Always Moving Forward

“When I started at Robinson 16 years ago [as controller], it was very common that if customers had shipments, you could call them back that afternoon or the following day and tell them we could arrange for it,” Wiehoff recalls. “When you scheduled a delivery appointment, it was usually just the day that the shipment would arrive.” Since then, customers have been “scheduling their dock doors very aggressively for when trucks are coming and going”—sometimes with delivery windows as small as 10 minutes. This puts all kinds of pressures on C. H. Robinson and its logistics staff. On an electronic order, Wiehoff says, “we might have 30 minutes to accept or reject the shipment—to say whether we can accommodate it or not.”

This new world of high-speed decision making and just-in-time delivery can also be taxing on the many smaller carriers that Robinson relies on. To help these carriers remain in business, Robinson keeps them informed as to how many trucks it expects to need from them on an ongoing basis. And once the load is on the dock, Robinson will try to provide them with backhauls so they don’t return empty.

Another boon to C. H. Robinson’s shippers is the company’s T-Chek Systems subsidiary, which offers online payment and information services to fleet operators. T-Chek provides truckers with a fuel card that they can use at universally accepted truck stops. It keeps trucks moving, and allows C. H. Robinson to give cash advances to its carriers.

Meanwhile, the company continues to branch out in terms of markets and geography. Last year, it acquired Transera International Holdings, a Calgary-based company providing forwarding services for large-scale shipments in various energy industries. It had 107 employees in eight offices in North America and overseas. The Transera acquisition expanded C. H. Robinson’s international network into Dubai and Singapore while also giving it a foothold in the energy- and mining-equipment transport sector.

Given the current economy, it may need all the markets it can get.

The Road Ahead

In mid-December, the Wall Street Journal reported that freight shipping volume in the United States was down considerably in 2008, and that industry experts predict that 2009 could be the worst year for freight hauling in more than 30 years. So where might that leave a big forwarder like C. H. Robinson?

Maybe well positioned to handle the downturn. Armstrong believes that “it will be easier for Robinson to adjust because it does not have the asset obligations”—that is, owning no vehicles. Though C. H. Robinson may pick up some new customers, it’s likely that many of those customers will have less to ship. “But remember, more than half of Robinson’s business is in the food and beverage category,” Armstrong adds, “and food and beverages are fairly recession proof.”