C. H. Robinson Worldwide

C.H. Robinson Worldwide, Inc.
Type Public
Traded as NASDAQ: CHRW
NASDAQ-100 Component
S&P 500 Component
Industry Air courier
Founded Grand Forks, North Dakota (1905)
Headquarters Eden Prairie, Minnesota, U.S.
Key people John P. Wiehoff
(Chairman and CEO)
Revenue increaseUS$ 9.274 billion (2010)[1]
Operating income increase US$ 622.9 million (2010)[1]
Net income increase US$ 387.0 million (2010)[1]
Total assets increase US$ 1.996 billion (2010)[1]
Total equity increase US$ 1.204 billion (2010)[1]
Employees 7,628 (December 2010)[1]
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.[2] A Fortune 500 company,[3] it is one of the world's largest third party logistics providers.[4]

C.H. Robinson handles more than 10 million shipments for more than 37,000 customers.[5] 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 more than 50,000 transportation providers worldwide to select and hire transportation for its customers.[6][7] 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.[5]

Based in North America, C.H. Robinson has 235 offices in Europe, Asia, South America, Australia and the Middle East.[8]TMC, 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.[9]

History

In 1905, Charles 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.[10] The company became wholly owned by its employees in 1976.[11]

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.[12]

C.H. Robinson went public on October 16, 1997, as C.H. Robinson Worldwide, Inc. (NASDAQ: CHRW).[11]

Throughout the past two decades, C.H. Robinson has expanded primarily through organic growth. It has also made several acquisitions.[11]

On March 4, 2010, Fortune magazine named C. H. Robinson as the most admired transportation, trucking and logistics company in the world[13] and on March 21, 2011 Union Pacific was named first and C.H. Robinson named second.[14]

Offerings Overview

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

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.[15]

Corporate Affairs

C.H. Robinson's headquarters are located in Eden Prairie, Minnesota.[3]

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.[4]

In 2009, C.H. Robinson declined in annual gross revenue by 11.7% to $7.6 billion. However, net revenues increased 0.5% to $1.3 billion.[16] 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.[4]

C.H. Robinson reported annual gross revenues of approximately $9.3 billion in 2010.[3]

C.H. Robinson reported annual gross revenues of $10.6 billion in 2011.[17]

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.[18]

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.[3]

C.H. Robinson maintains membership in a number of professional organizations, including the Council of Supply Chain Management Professionals (CSCMP).[19] The company also supports many non-profit organizations, including the Minnesota Timberwolves'‚ FastBreak Foundation‚ WolvesCare community initiative.[20] In 2012, C.H. Robinson announced it would give $100,000 in donations to the following organizations:

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.[5]

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.[15]

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.[5][21]

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:

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.[5]

Analyst Coverage (as of 2011)[22]

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.[2]

A significant element in the company's globalization is its industry-leading online reporting capabilities, available through CHRWOnline. 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.[5][23]

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.[24][25]

The company's 2011 acquisition of Timco Worldwide, brought with it technological advances, including the patented TX-5TM 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.[3]

In 2011, the company also launched an application called CHRWtrucks.com 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.[26][23]

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 transfering, spend management reporting, driver payroll services, vendor payments, fuel purchasing, permits and online expense management.[27][23]

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.[27][23]

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.[28][21]

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).[21]

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.[29]

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.[30]

