The following discussion of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes.



FORWARD-LOOKING INFORMATION
Our quarterly report on Form 10-Q, including this discussion and analysis of our
financial condition and results of operations and our disclosures about market
risk, contains certain "forward-looking statements." These statements represent
our expectations, beliefs, intentions, or strategies concerning future events
that, by their nature, involve risks and uncertainties. Forward-looking
statements include, among others, statements about our future performance, the
continuation of historical trends, the sufficiency of our sources of capital for
future needs, the effects of acquisitions or dispositions, the expected impact
of recently issued accounting pronouncements, and the outcome or effects of
litigation. Risks that could cause actual results to differ materially from our
current expectations include, but are not limited to, 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; freight levels and increasing costs and availability of truck capacity
or alternative means of transporting freight; risks associated with significant
disruptions in the transportation industry; changes in relationships with
existing contracted truck, rail, ocean, and air carriers; changes in our
customer base due to possible consolidation among our customers; risks with
reliance on technology to operate our business; cyber-security related risks;
risks associated with operations outside of the United States; our ability to
identify or complete suitable acquisitions; our ability to successfully
integrate the operations of acquired companies with our historic operations;
risks associated with litigation, including contingent auto liability and
insurance coverage; risks associated with the potential impact of changes in
government regulations; our ability to hire and retain a sufficient number of
qualified personnel; risks associated with the changes to income tax
regulations; risks associated with the produce industry, including food safety
and contamination issues; the impact of war on the economy; changes to our
capital structure; changes due to catastrophic events including pandemics such
as COVID-19, and other risks and uncertainties, detailed in our Annual and
Quarterly Reports. Therefore, actual results may differ materially from our
expectations based on these and other risks and uncertainties, including those
described in Item 1A. Risk Factors of our Annual Report on Form 10-K for the
year ended December 31, 2021, filed with the Securities and Exchange Commission
on February 23, 2022 as well as the updates to these risk factors included in
Part II-"Item 1A, Risk Factors," herein.

Any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update such statement to reflect events or circumstances arising after such date.

OVERVIEW

C.H. Robinson Worldwide, Inc. ("C.H. Robinson," "the company," "we," "us," or
"our") is one of the world's largest logistics platforms. Our mission is to
improve the world's supply chains through our people, processes, and technology
by delivering exceptional value to our customers and suppliers. We provide
freight transportation services and logistics solutions to companies of all
sizes in a wide variety of industries. We operate through a network of offices
in North America, Europe, Asia, Oceania, and South America. We offer a global
suite of services using tailored, market-leading solutions built by and for
supply chain experts. Our global network of supply chain experts work with our
customers to drive better supply chain outcomes by leveraging our experience,
data, digital solutions, and scale.
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Our adjusted gross profit and adjusted gross profit margin are non-GAAP
financial measures. Adjusted gross profit is calculated as gross profit
excluding amortization of internally developed software utilized to directly
serve our customers and contracted carriers. Adjusted gross profit margin is
calculated as adjusted gross profit divided by total revenues. We believe
adjusted gross profit and adjusted gross profit margin are useful measures of
our ability to source, add value, and sell services and products that are
provided by third parties, and we consider adjusted gross profit to be a primary
performance measurement. Accordingly, the discussion of our results of
operations often focuses on the changes in our adjusted gross profit and
adjusted gross profit margin. The reconciliation of gross profit to adjusted
gross profit and gross profit margin to adjusted gross profit margin is
presented below (dollars in thousands):
                                                                 Three Months Ended March 31,
                                                                        2022                          2021
Revenues:
Transportation                                                                  $ 6,528,351                       $ 4,560,227
Sourcing                                                                            287,602                           243,642
Total revenues                                                                    6,815,953                         4,803,869
Costs and expenses:
Purchased transportation and related services                                     5,650,224                         3,881,285
Purchased products sourced for resale                                               259,533                           220,204
Direct internally developed software amortization                                     5,734                             4,647
Total direct costs                                                                5,915,491                         4,106,136
Gross profit / Gross profit margin                                                  900,462         13.2  %           697,733       14.5  %
Plus: Direct internally developed software amortization                               5,734                             4,647
Adjusted gross profit / Adjusted gross profit margin

$ 906,196 13.3 % $ 702,380 14.6 %





Our adjusted operating margin is a non-GAAP financial measure calculated as
operating income divided by adjusted gross profit. We believe adjusted operating
margin is a useful measure of our profitability in comparison to our adjusted
gross profit, which we consider a primary performance metric as discussed above.
The reconciliation of operating margin to adjusted operating margin is presented
below (dollars in thousands):
                                      Three Months Ended March 31,
                                                             2022              2021

Total revenues                                          $ 6,815,953       $ 4,803,869
Operating income                                            345,474           223,329
Operating margin                                                5.1  %            4.6  %

Adjusted gross profit                                   $   906,196       $   702,380
Operating income                                            345,474           223,329
Adjusted operating margin                                      38.1  %           31.8  %


