Risk Factors Dashboard
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Risk Factors - CHRW
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Item 1A. of Part I, Risk Factors.
The Company maintains an Enterprise Risk Management (“ERM”) program, which includes processes for key risk identification, mitigation efforts, and day-to-day management of risks, including cybersecurity risks. The ERM program is administered by our Internal Audit department and involves our global cybersecurity team, which possesses knowledge and expertise in the area of cybersecurity risks. Our global cybersecurity team helps ensure the cybersecurity risks identified from the ERM program are incorporated into our overall cybersecurity program. Programs to address key cybersecurity risks have been put into place including layered coverage with focus areas and practices designed to address network and endpoint security, application security, and security operations. We also employ automated detection and event correlation techniques and alerting as well as integrate cyber threat intelligence into our processes. Our security operations center serves as the front line of these alerts and investigates and remediates threats as necessary. We also perform regular vulnerability assessments and penetration tests. Although it is difficult to determine the potential impacts from a cybersecurity incident, we may experience negative impacts such as reputational harm, inability to retain existing customers or attract new customers, exposure to legal claims and government action, among others. Previous attacks on our operating systems have not had a material financial impact on our operations, but we cannot guarantee future attacks will have little to no impact on our business. Furthermore, given the interconnected nature of the global supply chain and our significant presence in the industry, we believe we may be an attractive target for such attacks. Furthermore, given the interconnected nature of the supply chain and our significant presence in the industry, we believe we may be an attractive target for such attacks. The impact of a cybersecurity incident may have a material adverse impact on our financial condition, results of operations, availability of our systems, and growth prospects, which makes cybersecurity risk management of critical importance to our organization.Although we have internally developed the majority of our line of business applications, we also rely on technology provided by third parties. We have processes in place to oversee and identify risks from cybersecurity threats associated with the use of third-party technology including third-party risk management, process and partner intake risk assessments, and dedicated procurement functions. These processes help mitigate the risks associated with utilizing external technology platforms and help prevent disruptions to our business operations. We also involve external cybersecurity experts to assess our cybersecurity program, risk management, and relevant internal controls. In addition to our cybersecurity programs and policies, the Company also purchases a cybersecurity risk insurance policy to limit its exposure to cybersecurity incidents.The Board of Directors is tasked with oversight of the Company’s cybersecurity, information governance, and privacy programs. The Audit Committee oversees our ERM program and receives semi-annual ERM updates, which include cyber-related risk items. In addition, our Audit Committee receives quarterly reports on cybersecurity from our Chief Technology Officer and our Chief Information Security Officer and Technology Risk Management . Our Chief Information Security Officer
We have also established a cross-functional project team of subject matter experts from across the organization to quickly analyze, mitigate, and remediate potential cybersecurity incidents or vulnerabilities and comply with cybersecurity related reporting requirements. The details of any such cybersecurity incidents or threats are included in the quarterly reports to the Audit Committee. 
Relationships with Transportation Providers
We continually work on establishing contractual relationships with qualified transportation providers that meet both our and our customers’ service requirements to provide dependable services, favorable pricing, and available capacity during periods when demand for transportation equipment is greater than the supply. We own very little transportation equipment and do not employ the people directly involved with the delivery of our customers’ freight, so these relationships are critical to our success.
In 2025, more than 450,000 transportation providers were on our platform, the vast majority of which are contracted motor carriers. To strengthen and maintain our relationships with contracted motor carriers, our employees regularly communicate with them and try to assist them by increasing their equipment utilization, reducing their empty miles, and repositioning their equipment. To make it easier for contracted motor carriers to work with us, we send hyper-customized load recommendations to them directly, give them simple tools to make offers and instantly book loads, and provide financial services that make it easier to get paid. To make it easier for contracted motor carriers to work with us, we have a policy of making contracted motor carrier invoice payments upon receipt of proof of delivery in accordance with our standard payment terms. For those contracted motor carriers that would like to be paid faster than our standard terms, we offer cash advances of up to 60 percent upon picking up a load and, in exchange for a discount, expedited final payment upon proof of delivery. For those contracted motor carriers that would like a faster payment, we also offer expedited payment upon receipt of proof of delivery in exchange for a discount, along with offering in-trip cash advances.
Contracted motor carriers provide us access to dry vans, temperature-controlled vans, flatbeds, and bulk capacity. 8Table of ContentsContracted motor carriers provide access to dry vans, temperature controlled vans, flatbeds, and bulk capacity. These contracted motor carriers are of all sizes, including owner-operators of a single truck, small and mid-size fleets, private fleets, and the largest national trucking companies. Consequently, we are not dependent on any one contracted motor carrier. In 2025, our largest truck transportation provider was less than one percent of our total cost of transportation, and contracted motor carriers that had fewer than 100 trucks transported approximately 72 percent of our truckload shipments. Every U.S. and Canadian motor carrier we do business with is required to execute a contract that establishes the motor carrier is acting as an independent contractor. At the time the contract is executed, and thereafter, through subscriptions with a third-party service, we confirm that each U.S. contracted motor carrier is properly licensed and insured, has the necessary federally issued authority to provide transportation services, and can provide the necessary level of service on a dependable basis. Our motor carrier contracts require the contracted motor carrier to issue invoices only to, and accept payment solely from, us for the shipments they transport under their contract with us and allow us to withhold payment to satisfy previous claims or shortages. Our motor carrier contracts require the contracted motor carrier issue invoices only to, and accept payment solely from, us for the shipments they transport under their contract with us and allow us to withhold payment to satisfy previous claims or shortages. Our
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standard contracts do not include volume commitments, and typically, the initial contract rate is modified each time we confirm an individual shipment with a contracted motor carrier.
In our NVOCC ocean transportation business, we have contracts with most of the major ocean carriers, which support a variety of service and rate needs for our customers. We negotiate annual contracts that establish the predetermined rates we agree to pay the ocean carriers. The rates are negotiated based on expected volumes from our customers in specific trade lanes. These contracts are often amended throughout the year to reflect changes in market conditions.
We operate both as a consolidator and as a transactional IAC in the United States and internationally. We select air carriers and provide for local pickup and delivery of shipments. We execute our air freight services through our relationships with air carriers, charter services, block space agreements, capacity space agreements, and transactional spot market negotiations. Through charter services, we contract part or all of an airplane to meet customer requirements. Our block space agreements and capacity space agreements are contracts for a defined time period. The contracts include fixed allocations for predetermined flights at agreed upon rates that are reviewed periodically throughout the year. The transactional negotiations afford us the ability to capture excess capacity at prevailing market rates for a specific shipment.
Seasonality
Our operating results have been subject to seasonal trends as a result of, or as influenced by, numerous factors, including national holidays, weather patterns, consumer demand, economic conditions, and other similar and subtle forces. Although seasonal changes in the transportation industry have not had a significant impact on our cash flow or results of operations, we expect this trend to continue, and we cannot guarantee that it will not adversely impact us in the future.
Government Regulation
Our operations may be regulated and licensed by various federal, state, and local transportation agencies in the United States and similar governmental agencies in foreign countries in which we operate.
We are subject to licensing and regulation as a property freight broker and are licensed by the U.S. Department of Transportation (“DOT”) to arrange for the transportation of property by motor vehicle. The DOT prescribes qualifications for acting in this capacity, including certain surety bonding requirements. C.H. Robinson is also licensed under, and subject to regulation by, the Federal Maritime Commission (“FMC”) as an ocean transportation intermediary in the capacity as both a freight forwarder and NVOCC; we maintain separate bonds and licenses for each. We operate as a U.S. Department of Homeland Security certified IAC, providing air freight services, subject to commercial standards set forth by the International Air Transport Association (“IATA”) and federal regulations issued by the Transportation Security Administration (“TSA”). C.H. Robinson performs customs brokerage services pursuant to its customs brokerage license issued by U.S. Customs and Border Protection (“CBP”). As a licensed customs broker, C.H. Robinson has experience working with other government agencies that maintain jurisdiction over certain customs entries. We also hold Customs Trade Partnership Against Terrorism (“CTPAT”) certification with CBP as both a customs broker and NVOCC. We also hold customs trade partnership against terrorism (“CTPAT”) certification with CBP as both a customs broker and NVOCC.
