The C.H. Robinson business model is based on a network of regional sales offices. The company operates 200+ offices around the world. Representatives in these offices assess local and global market conditions and deal directly with customers and contract carriers.
The regional offices typically work together to complete transactions. This model attracts large multi-location customers because they can leverage the company’s multiple offices for service in specific geographic areas or access to specific transportation services. All offices utilize C.H. Robinson’s global platform of proprietary systems and technology processes.
With the help of information provided by the operating system, representatives typically select a contracted carrier for each assignment based upon their knowledge of the carrier’s service capability, equipment availability, freight rates, and other relevant factors. Based on that information, representatives may either determine an appropriate price or wait to communicate with a contracted carrier directly before setting a price.
This business model relies heavily on salespeople who can solicit and manage customers. C.H. Robinson attracts appropriate talent using performance-oriented compensation to reward salespeople. Compensation is the company's largest expense. The company's revenues in terms of transportation mode (as of 2011) are as follows:
- Truck - 88% of net revenue
- Intermodal - 2.9% of net revenue
- Ocean - 4.6% of net revenue
- Air - 2.7% of net revenue
- Other Logistics Services – 1.8% of net revenue
C.H. Robinson offers a portfolio of planning, consulting, optimization and outsourcing services delivered in a sustained relationship model. The company assigns transportation experts to specific customer accounts, sometimes actually placing people on-site in customer locations. Those experts serve as an extension of the shipper's transportation staff and handle a variety of day-to-day transportation tasks and strategic assignments, such as annual planning and supply chain optimization.
Read more about this topic: C. H. Robinson Worldwide
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