C. H. Robinson (CHRW) 19th Annual Global Transportation & Industrials Conference summary

Industry developments and regulatory impact

• The Montgomery ruling is expected to drive industry consolidation, particularly affecting small and medium brokers and carriers due to increased insurance costs and liability concerns.

• Larger, well-capitalized brokers are positioned to benefit as shippers seek trusted partners with robust vetting and insurance coverage.

• The company anticipates 20%-30% of broker capacity could exit the market over the medium term, with some impact on carrier capacity as well.

• Insurance costs are locked in through 2026, with any increases expected to be transitory and ultimately passed on to shippers and consumers.

• The company leads industry efforts in fraud prevention and maintains a 99.9% fraud-free network through advanced vetting and technology partnerships.

Operational strategy and performance

• Maintains industry-leading carrier vetting and revenue management, with no major changes planned but a focus on continuous improvement.

• Achieved 50% labor productivity improvement in NAST and 45% in global forwarding since 2022, driven by Lean and AI integration.

• Productivity gains are ongoing, with thousands of processes yet to be automated, indicating early innings in the improvement journey.

• Technology enhancements, such as automated quoting, have increased responsiveness from 60% to 100% of transactional quotes, improving win rates and customer service.

• The company selectively pursues volume based on margin discipline, prioritizing profitability over sheer volume growth.

Financial outlook and margin management

• Reaffirms a $6 earnings target for the year, based on a zero-growth market, with a commitment to deliver regardless of market headwinds.

• Maintains a 40% mid-cycle margin target for NAST, with potential to exceed this but prefers to retain flexibility for market share gains.

• Gross profit per load has increased meaningfully since mid-2023, outpacing industry trends.

• Operating leverage is expected to rival asset-based carriers when volume returns, with incremental margins currently strong.

• The company can rapidly adjust volume and share growth as market conditions improve, leveraging its technology and disciplined approach.