Although Congress enacted legislation in 1994 that substantially preempts the authority of states to exercise economic regulation of motor carriers and brokers of freight, some intrastate shipments for which we arrange transportation may be subject to additional licensing, registration, or permit requirements. We contractually require and rely on the motor carrier transporting the shipment to ensure compliance with these types of requirements. We, along with the contracted motor carriers on which we rely to arrange transportation services for our customers, are also subject to a variety of federal and state safety and environmental regulations. Although compliance with the regulations governing licensees in these areas has not had a materially adverse effect on our operations or financial condition in the past, there can be no assurance that such regulations or changes thereto will not adversely impact our operations in the future. Violation of these regulations could also subject us to fines, as well as increased claims liability.
We buy and sell fresh produce under licenses issued by the U.S. Department of Agriculture (“USDA”) as required by the Perishable Agricultural Commodities Act (“PACA”). Other sourcing and distribution activities may be subject to various federal and state food and drug statutes and regulations.
As a publicly traded company and issuer of stock, we are subject to and maintain compliance with various anti-corruption and anti-bribery statutes such as the U.S. Foreign Corrupt Practices Act (“FCPA”), the UK Bribery Act 2010, and certain other foreign countries’ equivalent statutes or programs in the countries in which we operate.
We are subject to laws and regulations in the United States and other countries concerning the handling of personal information, including laws that require us to notify governmental authorities and/or affected individuals of data breaches involving certain personal information. These laws and regulations include, for example, the European General Data Protection Regulation and
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the California Consumer Privacy Act. Regulatory actions or litigation seeking to impose significant penalties could be brought against us in the event of a data breach or alleged non-compliance with such laws and regulations.
Human Capital
At C.H. Robinson, our employees connect the world and power our transformation, creating value for our customers and contract carriers today and anticipating what they will need next. Robinson, our employees connect the world and are the foundation of our success, creating value for our customers and contract carriers. They are supply chain experts and problem solvers who act as strategic partners, leveraging scale, data, and expertise to solve challenges in global supply chains. They are supply chain experts and problem solvers who are committed to winning, and act as an extension of our customers’ teams. Customers and carriers consistently identify our people as a key differentiator, citing the expertise that enables us to deliver speed, simplicity, quality, and clarity in every interaction.
Our employees bring our enterprise strategy and the Robinson Operating Model to life through The Robinson Way, a culture framework that aligns our purpose, customer promise, and behavioral advantages (Authentic, Persistent, Accountable, Curious, United). This framework emphasizes delivering exceptional service and high value through our expertise, scale, and tailored solutions while embracing innovation and continuous improvement. This framework emphasizes delivering exceptional service and high value through our expertise, scale and tailored solutions. The Robinson Way provides clarity on how every role contributes to our success and inspires a sense of purpose and direction in a rapidly evolving supply chain landscape. It reinforces forging lasting relationships with integrity and respect; committing to executional excellence; owning successes and failures; challenging the status quo; and working together to raise the bar through smarter, faster, and simpler ways of working. It emphasizes forging lasting relationships with integrity, honesty, and respect; committing to getting the job done right; owning successes and failures and learning from both; challenging the status quo; and working together to raise the bar. This framework aligns employees with the company’s strategic goals and creates a high-performance culture of engagement, recognition, and continuous improvement, enhancing career growth and job satisfaction while driving innovation and speed. This framework not only aligns employees with the company’s strategic goals but also creates a high-performance culture of engagement, recognition, and continuous improvement, ultimately enhancing career growth and job satisfaction.
We attract, retain, and reward exceptional talent through a performance culture grounded in purpose and a commitment to career development, growth, and innovation. As a service company, success depends on creating an environment where people are empowered to succeed, grow, and innovate.
We are a global company with a large and varied customer and contract carrier base. We work with 75,000 customers across a wide variety of industries, with 450,000 contract carriers on our platform. We work with 83,000 customers across a wide variety of industries, with 450,000 contract carriers on our platform. As of December 31, 2025, we had a total of 11,855 employees in 37 countries. Our employees speak 70 languages and encompass four generations in the workplace. Our success depends on a workforce that reflects the communities where we live and work—and the diversity of our customers and contract carriers. This alignment strengthens relationships and drives meaningful impact across the global supply chain. We harness the unique perspectives, skills, and experiences of our global network of supply chain experts to fuel innovation, strengthen collaboration, and build a team positioned to win in a rapidly changing market. We leverage the unique perspectives, skills, and experiences of our global network of supply chain experts to create a stronger, more innovative and successful team. This approach delivers smarter solutions for customers, contract carriers, and growers, creating a competitive edge in attracting and retaining top talent.
Oversight and Governance
Our Board of Directors and Talent and Compensation Committee oversee our human capital management efforts. They receive regular updates from our Chief Human Resources and Environmental, Social, and Governance (“ESG”) Officer on key talent strategy initiatives, success measurements, and other relevant matters including hiring, retention, culture, employee engagement, succession planning, leadership, compensation, and benefits. They receive regular updates from our Chief Human Resources and Environmental, Social, and Governance (“ESG”) Officer on key strategic initiatives, success measurements, and other relevant matters including hiring, retention, culture, employee engagement, succession planning, leadership, compensation, and benefits.
Our People
Our global workforce includes 11,855 employees and 761 contingent workers, as presented below. We have 9,899 network employees, while the remaining employees support functions such as Advanced Analytics and Data Science, Communications and Marketing, Finance, Human Resources, Legal, Product, and Technology and Engineering. Among our employees, 99 percent work full-time hours.
The following table illustrates our employee count by global region as of December 31, 2025:
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Talent Acquisition, Engagement, and Retention
C.H. Robinson attracts, engages, and retains top talent by combining our reputation for supply chain expertise with advanced technology, meaningful career opportunities, and a high performance culture grounded in innovation, continuous improvement, and inclusion. We use data-driven recruitment strategies and targeted marketing to strengthen our talent brand and drive a high-quality pipeline of candidates aligned with our strategic goals. We seek individuals who embody our behavioral advantages while demonstrating adaptability, collaboration, and a passion for solving complex challenges with speed, simplicity, quality and clarity.
Lean AI and how our people leverage it, is a key part of how we’re building a smarter and faster C.H. Robinson. Lean AI has become a talent differentiator, starting with the hiring process.Generative AI has become a talent differentiator, starting with the hiring process. We explore how candidates leverage AI during interviews to help us identify continuous learners and innovators. Candidates leveraging generative AI during interviews helps us identify continuous learners and innovators. We then put Lean AI technology in the hands of our employees and are investing in the development of critical skills to make their work efficient and allow them to deliver more impact. Lean AI is rapidly accelerating how our people solve problems, drive growth, and deliver more value to our customers and carriers. Our strategy and operating model are the engine, and Lean AI is our accelerator. Together, they help us solve problems, drive growth, and deliver more value to our customers and carriers.
Our employee turnover ratio in 2025, which is calculated as the number of employees who departed in the 12 months ended December 31, 2025, divided by the average number of employees in the 12 months ended December 31, 2025, was 19 percent. We actively drive retention by focusing on top drivers for our employees, including compensation, work-life balance, and career growth opportunities. This has enabled us to maintain a voluntary turnover rate of 11 percent, lower than companies of similar size and industry.
We regularly survey our employees and engage in focus groups to better understand what they value and how we can continuously enhance their experience. Our 2025 engagement survey generated a 76 percent engagement score. Survey feedback underscores that our employees are aligned with our strategic direction, committed to continuous improvement, ready to learn and work with AI tools, and trust our leaders to guide them through change.
