C H Robinson Worldwide : 2021Annual Report

"I am proud of how C.H. Robinson helped our customers navigate the unprecedented level of supply chain disruption in 2021, allowing us to provide the superior level of service that global customers have come to expect from us, while delivering record annual financial results."

To our fellow shareholders

In 2021, people around the world were impacted by disruptions in the global supply chain, and our customers needed us more than ever. A convergence of factors including low inventory levels, a shortage of workers in key roles such as truck drivers and warehouse workers, port congestion, material shortages, and the ongoing impacts of COVID-19 kept the freight markets imbalanced throughout the year. More than any time in the recent past, the focus on supply chain performance and resilience was top-of-mind for businesses around the globe, and the rest of the world learned what we already knew: the global supply chain and the people who make it work are vital to the world's economy. I am proud of how C.H. Robinson helped our customers navigate the unprecedented level of supply chain disruption in 2021, allowing us to provide the superior level of service that global customers have come to expect from us, while delivering record annual financial results.

2021 Business Results

Shipping capacity was constrained across all modes throughout the year. Despite these challenging market conditions, we increased our total transportation volume by 8% to 20 million shipments and grew our total revenues by 43% to $23.1 billion, reflecting the strength of our integrated, multimodal service model. The persistent capacity constraints in 2021 led to continued increases in purchased transportation costs in the industry. We reacted to rising costs by repricing our business throughout the year to reflect the rapidly changing market environment, which drove an increase in our adjusted gross profit (AGP) per shipment in all modes. The combination of increased volumes and larger AGP per shipment resulted

In our North American Surface Transportation (NAST) business, we increased our truckload and less than truckload (LTL) shipment volume while balancing the realities of the short-term market conditions with our long-term commitment to strong customer relationships. Throughout the year, we remained focused on profitable market share growth, achieving an 18% increase in AGP and a 15% increase in operating income. We capitalized on our technology investments and transformation efforts and deployed more frictionless digital processes for both customers and carriers as we further scaled our marketplace. This enabled us to increase our shipments per person per day, a key productivity measure for our NAST business. In our Global Forwarding business, we leveraged our global supply chain expertise and data and scale advantages to provide creative solutions to help our customers secure capacity in a very tight market. The resulting volume growth, combined with a balanced portfolio of contractual and spot business, enabled Global Forwarding to increase AGP by 71% and operating income by 191%. Our Robinson Fresh®, Managed Services, and Europe Surface Transportation businesses continued to deliver value to customers, increasing their combined total revenues by 4% and AGP by 7% in 2021.

in an increase of 31% in 2021 AGP, to an annual record of $3.2 billion. We also managed our operations efficiently and delivered record annual operating income of $1.1 billion and diluted earnings per share of $6.31.

The performance of our business segments, along with the coordinated efforts of our shared services teams, led to $1.2 billion of EBITDA in 2021. We returned nearly $886 million to shareholders through dividends and share repurchases. Our strategy has been to increase our dividends based on long-term EBITDA growth. To this end, our Board of Directors approved a 7.8% increase to our regular quarterly cash dividend and increased our share repurchase authorization by an additional 20 million shares in December. Over the long term, we remain committed to uninterrupted quarterly dividends without decline and an opportunistic share purchase program as important levers to enhance shareholder value.

Moving the World Forward

C.H. Robinson operates at the center of global trade. We accelerate commerce through the world's most connected supply chain platform. Our ability to facilitate global trade increases overall global wealth, improves economies and standards of living and connects people across the globe. We enable companies to trade with the world. We use the capabilities of our people, combined with power of our products and technology, to facilitate that trade, in the most economically efficient way.

Our success is driven by our ability to effectively leverage the four pillars of our customer promise: the people that you can rely on, our information advantage, our suite of global, integrated logistics services, and our industry-leading technology. We have a broad and diverse portfolio of customers that cover multiple industries, geographies, and services, and we see this as an advantage to our model as well as an opportunity to drive growth and shareholder value.

As we turn the calendar to 2022, I am excited about our future. Demand for our services continues to grow, and shippers increasingly want more global, end-to-end solutions for their supply chains, as evidenced by over half of our 2021 total revenues coming from customers to whom we provide both surface transportation and global forwarding services. As an organization, we will build on the success of 2021 and will continue to invest in what is most critical to our future: key talent and smart, customer-focused technology products. We expect to launch several new products and features that will benefit our customers and carriers as we continue to build out the most powerful supply chain platform on the market.

One of the many takeaways from the disruption and unpredictability of the last several years is that agility and the ability to adapt quickly to changing market conditions are essential. There is still uncertainty around what the marketplace and supply chain conditions will look like in 2022. But whether 2022 continues to look like 2021 or market factors shift to a more balanced marketplace, we are confident in our competitive advantages and our ability to execute. Key to our success is our strategy of: investing in our talented, performance-driven employees; bringing to life new ways to help customers leverage our data advantage; building great technology products and expanding our global suite of smart services. These are the right actions to continue creating value for our customers and our shareholders.

Thank you to the C.H. Robinson team for their hard work in 2021, to all the carriers that have kept the world's supply chains moving, and to our customers for continuing to trust us as a partner in your businesses and your success. To our shareholders, we will continue to take a long-term focus on profitable growth and strong shareholder returns. Thank you for investing in our future.

Bob Biesterfeld

President and Chief Executive Officer