What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2021-02-19 compared with 2020-02-19 · 209 added, 213 removed, 246 unchanged (63% of the section changed)

Robinson Worldwide, Inc.

Robinson,” “the company,” “we,” “us,” or “our”) is one of the largest third party logistics companies in the world with consolidated total revenues of $15.3 billion in 2019.

Robinson,” “the company,” “we,” “us,” or “our”) is one of the largest global logistics companies in the world with consolidated total revenues of $16.2 billion in 2020.

Our mission is to improve the world's supply chains through our people, processes, and technology by delivering exceptional value to our customers and suppliers.

We provide freight transportation services and logistics solutions to companies of all sizes in a wide variety of industries.

During 2019, we handled approximately 18 million shipments and worked with more than 119,000 customers.

During 2020, we handled approximately 19 million shipments and worked with approximately 105,000 customers.

We operate through a network of offices in North America, Europe, Asia, Oceania, and South America.

We have developed global transportation and distribution networks to provide transportation and supply chain services worldwide.

As a result, we have the capability of facilitating most aspects of the supply chain on behalf of our customers.

We have two reportable segments:

North American Surface Transportation (“NAST”) and Global Forwarding, with our remaining operating segments reported under All Other and Corporate.

For financial information concerning our reportable segments and geographic regions, refer to Note 9, Segment Reporting , of our consolidated financial statements.

As a third party logistics provider, we enter into contractual relationships with a wide variety of transportation companies and utilize those relationships to efficiently and cost-effectively arrange the transport of our customers’ freight.

We utilized approximately 78,000 contracted transportation companies, including contracted motor carriers, railroads (primarily intermodal service providers), and air and ocean carriers in 2019.

We offer a global suite of services using tailored, market-leading technology built by and for supply chain experts.

Our global network of supply chain experts work with our customers to drive better supply chain outcomes by leveraging our experience, data, technology, and scale.

As a global logistics platform, we enter into contractual relationships with a wide variety of transportation companies and utilize those relationships to efficiently and cost-effectively arrange the transport of our customers’ freight.

We utilized approximately 73,000 contracted transportation companies around the world, including contracted motor carriers, railroads (primarily intermodal service providers), and ocean and air carriers in 2020 .

Depending on the needs of our customers and their supply chain requirements, we select and hire the appropriate mode of transportation for each shipment.

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As an integral part of our transportation services, we may also provide a wide range of value-added logistics services, such as freight consolidation, customs brokerage, supply chain consulting and analysis, optimization, and reporting.

Most of our global network operates on a single global technology platform called Navisphere ® (“Navisphere”) that is used to match customer needs with supplier capabilities, to collaborate with other offices, and to utilize centralized support resources to complete all facets of the transaction.

In addition to transportation and logistics services, we provide sourcing services under the trade name Robinson Fresh ® (“Robinson Fresh”).

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We have instituted quality assurance and monitoring procedures with each of these preferred growers.

Our flexible business model has been the main driver of our historical results, and we believe it has positioned us for continued growth.

One of our competitive advantages is our network of offices.

Our employees are in close proximity to both customers and transportation providers, which gives them broad knowledge of their local markets and enables them to respond quickly to customers’ and transportation providers’ changing needs.

Employees act as a team in their sales efforts, customer service, and operations.

A significant portion of most employees’ compensation is performance-oriented, based on profitability and their contributions to the success of the company.

We believe this makes our employees more service-oriented and focused on driving growth and maximizing team productivity.

Our network of offices work together to meet our customers’ needs and cross-sell our services.

For large, multi-location customers, we often coordinate our efforts in global account centers or in one office and rely on multiple offices to deliver specific geographic or modal needs.

Most of our global network operates on a single global technology platform called Navisphere ® that is used to match customer needs with supplier capabilities, to collaborate with other offices, and to utilize centralized support resources to complete all facets of the transaction.

We have grown primarily through internal growth by increasing market share through the addition of new customers and expanding relationships with our current customers, adding new services, expanding our market presence and operations globally, hiring additional employees, and leveraging our technology.

We continually look to grow through selective acquisitions.

In February 2019, we acquired The Space Cargo Group (“Space Cargo”), a provider of international freight forwarding, customs brokerage, and other logistics services to expand our offerings in Spain and Colombia.

Space Cargo operates in our Global Forwarding operating segment.

In January 2020, we entered into a definitive agreement to acquire Prime Distribution Services, a leading provider of retail consolidation services in North America, for approximately $225 million in cash.

The agreement is subject to certain customary closing conditions, including regulatory approval.

In May 2019, we acquired Dema Service S.p.A.

(“Dema Service”), a provider of European road transportation to expand our offerings primarily in Italy.

Dema Service operates in our European Surface Transportation operating segment.

In August 2017, we acquired Milgram & Company Ltd.

(“Milgram”), a provider of freight forwarding, customs brokerage, and surface transportation, to strengthen our freight forwarding and customs brokerage offerings in Canada.

Milgram operates primarily in our Global Forwarding operating segment.

Segment information.

We have two reportable segments:

North American Surface Transportation (“NAST”) and Global Forwarding with our remaining operating segments reported as All Other and Corporate.

The All Other and Corporate segment includes Robinson Fresh, Managed Services, Other Surface Transportation outside of North America, and other miscellaneous revenues and unallocated corporate expenses.

See additional disclosure in Note 9, Segment Reporting , to our consolidated financial statements.

NAST provides transportation and logistics services across North America through a network of offices in the United States, Canada, and Mexico.

The primary services provided by NAST are truckload and less than truckload (“LTL”) transportation services.

Global Forwarding provides transportation and logistics services through an international network of offices in North America, Europe, Asia, Oceania, and South America;

and also contracts with independent agents worldwide.