Onboarding and Development
We grow and develop leaders and employees by offering opportunities for early-career talent and seasoned experts to work on complex, strategic projects that shape global supply chains and deliver value for some of the world’s largest companies. Our talent model prioritizes developing talent and leaders and building expertise, recognizing that experience, knowledge, and relationships compound over time to drive innovation and competitive advantage.
We take a strategic approach to developing great leaders, leveraging our scale, global footprint, and deep relationships to create leaders who can navigate complexity and deliver with speed, simplicity, and clarity. At C.H. Robinson, 79 percent of our people leaders have been with us for more than five years, and over half for more than 10 years, a testament to our commitment to career growth and retention. Robinson, 78 percent of our people leaders have been with us for more than five years, and over half for more than 10 years. We identify strong talent early and use a defined success profile to illustrate what excellence looks like at C. We identify strong talent early and have a defined success profile illustrating what excellence looks like at C. H. Robinson. We use data driven insights to measure leadership effectiveness and optimize performance through our operating model, technology tools, and culture, ensuring our employees are supported by strong, knowledgeable leaders.
Our onboarding process provides employees with clarity on our culture, strategy, and growth opportunities.Our onboarding process provides employees with a clear understanding of our culture, strategic goals, and growth opportunities. It includes training on our operating model, proprietary technology systems, customer service philosophy, and differentiating behaviors. It includes training on proprietary technology systems, customer service philosophy, company culture, and differentiating behaviors. Onboarding is followed by on-the-job training and ongoing performance and development conversations to reinforce learning and accelerate growth. Onboarding is followed by on-the-job training and regular performance and development conversations.
Throughout their careers, employees have access to a digital learning platform that supports continuous development through a variety of in-person and virtual leadership development and skill-building programs.Throughout their careers, employees have access to a digital learning platform supporting ongoing development through a variety of in-person and virtual leadership development and skill building programs. Employees can explore career paths through an online resource center that provides resources for performance, development, and recognition, empowering them to own their growth journey.
Wellness, Benefits, and Compensation
At C.H. Robinson, we take a comprehensive view of supporting our employees’ health and wellbeing. Our total rewards strategies support employees’ health, wealth, and self, incorporating market-competitive pay and comprehensive benefit programs for all global employees.
We are committed to creating and maintaining a safe and secure workplace for all employees. Our safety efforts across divisions and regions are united by the warehouse environmental, health, and safety policy, which is publicly available in the company’s global Code of Ethics.
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We deliver highly competitive and meaningful benefit programs designed to meet the needs of our global workforce. Our benefit programs include healthcare, retirement benefits, and an employee assistance program in various global locations, providing additional no-cost access to behavioral health benefits and counseling. Our benefit programs include healthcare, retirement benefits, and an employee assistance program in various global locations, 11Table of Contentsproviding additional no-cost access to behavioral health benefits and counseling. Benefits are reviewed annually to ensure competitiveness and clarity, incorporating employee feedback to meet a variety of needs.
Our compensation programs are designed to align with company goals and drive sustainable, profitable growth. Incentives are performance-based and emphasize an ownership mentality, rewarding employees for delivering customer value, growing market share, and expanding margins. Enterprise bonus plans use financial measures tied to strategic priorities, and compensation incorporates individual, team, and enterprise performance for accountability and consistency. For customer-facing roles, incentives balance volume and margin. Increased compensation transparency strengthens the link between pay and performance and provides visibility into career opportunities.
Our equity program is an important part of how we stay competitive from a total compensation perspective, as it incentivizes and rewards leadership for sustained enterprise performance.Our equity compensation program is an important part of how we stay competitive from a total compensation perspective, as it incentivizes and rewards leadership for sustained enterprise performance. In our equity program, we grant equity to about 11 percent of our employees. Additionally, 36 percent of eligible employees participate in our employee stock purchase plan. Both aspects contribute to our internal ownership being broad and deep. Refer to Note 6, Capital Stock and Stock Award Plans, to our consolidated financial statements for further discussion related to our equity award plan design.
Community Engagement
C.H. Robinson and the C.H. Robinson Foundation invest in organizations that support our people, strengthen our industry, and make a positive impact on communities around the globe. Our community engagement work is also a key part of our culture and how we engage and develop our people.
We provide support through grantmaking for our industry and communities, scholarship programs, disaster relief and humanitarian aid, and employee-driven philanthropy to support the organizations our people care about most.
Environmental Sustainability
We prioritize work that drives long-term growth for the business by aligning with our enterprise strategy and stakeholder needs. We focus our sustainability efforts in three areas: helping customers meet their sustainability goals, working to reduce our own greenhouse gas emissions, and contributing to advancements in sustainability within the transportation industry.
The C.H. Robinson business model is based on finding efficiencies and reducing waste across supply chains. Our scope and scale, combined with our supply chain experts and advanced technology, position us to help our customers report and reduce emissions to meet sustainability-related goals and comply with associated regulations. We are also proud to have joined multiple industry coalitions that advance the scalability of infrastructure alongside the Smart Freight Centre, our peers, our shippers, and our contract carriers in 2025. The company’s Alternative Fuel Program is now available across all modes, providing shippers with access to alternative fuels or advanced technology around the world. Since the launch of our program, C.H. Robinson has logged more than 3 million miles on alternative fuels and electric vehicles.
Additionally, Robinson Fresh focuses on reducing waste through innovative technologies and sustainable packaging options across our product portfolio. Additionally, Robinson Fresh focuses on reducing waste through innovative technologies and sustainable packaging options across our product portfolio. Our proactive management of supply networks enables us to create more sustainable, efficient, and flexible supply chains that support both our customers’ needs and the long-term viability of fresh produce sourcing and the logistics industry. Our scope and scale, combined with our supply chain experts and advanced technology, position us to help our customers report and reduce emissions to meet sustainability-related goals and comply with associated regulations.
We measure and report on our Scope 1, 2, and 3 emissions in our annual sustainability report, and disclose the results of climate scenario analysis through the company’s annual climate risk report, updated mid-year.We measure and report on our Scope 1, 2, and 3 emissions in our annual sustainability report. In 2023, we announced the completion of our science-aligned, below 2°C goal to reduce our Scope 1 and 2 carbon intensity by 40 percent by 2025. Not only did we exceed our goal, but we were also proud to accomplish this work two years early. We expect to continuously evolve and improve our greenhouse gas reporting and management.
As a leader in our industry, we collaborate with non-profit and academic institutions on supply chain sustainability topics, including sponsorship of research and participation in working groups focused on innovation within the transportation industry.
Additional information about our human capital management and environmental sustainability initiatives, goals, and achievements are available in the sustainability report or climate risk report available on our website; however, neither the sustainability report nor the climate risk report are incorporated by reference in, and are not a part of, this Annual Report on Form 10-K.
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Information about our Executive Officers
The Board of Directors designates the executive officers annually. Below are the names, ages, and positions of the executive officers as of February 13, 2026:
David P. Bozeman was named the President and Chief Executive Officer in June 2023. Prior to joining C.H. Robinson, Dave served as Vice President, Ford Customer Service Division, and Vice President, Enthusiast Vehicles, for Ford Blue of Ford Motor Company, an automobile manufacturer, a position he held since August 2022. Prior to joining Ford, Dave was Senior Vice President, Amazon Transportation Services of Amazon.com, Inc., an electronic commerce and cloud computing company, from February 2017 to August 2022. Dave previously held leadership positions of increasing responsibility at Caterpillar Inc. and Harley-Davidson, Inc. He currently serves on the board of directors for 3M Company, the Brookings Institution, and the Conservation Fund. Dave holds a Master of Science degree in Engineering Management from the Milwaukee School of Engineering and a Bachelor of Science degree in Manufacturing Design from Bradley University.
