensation. Average headcount decreased 4.8%, despite headcount additions from Prime that added approximately 2.0 percentage points.
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Selling, general and administrative expenses of US$124.5 million decreased 13.0%, primarily due to cost savings initiatives including lower travel expenses. Income from operations totalled US$206.8 million, up 51.2% due to the increase in adjusted gross profits. Adjusted operating margin of 32.3% increased 870 basis points. Net income totalled US$147.8 million, up 49.1% from a year ago.
For the Full Year 2020, total revenues increased by 5.9% to US$16.2 billion, driven primarily by higher pricing in the ocean and air services and contributions from the Prime acquisition. Gross profits decreased by 7.0% to US$2.4 billion. Adjusted gross profits decreased 6.7% to US$2.4 billion, primarily driven by lower adjusted gross profit margins in truckload services, partially offset by contributions from the Prime acquisition and higher adjusted gross profits in air and ocean services. Operating expenses decreased by 3.2% to US$1.7 billion.
Personnel expenses decreased 4.3% to US$1.2 billion, driven primarily by cost savings initiatives, including a 2.8% decrease in average headcount, and a decline in benefits expenses and incentive compensation. SG&A expenses decreased by 0.3% to US$496.1 million, primarily due to significantly lower travel expenses, partially offset by the ongoing expenses from the Prime acquisition. Income from operations totalled US$673.3 million, down 14.8% from last year due to a decline in adjusted gross profits. Adjusted operating margin of 27.9% decreased 260 basis points. Net income totalled US$506.4 million, down 12.2% from a year ago.
Fourth-quarter total revenues for C.H. Robinson’s North American Surface Transportation (NAST) segment totalled US$3.1 billion, an increase of 10.8% over the prior year, primarily driven by higher truckload pricing and an increase in less than truckload (LTL) shipments. NAST adjusted gross profits increased by 1.6% in the quarter to US$396.8 million, with the March 2020 acquisition of Prime contributing 4.0 percentage points of adjusted gross profit growth in the quarter.
Adjusted gross profits in truckload decreased by 2.1% and LTL adjusted gross profits increased by 4.0% versus the year-ago period. Average truckload linehaul rate per mile charged to customers, which excludes fuel surcharges, increased approximately 29.0% in the quarter, while truckload linehaul cost per mile, excluding fuel surcharges, increased approximately 32.5%.
Truckload volume declined 3.5% in the quarter, and LTL volumes grew 20.0%, representing an overall market share gain for NAST in the quarter when compared to a 4.0% increase in industry volumes. Operating expenses decreased by 5.3% primarily due to cost savings initiatives. Income from operations increased by 15.3% to US$150.6 million, and adjusted operating margin expanded 450 basis points to 37.9%. NAST average headcount was down 8.4% in the quarter, with Prime contributing 4.0 percentage points of growth.
Fourth-quarter total revenues for the Global Forwarding segment increased 71.7% to US$1.0 billion, primarily driven by higher pricing in the ocean across the industry driven by higher demand and higher pricing in the air due to reduced air cargo capacity, increased charter flights and larger shipment sizes. Adjusted gross profits increased by 39.6% in the quarter to US$180.1 million. Ocean adjusted gross profits increased 53.1%, driven by higher pricing and a 12.0% increase in volumes. Adjusted gross profits in the air increased 38.3% driven by higher pricing, partially offset by a 7.5% decline in shipments.
Customs adjusted gross profits increased 4.5%, primarily driven by an 8.0% increase in transaction volume. Operating expenses increased 6.7%, primarily driven by increased incentive compensation in personnel expenses and partially offset by cost savings initiatives. Fourth-quarter average headcount decreased by 4.1%. Income from operations increased 289.1% to US$58.5 million and adjusted operating margin expanded 2,080 basis points to 32.5% in the quarter.
Total revenues gross profits for Robinson Fresh, Managed Services and Other Surface Transportation increased 6.1% to US$429.4 million in Q4, 2020. Adjusted gross profits increased by 3.0% to US$23.6 million, primarily due to volume growth and margin expansion in the retail vertical. Managed Services adjusted gross profits increased 15.7% in the quarter, primarily due to a 27.0% increase in volume. Other Surface Transportation adjusted gross profits increased by 2.9% to US$15.4 million. Europe truckload adjusted gross profit was up 1.7% in the quarter due to a 7.0% volume increase and strength of the Eur.