The primary services provided by Global Forwarding include ocean freight services, air freight services, and customs brokerage.

Robinson Fresh provides sourcing services that primarily include the buying, selling, and marketing of fresh fruits, vegetables, and other value-added perishable items.

Robinson Fresh sources products from around the world.

Managed Services is primarily comprised of our TMC division, which offers Managed TMS ® .

Managed TMS combines the use of Navisphere, logistics process expertise, and consulting services in relation to the use of motor carriers chosen by our customers.

Customers can access Navisphere, logistics experts, and supply chain engineers to manage their day-to-day operations and optimize supply chain performance.

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Other Surface Transportation revenues are primarily earned by our Europe Surface Transportation operating segment.

Europe Surface Transportation provides transportation and logistics services including truckload and groupage services across Europe.

Transportation and Logistics Services

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Our services range from commitments on a specific shipment to much more comprehensive and integrated relationships.

We execute these service commitments by investing in and retaining talented employees, developing innovative proprietary systems and processes, and utilizing a network of contracted transportation providers, including, but not limited to, contracted motor carriers, railroads, and air and ocean carriers.

We make a profit driven by the value we provide our customers and the resulting difference between what we charge to our customers for the totality of services provided to them and what we pay to the transportation providers to handle or transport the freight.

While industry definitions vary, given our extensive contracting to create a flexible network of solutions, we are generally referred to in the industry as a third party logistics company.

We provide the following transportation and logistics services:

Through our contracts with motor carriers, we have access to dry vans, temperature controlled vans, flatbeds, and bulk capacity.

We connect our customers with contracted motor carriers who specialize in their transportation lanes and product types, and we help contracted motor carriers optimize the usage of their equipment.

• Less than Truckload (“LTL”):

We connect our customers with contracted motor carriers that specialize in their transportation lanes and product types, and we help contracted motor carriers optimize the usage of their equipment.

LTL transportation involves the shipment of single or multiple pallets of freight.

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Through our contracts with motor carriers and use of Navisphere, we consolidate freight and freight information to provide our customers with a single source of information on their freight.

In many instances, we will consolidate partial shipments for several customers into full truckloads.

• Intermodal:

Our intermodal transportation service is the shipment of freight in trailers or containers by a combination of truck and rail.

We have intermodal marketing agreements with container owners and all Class 1 railroads in North America, and we arrange local pickup and delivery (known as drayage) through local contracted motor carriers.

In addition, we own approximately 1,500 and lease approximately 1,100 intermodal containers.

As a non-vessel ocean common carrier (“NVOCC”) and freight forwarder, we consolidate shipments, determine routing, select ocean carriers, contract for ocean shipments, and/or provide for local pickup and delivery of shipments.

In many instances, we consolidate partial shipments for several customers into full truckloads.

As a licensed Non-Vessel Ocean Common Carrier (“NVOCC”) and freight forwarder, we consolidate shipments, determine routing, select ocean carriers, contract for ocean shipments, and/or provide for local pickup and delivery of shipments.

As a certified Indirect Air Carrier (“IAC”) and freight forwarder, we organize air shipments and provide door-to-door service.

Our customs brokers are licensed and regulated by U.S.

Customs and Border Protection and other authoritative governmental agencies to assist importers and exporters in meeting legal requirements governing imports and exports.

Customs and Border Protection and other authoritative governmental agencies to assist importers and exporters in meeting regulatory and operational requirements governing imports and exports.

• Other Logistics Services:

We provide fee-based managed services, warehousing services, small parcel, and other services.

We provide intermodal transportation service, which is the shipment of freight in trailers or containers by a combination of truck and rail.

In addition, we provide fee-based Managed Services, warehousing services, small parcel, and other services.

Customers communicate their freight needs, typically on an order-by-order basis, to the C.H.

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The carrier’s contract is with us, not the customer, and we are responsible for prompt payment of freight charges.

In the cases where we have agreed (either contractually or otherwise) to pay for claims for damage to freight while in transit, we pursue reimbursement from the contracted carrier for the claims.

In the cases where we have agreed to pay for claims for damage to freight while in transit, we pursue reimbursement from the contracted carrier for the claims.

In our Managed Services business, we are acting as the shipper’s agent.

In those cases, the carrier’s contract is typically with the customer, and we collect a fee for our services.

As a result of our logistics capabilities, some of our customers have us handle all, or a substantial portion, of their freight transportation requirements.

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As a result of our logistics capabilities, our technology, and global suite of services, some of our customers have us handle all, or a substantial portion, of their freight transportation requirements.

Our employees price our services to provide a profit to us for the totality of services performed for the customer.

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As is typical in the transportation industry, most of these contracts do not include specific volume commitments.

When we enter into prearranged rate agreements for truckload services with our customers, we usually have fuel surcharge agreements which allow for fuel to primarily act as a pass-through cost, in addition to the underlying line-haul portion of the rate.

When we enter into prearranged rate agreements for truckload services with our customers, we usually have fuel surcharge agreements that allow for fuel to primarily act as a pass-through cost, in addition to the underlying line-haul portion of the rate.

We purchase most of our truckload services from our contracted truckload carriers on a spot market, or transactional basis, even when we are working with the customer on a contractual basis.

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Our transportation and logistics services are provided to numerous international customers through our worldwide network.

Transportation services accounted for approximately 96 percent of net revenues in 2019 and 2018, respectively, and 95 percent in 2017.

Net revenues are a non-GAAP financial measure calculated as total revenues less the total of purchased transportation and related services and the cost of purchased products sourced for resale.

Transportation services accounted for approximately 96 percent of adjusted gross profit in 2020 , 2019, and 2018.

Adjusted gross profit is a non-GAAP financial measure calculated as total revenues less the total of purchased transportation and related services and the cost of purchased products sourced for resale.