Dorothy G. Capers was named Chief Legal Officer and Corporate Secretary in May 2025. Prior to joining C.H. Robinson, Dorothy served as Senior Vice President and General Counsel at Xylem Inc., a global water technology company, from February 2022 to May 2025, and as Executive Vice President and Global General Counsel at National Express Group, a multinational transportation company, from March 2018 to March 2022. Earlier in her career, she held legal leadership roles at US Foods, Inc., and served as Deputy Corporation Counsel for the City of Chicago and as a prosecutor for the Cook County State’s Attorney’s Office. Dorothy currently serves on the Board of the Chicago State University Foundation. She holds a Juris Doctor degree from Howard University School of Law and a Bachelor of Arts degree from the University of Illinois.
Michael Castagnetto was promoted to President of NAST in February 2024. Prior executive and management positions with the company include NAST Vice President of Customer Success from January 2023 to January 2024, Robinson Fresh President, from January 2020 to December 2022 and other management roles of increasing responsibility since 2013. Prior to these roles, Michael held various customer-facing roles within the company.Michael Castagnetto became President of NAST in February 2024. Prior executive and management positions with the company include NAST Vice President of Customer Success from January 2023 to January 2024, Robinson Fresh President, from January 2020 to December 2022 and other management roles of increasing responsibility since 2013. Prior to these roles, Michael held various customer-facing roles within the company. He began his career with C.H. Robinson through the company’s acquisition of FoodSource, Inc., in 2005. He is a board member of the Angel Foundation. He holds a Bachelor of Arts degree from Saint Mary’s College of California. He holds a Bachelor of Arts from Saint Mary’s College of California.
Angela K. Freeman was named Chief Human Resources Officer in January 2015, and in October 2019, also became ESG Officer. She additionally serves as the Chair of the Board of the C.H. Robinson Foundation. Prior to her current roles, she served as Vice President of Human Resources from August 2012 to December 2014 and Vice President of Investor Relations and Public Affairs from January 2009 to August 2012. Previous positions at C.H. Robinson include Director of Investor Relations and Director of Marketing Communications. In addition to her responsibilities at C.H. Robinson, Angela currently serves on the Board of Directors of the Aebi Schmidt Group, and on the Board of the University of North Dakota Alumni Association & Foundation. Prior to joining C.H. Robinson in 1998, Angela was with McDermott/O’Neill & Associates, a Boston-based public affairs firm. Angela holds a Bachelor of Arts degree and a Bachelor of Science degree from the University of North Dakota and a Master of Science degree from the London School of Economics.
Damon Lee was named Chief Financial Officer in June 2024. Previously, he served as Vice President and Chief Financial Officer of GE Commercial Engines and Services, the largest division of GE Aerospace, from August 2022 to May 2024, and as Vice President and Chief Financial Officer, Commercial Services of GE Aerospace from May 2021 to August 2022. Prior to joining GE Aerospace, Damon served as Vice President of Finance (CFO), Electrical Distribution Systems at Aptiv Corporation PLC from July 2018 to June 2021. He previously held positions of increasing responsibility at Precision Castparts Corp., Eaton Corporation plc, Newell-Rubbermaid (now Newell Brands Inc.), Ingersoll Rand Inc., and Mattel, Inc. Damon holds a Bachelor of Science degree and Master of Business Administration degree, both from Murray State University.
Arun Rajan was named Chief Strategy and Innovation Officer in June 2024. He previously served as the Company’s Chief Operating Officer from October 2022 to June 2024, leading the Product, Technology, Data Science, Analytics, and Marketing organizations at C.H. Robinson. Arun joined C.H. Robinson as Chief Product Officer in September 2021. Prior to joining
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C.H. Robinson, Arun was the Chief Technology Officer of Whole Foods Market, part of Amazon, from September 2019 to July 2021. Arun also held leadership positions at Zappos, an online retail company, through its acquisition by Amazon, serving as Chief Operating Officer from April 2015 to August 2019, Acting Chief Operating Officer from September 2014 to March 2015, and Chief Technology Officer from 2009 to 2013. Prior to Zappos, Arun’s leadership roles included serving as the Chief Technology Officer of One Kings Lane in San Francisco, Co-founder and Chief Technology Officer of New York City’s Intent Media, Chief Technology Officer of Travelocity Europe and LastMinute.com in London, and Co-Founder and Chief Technology Officer of ITRadar.com in Minneapolis, Minnesota. Arun holds a Bachelor of Science degree in Computer Science from Pittsburgh State University and a Master of Science degree in Information Systems Management from the University of Arizona.
Michael J. Short was named President of Global Freight Forwarding in May 2015. He joined C.H. Robinson through the company’s acquisition of Phoenix International in 2012 and is a veteran of the global forwarding industry. Prior to being named President of Global Freight Forwarding, Michael served as Vice President, Global Forwarding – North America. Prior to joining C.H. Robinson, he held a number of roles at Phoenix International, including Regional Manager, Sales Manager, and General Manager of the St. Louis office. He holds a Bachelor of Science degree from the University of Missouri.
Investor Information
We were reincorporated in Delaware in 1997 as the successor to a business existing, in various legal forms, since 1905. Our corporate office is located at 14701 Charlson Road, Eden Prairie, Minnesota, 55347-5088, and our telephone number is (952) 937-8500. Copies of our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Proxy Statement, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 are available free of charge through our website (www.chrobinson.com) as soon as reasonably practicable after we electronically file the material with the Securities and Exchange Commission. Information contained on our website is not part of this report.
Cautionary Statement Relevant to Forward-Looking Information
This Annual Report on Form 10-K, including our financial statements, Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of Part II of this report, and other documents incorporated by reference, contain certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. When used in this Form 10-K and in our other filings with the Securities and Exchange Commission, in our press releases, presentations to securities analysts or investors, in oral statements made by or with the approval of any of our executive officers, the words or phrases “believes,” “may,” “could,” “will,” “expects,” “should,” “continue,” “anticipates,” “intends,” “will likely result,” “estimates,” “projects,” or similar expressions and variations thereof are intended to identify such forward-looking statements.
Except for the historical information contained in this Form 10-K, the matters set forth in this document may be deemed to be forward-looking statements that represent our expectations, beliefs, intentions, or strategies concerning future events. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our historical experience or our present expectations, including, but not limited to, factors such as changes in economic conditions, including uncertain consumer demand; changes in market demand and pressures on the pricing for our services; fuel price increases or decreases, or fuel shortages; competition and growth rates within the global logistics industry that could adversely impact our profitability and ability to achieve our long-term growth targets; freight levels and increasing costs and availability of truck capacity or alternative means of transporting freight; risks associated with seasonal changes or significant disruptions in the transportation industry; risks associated with identifying and completing suitable acquisitions; our dependence upon and changes in relationships with existing contracted truck, rail, ocean, and air carriers; risks associated with the loss of significant customers; risks associated with reliance on technology to operate our business, including reliance on third-party platforms and cybersecurity related risks; our ability to staff and retain employees; risks associated with operations outside of the United States; our ability to successfully integrate the operations of acquired companies with our historic operations or efficiently manage divestitures; climate change related risks; risks associated with our indebtedness; risks associated with interest rates; risks associated with litigation, including contingent auto liability and insurance coverage; risks associated with the potential impact of changes in government regulations, including environmental-related regulations; risks associated with the changes to income tax regulations; risks associated with the produce industry, including food safety and contamination issues; the impact of changes in political and governmental conditions; changes to our capital structure; changes due to catastrophic events; risks associated with the usage of AI technologies; and other risks and uncertainties, including those described in Item 1A, Risk Factors. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our historical experience or our present expectations, including, but not limited to, factors such as changes in economic conditions, including uncertain consumer demand; changes in market demand and pressures on the pricing for our services; fuel price increases or decreases, or fuel shortages; competition and growth rates within the global logistics industry that could adversely impact our profitability and ability to achieve our long-term growth targets; freight levels and increasing costs and availability of truck capacity or alternative means of transporting freight; risks associated with seasonal changes or significant disruptions in the transportation industry; risks associated with identifying and completing suitable acquisitions; our dependence upon and changes in relationships with existing contracted truck, rail, ocean, and air carriers; risks associated with the loss of significant customers; risks associated with reliance on technology to operate our business; cybersecurity related risks; our ability to staff and retain employees; risks associated with operations outside of the United States; our ability to successfully integrate the operations of acquired companies with our historic operations or efficiently manage divestitures; climate change related risks; risks associated with our indebtedness; risks associated with interest rates; risks associated with litigation, including contingent auto liability and insurance coverage; risks associated with the potential impact of changes in government regulations including environmental-related regulations; risks associated with the changes to income tax regulations; risks associated with the produce industry, including food safety and contamination issues; the impact of changes in political and governmental conditions; changes to our capital structure; changes due to catastrophic events; risks associated with the usage of artificial intelligence technologies; risks associated with cybersecurity events; and other risks and uncertainties, including those described in Item 1A, Risk Factors. Forward-looking statements speak only as of the date they are made. We undertake no obligation to update these statements in light of subsequent events or developments.
