C. H. Robinson Worldwide

C.H. Robinson Worldwide, Inc.

Type	Public
Traded as	NASDAQ: CHRW NASDAQ-100 Component S&P 500 Component
Industry	Transportation
Founded	Grand Forks, North Dakota (1905)
Headquarters	Eden Prairie, Minnesota, U.S.
Key people	John P. Wiehoff (Chairman and CEO)
Revenue	$ 11.359 billion (FY 2011)
Operating income	$ 675.3 million (2012)
Net income	$ 593.8 million (2012)
Total assets	$ 2.804 billion (2012)
Total equity	$ 1.504 billion (2012)
Employees	10,929 (December 2012)
Website	chrobinson.com

C.H. Robinson Worldwide, Inc. (NASDAQ: CHRW) is a global provider of multimodal transportation services and logistics solutions with its headquarters located in Eden Prairie, MN. A Fortune 500 company, it is one of the world's largest third party logistics providers.

During 2012, C.H. Robinson handles approximately 11.5 million shipments and worked with more than 42,000 active customers. As a third party logistics provider, C.H. Robinson does not own the transportation equipment that is used to transport its customers' freight (with the exception of rail containers). It works with approximately 56,000 transportation providers worldwide, of which the vast majority are contracted motor carriers. C.H. Robinson's transportation of goods accounts for roughly 88% of its gross net revenues; the remaining revenues come from sourcing and marketing fresh produce and its T-Chek Service Unit, which provides payment management services to the trucking industry.

Based in North America, C.H. Robinson has 276 branch offices in Europe, Asia, South America, and Australia. its division that operates the company's Managed TMS has control towers located in Chicago, Amsterdam and Mumbai. A new control tower opened recently (2011) in Shanghai, China.

History

In 1905, Charles Henry Robinson (born in New York City) partnered with Fred Parks Nash and Willis King Nash to incorporate C.H. Robinson Company in the city of Grand Forks, North Dakota, as a produce and general merchandise brokerage firm. Robinson expanded the business and moved the headquarters to Minneapolis, Minnesota in 1919. In 1968, the company entered the regulated trucking business with a contract carrier known as Meat Packers Express in Omaha, Nebraska and later created ROBCO Transportation as an irregular route carrier. The company became wholly owned by its employees in 1976.

The 1980 Motor Carrier Act deregulated the trucking industry, permitting more flexible pricing and service arrangements between carriers and shippers. In 1989, C.H. Robinson International, Inc. was formed, which expanded the company's services as a freight forwarder, non-vessel operating common carrier (NVOCC) and customs broker.

C.H. Robinson went public on October 16, 1997, as C.H. Robinson Worldwide, Inc. (NASDAQ: CHRW).

Throughout the past two decades, C.H. Robinson has expanded primarily through organic growth. It has also made several acquisitions.

On March 4, 2010, Fortune magazine named C. H. Robinson as the most admired transportation, trucking and logistics company in the world and on March 21, 2011 Union Pacific was named first and C.H. Robinson named second.

Offerings Overview

C.H. Robinson provides logistics services, including supply chain analysis, freight consolidation, core carrier program management and information reporting, including:

• Truckload — dry vans, temperature-controlled vans and flatbeds. The company offers time-definite and expedited transportation and will consolidate partial shipments for several customers into full truckloads.
• Less Than Truckload — any size, usually single pallet or larger. The company consolidates freight and freight information to provide customers with a single source of information.
• Intermodal — in trailers or containers through a combination of truck and rail. The company arranges local pickup and delivery (drayage).
• Ship — ocean carriers. The company consolidates shipments, determines routing, selects the carriers, provides local pickup and delivery and arranges for custom clearance and payment.
• Air — international and domestic air freight forwarder. The company offers complete, door-to-door service.

In addition to these multimodal transportation services, C.H. Robinson provides other logistics business lines: fresh produce sourcing, fee-based transportation management services, customs brokerage, logistics outsourcing, Managed TMS and warehousing.

Corporate Affairs

C.H. Robinson's headquarters are located in Eden Prairie, Minnesota.