For additional information, see Item 7 of Part II, Management’s Discussion and Analysis of Financial Condition and Results of Operations .

The table below shows our net revenues by transportation mode, for the years ended December 31 (in thousands):

The table below shows our adjusted gross profit by transportation mode, for the years ended December 31 (in thousands):

2020 2019 2018 2017 2016

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LTL 457,290 477,348 471,275 407,012 381,817

Intermodal 27,670 32,469 29,145 33,482 41,054

Ocean 350,094 308,367 312,952 290,630 244,276

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Our sourcing services include inventory forecasting and replenishment, brand management, and category development services.

We have various national and regional branded produce programs, including both proprietary brands and nationally licensed brands.

We have various national and regional branded produce programs, including both proprietary brands and nationally licensed

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These programs contain a wide variety of high quality, fresh bulk, and value added fruits and vegetables.

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We have also instituted quality assurance and monitoring programs as part of our branded and preferred grower programs.

Sourcing accounted for approximately four percent of our net revenues in 2019 and 2018, respectively, and five percent in 2017.

Segment information.

We have two reportable segments:

NAST and Global Forwarding with our remaining operating segments reported as All Other and Corporate.

See additional disclosure in Note 9, Segment Reporting , to our consolidated financial statements.

NAST provides freight transportation services across North America through a network of offices in the United States, Canada, and Mexico.

The primary services provided by NAST are truckload, LTL, and intermodal.

Global Forwarding provides global logistics services through an international network of offices in North America, Europe, Asia, Oceania, and South America;

and also contracts with independent agents worldwide.

The primary services provided by Global Forwarding include ocean freight services, air freight services, and customs brokerage.

All Other and Corporate primarily consists of Robinson Fresh, Managed Services and Other Surface Transportation outside of North America.

Robinson Fresh provides sourcing services which primarily include the buying, selling, and marketing of fresh fruits, vegetables, and other perishable items.

Robinson Fresh sources products from around the world.

Managed Services is primarily comprised of our TMC division which offers Managed TMS ® .

Managed TMS combines the use of Navisphere, logistics process expertise, and consulting services in relation to the use of motor carriers chosen by our customers.

Customers can access Navisphere, logistics experts, and supply chain engineers to manage their day-to-day operations and optimize supply chain performance.

Other Surface Transportation revenues are primarily earned by our Europe Surface Transportation operating segment.

Europe Surface Transportation provides services similar to NAST across Europe.

Office Network.

To keep us close to our customers and markets, we operate through a network of offices in North America, Europe, Asia, Oceania, and South America.

Our employees are responsible for developing new business, negotiating and pricing services, receiving and processing service requests from customers, and negotiating with carriers to provide the transportation requested.

In addition to routine transportation, employees are often called upon to handle customers’ unusual, seasonal, and emergency needs.

We have developed complex proprietary pricing algorithms that guide our employees regarding establishing competitive pricing with our customers and contracted motor carriers based on the unique characteristics of each customer's shipment.

Employees typically rely on expertise in other offices when contracting and executing truckload, LTL, intermodal, ocean and air shipments.

Multiple network offices often also work together to service larger, global accounts where the expertise and resources of more than one office are required to meet the customer’s needs.

Their efforts are usually coordinated by one “lead” office on the account.

Network Employees.

Employees are generally specialized into roles on new customer sales opportunities, account managing existing customer relationships, managing contracted carrier/supplier relationships for procuring capacity, or ongoing service and operations of shipments.

Customer sales opportunities are identified through our internal database, referrals from current customers, leads generated by people through knowledge of their local and regional markets, company marketing efforts, and

access to transportation industry shipment databases.

Employees who are responsible for recruiting new motor carriers refer them to our centralized carrier services group to confirm they are properly licensed and insured, have acceptable Federal Motor Carrier Safety Administration (“FMCSA”) issued safety ratings, and will enter into a contract for transportation services with C.H.

Working with their regional or divisional leaders, each team makes hiring and staffing decisions, based on balancing business needs with personnel investment and meeting targeted productivity and profitability goals.

Because the quality of our employees is essential to our success, we are highly selective in our recruiting and hiring.

To support our hiring processes, we have a corporate talent acquisition team that develops a pipeline of qualified candidates that managers can draw from.

Our applicants typically have college degrees, and may have some business experience, although not necessarily within the transportation industry.

Our employees go through centralized onboarding that emphasizes development of the skills necessary to become productive employees, including technology training on our proprietary systems and our customer service philosophy.

Centralized training is followed by ongoing, on-the-job training.

Compensation programs include performance-based metrics and cash incentives directly tied to productivity and performance.

A significant portion of network management compensation is dependent on the growth and profitability of their team.

They are paid a performance-based bonus, which is measured based on balanced growth in top and bottom line performance of the team they represent for that calendar year.

The percentage they can potentially earn is predetermined in an annual bonus contract and is based on their role and the overall success of the team.

All of our managers and certain other employees who have significant responsibilities are eligible to receive equity awards because we believe these awards are an effective tool for creating long-term ownership and alignment between employees and our shareholders.

Generally, these awards are eligible to vest over five-year periods and may also include financial performance-based requirements for management employees.

Employees benefit both through the growth and profitability of their team and by achieving individual goals.

They are motivated by the opportunity to advance in a variety of career paths, including management, corporate sales, and customer and carrier account management.

Shared Services.

Our network offices are supported by our shared and centralized services.

Approximately 12 percent of our employees provide shared services in centralized centers.

Over 55 percent of these shared services employees are technology personnel who enhance and maintain our proprietary operating system software and our technology infrastructure.

Sourcing accounted for approximately four percent of our adjusted gross profit in 2020, 2019, and 2018.

Customer Relationships

We work to establish long-term relationships with our customers and to increase the amount of business done with each customer by providing them with a full range of logistics services.