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ITEM 1A. RISK FACTORS
The following are material factors that could affect our financial performance and could cause actual results for future periods to differ materially from our anticipated results or other expectations, including those expressed in any forward-looking statements made in this Annual Report on Form 10-K. We may also refer to this disclosure to identify factors that may cause actual results to differ from those expressed in other forward-looking statements, including those made in oral presentations such as telephone conferences and webcasts open to the public.
Business environment and competition risk factors
Economic recession could have a significant, adverse impact on our business. The transportation industry historically has experienced cyclical fluctuations in financial results due to economic recessions, downturns in business cycles of our customers, interest rate fluctuations, currency fluctuations, and other economic factors beyond our control. Deterioration in the economic environment subjects our business to various risks, which may have a material and adverse impact on our operating results and cause us to not reach our long-term growth goals:
•Decrease in volumes: A reduction in overall freight volumes in the marketplace may reduce our opportunities for growth. A significant portion of our freight is comprised of transactional or spot market opportunities. The market may be impacted by supply chain disruptions, overall economic conditions, or changes in trade policies such as tariffs. The market may be impacted by supply chain disruptions or overall economic conditions. In addition, if a downturn in our customers’ business cycles causes a reduction in the volumes of freight shipped by those customers, particularly in the retail, food, beverage, automotive, industrial, manufacturing, housing, chemicals, or technology industries, our operating results could be adversely affected.
•Credit risk and working capital: Some of our customers may face economic difficulties and may not be able to pay us, and some may go out of business. In addition, some customers may not pay us as quickly as they have in the past, which may cause our working capital needs to increase.
•Transportation provider failures: A significant number of our contracted transportation providers may go out of business, and we may be unable to secure sufficient equipment or other transportation services to meet our commitments to our customers.
•Expense management: We may not be able to appropriately adjust our expenses to changing market demands. In order to maintain high variability in our business model, it is necessary to adjust staffing levels to changing market demands. In periods of rapid change, it may be more difficult to match our staffing levels to our business needs. In addition, we have other expenses that are fixed for a period of time, and we may not be able to adequately adjust them in a period of rapid change in market demand.
Higher carrier prices may result in decreased adjusted gross profit margin and increases in working capital. Carriers can be expected to charge higher prices if market conditions warrant or to cover higher operating expenses. Our adjusted gross profits and income from operations may decrease if we are unable to increase our pricing to our customers. Increased demand for over the road transportation services and changes in regulations may reduce available capacity and increase motor carrier pricing. In some instances where we have entered into contract freight rates with customers, in the event market conditions change and those contracted rates are below market rates, we may be required to provide transportation services at a loss. As our volumes increase or we increase freight rates charged to our customers, the resulting increase in revenues may increase our working capital needs due to our business model, which generally has a higher length of days sales outstanding than days payables outstanding. Adjusted gross profit margin is a non-GAAP financial measure calculated as adjusted gross profits divided by total revenues. For additional information, see Item 7 of Part II, Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Changing fuel costs and interruptions of fuel supplies may have an impact on our adjusted gross profit margin. In our truckload transportation business, fluctuating fuel prices may result in a decreased adjusted gross profit margin. While our different pricing arrangements with customers and contracted motor carriers make it very difficult to measure the precise impact, we believe fuel costs essentially act as a pass-through cost to our truckload business. In times of fluctuating fuel prices, our adjusted gross profit margin may also fluctuate.
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Our dependence on third parties to provide equipment and services may impact the delivery and quality of our transportation and logistics services. We do not employ the people directly involved in delivering our customers’ freight. We depend on independent third parties to provide truck, rail, ocean, and air services and to report certain events to us, including but not limited to, shipment status information and freight claims. These independent third parties may not fulfill their obligations to us, or our relationship with these parties may change, which may prevent us from meeting our commitments to our customers. Our reliance on these third parties also could cause delays in reporting certain events, including recognizing claims. In addition, if we are unable to secure sufficient equipment or other transportation services from third parties to meet our commitments to our customers, our operating results could be materially and adversely affected, and our customers could switch to our competitors temporarily or permanently. Many of these risks are beyond our control, including:
•equipment and driver shortages in the transportation industry, particularly among contracted motor carriers;
•changes in regulations impacting transportation;
•disruption in the supply or cost of fuel;
•reduction or deterioration in rail service;
•geopolitical factors that may limit the availability of certain carriers;
•the introduction of alternative means of transporting freight; and
•unanticipated changes in freight markets.
We face substantial industry competition, including impacts from technological disruption and automation adoption. We operate in an intensely competitive transportation and logistics industry, facing both traditional and non-traditional competitors, including asset-based carriers, third-party freight brokers, technology-driven matching platforms, internet freight brokers, carriers offering logistics services, and on-demand transportation providers. Customers may also choose to bring certain services in-house, and we often buy and sell transportation services from and to many of our competitors. Increased competition could reduce our market opportunities, create downward pressure on freight rates, and adversely affect our adjusted gross profits and income from operations. Increased competition could reduce our market opportunity and create downward pressure on freight rates, and continued rate pressure may adversely affect our adjusted gross profits and income from operations. In some instances where we have entered into contract freight rates with customers, changes in market conditions could require us to provide transportation services at a loss. In some instances where we have entered into contract freight rates with customers, in the event market conditions change and those contracted rates are below market rates, we may be required to provide transportation services at a loss.
The industry is undergoing rapid technological change, including the emergence of disruptive technologies and accelerated adoption of automation and AI. Competitors are leveraging advanced digital platforms, AI-driven freight matching, and automation to improve efficiency and reduce costs. If we fail to maintain the pace, scale, or quality of automation and AI adoption, we may be unable to achieve our strategic goals for operational efficiency and digital transformation. Inability to keep up with these advancements could increase our cost to serve customers, reduce productivity and negatively impact our ability to compete. Delays in implementing new systems or integrating emerging technologies into our workflows may also lead to higher operating expenses and missed opportunities for growth. If we cannot effectively respond to competitive pressures and technological disruption, our business, financial condition, and results of operations could be materially and adversely affected.
Our earnings may be affected by seasonal changes or significant disruptions in the transportation industry. Results of operations for our industry generally show a seasonal pattern as customers reduce shipments during and after the winter holiday season. We believe this historical pattern has been the result of, or influenced by, numerous factors, including national holidays, weather patterns, consumer demand, economic conditions, and other similar and subtle forces. Although seasonal changes in the transportation industry have not had a significant impact on our cash flow or results of operations, we expect this trend to continue, and we cannot guarantee it will not adversely impact us in the future. The transportation industry may also be significantly impacted by disruptions such as port congestion and the availability of transportation equipment, as well as factors such as labor shortages, fuel prices, shifts in consumer demand toward more locally sourced products, and regulatory changes. These disruptions may impact the growth rates within the global logistics industry and our ability to provide transportation services for our customers, each of which may adversely impact our results of operations and operating cash flows.
We may be unable to identify or complete suitable acquisitions and investments. We may acquire or make investments in complementary businesses, products, services, or technologies. We cannot guarantee we will be able to identify suitable acquisitions or investment candidates. Even if we identify suitable candidates, we cannot guarantee we will make acquisitions or investments on commercially acceptable terms, if at all. The timing and number of acquisitions we pursue may also cause volatility in our financial results. In addition, we may incur debt or be required to issue equity securities to pay for future acquisitions or investments. The issuance of any equity securities could be dilutive to our stockholders.
