Company Reports

C.H. Robinson dominates the $90 billion-plus asset-light truck brokerage market, and its immense network of shippers and asset-based truckers supports a wide economic moat, in our view. Although the company is by no means immune to freight pullbacks, its variable-cost model historically helps shield profitability during periods of lackluster volume and pricing, as evidenced by a long history of above-average operating margins. The firm's ownership of transportation equipment is minimal, and a large swath of operating expenses are tied to performance-based variable compensation, which moves with net revenue. We think the company remains well positioned to capitalize on gradual truck brokerage industry consolidation (including market share gains) despite intensifying competition.

C.H. Robinson’s first-quarter gross revenue fell 4% year over year, but NAST-segment (truck brokerage) declines moderated materially, and air and ocean forwarding trends flipped positive. Revenue came in slightly above our forecast, especially for global forwarding, which improved more than we expected on a spike in ocean pricing driven by Red Sea-related capacity disruptions.

C.H. Robinson dominates the $90 billion-plus asset-light truck brokerage market, and its immense network of shippers and asset-based truckers supports a wide economic moat, in our view. Although the company isn't immune to freight pullbacks, its variable-cost model historically helps shield profitability during periods of lackluster volume and pricing, as evidenced by a long history of above-average profitability. The firm's ownership of transportation equipment is minimal, and a large swath of operating expenses are tied to performance-based variable compensation, which moves with net revenue. We think the company remains well positioned to capitalize on gradual truck brokerage industry consolidation (including market share gains) despite intensifying competition.

C.H. Robinson dominates the $90 billion-plus asset-light truck brokerage market, and its immense network of shippers and asset-based truckers supports a wide economic moat, in our view. Although the company isn't immune to freight pullbacks, its variable-cost model historically helps shield profitability during periods of lackluster volume and pricing, as evidenced by a long history of above-average profitability. The firm's ownership of transportation equipment is minimal, and a large swath of operating expenses are tied to performance-based variable compensation, which moves with net revenue. We think the company remains well positioned to capitalize on gradual truck brokerage industry consolidation (including market share gains) despite intensifying competition.

C.H. Robinson’s fourth-quarter gross revenue fell 17% year over year (slightly below our forecast), though declines are easing. The key theme throughout 2023 was declining freight demand and customer pricing for NAST and global forwarding, driven by muted retail sector restocking, soft industrial end markets, and the swing to excess transportation industry capacity.

C.H. Robinson dominates the $90 billion-plus asset-light truck brokerage market, and its immense network of shippers and asset-based truckers supports a wide economic moat, in our view. Although the company isn't immune to freight pullbacks, its variable-cost model historically helps shield profitability during periods of lackluster volume and pricing, as evidenced by a long history of above-average profitability. The firm's ownership of transportation equipment is minimal, and a large swath of operating expenses are tied to performance-based variable compensation, which moves with net revenue. We think the company remains well positioned to capitalize on gradual truck brokerage industry consolidation (including market share gains) despite intensifying competition.

C.H. Robinson’s third-quarter gross revenue fell 28% year over year, below our forecast, on greater-than-expected volume declines in the truck brokerage division, or NAST. The theme this year is that muted retail sector restocking, soft industrial end markets, and excess transportation industry capacity are driving down freight demand and customer pricing for NAST and global forwarding, especially relative to still-elevated levels a year ago.

C.H. Robinson dominates the $90 billion-plus asset-light truck brokerage market, and its immense network of shippers and asset-based truckers supports a wide economic moat, in our view. Although the company isn't immune to freight pullbacks, its variable-cost model historically helps shield profitability during periods of lackluster volume and pricing, as evidenced by a long history of above-average profitability. The firm's ownership of transportation equipment is minimal, and a large swath of operating expenses are tied to performance-based variable compensation, which moves with net revenue. We think the company remains well positioned to capitalize on gradual truck brokerage industry consolidation (including market share gains) despite intensifying competition.

C.H. Robinson dominates the $90 billion-plus asset-light truck brokerage market, and its immense network of shippers and asset-based truckers supports a wide economic moat, in our view. Although the company isn't immune to freight pullbacks, its variable-cost model historically helps shield profitability during periods of lackluster volume and pricing, as evidenced by a long history of above-average profitability. The firm's ownership of transportation equipment is minimal, and a large swath of operating expenses are tied to performance-based variable compensation, which moves with net revenue. We think the company remains well positioned to capitalize on gradual truck brokerage industry consolidation (including market share gains) despite intensifying competition.

C.H. Robinson’s second-quarter gross revenue fell 35% year over year; below our forecast, on greater-than-expected volume declines in the truck brokerage division, or Nast. The theme these past several quarters is that retail-sector destocking (high inventories), sluggish industrial end markets, and loose transportation-industry capacity are driving down freight demand and customer pricing for Nast and global forwarding, especially relative to unusually robust levels a year ago.