During 2019, we served over 119,000 customers worldwide, ranging from Fortune 100 companies to small businesses in a wide variety of industries.

During 2019, our largest customer accounted for approximately two percent of total revenues.

We work to establish long-term relationships with our customers and to increase the amount of business done with each customer by providing them with a full range of logistics services and people they can rely on.

During 2020, we served approximately 105,000 customers worldwide, ranging from Fortune 100 companies to small businesses in a wide variety of industries.

During 2020, our largest customer accounted for approximately one percent of total revenues.

In recent years, we have grown by adding new customers and by increasing our volumes with, and providing more services to, our existing customers.

We seek additional business from existing customers and pursue new customers based on our knowledge of the marketplace and the range of logistics services that we can provide.

We believe that our account management disciplines, expertise and technology enable our employees to better serve our customers by combining a broad knowledge of logistics and market conditions with a deep understanding of the specific supply chain issues facing individual customers and certain vertical industries.

We seek additional business from existing customers and pursue new customers based on our knowledge of the marketplace, our unique information advantage, and the range of logistics services that we can provide.

We believe that our account management disciplines, expertise, and technology built by and for supply chain experts, enable our employees to better serve our customers by combining a broad knowledge of logistics and market conditions with a deep, data-driven, understanding of the specific supply chain issues facing individual customers and certain vertical industries.

With the guidance of our executive and shared services teams, offices are given significant latitude to pursue opportunities and to commit our resources to serve our customers.

Markets and Resources

The transportation services industry is highly competitive and fragmented.

We compete against many logistics companies, including technology-based service companies, trucking companies, property freight brokers, carriers offering logistics services, NVOCCs, IACs, and freight forwarders.

We also buy from and sell transportation services to companies that compete with us.

In our sourcing business, we compete with produce brokers, produce growers, produce marketing companies, produce wholesalers, and foodservice buying groups.

We also buy from and sell produce to companies that compete with us.

We often compete with respect to price, scope of services, or a combination thereof, but believe that our most significant competitive advantages are:

Our knowledgeable, dedicated, and empowered people act as an extension of our customers’ teams – logistics experts they can rely on, to innovate and execute their supply chain strategies;

• Technology:

Navisphere, our proprietary technology, provides flexibility, global visibility, customized solutions, easy integration, broad connectivity, and advanced security;

Proven processes and solutions combine strategy with practical experience for customized action plans that succeed in the real world;

Our combination of global capability, regional and local expertise, and scale gives our customers a strategic advantage in supply chain execution;

• Relationships:

A large number of unique, strong relationships provide global connections and valuable market knowledge;

• Global Suite of Services:

A wide selection of services and products help provide our customers with consistent capacity and service levels;

Our customers leverage our industry-leading capacity, broad procurement options, global data insights, and substantial shipment volumes for better efficiency, service, and marketplace advantages;

• Information:

Our global suite of services, unparalleled quantity of relationships, and scale combine to provide us with an industry leading data estate.

We have one of the largest datasets of shipments, routings, and carriers in the world.

We use our industry leading data and data analysts to drive smarter solutions for our customers;

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Our customers and our contract carriers rely on us to support critical elements of their business.

Our financial strength, discipline, and consistent track record of success are a key foundation of our ability to sustainably meet their needs.

Proprietary Information Technology and Intellectual Property

Our technology and software platform is essential to service our customers and contracted carriers, and to manage our business.

In 2020, we executed approximately 19 million shipments for approximately 105,000 customers with more than 73,000 contracted carriers.

Navisphere and our other operational systems help our employees service customer orders, select the optimal mode of transportation, build and consolidate shipments, identify appropriate carriers, and manage exceptions, all based on customer-specific service parameters.

Our industry-leading data estate provides our organization with the necessary business intelligence to allow for the necessary decision support in all areas of our business.

We have committed to investing $1 billion in technology innovation over a five-year period to bring the value of technology, data, and analytics to our customers, help solve their most complex logistics challenges and drive the industry forward.

With more than 1,000 data scientists, engineers and developers, we are continuing to invest in global talent in this critical area, building the next generation of tools and processes that will change how supply chains function.

Robinson ® Labs™ is part of this commitment.

It is an innovation incubator where the next big ideas in logistics and supply chain are created, tested, and scaled to drive smarter solutions for our customers and contracted carriers.

The Robinson Labs team collaborates with customers to create personalized solutions for shippers’ challenges with the industry’s premier technology that is built by and for supply chain experts.

Our operations primarily use Navisphere, a global, multimodal transportation management system that allows customers to communicate worldwide with parties in their supply chain across languages, currencies, and continents.

Navisphere offers sophisticated business analytics to help improve supply chain performance and meet increasing customer demands.

The Navisphere Vision ® product allows our customers to see their freight across all modes and services globally in a single view.

Details of shipment contents, status of shipments based on milestones, disruptions to shipments, and resulting estimated time of arrival adjustment using artificial intelligence are provided for the customer to manage their supply chain exceptions.

Collaboration, intelligent notifications, and performance scorecarding allow customers to manage their supply chain and identify inefficiencies.

The Navisphere Carrier platform provides contracted motor carriers access to the functionality necessary to manage their relationship with C.H.

Contracted motor carriers can access available freight, provide online status updates, keep track of receivables, and upload scanned documentation.

Many of our contracted motor carriers’ favorite features from Navisphere Carrier are also available through our Navisphere Carrier mobile application available for Android and iOS mobile operating systems.

The Navisphere Driver mobile application provides contracted motor carriers’ drivers with load status automation capabilities.

Drivers can elect to allow the application to automate location services and updates while in transit.

Drivers can also capture and upload bill of lading documentation to initiate payment processes.

The track and trace capabilities give our systems and customers frequent load status information.