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Our sourcing business is dependent upon the supply and price of fresh produce. The supply and price of fresh produce is affected by weather and growing conditions, including but not limited to, flood, drought, freeze, insects, disease, and other conditions over which we have no control. Commodity prices can be affected by shortages or overproduction and are often highly volatile. If we are unable to secure fresh produce to meet our commitments to our customers, our operating results could be materially and adversely affected, and our customers could switch to our competitors temporarily or permanently. To assure access to certain commodities, we occasionally make monetary advances to growers to finance their operations. Repayment of these advances is dependent upon the growers’ ability to grow and harvest marketable crops.
Company risk factors
We rely on technology to operate our business, with the majority of our operating systems developed internally and supplemented by third-party technology, which may subject us to cybersecurity events and disruptions. Our continued success depends on the effective operation and adaptation of these systems to meet the evolving needs of our customers and users. The automation of existing processes and the use of third-party technology and cloud network capacity may increase our exposure to cybersecurity risks and system availability reliance. We depend on our technology staff and third-party vendors to implement changes and maintain our systems efficiently. Failure to maintain, protect, and enhance our operating systems could result in a competitive disadvantage and loss of customers.
We process and maintain confidential, proprietary, personal, and sensitive information, including financial and business data. Our information technology systems, devices, storage, and applications, as well as those maintained by third-party providers, are vulnerable to damage, disruptions, and shutdowns due to cyberattacks, ransomware, malware, phishing, denial of service attacks, and other unauthorized access attempts. These incidents have occurred in the past and may happen again, potentially causing material service outages, inappropriate access, or other significant business interruptions. The frequency and sophistication of cyberattacks have increased globally, making it challenging to anticipate and prevent such events or mitigate their effects. Additionally, we may not immediately detect these incidents.
Given the interconnected nature of the supply chain and our significant industry presence, we may be an attractive target for cyberattacks. Many aspects of our operations depend on third-party networks and systems, which are also susceptible to cyber risks. While we have dedicated resources for security, privacy, and incident response, our processes may not be adequate to prevent or limit harm or to remediate incidents promptly.
A failure to prevent a cyberattack that impacts the performance, reliability, security, and availability of our systems could result in service interruptions, operational difficulties, inability to retain or attract customers, loss of revenues or market share, expose us to legal claims and government actions, liability to customers, reputational damage, and increased service and maintenance costs. Addressing these issues could be costly, and our insurance coverage may not be sufficient to cover all liabilities. These impacts could adversely affect our financial condition, results of operations, and growth prospects.
Our international operations subject us to operational, financial, and data privacy risks. We provide services within and between foreign countries on an increasing basis. Our business outside of the United States is subject to various risks, including:
•changes in tariffs, trade restrictions, trade agreements, and taxations. In 2025, the United States government made significant changes to our national trade policy, including imposing tariffs on certain goods imported into the United States. The tariffs impacted our Global Forwarding business in 2025, most significantly in the second quarter of 2025, with volatile market conditions causing global demand fluctuations and lower volumes. Changes in United States trade policy, including tariffs on certain imported goods, could continue to increase our costs and disrupt global supply chains. These actions, and any retaliatory measures by other countries, may lead to higher transportation costs and reduced demand, resulting in potential loss of freight volume. We are also subject to various regulations and requirements promulgated by other international, domestic, state, and local agencies and port authorities. Additionally, heightened customs requirements could delay shipments and require significant internal resources, increasing operating expenses and negatively impacting our ability to serve customers efficiently. If we cannot mitigate these challenges, our business, financial condition, and results of operations could be materially affected;
•difficulties in managing or overseeing foreign operations and agents;
•limitations on the repatriation of funds because of foreign exchange controls;
•different liability standards;
•intellectual property laws of countries that do not protect our rights in our intellectual property, including but not limited to, our proprietary information systems, to the same extent as the laws of the United States;
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•issues related to non-compliance with laws, rules, and regulations in the countries in which we operate including, among others, those promulgated by the United States Office of Foreign Assets Control (“OFAC”) related to sanctions and embargoes and the United States Foreign Corrupt Practices Act related to bribery and corruption. Failure to comply could result in reputational harm, substantial penalties, and operational restrictions; and
•global laws and regulations regarding the collection, use, processing, and transfer of personal information may impact our services by imposing restrictions on processing, increasing legal claim liability, and increasing regulatory scrutiny and fines. These requirements continue to evolve and vary by region and regime, which increases the risk of noncompliance and impacts operations, including additional expenses and resources necessary to manage compliant operations.
The occurrence or consequences of any of these factors may restrict our ability to operate in the affected region and/or decrease the profitability of our operations in that region.
As we continue to expand our business internationally, we expose the company to increased risk of loss from foreign currency fluctuations, as well as longer accounts receivable payment cycles.17Table of ContentsAs we continue to expand our business internationally, we expose the company to increased risk of loss from foreign currency fluctuations, as well as longer accounts receivable payment cycles. Foreign currency fluctuations could result in currency exchange gains or losses or could affect the book value of our assets and liabilities. Furthermore, we may experience unanticipated changes to our income tax liabilities resulting from changes in geographical income mix and changing international tax legislation. We have limited control over these risks, and if we do not correctly anticipate changes in international economic and political conditions, we may not alter our business practices in time to avoid adverse effects.
Our ability to appropriately staff and retain employees is important to our business model. Our continued success depends upon our ability to attract and retain motivated logistics professionals. In order to maintain high variability in our business model, it is necessary to adjust staffing levels to changing market demands. In periods of rapid change, it may be more difficult to match our staffing level to our business needs. We cannot guarantee we will be able to continue to hire and retain a sufficient number of qualified personnel. In addition, macroeconomic factors impacting the labor market may result in higher costs to hire and retain qualified personnel. Because of our comprehensive employee training program, our employees are attractive targets for new and existing competitors. Our continued success depends significantly on our ability to develop talented employees and prepare them for leadership roles. Our continued success depends upon our ability to attract and retain motivated logistics professionals.
We use, and may continue to expand our use of, machine learning and AI technologies to deliver our services and operate our business.We use, and may continue to expand our use of, machine learning and artificial intelligence (“AI”) technologies to deliver our services and operate our business. We leverage machine learning and AI technologies to enhance operational efficiency, automate processes, and improve the customer experience across our logistics platform. If we fail to successfully integrate AI into our platform and business processes, or if we fail to keep pace with rapidly evolving AI technological developments, including attracting and retaining talented AI developers, programmers, and cybersecurity personnel, we may face a competitive disadvantage. At the same time, the use or offering of AI technologies may result in new or expanded risks and liabilities, including enhanced government or regulatory scrutiny, litigation, privacy and compliance issues, ethical concerns, confidentiality, reputational harm, and security risks. It is not possible to predict all of the risks related to the use of AI, and changes in laws, rules, directives, and regulations governing the use of AI may adversely affect our ability to develop and use AI or subject us to additional legal liability. The cost of complying with laws and regulations governing AI could be significant and would increase our operating expenses, which could adversely affect our business, financial condition, and results of operations. Further, market demand and acceptance of AI technologies are uncertain, and we may be unsuccessful in efforts to further incorporate AI into our processes.
We derive a significant portion of our total revenues and adjusted gross profits from our largest customers. During 2025, our top 100 customers based on total revenue comprised approximately 40 percent of our consolidated total revenues and our top 100 customers based on adjusted gross profits comprised approximately 28 percent of our consolidated adjusted gross profits. Our largest customer comprised approximately two percent of our consolidated total revenues. The sudden loss of major customers could materially and adversely affect our operating results.
