C.H. Robinson’s growth is fueled by tech investment

Cracking the top 10 for the second year in a row, freight logistics heavyweight C.H. Robinson (NASDAQ: CHRW) retained its position at number nine on the 2020 FreightTech 25 list.

While many view the global logistics provider as a freight broker, those that have used C.H. Robinson’s product offerings see much more.

For years the company has been a technology leader in freight brokerage and the latest versions of its tech offerings are capable of supplying shippers and capacity providers with an all-encompassing technology platform from which to move freight.  

But now C.H. Robinson finds itself in a race with many new and well-funded digital entrants vying to garner market share in the increasingly tech-competitive, fast-paced brokerage arena. For more than a year now, freight brokers have been forced to compete on price in attempts to capture or retain market share.

“Leveraging technology to improve the efficiency of the supply chain is nothing new for us, but what is new for everyone is the rapid pace of change that is helping to advance the industry. As the world’s largest, most connected logistics platform, C.H. Robinson is uniquely suited to solve our customers’ greatest challenges,” said Bob Biesterfeld, the company’s president and CEO.

A significant number of carriers used a strong 2018 freight environment to add tractor capacity to their fleets. As volumes began to slow in the early fall of 2018, equipment additions continued at a robust clip. The result has been a capacity overhang in the truckload (TL) market, which has driven spot rates lower. Contract TL rates are beginning to catch up to those lower levels. The combination of new digital entrants looking to carve out a piece of the industry, asset-based carriers building out their respective brokerage networks and excess capacity weighing on rates is creating a very competitive brokerage market with incumbent providers bolstering their tech platforms to keep pace. 

Navisphere technology continues to evolve

C.H. Robinson has continued to evolve the capabilities of its flagship technology, Navisphere. Navisphere is more than a web-based freight brokerage platform matching customer shipping needs with suppliers’ capacity offerings.

Navisphere Vision is C.H. Robinson’s software-as- a-service (SaaS) platform that allows clients to leverage C.H. Robinson’s technology investments to gain improved visibility into their own supply chain operations, optimize processes and access data and reporting on one platform.

Biesterfeld continued, “Our technology – such as our single, global multimodal transportation management system, Navisphere, and our recently introduced Freightquote by C.H. Robinson –  is built by and for supply chain experts and is designed to address exactly what our customers need. Being able to meet our customers where and how they want to buy is one reason we have 100% customer retention among our top 500 customers.”

Using application programming interface (API) technology, Navisphere Vision uses real-time order and shipment information and predictive and prescriptive analytics to compile historical data into trends and insight, identifying potential supply chain disruptions. The system provides users with end-to-end shipment visibility for all geographies and all modes on the same dashboard.

While many digital freight brokerage platforms are fully automated, lacking easily accessible human support, C.H. Robinson’s customers have access to logistics experts and supply chain engineers to manage and optimize their supply chain performance.

“Ultimately, we want to drive better outcomes for our customers, such as improved savings, reliability and visibility. Some ways we do this are: providing secure fast connections via APIs to our Navisphere platform; providing more real-time updates as well as predictive analytics to enable our customers to make real-time decisions to best manage supply chains around the globe; continuing to improve our pricing engines to provide dynamic market rates to customers; and optimizing digital freight matching to reduce wasted carrier miles driven, improve tender acceptance and increase quality metrics such as on-time scores,” said C.H. Robinson’s chief technology officer Mike Neill.

Navisphere Carrier allows contracted carriers to find available freight, register their check calls online once the driver has reached the facility, track receivables and upload documentation. Most of these features are available through a mobile app as well.

The Navisphere Driver mobile app provides drivers with the ability to complete all stop updates and in-transit calls automatically, upload bill of lading documentation and load status information through track and trace technology.

Navisphere has more than 200,000 organizations connected to the platform, 55 million digital transactions monthly, with more than half of all shipments completely automated (more than 75% of customer interaction).

Freightquote by C.H. Robinson addresses the small to mid-sized shipper

C.H. Robinson is seeking to compete more vigorously in the market for smaller shippers. The company believes that it can gain traction with this group, which has historically been underserved, with its new Freightquote by C.H. Robinson option.

In November, the company launched this new product. The web portal offers capacity sourcing capabilities to small and medium-sized businesses for most modes of transportation. The platform allows shippers to compare real-time rates from C.H. Robinson’s network of approved carriers and book their shipment via credit card. Additionally, the system provides the shipper with load tracking and shipment notifications.

C.H. Robinson, which currently works with approximately 100,000 small and medium-sized businesses, estimates that the market for these shippers could be as large as 1.8 to 1.9 million with more than $70 billion in annual freight spend. C.H. Robinson is looking to help automate freight movements for this demographic through its platform. The automated opportunity is large for a smaller shipper, especially the ones not operating on a transportation management system (TMS) or can’t or don’t want to invest in the technology.

Freightquote by C.H. Robinson is the evolution of the company’s acquisition of Freightquote.com, Inc., which was completed in 2015. Freightquote.com was one of the largest web-based freight brokers in the U.S. at the time.

Large commitment to tech investment

Over the last decade, C.H. Robinson has spent roughly $1 billion on technology, with the expectation of spending a similar amount over the next five years. The company’s current guidance calls for total tech spending of $200 million in 2019, much higher than the previous annual historical average of roughly $125 million. Roughly 80% of the planned investment will be to expand capabilities and build new products with the remaining earmarked to improving its digital infrastructure that facilitates significantly more volumes today than it did a few years ago.

“We know that technology, predictive analytics and AI are revolutionizing our industry, and we’ve recently announced that we’re doubling our technology investment to $1 billion over the next five years to help us lead the way forward with innovative solutions. The majority of this investment will be focused on expanding our capabilities and adding new technology products to deliver an information advantage to our customers and carriers by utilizing our experience, data and scale,” concluded Neill.

The FreightTech 25 list was revealed during FreightWaves LIVE Chicago on Nov. 13. The list comprises of the most technologically innovative and disruptive companies across the transportation industry. These companies were selected by a panel of industry experts, which ranked members from the FreightTech 100 list on a 1 to 25 point basis, with the companies receiving the highest amount of points filling out the list from 1 to 25.

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