Freightquote by C.H.

Robinson is a web-based, mobile-responsive offering designed to streamline the shipping process for small business customers allowing the booking of freight without any shipping knowledge or expertise.

Freightquote's small business customers can go online with their phone, tablet, or computer to book their LTL or truckload freight, track shipments, get proactive notifications, and pay for transportation services with a credit card.

We rely on a combination of cyber security, trademarks, copyrights, trade secrets, and nondisclosure and non-competition agreements to establish and protect our intellectual property and proprietary technology.

Additionally, we have numerous registered trademarks, trade names, and logos in the United States and international locations.

Relationships with Transportation Providers

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We own very little transportation equipment and do not employ the people directly involved with the delivery of our customers’ freight, so these relationships are critical to our success.

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In 2020, we worked with approximately 73,000 transportation providers worldwide, of which the vast majority are contracted motor carriers.

To strengthen and maintain our relationships with contracted motor carriers, our employees regularly communicate with contracted motor carriers and try to assist them by increasing their equipment utilization, reducing their

empty miles, and repositioning their equipment.

To strengthen and maintain our relationships with contracted motor carriers, our employees regularly communicate with them and try to assist them by increasing their equipment utilization, reducing their empty miles, and repositioning their equipment.

To make it easier for contracted motor carriers to work with us, we have a policy of contracted motor carrier invoice payment upon receipt of proof of delivery in accordance with our standard payment terms.

For those contracted motor carriers who would like a faster payment, we also offer expedited payment upon receipt of proof of delivery in exchange for a discount, along with offering in-trip cash advances.

For those contracted motor carriers that would like a faster payment, we also offer expedited payment upon receipt of proof of delivery in exchange for a discount, along with offering in-trip cash advances.

Contracted motor carriers provide access to dry vans, temperature controlled vans, flatbeds, and bulk capacity.

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Contracted motor carriers that had fewer than 100 tractors transported approximately 78 percent of our truckload shipments in 2020.

Every United States and Canadian motor carrier with which we do business with is required to execute a contract that establishes that the motor carrier is acting as an independent contractor.

Every United States and Canadian motor carrier which we do business with is required to execute a contract that establishes that the motor carrier is acting as an independent contractor.

At the time the contract is executed, and thereafter, through subscriptions with a third party service, we confirm that each United States contracted motor carrier is properly licensed and insured, has the necessary federally-issued authority to provide transportation services, and can provide the necessary level of service on a dependable basis.

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Our standard contracts do not include volume commitments, and typically the initial contract rate is modified each time we confirm an individual shipment with a contracted motor carrier.

We also have intermodal marketing agreements with container owners and all Class 1 railroads in North America, giving us access to additional trailers and containers.

Our contracts with railroads specify the transportation services and payment terms by which our intermodal shipments are transported by rail.

Intermodal transportation rates are typically negotiated between us and the railroad on a customer-specific basis.

We own approximately 1,500 53-foot containers and lease approximately 1,100 containers.

We believe that these containers have helped us better serve our customers, and we will continue to analyze the strategy of controlling containers.

In our NVOCC ocean transportation business, we have contracts with most of the major ocean carriers, which support a variety of service and rate needs for our customers.

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The transactional negotiations afford us the ability to capture excess capacity at prevailing market rates for a specific shipment.

The transportation services industry is highly competitive and fragmented.

We also buy from and sell transportation services to companies that compete with us.

In our sourcing business, we compete with produce brokers, produce growers, produce marketing companies, produce wholesalers, and foodservice buying groups.

We also buy from and sell produce to companies that compete with us.

We often compete with respect to price, scope of services, or a combination thereof, but believe that our most significant competitive advantages are:

Smart, dedicated, empowered people act as an extension of our customers’ teams to innovate and execute their supply chain strategies;

Proven processes and solutions combine strategy with practical experience for customized action plans that succeed in the real world;

• Technology:

Navisphere, our proprietary technology, provides flexibility, global visibility, customized solutions, easy integration, broad connectivity, and advanced security;

Our customers gain local presence, regional expertise, and multiple global logistics options from one of the world’s largest providers of logistics services;

• Relationships:

A large number of unique, strong relationships provide global connections and valuable market knowledge;

• Portfolio of Services:

A wide selection of services and products help provide our customers with consistent capacity and service levels;

Our customers leverage our industry-leading capacity, broad procurement options, and substantial shipment volumes for better efficiency, service, and marketplace advantages;

Our financial strength, discipline, and consistent track record of success for strategic support of our customers’ supply chains.

Our operating results have been subject to seasonal trends as a result of, or influenced by, numerous factors, including national holidays, weather patterns, consumer demand, economic conditions, and other similar and subtle forces.

Although seasonal changes in the transportation industry have not had a significant impact on our cash flow or results of operations, we expect this trend to continue and we cannot guarantee that it will not adversely impact us in the future.

Proprietary Information Technology and Intellectual Property

Additionally, we have numerous registered trademarks, trade names, and logos in the United States and international locations.

Our software systems are essential to service our customers and contracted carriers, and manage our business.

In 2019, we executed approximately 18 million shipments for more than 119,000 customers with more than 78,000 contracted carriers.

Our operational systems help our employees service customer orders, select the optimal mode of transportation, build and consolidate shipments, identify appropriate carriers and manage exceptions, all based on customer-specific service parameters.

Our data estate provides our organization with the necessary business intelligence to allow for the necessary decision support in all areas of our business.

Our operations primarily use Navisphere, a global, multi modal transportation management system that allows customers to communicate worldwide with parties in their supply chain across languages, currencies, and continents.

Navisphere offers sophisticated business analytics to help improve supply chain performance and meet increasing customer demands.

The Navisphere Vision product allows our customers to see their freight across all modes and services globally in a single view.

