Andrew Clarke missed his flight out of New York a few weeks ago after two ride-sharing vehicles canceled on him. What for most people would be an extreme inconvenience was to Clarke a lesson in transportation and logistics business strategy.
“Those [ride-hailing] companies don’t take a position whether we make our flight,” said Clarke, chief financial officer of C.H. Robinson (NASDAQ: CHRW), and a Transparency2019 keynote speaker. “We as a service provider do. That’s how we go to market every day.”
Founded in 1905, C.H. Robinson is one of the world’s largest third-party logistics (3PL) companies, with 2017 gross revenues of $14.9 billion. The company provides freight transportation and logistics, outsource solutions, produce sourcing, and information services to 120,000 customers throughout North America, South America, Europe, Asia, and Oceania.
To meet customer needs, C.H. Robinson provides access to 73,000 transportation providers worldwide, including contract motor carriers, railroads, air freight carriers, and ocean carriers.
Data and people/relationships are as important as the freight tech platforms that are springing up everywhere, Clarke said. Technological disruption will continue to accelerate. “But knowing how and where and why freight moves is equally important.”
Not that legacy companies are bystanders to the digital revolution. C.H. Robinson for example, invests $170 million annually in tech.
“Unlike the taxi industry, all of us are investing in technology,” said Clarke. “We also have the relationships with the customers and carriers.”
Clarke got his start in the industry working on Wall Street, where he took logistics companies public. He worked for the firm that led C.H. Robinson’ s IPO in 1997. Clarke eventually left the world of finance to become Chief Financial Officer of Forward Air Corporation. He previously served as President and Chief Executive Officer of Panther Expedited Services from 2006 to 2013, now a wholly owned subsidiary of Arkansas Best Corporation. He joined C.H. Robinson as CFO in mid-2015.
Clarke noted the sizable economic impact of the transportation and logistics industry – 10% of GDP – and said he finds the supply chain endlessly fascinating.
“People don’t think about it, but the coffee you drank today wasn’t made in Tennessee. Someone had to get it there. Wherever you are today, none of it was made wherever you are.”
As for other freight disruptors, such as self-driving trucks, Clarke believes “the whole concept of autonomous is further out than everyone is talking about right now.” For one, the infrastructure isn’t there. “We have a hard enough time filling potholes today.”
As the technology evolves, it will allow drivers to be more productive. Plus, workers will still be needed to secure the freight. “I am not concerned about rampant unemployment,” Clarke said.