C.H. Robinson's double-digit, digital growth keeps it ahead of challengers

Freight forwarder C.H. Robinson Worldwide Inc. reported Q4'20 revenues that increased by 5.9% year over year, "driven primarily by higher pricing in ocean and air services" as well as the acquisition of Prime Distribution. Gross profits fell and were below analysts' expectations due to reduced margins in the truckload business.

Global forwarding revenues surged 71.7% higher, which is perhaps not a surprise given Q4'20 U.S. seaborne imports handled by the company climbed 31.6% higher, Panjiva's data shows. That was almost double the rate of the sector as a whole, as outlined in Panjiva's research of Jan. 20, and included a 38.7% increase in December 2020.

In terms of outlook, the company has stated "freight markets remain tight, and we anticipate this will continue for much of 2021." That is certainly borne out by freight rates while U.S. trade volumes at the start of January are still expanding, albeit at a slower rate than in December 2020.

While some care is needed with fractional month data, U.S. seaborne volumes handled by C.H. Robinson continued their rapid ascent in the first three weeks of January compared to a year earlier with a 32.2% growth rate, Panjiva's data shows. That has included a 29.1% rise in shipments from China, 28.8% growth in imports from Asia excluding China and a 48.9% jump in imports from Europe.

The company has also invested heavily in digitizing its workflow, with CEO Bob Biesterfeld stating "we expect to see continued productivity benefits as well as growth with both customers and carriers that prefer to operate in a truly frictionless environment." C.H. Robinson is not the only company offering such services of course, and faces significant challenges from digital-first forwarders including Flexport Inc. and Amazon.com Inc.'s freight forwarding operations.

Both are still in rapid-expansion mode, with imports linked to Flexport having increased by 71.4% year over year in December 2020 and Amazon's by 84.2%. Both have seen a marked slowdown in early January with growth of 45.5% at Flexport and 48.8% at Amazon. Both also have a long way to go to catch C.H. Robinson in terms of scale given its handling is still around 7x those of the upstarts.

Christopher Rogers is a senior researcher at Panjiva, which is a business line of S&P Global Market Intelligence, a division of S&P Global Inc. This content does not constitute investment advice, and the views and opinions expressed in this piece are those of the author and do not necessarily represent the views of S&P Global Market Intelligence. Links are current at the time of publication. S&P Global Market Intelligence is not responsible if those links are unavailable later.