We may be subject to the negative impacts of climate change, which could adversely impact our business and financial results. The potential impacts of climate change may subject us to various risks, including:
•physical risks such as extreme weather conditions or other types of weather events, which could disrupt our operations;
•compliance costs and transition risks such as increased regulation on us and on our contracted transportation providers; and
•reputational and strategic risks due to shifts in customer demands such as customers requiring more fuel-efficient transportation, autonomous transportation modes, or increased transparency to carbon emissions in their supply chains.
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Such impacts may disrupt our operations by adversely affecting our ability to procure services that meet regulatory or customer requirements and may negatively affect our results of operations, cash flows, and financial condition.
We may have difficulties integrating acquired companies or efficiently managing divestitures. For acquisitions, success depends upon efficiently integrating the acquired business into our existing operations. If we complete a large acquisition or multiple acquisitions within a short period of time, we may experience heightened difficulties integrating the acquired companies. We are required to integrate these businesses into our internal control environment, which may present challenges that are different than those presented by organic growth and that may be difficult to manage. If we are unable to successfully integrate and grow these acquisitions and to realize contemplated revenue synergies and cost savings, our business, prospects, results of operations, financial position, and cash flows could be materially and adversely affected.
Divestiture activity poses risks, and success depends upon efficiently managing the transition process. Failure to do so includes potential risks, including disruption to our core operations, failure to deliver the anticipated value for shareholders, diverting management’s attention from other strategic initiatives, negative impacts on our customer and contract carrier relationships, and the loss of key employees. Failure to do so includes potential risks including disruption to our core operations, failure to deliver the anticipated value for shareholders, diverting management’s attention from other strategic initiatives, negative impacts on our customer and carrier relationships, and the loss of key employees. The inability to successfully manage these risks may result in higher operating expenses, lost revenues, or other negative effects on earnings and our financial results.
Our growth and profitability may not continue, or we may not achieve our long-term growth targets, which may result in a decrease in our stock price. There can be no assurance that our long-term growth targets will be achieved or that we will be able to effectively adapt our management, administrative, and operational systems to respond to any future growth. Future changes in and expansion of our business, or changes in economic or political conditions, could adversely affect our operating margins. Slower or less profitable growth or losses could adversely affect our stock price.
Our indebtedness could adversely impact our financial condition and results of operations. Significant adverse economic and industry conditions could negatively affect our ability to pay principal and interest on our debt and limit our ability to fund working capital, capital expenditures, possible acquisitions, dividends, share repurchases, or other investments. If we are unable to generate sufficient cash flows to satisfy our debt obligations or refinance these debt obligations with commercially acceptable terms, it may adversely impact our financial position and results of operations. We may be unable to comply with the various restrictions and covenants under our indebtedness, which may result in default and our outstanding indebtedness may become immediately due and payable and adversely impact our financial position.
We may be adversely impacted by changing interest rates. We are exposed to changes in interest rates, primarily on our short-term debt that carries floating interest rates. Interest rates are highly sensitive to many factors, including governmental monetary policies, economic conditions, and other factors beyond our control. A significant increase in interest rates could adversely impact our financial position and results of operations.
Governmental, regulatory, and legal risk factors
Changes to income tax regulations in the United States and other jurisdictions where we operate may increase our tax liability. We are subject to income taxes in the United States and other jurisdictions where we operate. Changes to income tax laws and regulations in any of the jurisdictions where we operate could adversely affect our overall tax liability. The Organization for Economic Cooperation and Development (“OECD”) reached agreement among various countries to implement a minimum 15 percent tax rate on certain multinational enterprises, commonly referred to as Pillar Two. Many non-U.S. tax jurisdictions have either enacted legislation to adopt certain components of the Pillar Two Model Rules beginning in 2024, including the European Union Member States, with the adoption of additional components in later years, or announced their plans to enact legislation in future years. We are subject to these rules in certain jurisdictions in which we operate, and any expected tax impacts have been included in our results. Some of these legislative changes could impact our effective tax rate and tax liabilities. Given the numerous proposed tax law changes and the uncertainty regarding such proposed legislative changes, the impact of Pillar Two could adversely impact our effective tax rate, financial position, and results of operations.
We are subject to claims arising from our transportation operations. We use the services of thousands of third-party transportation companies in connection with our transportation operations. From time to time, the drivers employed and engaged by the motor carriers with which we contract are involved in accidents, which may result in serious personal injuries. The resulting types and/or amounts of damages may be excluded by or exceed the amount of insurance coverage maintained by the contracted motor carrier. We contractually require all motor carriers we work with to carry at least $750,000 in automobile liability insurance. We also require all contracted motor carriers to maintain workers’ compensation and other insurance coverage as required by law. Most contracted motor carriers have insurance exceeding these minimum requirements, as well as cargo insurance in varying policy amounts. Railroads, which are generally self-insured, provide limited common carrier cargo loss or damage liability protection, which generally ranges from $100,000 to $250,000 per shipment. Railroads, which are generally self-insured, provide limited common carrier cargo loss or damage liability protection, generally up to $250,000 per shipment. Although these drivers are not our employees and all of these drivers are employees, owner-operators, or independent contractors working for the contracted motor carriers, from time to time, claims may be asserted against us for their actions or for our actions in retaining
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them. Claims against us may exceed the amount of our insurance coverage or may not be covered by insurance at all. A material increase in the frequency or severity of accidents, liability claims, workers’ compensation claims, or unfavorable resolutions of claims could materially and adversely affect our operating results. In addition, significant increases in insurance costs or the inability to purchase insurance as a result of these claims could reduce our profitability. Our involvement in the transportation of certain goods, including but not limited to, hazardous materials, could also increase our exposure in the event one of our contracted motor carriers is involved in an accident resulting in injuries or contamination.
In North America, as a property freight broker, we are not legally liable for loss or damage to our customers’ cargo.19Table of ContentsIn North America, as a property freight broker, we are not legally liable for loss or damage to our customers’ cargo. In our customer contracts, we may agree to assume cargo liability up to a stated maximum. We typically do not assume cargo liability to our customers above minimum industry standards in our international freight forwarding, ocean transportation, or air freight businesses on international or domestic air shipments. Although we are not legally liable for loss or damage to our customers’ cargo, from time to time, claims may be asserted against us for cargo losses. We maintain a broad cargo liability insurance policy to help protect us against catastrophic losses that may not be recovered from the responsible contracted carrier. We also carry various liability insurance policies, including automobile and general liability, with total automobile limits of $135 million subject to a $10 million per incident deductible, and total general liability limits of $87 million subject to a $500,000 per incident deductible. We also carry various liability insurance policies, including automobile and general liability, with a $125 million umbrella with up to a $10 million retention, an additional $10 million corridor retention, and a $6.5 million retention in various layers throughout the umbrella.
Buying and reselling fresh produce exposes us to possible product liability. Agricultural chemicals used on fresh produce are subject to various approvals, and the commodities themselves are subject to regulations on cleanliness and contamination. Product recalls in the produce industry have been caused by concern about particular chemicals and alleged contamination, often leading to lawsuits brought by consumers of allegedly affected produce. We may face claims for a variety of damages arising from the sale of produce, which may include potentially uninsured consequential damages. While we are insured for up to $87 million for product liability claims subject to a $500,000 per incident deductible, settlement of class action claims is often costly, and we cannot guarantee our coverage will be adequate or that it will continue to be available. If we have to recall produce, we may be required to bear the cost of repurchasing, transporting, and destroying any allegedly contaminated product, as well as associated consequential damages. We carry product recall and contamination insurance coverage of $30 million. A loss for which we are not adequately insured could materially affect our financial results. The coverage we currently have in place may not apply to a particular loss, or it may not be sufficient to cover all liabilities to which we may be subject. This policy has a retention of $3.5 million per incident. Any recall or allegation of contamination could affect our reputation, particularly our proprietary and/or licensed branded produce programs, which could materially and adversely affect our operating results. Any recall or allegation of contamination could affect our reputation, particularly of our proprietary and/or licensed branded produce programs, which could materially and adversely affect our operating results. Loss due to spoilage (including the need for disposal) is also a routine part of the sourcing business.