Further reading

Inbound Logistics

Journal of Commerce

World Trade 100

Logistics Management

Procurement Leaders

Supply Chain Brain

Competitors

Ryder

Transplace

Echo

Access America Transport

UPS Supply Chain

Kuene & Nagel

JB Hunt

Expeditors International

Schneider National

References

  1. ^ a b c d e f "2010 Form 10-K, C.H. Robinson Worldwide, Inc.". United States Securities and Exchange Commission. http://www.sec.gov/Archives/edgar/data/1043277/000119312511051458/d10k.htm. 
  2. ^ a b "The Top 40 3PLs Third-Party Logistics Recovers". Logistics Quarterly. http://logisticsquarterly.com/issues/16-3/3pl2011/chrobinson.html. 
  3. ^ a b c d e "World Trader". http://www.worldtradewt100.com/articles/87647-ch-robinson-acquires-timco-worldwide-inc. 
  4. ^ a b c "Wikinvest". http://www.wikinvest.com/stock/C.H._Robinson_Worldwide_(CHRW). 
  5. ^ a b c d e f g "CHRW 2011 10-K Part 1 - Business (pages 3-4)". http://www.gurufocus.com/StockLink.php?type=sec&symbol=CHRW&date=2012-02-29&report=10-K. 
  6. ^ "C.H. Robinson stays strong as shipping slows". Star Tribune. http://www.startribune.com/business/39232472.html. 
  7. ^ "CH Robinson News Room Fact Sheet". http://www.chrobinson.com/en/us/About-Us/Newsroom/Fact-Sheet/. 
  8. ^ "Hoovers". http://www.hoovers.com/company/CH_Robinson_UK_Ltd/ryhyrhi-1.html. 
  9. ^ "C.H. Robinson Unveils New TMS Control Tower in Shanghai China". Sustainable Business Forum. http://sustainablebusinessforum.com/kim-knickle/52780/ch-robinson-unveils-new-tms-control-tower-shanghai-china. 
  10. ^ "Pick Stocks". http://money.cnn.com/magazines/fortune/mostadmired/2011/industries/54.html. 
  11. ^ a b c "Company History". C.H. Robinson - Investors. http://investor.chrobinson.com/phoenix.zhtml?c=97366&p=irol-companyhistory. 
  12. ^ "Always Moving Forward". Twin Cities Business. http://www.tcbmag.com/peoplecompanies/companies/112992p2.aspx. 
  13. ^ "World's Most Admired Companies - 2010". CNN Money. http://money.cnn.com/magazines/fortune/mostadmired/2010/snapshots/10666.html. 
  14. ^ "World's Most Admired Companies - 2011". CNN Money. http://money.cnn.com/magazines/fortune/mostadmired/2011/industries/54.html. 
  15. ^ a b c "CHRW 2011 10-K Part I Transportation and Logistics Services pages 4-6". http://www.gurufocus.com/StockLink.php?type=sec&symbol=CHRW&date=2012-02-29&report=10-K. 
  16. ^ "C.H. Robinson Worldwide Inc. Q4 2009 Earnings Call Transcript". Seeking Alpha. http://seekingalpha.com/article/186159-c-h-robinson-worldwide-inc-q4-2009-earnings-call-transcript. 
  17. ^ "Wiki Invest Stock C.H. Robinson". http://www.wikinvest.com/stock/C.H._Robinson_Worldwide_(CHRW)/Data/Gross_Profit. 
  18. ^ "CHRW 2011 10-K Part I Executive Officers pages 8-9". http://www.gurufocus.com/StockLink.php?type=sec&symbol=CHRW&date=2012-02-29&report=10-K. 
  19. ^ "CSMP Sponsors". http://www.atlantacscmp.org/AtlantaCSCMPSponsors.asp. 
  20. ^ "C.H. Robinson and Timberwolves Continue Partnership Through WolvesCare Month". NBA Minnesota Timberwolves. http://www.nba.com/timberwolves/news/news_CH_Robinson_120125.html. 
  21. ^ a b c "CHRW 2011 10-K Part I Customer Relationships and Relationships with Transportation Providers pages 9-11". http://www.gurufocus.com/StockLink.php?type=sec&symbol=CHRW&date=2012-02-29&report=10-K. 
  22. ^ "C.H. Robinson Analyst Coverage". http://investor.chrobinson.com/phoenix.zhtml?c=97366&p=irol-analysts. 
  23. ^ a b c d "CHRW 2011 10-K Part I Proprietary Information Technology page 12". http://www.gurufocus.com/StockLink.php?type=sec&symbol=CHRW&date=2012-02-29&report=10-K. 
  24. ^ "TMC Elevates C.H. Robinson's Software Profile". Logistics Management. http://www.logisticsmgmt.com/article/tmc_elevates_c.h._robinsons_software_profile/. 
  25. ^ "New Software Platform Extends C.H. Robinson's Reach". Logistics Management. http://www.logisticsmgmt.com/view/new_software_platform_extends_c.h._robinsons_reach/tms. 
  26. ^ "C.H. Robinson Launches Mobile Application to Enhance Motor Carrier Communication". World Trade 100. http://www.worldtradewt100.com/articles/87823-ch-robinson-launches-mobile-application-to-enhance-motor-carrier-communication. 
  27. ^ a b "CHRW 2011 10-K Part I Payment Services page 7". http://www.gurufocus.com/StockLink.php?type=sec&symbol=CHRW&date=2012-02-29&report=10-K. 
  28. ^ "CHRW 2011 10-K Part I Organization pages 7-8". http://www.gurufocus.com/StockLink.php?type=sec&symbol=CHRW&date=2012-02-29&report=10-K. 
  29. ^ "CSX Salutes C.H. Robinson With Environmental Award". Refrigerated Transporter. http://refrigeratedtrans.com/2010-emissions/csx_salutes_ch_robinson_0428/. 
  30. ^ "Green Transportation: Greening Your Fleet". World Trade 100. http://www.worldtradewt100.com/articles/print/86656. 

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