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MARKET TRENDS



The North American surface transportation market continues to be impacted by
tight carrier capacity although the market did start to soften within the first
quarter of 2022. While driver availability challenges and supply chain
disruptions caused by port congestion have continued, the market has started to
show signs of improvement. Moderating demand combined with capacity entering the
market has resulted in purchased transportation costs declining near the end of
the first quarter of 2022. Despite these declines, purchased transportation
costs continue to be well above historic levels and above those in the first
quarter of 2021. Industry freight volumes, as measured by the Cass Freight
Index, were flat during the first quarter of 2022 compared to the first quarter
of 2021. This compares to a 7.5 percent increase for the same index during the
first quarter of 2021. One of the metrics we use to measure market conditions is
the truckload routing guide depth from our Managed Services business. Routing
guide depth represents the number of carriers contacted prior to acceptance when
procuring a transportation provider. The average routing guide depth of tender
in the first quarter of 2022 was 1.7, representing that on average, the first or
second carrier in a shipper's routing guide was executing the shipment in most
cases. This average routing guide penetration was consistent with all of 2021.
Within the first quarter of 2022, this metric declined and reached 1.5 by the
end of the quarter as more capacity entered the market and demand began to
soften resulting in first tender rates climbing across the industry.

The global forwarding market continues to be significantly impacted by supply
chain disruptions caused by ongoing port congestion along with transportation
equipment shortages. While port congestion remains challenging in the western
United States, conditions showed signs of improvement in the first quarter of
2022, as more freight continues to be diverted to the southern and eastern
United States. In addition, continued pandemic related shutdowns and the
regional relocation of manufacturing in Asia have also resulted in shifts in the
global supply chain and an easing of demand for ocean freight out of China.
Demand in the air freight market showed signs of slowing in the first quarter of
2022 but remain above historic levels. Air freight conversions back to ocean
freight have increased with more shippers seeking lower supply chain costs by
tolerating the longer duration of ocean freight transit. Air freight capacity
remains strained by a reduction of commercial flights since the beginning of the
COVID-19 pandemic, although the softening of demand has resulted in a decreased
frequency of charter flights.

BUSINESS TRENDS

Our first quarter of 2022 surface transportation results benefited from the
softening market conditions, as periods where the cost of purchased
transportation begins to decline often result in improved adjusted gross profits
per transaction in our portfolio. Industry freight volumes as measured by the
Cass Freight Index were flat in the first quarter of 2022 compared to the first
quarter of 2021. Industry freight volumes increased approximately 7.5 percent
during the first quarter of 2021. Our combined NAST truckload and less than
truckload ("LTL") volume increased 1.0 percent during the first quarter of 2022
compared to a 5.5 percent increase during the first quarter of 2021. We have
continued to reprice our contractual truckload business to reflect the elevated
cost environment and participate to a greater extent in the spot market. As a
result of our repricing efforts and the impact of the softening market
conditions, our adjusted gross profit per shipment increased and the percentage
of shipments with negative adjusted gross profit margins improved significantly
in the first quarter of 2022. Our average truckload linehaul cost per mile,
excluding fuel costs, increased 21.0 percent during the first quarter of 2022.
Our average truckload linehaul rate charged to our customers, excluding fuel
surcharges, increased approximately 20.5 percent during the first quarter of
2022.

In our global forwarding business, we continued to experience significant
increases in purchased transportation costs for both ocean and air freight due
to port congestion in addition to the equipment and labor shortages impacting
the global forwarding market. This along with increased volumes has resulted in
strong growth in both total revenue and cost of transportation for our ocean and
air freight services. Ocean volumes increased 7.0 percent with strong growth in
North America and Europe more than offsetting a modest decline in Asia resulting
from pandemic-related shutdowns in China. Air freight tonnage increased 10.0
percent with strong growth in all regions we serve.

On June 3, 2021, we acquired Combinex Holding B.V. ("Combinex") to further expand our European road transportation presence. Our consolidated results include the results of Combinex as of June 3, 2021.

SELECTED OPERATING PERFORMANCE AND OTHER SIGNIFICANT ITEMS

The following summarizes select first quarter 2022 year-over-year operating comparisons to the first quarter 2021:

•Total revenues increased 41.9 percent to $6.8 billion, driven primarily by higher pricing and higher volume across most of our services.



•Gross profits increased 29.1 percent to $900.5 million. Adjusted gross profits
increased 29.0 percent to $906.2 million, primarily due to higher adjusted gross
profit per transaction and higher volume across most of our services.
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•Personnel expenses increased 14.6 percent to $413.4 million, primarily due to higher headcount. Average headcount increased 15.1 percent.

•Other selling, general, and administrative ("SG&A") expenses increased 24.7 percent to $147.4 million, primarily due to higher purchased and contracted services, a non-recurring legal expense, and increased travel expenses.

•Income from operations totaled $345.5 million, up 54.7 percent due to the increase in adjusted gross profits, partially offset by the increase in operating expenses.

•Adjusted operating margin of 38.1 percent increased 630 basis points.



•Interest and other income/expenses totaled $14.2 million, consisting primarily
of $14.5 million of interest expense, which increased $2.3 million versus last
year due to a higher average debt balance.

•The effective tax rate in the quarter was 18.4 percent compared to 18.3 percent in the first quarter last year.

•Diluted earnings per share (EPS) increased 60.2 percent to $2.05.

•Cash flow from operations improved $42.8 million.

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