Always Moving Forward

Making Moves

C. H. Robinson uses more than 48,000 transportation carriers worldwide, with 44,500 of those carriers located in North America. In 2007, among its North American truck carriers, 75 percent were small, with fewer than 100 tractor trucks; 13 percent were considered medium, with 100 to 399 vehicles; and 12 percent were large, with more than 400 trucks. The company’s transportation services generate 88 percent of its net revenues. Procurement, distribution, and marketing of fresh produce for grocers, food service companies, wholesalers, and repackers account for another 8 percent. Information Services, which originated through the 1983 acquisition of T-Chek Systems, a fuel-card management company, represents the remaining 4 percent.

The products that C. H. Robinson moves are diverse. It has arranged for the transport of live sharks to the Underwater Adventures Aquarium at the Mall of America, moved a fire truck from Minneapolis to Tovar Merida, Venezuela, for major-league pitcher Johan Santana, and delivered Harry Potter and the Deathly Hallows books to ensure that they were received in time for anxiously awaiting fans. “Although most of our freight movements are not that unusual, what is extraordinary is the magnitude of our impact,” Wiehoff says. “We manage over 6.5 million shipments a year.”

Those shipments originate from C. H. Robinson’s 29,000-plus customers worldwide, though the vast majority of the company’s business, about 85 percent, is still conducted stateside. Its top category remains food and beverages, with manufacturing, paper products, and retail customers making up most of the rest. The company’s top-100 customers bring in approximately one-third of its consolidated gross profits, though no one individual client exceeds 3 percent of those profits.

Robinson’s largest office, in Chicago, the Midwest transportation hub, employs about 700. Its large open room serves as a clearinghouse for shipping orders. It reminds some visitors of a trading floor because of its large space and high energy level, with employees analyzing the market, pricing services, and finding optimal transport for customers. That said, Wiehoff points out that transportation “isn’t technically traded like a commodity, because each shipment gets assigned to a specific carrier.” There are no futures contracts on transportation rates—each day is different in terms of how difficult it is to find capacity, and prices fluctuate.

What drives costs? Mostly, simple supply and demand. The more people need trucks, the more they’ll have to pay. (Fuel costs are also an issue, of course, though they’ve been fairly low lately.) Other factors include origin and destination and special requirements, such as refrigeration, safeguards for hazardous materials, and oversized loads.