In 2008, the company reported gross revenue of $8.58 billion, up 17.3%, and net income up 10.8 percent to $359 million. In the fourth quarter, sales were virtually flat at $1.95 billion, while income rose 4.3% to $88.9 million. In 2009,its annual gross revenue declined by 11.7% to $7.6 billion. However, net revenues increased 0.5% to $1.3 billion. Total transportation revenues declined 16.2% and total purchased transportation services fell by 19.4%. The company attributes the decline to a weak economy and rising fuel prices. The company reported annual gross revenues of approximately $9.3 billion in 2010, and $10.6 billion in 2011.

Corporate Governance

In 2002, John P. Wiehoff took over as CEO from D.R. "Sid" Verdoorn, who remained chairman of the board until his retirement in 2006. At that time, Wiehoff assumed the role of Chairman.

Organizations

C.H. Robinson and its employees contribute millions of dollars annually to a variety of organizations, including the Juvenile Diabetes Research Foundation, Community Health Charities, the American Logistics Aid Network, Children's Hospital and Clinics of Minnesota, Sustainable Harvest International and the United Way.

C.H. Robinson maintains membership in a number of professional organizations, including the Council of Supply Chain Management Professionals (CSCMP). The company also supports many non-profit organizations, including the Minnesota Timberwolves'‚ FastBreak Foundation‚ WolvesCare community initiative. In 2012, C.H. Robinson announced it would give $100,000 in donations to the following organizations:

• Boys & Girls Clubs of America
• CureSearch for Children's Cancer
• EarthShare
• Feeding America
• Global Impact
• International Federation of Red Cross
• JDRF
• Let's Move Salad Bars to Schools
• Make-A-Wish
• Multiple Sclerosis Society

Corporate Culture

The C.H. Robinson business model is based on a network of regional sales offices. The company operates 200+ offices around the world. Representatives in these offices assess local and global market conditions and deal directly with customers and contract carriers.

The regional offices typically work together to complete transactions. This model attracts large multi-location customers because they can leverage the company’s multiple offices for service in specific geographic areas or access to specific transportation services. All offices utilize C.H. Robinson’s global platform of proprietary systems and technology processes.

With the help of information provided by the operating system, representatives typically select a contracted carrier for each assignment based upon their knowledge of the carrier’s service capability, equipment availability, freight rates, and other relevant factors. Based on that information, representatives may either determine an appropriate price or wait to communicate with a contracted carrier directly before setting a price.

This business model relies heavily on salespeople who can solicit and manage customers. C.H. Robinson attracts appropriate talent using performance-oriented compensation to reward salespeople. Compensation is the company's largest expense. The company's revenues in terms of transportation mode (as of 2011) are as follows:

• Truck - 88% of net revenue
• Intermodal - 2.9% of net revenue
• Ocean - 4.6% of net revenue
• Air - 2.7% of net revenue
• Other Logistics Services – 1.8% of net revenue

C.H. Robinson offers a portfolio of planning, consulting, optimization and outsourcing services delivered in a sustained relationship model. The company assigns transportation experts to specific customer accounts, sometimes actually placing people on-site in customer locations. Those experts serve as an extension of the shipper's transportation staff and handle a variety of day-to-day transportation tasks and strategic assignments, such as annual planning and supply chain optimization.

Analyst Coverage (as of 2011)

Firm	Analyst
Avondale Partners	Donald Broughton
Bank of America Merrill Lynch	Ken Hoexter
BB & T Capital	Thom Albrecht
Citi	Christian Wetherbee
Cleveland Research Company	Mark Davis
Credit Suisse	Chris Ceraso
Dahlman Rose & Co.	Jason Seidl
Deutsche Bank Securities Inc	Justin Yagerman
Goldman Sachs	Scott Malat
Jefferies & Co	Peter Nesvold
J.P. Morgan	Thomas Wadewitz
Macquarie Research	Scott Flower
Morgan Keegan	Chaz Jones
Morgan Stanley	William Greene
Morningstar, Inc.	Matthew Young
Piper Jaffray	Matt Brooklier
Raymond James & Associates	William Fisher
RBC Capital Markets	John Barnes
Robert W. Baird & Co	Jon Langenfeld
Standard & Poors	James Corridore
Stephens Inc.	Jack Waldo
Sterne, Agee & Leach	Jeff Kauffman
Stifel Nicolaus	John Larkin
Suntrust Robinson Humphrey	Alexander Brand
Thompson, Davis	David Campbell
UBS	Rick Paterson
Wall Street Strategies	David Urani
Wells Fargo Securities	Anthony Gallo
When2Trade	James Hopkins
William Blair	Nate Brochmann
Wolfe Trahan & Co.	Ed Wolfe & Scott Group

Technology

The rapidly expanding global capabilities of C.H. Robinson allow customers of all sizes to serve and source markets anywhere in the world. The company has become known as a global transportation leader largely because of institutional knowledge and worldwide carrier partnerships.

