As John Wiehoff looks out the windows of his spacious corner office in Eden Prairie, he sees expansive views overlooking the Minnesota River, Highway 169, and County Road 101—three ground-level transportation arteries. That’s not to mention the sky above his company’s corporate headquarters, where transport planes fly in and out of MSP International.
As chairman and CEO of C. H. Robinson Worldwide, one of the world’s largest third-party providers of transportation, distribution, and other logistics services (it also provides produce sourcing, the company’s original business), Wiehoff doesn’t get to spend much time in his office. Half the time, he’s on the road, staying in touch with mega- customers like Wal-Mart and Anheuser-Busch. Business has also picked up for Wiehoff and C. H. Robinson, not only in revenue and customer growth, but also in terms of the company’s reach.
“Globalization and technology are driving growth and innovation in the supply chain management industry,” Wiehoff says. “At the same time, service level expectations are always increasing. As an example, just 10 years ago, the definition of on-time delivery for many companies was that the freight arrived at the receiving dock some time on the required day. Today, for many of our customers, on-time delivery means delivery within a 10-minute window.”
To those unfamiliar with freight transport, C. H. Robinson’s third-party model may seem a little curious. It doesn’t actually move the products. It has no vehicles of its own. Instead, it coordinates and tracks shipments between its clients and its clients’ customers. It’s a specialist, and so are the carriers it contracts with. Companies like C. H. Robinson exist because of all of the interfaces and interrelationships between ocean, air, and truck freight. Every ocean shipment has a domestic leg on each side of it that necessitates truckload service. This requires C. H. Robinson to know all the regulations and legalities of the different transportation modes across continents and national borders. Freed from managing this complexity, customers save time and money.
“Companies are putting plants around the world to try to take advantage of lower-cost labor,” Wiehoff notes. “Or they are consolidating into bigger plants and producing in fewer locations and shipping greater distances. So supply chains in general have become more spread out, more complicated, and we are all using technology to try to improve the process, speed it up, and make it more efficient.”
C. H. Robinson’s roots of sourcing and distributing produce helped position the company to take advantage of globalization, technological advances, and deregulation of the trucking industry. Now the company ranks number 341 on the 2008 Fortune 500 list.
So how did C. H. Robinson get to be so big? By making the right moves.