Freight brokerage giant C.H. Robinson Worldwide announced that it has hired Ford's vice president of customer service and enthusiast brands, Dave Bozeman, as its new chief executive. Robinson had fired Bob Biesterfeld as CEO in December, calling it an involuntary termination without cause. His departure was probably the result of pressure from activist investor Ancora, which we understand has been pushing for more rapid strategic changes amid slowing freight demand, particularly for the global air and ocean forwarding operations.

C.H. Robinson dominates the $90 billion-plus asset-light truck brokerage market, and its immense network of shippers and asset-based truckers supports a wide economic moat, in our view. Although the company isn't immune to freight downturns, its variable-cost model historically helps shield profitability during periods of lackluster demand, as evidenced by a long history of above-average profitability. The firm's ownership of transportation equipment is minimal, and a large swath of operating expenses are tied to performance-based variable compensation, which moves with net revenue. We think the company remains well positioned to capitalize on gradual truck brokerage industry consolidation (including market share gains) despite intensifying competition.

C.H. Robinson’s first-quarter gross revenue fell 32% year over year; below our forecast, on greater-than-expected pricing declines in the truck brokerage division, or NAST. In short, retail-sector destocking (high inventories), softening industrial end markets, and loosening transportation-industry capacity are driving down freight demand and customer pricing for NAST and global forwarding, especially relative to robust levels a year ago.

C.H. Robinson dominates the $90 billion-plus asset-light truck brokerage market, and its immense network of shippers and asset-based truckers supports a wide economic moat, in our view. Although the firm isn't immune to freight downturns, its variable-cost model historically helps shield profitability during periods of lackluster demand, as evidenced by a long history of above-average profitability. The firm's ownership of transportation equipment is minimal, and a large swath of operating expenses are tied to performance-based variable compensation, which tends to move with net revenue. We think the company remains well positioned to capitalize on gradual truck brokerage industry consolidation (including market share gains) despite intensifying competition.

C.H. Robinson dominates the $90 billion-plus asset-light truck brokerage market, and its immense network of shippers and asset-based truckers supports a wide economic moat, in our view. Although the firm isn't immune to freight downturns, its variable-cost model historically helps shield profitability during periods of lackluster demand, as evidenced by a long history of above-average profitability. The firm's ownership of transportation equipment is minimal, and a large swath of operating expenses are tied to performance-based variable compensation, which tends to move with net revenue. We think the company remains well positioned to capitalize on gradual truck brokerage industry consolidation (including market share gains) despite intensifying competition.

C.H. Robinson’s fourth-quarter gross revenue fell 22% year over year; below our forecast on softer-than-expected contractual truckload pricing and rapid deterioration in the global forwarding backdrop. The overall theme is that retail-sector restocking has dried up on high inventory levels, and industrial end markets are softening, driving down demand and customer pricing for truck brokerage, or NAST, and global forwarding units, especially relative to robust levels a year ago.

C.H. Robinson announced that Bob Biesterfeld stepped down as CEO as of Dec. 31, 2022. In its press release, the firm noted it was "an involuntary termination by the Company without cause." The firm did not give a specific reason for the transition. Overall, this was a surprise to us as we haven't been under the impression that execution has materially deteriorated, even amid the trucking and logistics industry's current pullback/normalization phase. That said, this past year the firm encountered pressure from an activist investor (Ancora), which we understand influenced the early 2022 board refresh. Also, third-quarter results came in shy of consensus expectations, and management admitted to overshooting in terms of headcount and has implemented layoffs. Thus, Biesterfeld's departure might have been brewing behind the scenes over the past quarter or so.

C.H. Robinson dominates the $90 billion asset-light highway brokerage market, and its immense network of shippers and asset-based truckers supports a wide economic moat, in our view. Although the company isn't immune to freight downturns, its variable-cost model historically helps shield profitability during periods of lackluster freight demand, as evidenced by a long history of above-average profitability. The firm's ownership of transportation equipment is minimal, and a large swath of operating expenses are tied to performance-based variable compensation, which tends to move in line with net revenue growth. We think the company remains well positioned to capitalize on gradual truck brokerage industry consolidation (including market share gains) despite intensifying competition.

C.H. Robinson dominates the $80-plus billion asset-light highway brokerage market, and its immense network of shippers and asset-based truckers supports a wide economic moat, in our view. Although the company isn't immune to freight downturns, its variable-cost model historically helps shield profitability during periods of lackluster freight demand, as evidenced by a long history of above-average profitability. The firm's ownership of transportation equipment is minimal, and a large swath of operating expenses are tied to performance-based variable compensation, which tends to move in line with net revenue growth. We think the company remains well positioned to capitalize on gradual truck brokerage industry consolidation (including market share gains) despite intensifying competition.

C.H. Robinson’s third-quarter gross revenue slowed materially, falling 4% year over year (it was up 23% last quarter) as demand and pricing across truck brokerage (North American surface transportation) and global forwarding are easing off elevated levels. The total top line was shy of our forecast as the global forwarding backdrop slowed a bit faster than we anticipated. We expect to lower our $98 fair value estimate, albeit by less than 5%, as we temper our near-term revenue and margin assumptions. The shares are appropriately valued, in our view.