Any material litigation related to the above types of claims or claims arising from our transportation operations may require significant time from management and could cause us to incur substantial legal and related costs, which may include damages that could have a material adverse impact on our financial results.
Our business depends upon compliance with numerous government regulations. Our operations may be regulated and licensed by various federal, state, and local transportation agencies in the United States and similar governmental agencies in foreign countries in which we operate.
We are subject to licensing and regulation as a property freight broker and are licensed by the DOT to arrange for the transportation of property by motor vehicle. The DOT prescribes qualifications for acting in this capacity, including certain surety bonding requirements. For purposes of our Global Forwarding services, we are also subject to regulation by the FMC as an ocean freight forwarder and NVOCC, and we maintain separate bonds and licenses for each. We operate as a U.S. Department of Homeland Security certified IAC, providing air freight services, subject to commercial standards set forth by the IATA and federal regulations issued by the TSA. We provide customs brokerage services as a customs broker under a license issued by CBP, and we maintain CTPAT certification with CBP. Some customs entries fall within the jurisdiction of other authoritative governmental agencies (e.g., Food and Drug Administration, Fish and Wildlife Service, etc.). We also have and maintain other licenses as required by law.
We source fresh produce under a license issued by the U.S. Department of Agriculture (“USDA”) as required by Perishable Agricultural Commodities Act (“PACA”). We are also subject to various regulations and requirements promulgated by other international, domestic, state, and local agencies and port authorities. Our failure to comply with the laws and regulations applicable to entities holding these licenses could materially and adversely affect our results of operations or financial condition.
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Legislative or regulatory changes can affect the economics of the transportation industry by requiring changes in operating practices or influencing the demand for, and the cost of providing, transportation services. As part of our logistics services, we operate owned or leased warehouse facilities. Our operations at these facilities include both warehousing and distribution services, and we are subject to various federal, state, and international environmental; work safety; and hazardous materials regulations. We may experience an increase in operating costs, such as security costs, as a result of governmental regulations that have been or will be adopted in response to terrorist activities and potential terrorist activities. No assurances can be given that we will be able to pass these increased costs on to our customers in the form of rate increases or surcharges, and our operations and profitability may be materially and adversely affected as a result.
United States Department of Homeland Security regulations applicable to our customers that import goods into the United States and our contracted ocean carriers can impact our ability to provide and/or receive services with and from these parties. Enforcement measures related to violations of these regulations can slow and/or prevent the delivery of shipments, which may negatively impact our operations. 20Table of ContentsEnforcement measures related to violations of these regulations can slow and/or prevent the delivery of shipments, which may negatively impact our operations.
We cannot predict the impact future regulations may have on our business. Our failure to maintain required permits or licenses, or to comply with applicable regulations, could result in substantial fines or revocation of our operating permits and licenses.
Our contracted transportation providers are subject to an increasingly complex climate-related regulatory landscape, including transitional risks relating to climate change, which could directly or indirectly have a material adverse effect on our business.Our contracted transportation providers are subject to increasingly stringent laws protecting the environment, including transitional risks relating to climate change, which could directly or indirectly have a material adverse effect on our business. Future and existing environmental regulatory requirements in the United States and abroad could adversely affect operations and increase operating expenses, which in turn could increase our purchased transportation costs. We may also incur expenses as a result of regulators requiring additional climate-related disclosures regarding our contracted transportation providers that may be labor-intensive to report on. Given the continuously developing nature of these regulatory frameworks, we cannot predict its effect on our company, but if we are unable to pass such costs along to our customers, our business could be materially and adversely affected. Until the timing, scope, and extent of such possible regulation becomes finalized, we cannot predict its effect on our company, but if we are unable to pass such costs along to our customers, our business could be materially and adversely affected. Even without any new legislation or regulation, increased public concern regarding greenhouse gas emissions by transportation carriers could harm the reputations of companies operating in the transportation and logistics industries and shift consumer demand toward more locally-sourced products and away from our services.
General risk factors
We may be subject to negative impacts of changes in political and governmental conditions. Our operations may be impacted by the influences of significant political, governmental, and similar changes and our ability to respond to them, including:
•changes in political conditions and in governmental policies;
•changes in and compliance with international and domestic laws and regulations; and
•wars, civil unrest, acts of terrorism, and other global conflicts, such as the current conflict in the Red Sea, which is impacting the global freight market.
We may be subject to negative impacts of catastrophic events. A disruption or failure of our systems or operations in the event of a major earthquake, weather event, cyber-attack, heightened security measures, actual or threatened terrorist attack, strike, civil unrest, pandemic, or other catastrophic event could cause delays in providing services or performing other critical functions. A disruption or failure of our systems or operations in the event of a major earthquake, weather event, cyber attack, heightened security measures, actual or threatened terrorist attack, strike, civil unrest, pandemic, or other catastrophic event could cause delays in providing services or performing other critical functions. We are particularly vulnerable to these risks given the broad and global scope of our operations. A catastrophic event that results in the destruction or disruption of any of our critical business or information systems could harm our ability to conduct normal business operations and adversely impact our operating results.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 1C. CYBERSECURITY
Cybersecurity Risk Management and Strategy
Our global reach and the ever-evolving threat landscape makes data security and privacy a critical priority for us. Our Chief Information Security Officer and their global cybersecurity team reports to our Chief Technology Officer and together, they are responsible for our network security, cybersecurity risk management processes, and business continuity. This team partners with leaders from all our global regions to align our cybersecurity risk management processes and strategic goals with our business priorities and ultimately mitigate cybersecurity risk at C.H. Robinson.
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Our global cybersecurity team has experience and expertise with potential cybersecurity threats and supporting mitigation of the potential cybersecurity threats facing our organization and vulnerabilities facing our technology infrastructure. Our Chief Information Security Officer has over a decade of experience leading cyber-security oversight, and others on our global cybersecurity team have cybersecurity experience and certifications. We view cybersecurity as a shared responsibility, and we periodically perform simulations and tabletop exercises at a management level and incorporate external resources and advisors as needed. All employees are required to complete cybersecurity trainings at least once a year and have access to more frequent cybersecurity trainings. We also require employees in certain roles to complete additional role-based, specialized cybersecurity trainings. We also require employees in certain roles to complete additional role-based, specialized 21Table of Contentscybersecurity trainings. Program performance is reported to and monitored by senior leadership and the Audit Committee on a quarterly basis.
We have processes and programs in place to meet our global compliance obligations and work with our employees and teams across the globe to ensure security and data protection principles are integrated into the way we do business every day. We utilize a set of controls that integrate guidance from the EU’s General Data Protection Regulations and align with the U.S. National Institute of Standards and Technology’s (“NIST”) framework. We undergo a regular independent assessment of our operational and strategic maturity across NIST controls and summary performance is shared with senior leadership including our board of directors. In addition, we submit to independent assessments by external parties, including System and Organizational Controls (“SOC”) 2 Type 2 audits, covering customer-facing and line-of-business applications to ensure all safeguards function as they should. These functions are also supported by internal compliance teams that perform additional layers of testing prior to SOC 2 Type 2 procedures.
Our Technology Resilience program is aligned with industry standards for disaster recovery including the Disaster Recovery Institute International’s Professional Practices.Our Technology Continuity program follows industry standards for disaster recovery practices, including close alignment with ISO 27031:2011 and the Disaster Recovery Institute International’s Professional Practices. The program includes processes such as regular continuity and cybersecurity exercises, protected backups for critical data, defined recovery time and recovery point objectives with supporting achievability metrics, application criticality tiering, ongoing audits and maintenance, awareness and training initiatives, business impact analysis, and risk evaluation and control measures. These measures are intended to mitigate the impact of potential disruptions but cannot eliminate all risks.
Cybersecurity Governance
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and Technology Risk Management and their global cybersecurity team has experience and expertise with potential cybersecurity threats and supporting mitigation of the potential cybersecurity threats facing our organization and vulnerabilities facing our technology infrastructure.
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