A significant element in the company's globalization is its industry-leading online reporting capabilities, available through Navisphere online. This technology gives customers complete visibility to all C.H. Robinson shipments, domestically and globally, across all services. Customers can access their global shipping data and create reports.

Another significant element of the company's global capabilities is a proprietary technology that provides Managed TMS. Serviced by a division of C.H. Robinson called TMC, this technology gives customers the resources, visibility and information needed to lower costs, raise efficiencies and elevate overall management to a more strategic level.[17] The technology provides a single view of shipments, business intelligence and freight payments throughout the integrated international supply chain, which can be shared across carriers, factories, and warehouses throughout the world.

The company's 2011 acquisition of Timco Worldwide, brought with it technological advances, including the patented TX-5^TM sorting system that weighs each fruit to guarantee uniform size and weight. Timco also maintains an exclusive relationship with Origene Seeds Ltd., enabling the development and introduction of innovative new products in the melon category.

In 2011, the company also launched an application called CHRWTrucks Mobile. This application allows a motor carrier to enter pick up information, check calls, and access delivery information on a smartphone or other device. Additionally, carriers can post empty equipment locations where C.H. Robinson employees can look for load matches to help fill empty trucks and reduce empty miles.

C.H. Robinson's Payment Services comprises its subsidiary, T-Chek Systems, Inc., (T-Chek). T-Chek is a business-to-business provider of spend management and payment processing services. The T-Chek platform supports open and closed loop networks that facilitate a variety of fuel management services, funds transferring, spend management reporting, driver payroll services, vendor payments, fuel purchasing, permits and online expense management.

These systems enable customers to track and manage expenses, including fuel and maintenance. For several companies and truck stop chains, T-Chek captures the data of sales and fuel costs, provides management information to the seller, and invoices the carrier for fuel, cash advances and fees.

C.H. Robinson has internally developed the majority of its operating systems. Branch employees use these information systems to identify freight matching opportunities, communicate and coordinate activity with other branches, and 'cross-cover' or find equipment for other branches' freight. These systems also help salespeople service customer orders, select the optimal modes of transportation, build and consolidate shipments, and select routes — all based on customer-specific service parameters. The systems make shipment data visible to the entire sales team, as well as to customers and contracted carriers. This allows salespeople to select contracted carriers and track shipments in progress. The company's systems automatically provide alerts to potential problems and deliver performance and productivity reports.

In addition to this day-to-day "transactional" support, C.H. Robinson applies assessment tools to help customers design more efficient transportation models. This can involve strategic decisions as simple as carrier selection or as complex as the design of global transportation models (which include specialized expertise for taxes, tariffs, border crossing and other key considerations).

Environment / Sustainability

In 2009, C.H. Robinson received an Environmental Award by CSX, a transportation company providing rail, intermodal, and rail-to-truck transload services. The award recognized the company's commitment to 'greening' supply chains by shipping via rail, thereby reducing carbon dioxide (CO2) emissions, decreasing congestion on highways and conserving fossil fuels.

In 2010, C. H. Robinson partnered with Cascade Sierra Solutions, a non-profit organization that helps motor carriers reduce fuel consumption and carbon emissions, by installing U.S. EPA SmartWay technologies to reduce idling and improve aerodynamics. C.H. Robinson provides financial support to Cascade Sierra Solutions and helps promote the non-profit's services to C.H. Robinson's network of more than 45,000 contract motor carriers. In addition, C.H. Robinson has set up a Customer Match Program that matches a percentage of C.H. Robinson's eligible customers' donations to Cascade Sierra Solutions.

Further reading

Inbound Logistics

Journal of Commerce

World Trade 100

Logistics Management

Procurement Leaders

Supply Chain Brain

Competitors

Ryder

Transplace

Echo

Worldwide Express

Access America Transport

GenPro, Inc.[1]

UPS Supply Chain

Kuene & Nagel

JB Hunt

Expeditors International

Schneider National

C.H. Express Inc.

Traffic Tech

External links

• Official Website
• C. H. Robinson Worldwide SEC Filings