C.H. Robinson Navigating Easing Spot-Freight Backdrop

C.H. Robinson dominates the $90 billion asset-light highway brokerage market, and its immense network of shippers and asset-based truckers supports a wide economic moat, in our view. Although the company isn't immune to freight downturns, its variable-cost model historically helps shield profitability during periods of lackluster freight demand, as evidenced by a long history of above-average profitability. The firm's ownership of transportation equipment is minimal, and a large swath of operating expenses are tied to performance-based variable compensation, which tends to move in line with net revenue growth. We think the company remains well positioned to capitalize on gradual truck brokerage industry consolidation (including market share gains) despite intensifying competition.