Collaboration, intelligent notifications, and performance score carding allow customers to manage their supply chain and identify inefficiencies.

The Navisphere Carrier platform provides contracted motor carriers access to the functionality necessary to manage their relationship with C.H.

Contracted motor carriers can access available freight, provide online status updates, keep track of receivables, and upload scanned documentation.

The Navisphere Driver mobile application provides contracted motor carriers’ drivers with load status automation capabilities.

Drivers can elect to allow the application to automated location services and updates while in-transit.

Drivers can also capture and upload bill of lading documentation to initiate payment processes.

The track and trace capabilities give our systems and customers frequent load status information.

Freightquote by C.H.

Freightquote's small business customers can go online with their phone, tablet, or computer to book their LTL or truckload freight, track shipments, get proactive notifications and pay for transportation services with a credit card.

Government Regulation

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Although Congress enacted legislation in 1994 that substantially preempts the authority of states to exercise economic regulation of motor carriers and brokers of freight, some intrastate shipments for which we arrange transportation may be subject to additional licensing, registration, or permit requirements.

We contractually require and rely on the motor carrier transporting the shipment to ensure compliance with these types of requirements.

We contractually require and rely on the motor carrier

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transporting the shipment to ensure compliance with these types of requirements.

We, along with the contracted motor carriers that we rely on in arranging transportation services for our customers, are also subject to a variety of federal and state safety and environmental regulations.

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and foreign laws and regulations including, but not limited to, the Foreign Corrupt Practices Act and other similar anti-bribery and anti-corruption statutes.

Risk Management and Insurance

We contractually require all motor carriers we work with to carry at least $750,000 in automobile liability insurance and $25,000 in cargo insurance.

We also require all contracted motor carriers to maintain workers compensation and other insurance coverage as required by law.

Most contracted motor carriers have insurance exceeding these minimum requirements.

Railroads, which are generally self-insured, provide limited common carrier cargo loss or damage liability protection, generally up to $250,000 per shipment.

In North America, as a property freight broker, we are not legally liable for loss or damage to our customers’ cargo.

In our customer contracts, we may agree to assume cargo liability up to a stated maximum.

We typically do not assume cargo liability to our customers above minimum industry standards in our international freight forwarding, ocean transportation, or air freight businesses on international or domestic air shipments.

With regards to international freight forwarding, certain ocean transportation, international domestic air freight shipments, and NAST LTL shipments, we offer our customers the option to purchase shippers’ interest insurance coverage to insure goods in transit.

When we agree to store goods for our customers for longer terms, we provide limited warehouseman’s coverage to our customers and typically contract for warehousing services from companies that provide us the same degree of coverage.

We maintain a broad cargo liability insurance policy to help protect us against catastrophic losses that may not be recovered from the responsible contracted carrier.

We also carry various liability insurance policies, including automobile and general liability, with a $200 million umbrella where we carry a $15 million retention.

Our contingent automobile liability coverage has a primary retention of $5 million per incident.

As a seller of produce, we may, under certain circumstances, have legal responsibility arising from produce sales.

We carry product liability coverage under our general liability and umbrella policies to cover tort claims.

The deductible on our general liability coverage is $500,000 per incident.

In addition, in the event of a recall, we may be required to bear the costs of repurchasing, transporting, and destroying any allegedly contaminated product, as well as potential consequential damages which were generally not insured.

We carry product recall insurance coverage of $50 million.

This policy has a retention of $5 million per incident.

We maintain a cyber liability insurance policy with coverage of $10 million to help protect us against losses that may result from a cyber-related security breach or similar event.

This policy has a retention of $1 million per incident.

Human Capital

As of December 31, 2020, we had a total of 14,888 employees, 12,977 of whom are network employees, as presented below.

Our remaining employees centrally serve our network of offices in areas such as finance, information technology and software engineering, data science and analysis, legal, marketing, and human resources.

The following table illustrates our employees by global region:

North America Europe Asia Oceania South America Total

Network employees 9,049 1,600 1,786 332 210 12,977

Shared services employees 1,596 82 168 32 33 1,911

Total Employees 10,645 1,682 1,954 364 243 14,888

Contractors 610 20 210 36 24 900

Talent Strategies

Our talented, empowered, and engaged employees continue to be one of our primary competitive advantages.

They are logistics experts and problem solvers, and act as an extension of our customers' teams.

Our customers and contract carriers consistently cite our people and the strong, value added relationships with our account teams as a primary reason they choose to work with us.

Our innovative talent strategies support the development and empowerment of our people, enabling the success of our customers and contract carriers and helping drive our growth strategy.

Working with their regional or divisional leaders, each team makes hiring decisions, based on balancing business needs with personnel investment and meeting targeted productivity and profitability goals.

Our continued success depends in large part on our ability to hire strong, diverse talent and retain and develop successful employees.

Our employee turnover ratio, which is calculated as the number of employees who departed the Company in the twelve months ended December 31, 2020, divided by the average number of employees in the twelve months ended December 31, 2020, was 18 percent.

On average, our managers lead a team of six direct reports.

Because the quality of our employees is essential to our success, we are highly selective in our recruiting and hiring.

To support our hiring processes, we have a corporate talent acquisition team that develops a robust, diverse pipeline of qualified candidates that managers can draw from.

Our employees go through onboarding that emphasizes development of the skills necessary to become productive employees, including technology training on our proprietary systems and our customer service philosophy.

Centralized training is followed by ongoing, on-the-job training and regular performance and career development reviews.

Ongoing employee development is an important component of our talent strategy;

therefore, our employees and managers have performance conversations on a regular basis, at least twice per year.

In 2020, approximately 97 percent of our workforce received regular performance and career development reviews.

