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C.H. Robinson Worldwide Inc CHRW

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1-Star Price

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5-Star Price

PREMIUM

Economic Moat

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Capital Allocation

PREMIUM

C.H. Robinson's Q2 TL Volume Flips Positive, Though Gross Profit Margin Percentage Still Pressured

Matthew Young, CFA Equity Analyst

Analyst Note

| Matthew Young, CFA |

Wide-moat logistics specialist C.H. Robinson’s posted another quarter of strong gross-revenue growth (up 53%), which was above our forecast due to robust global forwarding growth and higher than expected TL volume gains. Easy comparisons are at play given pandemic headwinds a year ago, but freight demand is facing extraordinarily strong consumer goods spending and retailer restocking. On top of that, truckload-market capacity remains incredibly constrained, awarding truck brokers with relatively healthy pricing power as contracts are renegotiated. Truck brokerage (NAST) gross revenue grew 45% on strong truckload spot and contract pricing and load growth. TL volumes finally flipped positive (up 6% year over year) while LTL loads soared 24%. Global forwarding revenue doubled on surging sell-rates (tight air cargo capacity) and strong air and ocean volume gains.

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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 (63% of 2020 net revenue), which reflects mostly truck brokerage but also rail intermodal. Additionally, the firm also operates a large air and ocean forwarding division (24%), which has grown organically and via acquisition, and a legacy produce-sourcing operation (8%). 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 Mar 31, 2021
Fiscal Year End Dec 31, 2021
Stock Type Cyclical
Employees 14,997

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