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Understanding C.H. Robinson’s Global Forwarding Business

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Global Forwarding segment

C.H. Robinson Worldwide’s (CHRW) Global Forwarding business provides ocean and air freight services and customs brokerage through its contracts with independent agents and its global network of offices. Let’s look at these services in detail.

  • Ocean freight services: CHRW, a non-vessel ocean common carrier, forwards ocean freight. As a part of this service, the company offers shipment consolidation, ocean carrier and route selection, ocean shipment contracts, and local shipment pickup and delivery.
  • Air freight services: CHRW, a certified indirect air carrier, forwards freight by air and provides door-to-door freight service.
  • Customs brokerage: The company’s custom brokers are licensed by United States Customs and Border Protection. CHRW’s licensed custom brokers help exporters and importers meet government requirements.
  • CHRW also provides other logistics services, including warehousing, fee-based, and small parcel services.

CHRW’s Global Forwarding revenue rose 36% year-over-year to $2.1 billion in 2017. Over the long term, C.H. Robinson plans to tap into more global forwarding markets, grow its air freight business, cross-sell more of its services, and harness technology to serve customers more effectively.

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Competition

In the global forwarding business, bigger players such as United Parcel Service (UPS), FedEx (FDX), and XPO Logistics (XPO) are giving CHRW a run for its money. UPS, which ranks among the world’s top air freight forwarders, is the top domestic air freight carrier in the United States. UPS offers guaranteed and non-guaranteed global air freight services.

The First Trust Industrials/Producer Durables AlphaDEX ETF (FXR) has a 1.7% exposure to CHRW, and an exposure of 13.7% to the airline sector, 1.9% to Old Dominion Freight Line (ODFL), and 1.8% to XPO. Next, we’ll look at CHRW’s Robinson Fresh segment.

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