In addition, on an annual basis we conduct an employee engagement survey to assess employee engagement, which is measured by willingness to recommend a company, intent to stay, pride, and the experience of intrinsic motivation on the job.

The 2020 survey indicated a positive engagement score of 81 percent, which was consistent with benchmark companies.

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Our market-competitive compensation programs help drive performance and reward success.

They include performance-based metrics and cash incentives directly tied to productivity, the achievement of specific performance goals, and the financial performance of the team or the organization overall.

A significant portion of management compensation is dependent on the growth and profitability of their team.

Senior managers are paid a performance-based bonus, which is measured based on balanced growth in top and bottom line performance of the team they represent for that calendar year.

The percentage they can potentially earn is predetermined in an annual bonus contract and is based on their role and the overall success of the team.

A majority of our managers and certain other employees who have significant responsibilities are eligible to receive equity awards because we believe these awards are an effective tool for creating long-term ownership and alignment between employees and our shareholders.

Refer to Note 6, Capital Stock and Stock Award Plans, for further discussion related to equity award plan design.

Employees benefit both through the growth and profitability of their team and by achieving individual goals.

They are motivated by the opportunity to advance in a variety of career paths, including management, corporate sales, and customer and carrier account management.

Network Employees

We have defined job families and roles to enable our employees to specialize in particular areas of the business and build their expertise.

We believe this enables them to perform at a higher level and create more value for our customers and contract carriers.

Some of our employees choose to stay in that area of specialization, while others progress across multiple areas of the business to build a broader base of experience.

We believe our strategy of having multiple career path opportunities enables our employees to develop to their highest potential and choose a career plan that fits their goals and aspirations.

We also believe this drives higher engagement and retention.

Depending on their role, our employees are responsible for developing new business, negotiating and pricing services, receiving and processing service requests from customers, and negotiating with carriers to provide the transportation requested.

In addition to routine transportation, employees are often called upon to handle customers’ unusual, seasonal, and emergency needs.

We have developed industry leading technology and complex proprietary pricing algorithms based on our information advantage that guide our employees regarding establishing competitive pricing with our customers and contracted motor carriers based on the unique characteristics of each customer's shipment.

Employees typically rely on expertise in other offices when contracting and executing truckload, LTL, ocean, and air shipments.

Multiple network offices often also work together to service larger, global accounts where the expertise and resources of more than one office are required to meet the customer’s needs.

Their efforts are usually coordinated by one lead office on the account.

Employees who are responsible for recruiting new motor carriers refer them to our centralized carrier services group to confirm they are properly licensed and insured, have acceptable Federal Motor Carrier Safety Administration issued safety ratings, and will enter into a contract for transportation services with C.H.

Shared Services.

Our network offices are supported by our shared and centralized services.

Approximately 13 percent of our employees provide shared services in centralized centers.

Approximately 55 percent of these shared services employees are technology personnel who enhance and maintain our proprietary operating system software and our technology infrastructure.

Environmental, Social, and Governance (“ESG”)

We integrate ESG into our business, driven by our “EDGE” values of evolving constantly, delivering excellence, growing together, and embracing integrity, to help to ensure we deliver value to our customers, employees, suppliers, shareholders, and communities.

We incorporate these principles into our business in a number of ways, including:

• Environmental Sustainability:

We have conducted an assessment to identify our priority ESG topics.

The results of this assessment and more information is available in our sustainability report.

We incorporate these principles and priorities into our business in a number of ways, including:

• Environmental Stewardship:

By leveraging our scope, size, and scale, we work with customers to help optimize their supply chain, eliminate empty miles on the road, and reduce their carbon footprint.

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Environmental Protection Agency since 2005.

In 2019, we announced a goal to reduce our Scope 1 and 2 carbon intensity 40% by 2025.

Additionally, we joined the Sustainable Packaging Coalition in an effort to reduce waste in packaging for our fresh produce sourcing services.

• Diversity and Inclusion:

We are committed to fostering an inclusive workplace that attracts and retains high-performing diverse talent.

This commitment is demonstrated by integrating diversity and inclusion initiatives into our talent strategies and across our business.

Last year, this included integration into employee training programs and ensuring our employee benefit programs meet the needs of our diverse employee workforce.

In 2019, we announced a goal to reduce our Scope 1 and 2 carbon intensity 40 percent by 2025.

We report according to the Task Force on Climate-related Financial Disclosures via the Carbon Disclosure Project Climate Change survey.

Additionally, we provide products and services to help our customers meet their ESG goals.

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• Diversity and Inclusion (“D&I”):

We work to create a culture of belonging, core to our values, that embraces the unique experiences and diverse backgrounds of our people in order to create a stronger, more innovative, and successful team.

This commitment is demonstrated by integrating D&I initiatives into our talent strategies and across our business.

Last year, we launched inclusivity training for all employees, created Employee Resource Groups, enhanced our talent acquisition processes, and further integrated D&I into leadership development and succession strategy.

We evaluate our success in attracting and retaining a high-performing diverse workforce as the percentage of women and minorities to our total workforce in addition to the percentage of women and minorities in a management position to our total management population.

These metrics are summarized below as of December 31, 2020:

Women in workforce (1)

Management positions held by women (1)

BIPOC in workforce (2)

Management positions held by BIPOC (2)

________________________________

(1) Metric is derived from our worldwide population of employees.

(2) Black, Indigenous, and People of Color ("BIPOC").

Metric is derived from our U.S.

population of employees.

• Community Engagement:

Involvement in our communities and supporting non-profit organizations is a core element of our culture and source of pride and engagement by our employees.

Through our company and the C.H.

Robinson Foundation, we contributed to more than 800 charities operating around the globe and our employees donated more than 11,000 hours to nonprofits in their local communities in 2019.

We proudly support organizations that matter most to our people through employee match programs, grantmaking, disaster relief efforts, employee hardship and scholarship fund programs.

