CH Robinson: Meeting Customers’ Evolving Logistics Needs
Over the past 120 years, CH Robinson has firmly established itself as one of the world’s largest logistics companies, providing solutions and services for global supply chains.
Thanks to a 15,000-strong global team, spread across more than 300 offices in 37 countries, the organisation offers a vast range of services. These include ocean, air, rail and truck transportation, not to mention customs and trade compliance, warehousing, fulfilment and supply chain design and optimisation.
In North America, its home continent, CH Robinson is perhaps best known for moving more truckload freight than anyone else and managing more less-than-truckload (LTL) shipments than any other 3PL.
And it’s in this particular space, third-party logistics, that the company is perceived as a true trailblazer among industry peers.
“We were the original 3PL,” enthuses Arun Rajan, Chief Strategy and Innovation Officer at CH Robinson. “We essentially created the third-party logistics category, then evolved enormously over time as the world and our customers’ needs evolved too.”
To Arun and his employer, 3PL translates as leveraging scale, data, tech and expertise to help companies operate their global supply chains in a way that wouldn’t be in reach on their own.
He explains: “If you’re a retailer, for example, you could hire a trucking company on your own; you could have your own fleet. But a logistics provider like us, with 7,500 retail customers and more than 90,000 customers in nearly every industry, has a uniquely broad view across the marketplace and uniquely deep knowledge and relationships to bring to the table.
“What retailer can maintain relationships and optimise across 450,000 carriers globally? They can’t, but we can and do.”
CH Robinson: A world leader in 3PL
CH Robinson has become a leader in its field thanks to its undisputed ability to adapt and offer tailored solutions to clients – an increasingly important asset as global supply chains become increasingly far-flung and complex.
One area where the business has amassed deep experience is in automotive supply chains. This can be traced back to the firm opening its first Mexico office more than 30 years ago when auto manufacturing clusters began to emerge.
Now, auto parts are one of the top items moving across the US-Mexico border and CH Robinson manages no fewer than a million cross-border shipments in the region every year.
For most freight, this requires a cross-docking facility, where goods from a Mexican trailer are transferred to a US trailer. CH Robinson recently opened the largest cross-dock of its kind in Laredo, Texas, growing its space along the border to 1.5 million sq ft.
“Expedited services have grown in importance for us too, because automotive supply chains operate on a just-in-time basis,” Arun adds.
Elsewhere, retail and food and beverage shippers have also found themselves wanting for more tailored solutions over time.
As these firms look to carve out new efficiencies in their supply chains, CH Robinson has grown its drop-trailer service to the point where it’s a top five drop-trailer provider and the leading provider for some customers.
“Many people think of drop trailer as the domain of the asset players in our industry,” Arun goes on. “But we’ve absolutely shown how a 3PL can aggregate even more of that type of capacity, so shippers can have flexibility in loading and keep warehouse space and crews lean.”
How 3PL is boosting business
Arun is unequivocal in his belief that outsourcing logistics to 3PL providers like CH Robinson, or at least having flexible transportation, is absolutely pivotal given the modern-day risks and general uncertainty facing supply chains.
He cites the collapse of the Francis Scott Key Bridge in Baltimore, which cut off the Port of Baltimore, as a prime example. A customer had 100 truckloads of freight destined for the port that very day, but CH Robinson came to the rescue by scrambling the necessary trucks to pick up their freight in Florida instead.
What’s more, when ships are 10 to 14 days longer on the water to avoid the Red Sea, CH Robinson can convert time-sensitive freight to air. When pricing for rail vs trucking fluctuates, it can adjust a customer’s shipping plans to take advantage of the best option at that present moment.
“The efficiency a 3PL enables is something a shipper can rarely accomplish on their own,” Arun continues. “When we consolidate products from multiple shippers on one truck to get to a single retailer, not only is that more efficient and less costly for each shipper, but it greatly improves on-time delivery, fill rates and inventory accuracy.
“Many shippers also have freight that flows in only one direction and, because we can fill the truck on the backhaul, they don’t have to pay for it to drive empty.”
Transloading is another area where 3PLs can improve business outcomes.
CH Robinson has transloading facilities in every North American port city to help customers move their ocean freight inland more efficiently. Cargo in three 40-foot ocean containers fits into two 53-foot trailers or intermodal containers, saving the customer US$500-1,000 in transportation and lowering the number of deliveries at their receiving docks, which in turn saves on space, staffing and forklifts.
Arun adds: “We have some customers who completely avoid the overhead of having their own distribution centres by bringing freight into multiple ports and having it transloaded for direct delivery to their end customers.”
Data the key to unlocking efficiencies
So, what exactly is the secret sauce that helps 3PLs facilitate such impressive flexibility, efficiency and cost savings for shippers.
For CH Robinson, it boils down to the sheer scale of its data, with insights on 19 million shipments per year. Its Procure IQ tool looks at patterns across three million shipping lanes to advise shippers on which of their freight should be put out to bid, which to award directly and which is better off in the spot market.
Arun says: “Rich data helps us get competitive real-time rates for our customers, schedule the optimal time for pick-up at their facilities and generate highly-accurate predictive ETAs for them.”
The operations chief believes that, overall, the future of 3PL will be far more data-driven, with more tools for planning and optimisation and more predictive analytics to help offset the increasing frequency and intensity of supply chain disruptions.
Use of generative AI (Gen AI) in 3PL remains in its infancy, Arun asserts. He has seen evidence of chatbots being developed for customers to query general datasets and numerous software teams taking advantage of the ability to write code faster, but says serious gains can be made in automating repetitive, manual tasks.
“Natural language processing and traditional machine learning had their limits when it comes to replicating the tasks a human can do, like replying to a simple email request,” Arun explains. “The training data was enormously expensive to get, host and maintain.
“The massive breakthrough was Gen AI and the large language models behind it. Now, all of a sudden, there’s a generalised set of training data that allows our tech to read and understand any type of email like a human can.”
A culture of innovation
The common thread here is that the very smartest experts in 3PL and the logistics field in general will constantly create and utilise tools in order to enhance customer relationships.
“Here at C.H. Robinson,” Arun says, “we like to say our people empower our tech and our tech empowers our people.”
Next for CH Robinson – looking at physical aspects of the business – are better batteries and charging infrastructure for electric vehicles, with completely autonomous trucks coming further down the road. With keen interest, Arun is also keeping tabs on rapid developments in sustainable aviation fuel and even wind-powered ships.
“The people who founded CH Robinson more than 100 years ago would be blown away by the business now,” he concludes. “I imagine the next 100 years will bring even more exponential change.”
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