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C.H. Robinson Worldwide Inc CHRW

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C.H. Robinson’s Q3 Truckload Pricing Rebounds, but Gross Margins Squeezed as Cost of Hire Spikes

Matthew Young, CFA Equity Analyst

Analyst Note

| Matthew Young, CFA |

Wide-moat logistics specialist C.H. Robinson’s third-quarter gross revenue swung to a 9.5% year-over-year increase, versus a 7% decline last quarter. In the flagship brokerage unit (NAST), gross revenue was up roughly 4% on better pricing and as shipment demand saw sequential improvement off pandemic lows due to the reopening economy, retailers' restocking, and spiking spot opportunities. Truckload volume was up only 0.5%, but that was much better than the 5% decline last quarter and LTL volume jumped 14%. Thanks to rapidly firming capacity, the firm also benefited from a nice uptick in pricing to shippers (particularly on spot business) as TL revenue per load jumped 10.5%. Global forwarding gross sales rose 39% due in part to robust airfreight pricing.

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Company Profile

Business Description

C.H. Robinson is a top-tier non-asset-based third-party logistics provider with a significant focus on domestic freight brokerage (66% of net revenue), which reflects mostly truck brokerage but also rail intermodal. It also operates a growing air and ocean forwarding unit (20%) and a legacy produce-sourcing operation (9%). The remainder of net revenue reflects transportation management services and the firm's European truck brokerage operations.

Contact
14701 Charlson Road
Eden Prairie, MN, 55347-5088
T +1 952 937-8500
Sector Industrials
Industry Integrated Freight & Logistics
Most Recent Earnings Sep 30, 2020
Fiscal Year End Dec 31, 2020
Stock Type Cyclical
Employees 15,177

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