We also make a difference in our industry through our carrier scholarship program and our support of Truckers Against Trafficking, which works with the transportation industry to fight human trafficking.

Robinson Foundation, we contributed over $3 million to more than 800 charities operating around the globe in 2020.

We proudly support our people, our industry, and our communities through employee match programs, grantmaking, disaster relief efforts, an employee hardship fund, and scholarship programs.

In 2020, we focused additional giving on supporting COVID-19 relief efforts.

We also support organizations focusing on social and racial equity.

Information about our Executive Officers

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Short 50 President of Global Freight Forwarding

Wiehoff 58 Executive Chairman of the Board

Zechmeister 54 Chief Financial Officer

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Bob graduated from Winona State University with a Bachelor of Arts degree.

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Campbell was named Chief Legal Officer and Secretary in January 2015.

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He began his career with C.H.

Robinson through the acquisition of FoodSource, Inc.

Robinson through the acquisition of FoodSource, Inc., in 2005.

He is a board member of the United Fresh Produce Association and the Pinky Swear Foundation.

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Freeman was named Chief Human Resources Officer in January 2015, and in October 2019 also became ESG Officer.

Prior to becoming CHRO, she served as Vice President of Human Resources from August 2012 to December 2014.

Prior to her current role, she served as Vice President of Human Resources from August 2012 to December 2014.

Previous positions with C.H.

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In addition to her responsibilities at C.H.

Robinson, Angie currently serves on the Board of Directors of Spartan Motors, Inc.

SPAR) and on the Board of the University of North Dakota Alumni Association & Foundation.

Robinson, Angie currently serves on the Board of Directors of The Shyft Group, Inc.

SHYF) and on the Board of the University of North Dakota Alumni Association & Foundation.

Prior to joining C.H.

Robinson in 1998, Angela was with McDermott/O’Neill & Associates, a Boston-based public affairs firm.

Robinson in 1998, Angie was with McDermott/O’Neill & Associates, a Boston-based public affairs firm.

Angie holds a Bachelor of Arts degree and a Bachelor of Science degree from the University of North Dakota, and a Master of Science degree from the London School of Economics.

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Neill was named Chief Technology Officer in June 2018.

Previous positions with the company include IT Director, Application Development from 2010 to 2018, IT Director, Infrastructure and Security from 2005 to 2010, and Software Development Manager from 2002 to 2004.

Previous positions with the company include IT Director, Application Development from 2010 to 2018;

IT Director, Infrastructure and Security from 2005 to 2010;

and Software Development Manager from 2002 to 2004.

Prior to joining C.H.

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He graduated from the University of Missouri in 1993 with a Bachelor of Science degree in Business.

Wiehoff has served as Chairman of the Board since 2007, and intends to retire from the company, including as a director, on May 7, 2020.

John served as Chief Executive Officer from May 2002 to May 2019, President of the Company since

December 1999, a director since 2001, and became the chairman in January 2007.

Previous positions with the company include Senior Vice President from October 1998, Chief Financial Officer from July 1998 to December 1999, Treasurer from August 1997 to June 1998, and Corporate Controller from 1992 to June 1998.

Prior to joining C.H.

Robinson, John was employed by Arthur Andersen LLP.

John also serves on the Boards of Directors of Polaris Inc.

PII) and Donaldson Company, Inc.

He holds a Bachelor of Science degree from St.

John’s University.

Zechmeister was named Chief Financial Officer in August 2019.

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Robinson, Mike served as Chief Financial Officer of United Natural Foods, Inc., a food wholesaler, from 2015 to August 2019.

Prior to joining United Natural Foods, Inc., Mike spent 25 years at General Mills, Inc.

holding a variety of leadership roles, including Vice President of Finance for the Pillsbury Division, Vice President of Finance for U.S.

Prior to joining United

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Natural Foods, Inc., Mike spent 25 years at General Mills, Inc., holding a variety of leadership roles, including Vice President of Finance for the Pillsbury Division, Vice President of Finance for U.S.

Retail Sales, and Treasurer.

Mike holds a Bachelor of Science in Business degree from the Carlson School of Management at the University of Minnesota and earned a MBA in Finance, Marketing, and Strategy from the Kellogg School of Management at Northwestern University.

Mike also serves on the Board of Overseers for the Carlson School of Management at the University of Minnesota.

As of December 31, 2019, we had a total of 15,427 employees, approximately 13,600 of whom were in our network offices.

Our remaining employees centrally serve our network of offices in areas such as finance, information technology, legal, marketing, and human resources.

Investor Information

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changes in market demand and pressures on the pricing for our services;

competition and growth rates within the third party logistics industry;

fuel price increases or decreases, or fuel shortages;

competition and growth rates within the global logistics industry;

freight levels and increasing costs and availability of truck capacity or alternative means of transporting freight;

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changes in our customer base due to possible consolidation among our customers;

cyber-security related risks;

risks associated with operations outside of the United States;

our ability to successfully integrate the operations of acquired companies with our historic operations;

risks associated with litigation, including contingent auto liability and insurance coverage;

risks associated with operations outside of the United States;

risks related to the elimination of LIBOR;

risks associated with the potential impact of changes in government regulations;

risks associated with the produce industry, including food safety and contamination issues;

fuel price increases or decreases, or fuel shortages;

cyber-security related risks;

the impact of war on the economy;

changes to our capital structure;

risks related to the elimination of LIBOR, and other risks and uncertainties, including those described below.

changes due to catastrophic events including pandemics such as COVID-19, and other risks and uncertainties, including those described in Item 1A, Risk Factors.

Forward-looking statements speak only as of the date they are made.

We undertake no obligation to update these statements in light of subsequent events or developments.

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What changed 10-K

Item 1. Business