Always Moving Forward

In 1992, C. H. Robinson crossed the $1 billion mark in total revenues for the first time. In 2007, its total revenues rose to $7.5 billion. For the nine years that Wiehoff has been either president or CEO, net revenues have risen by an average of 19.7 percent annually.

As the biggest player in the U.S. transportation management market, Robinson claims 21 percent of industry revenue. The company’s stock price per share (Nasdaq: CHRW) has risen from about $15 in late 2000 to nearly $55 at the end of 2008, and shareholders have received two two-for-one stock splits during that period.

“It is a very profitable and well-run company,” says Dick Armstrong, transportation analyst and principal at Armstrong and Associates, a market research and consulting firm for the supply chain industry, based in Stoughton, Wisconsin. “It is without peer in the U.S. market.”

The Need for Speed

C. H. Robinson’s growth has been primarily organic, adding customers and increasing business with existing ones. But the company has also made a number of strategic acquisitions. One of the first that Wiehoff was involved with as president was the 1999 purchase of Illinois-based American Backhaulers, a smaller non–asset based third-party transportation firm. With that acquisition, Armstrong says, C. H. Robinson acquired a major and timely improvement in its IT system. That system will be housed in the company’s new 7,000-square-foot data center, which will be completed this fall.

“At every moment, there are shipments that need to move, there are shipments in transit, there are shipments being delivered,” Wiehoff says. “Our operating system is really the central nervous system of the company. It is keeping track of every shipment that a customer has given to us to transport or manage for them.”

C. H. Robinson’s customers also have made technology improvements of their own, which have allowed them to better track their shipments and inventories. Like Robinson, many of those customers have ventured further into the global market by opening plants overseas or buying and selling in global markets.

“As supply chains have spread out and gotten more complex and much more automated, a big part of what’s happened is that most companies have had an emphasis on trying to reduce their inventory levels,” Wiehoff says. “Everyone understands better today that it takes money and capital to carry inventory. Things tend to break when they are sitting around, and so there are more [insurance] claims. There is a lot of added emphasis today on turning inventory quicker, shipping it faster.”

That shift to faster-moving, lower-quantity inventory management has led to a just-in-time delivery strategy in the transportation and logistics industry.