C.H. Robinson expands Canada network amid testy NAFTA talks

C.H. Robinson expands Canada network amid testy NAFTA talks

Uncertainty surrounding NAFTA isn't holding back C.H. Robinson's expansion efforts.

C.H. Robinson Worldwide’s acquisition of Canadian freight forwarder Milgram shows the company has stayed true to its word and has not let testy NAFTA talks infringe on its play to expand its North American network.

The $50 million deal will bring Milgram’s 330 employees, 6 Canadian offices, 1 US office, and 3,500 active customers into the fold at C.H. Robinson, which is already the largest US logistics provider with operations on 5 continents and in 31 countries with more than 4,000 employees and 125 offices worldwide.

“This acquisition continues our global expansion and marks our third global forwarding acquisition in the past five years,” John Wiehoff, chairman and CEO, said in a statement. “We are extremely proud of the progress we have made in bringing these companies into C.H. Robinson, and Milgram provides another unique opportunity to strengthen our global forwarding and customs brokerage offerings in Canada.”

C.H. Robinson, with roots in the US produce and truckload markets stretching back to 1905, has been building business outside the US for decades. The Milgram acquisition is now the company’s third acquisition of a freight forwarding firm outside the United States. Last October, C.H. Robinson bought the Australian APC Logistics for $225 million. In June 2004 the company opened agreed to acquire selected assets of Dalian Decheng Shipping Agency Co., a Chinese non-vessel-operating common carrier.

The company has also been growing organically. More recently in July, C.H. Robinson extended its overseas reach, opening a gateway for containerized ocean freight in Antwerp, Belgium.

“We have this third-party heritage as a brokerage that was very focused on North American surface transportation,” Wiehoff told JOC.com last month. “We’re leveraging that hundred years of history, and we’re aspiring to be more connected and more global.”

The ongoing back-and-forth among leaders over NAFTA have raised questions about future of freight forwarders in North America, especially those like C.H. Robinson that have a foothold on there. The second round of NAFTA talks renegotiating the free trade agreement restarted in Mexico on Friday.

Despite that uncertainty, Canadian imports from the United States are up 30.3 percent year over year in tonnage terms to 78.4 million tons in the six months through June, according to Global Trade Atlas, a sister product of JOC.com within IHS Markit.

C.H. Robinson has said it remains confident that demand for their expertise and services will be strong, regardless of the policy the new US administration pursues, or the potential clapback from its neighbors to the north and south.

“Global trade has been here for a long time, and there is not a ‘what if’ scenario that we have even thought about that says global trade goes to zero,” Andy Clarke, the company’s chief financial officer, said earlier this year in February. “Trade has and will always continue to exist.”

Back then, C.H. Robinson promised to stick to what has worked in the past. “We have 14,400 people across the globe,” Clarke said. “We have people who are on the ground, and are reacting to these things in real time. The process that we run is complying with all the regulations that pop up every day. We are crossing the border back and forth from Canada and the United States, and between Mexico and the United States. We will continue to do that.”

In North America, business has remained strong. Rather, it’s been a combination of higher truckload charges and higher volumes while trying to adjust their contractual rates that have tugged on profits.

C.H. Robinson’s total North American surface transportation revenue, including truckload, LTL, and intermodal sales, rose 10.8 percent to $2.4 billion in the second quarter of 2017, but net revenue after payments to motor carriers and intermodal suppliers dropped 9.8 percent to $359.9 million, according to the company.

Contact Reynolds Hutchins at reynolds.hutchins@ihsmarkit.com and follow him on Twitter: @Hutchins_JOC.