Dave Bozeman, Chief Executive Officer of CH Robinson, said:
Source: CH Robinson
Dave Bozeman takes the stage at his first Investor Day as CEO CH Robinsonhe will have to contend with a freight recession, the threat of higher tariffs, and the restructuring of a century-old logistics giant.
“I want to explain our vision, but we’ve actually already started executing,” Boseman told CNBC in an exclusive interview ahead of the company’s investor day on Thursday. “We intend to increase our market share and expand our overall operating margin.”
On Thursday, shipping company executives laid out new financial goals, answered questions about the transition to a lean operating model and discussed the business situation, including the potential impact of President-elect Donald Trump’s proposed tariffs. We plan to provide the latest information.
President Trump announced a 60% tariff on products from China and a 25% tariff on products from Mexico and Canada. This could have a significant impact on CH Robinson, which transports goods around the world for around 100,000 customers.
CH Robinson’s main business segments include global forwarding, known as freight brokering between the United States and other regions. Land transportation in North America primarily transports cargo by land.
Analysts estimate that CH Robinson is a top three carrier in the China-U.S. freight lane, and say the company transports about 10% of U.S.-Mexico freight shipments. I am.
“Some shippers may say, ‘We’ll take care of that duty.’ The economics of that volume will probably change based on pricing, etc. In any case, we’ll carry that cargo.” I intend to,” Boseman said. “The cargo still has to be moved. It may just be a different starting point, but we’re still there to move it.”
Citi transportation analyst Ali Rosa upgraded C.H. Robinson’s investment rating to “buy” in November. He believes the tariffs are creating near-term freight traction and agrees with Bozeman that the company has the ability to mitigate the impact of potential tariffs in the long term. .
“There’s no question that the company’s global transportation business is heavily influenced by China,” Rosa told CNBC. “But I think their business is diversified enough that they can survive the tariffs.”
new era
At Thursday’s Investor Day, CH Robinson and microsoft and the use of Azure AI.
“We’ve gone all-in on AI. It’s a game-changer for us, especially at our scale,” Boseman said, adding that while the partnership with Microsoft was a great value-add, much of the work was done in-house. He pointed out that it was
“Our engineers are actually building language models at scale. We send out 10,000 email quotes. [per day] Deployed via a large language model. We are really happy with the productivity we have achieved using this technology,” Bozeman said.
“We can get a quote back to the customer in under two minutes conversationally,” he said. “This allows our employees to focus on delivering, executing and resolving solutions with customers, rather than spending time on menial tasks.”
This week, Wells Fargo analyst Christian Weatherby upgraded CH Robinson stock in a note, writing in part: and expanding margins. ”
Key to all of Bozeman’s goals for CH Robinson is a transition to a new lean operating model focused on continuously improving and reducing inefficiencies and activities that don’t add value to the company or customers. .
Lean models are relatively new to logistics. However, it is used in the following places: Amazon, caterpillar and ford — All companies where Boseman served as CEO.
The shift is well received. CH Robinson’s stock is up more than 25% this year, far outpacing the Dow Jones Transportation Average’s rise of about 7% over the same period.
“I’m building a new company, a new culture,” Bozeman said. “It will be an easy company to invest in because it is the market leader.”
