C.H. Robinson Worldwide (NASDAQ:CHRW) executives told investors the company navigated a difficult fourth-quarter macro backdrop by focusing on what it can control—service, pricing discipline, and productivity—while continuing to invest in its “Lean AI” operating model.
Management described the quarter as challenging across multiple fronts: weak global freight demand, rising spot trucking costs late in the quarter, and substantially lower ocean rates. CEO Dave Bozeman noted the Cass Freight Shipment Index fell year-over-year for a 13th consecutive quarter and marked the lowest fourth-quarter reading since 2009. He added that truckload spot costs rose during the last five weeks of the quarter due to seasonally tighter capacity, three winter storms, and the cumulative enforcement of commercial driver regulations, while international demand softened after a Q3 peak season and ocean rates declined amid excess vessel capacity.
North American Surface Transportation: volume growth and margin improvement
Castagnetto highlighted double-digit year-over-year volume growth in retail and automotive verticals during the quarter, citing targeted strategic focus and expanded capabilities including drop trailer and cross-border offerings. He said that during 2025 the company introduced a drop trailer asset management system, added cross-border freight consolidation, and expanded warehousing and cross-docking space at the U.S.-Mexico border.
The late-quarter rise in spot rates tested pricing and procurement execution. Castagnetto said dry van load-to-truck ratios increased to about 10-to-1 versus 6-to-1 in the comparable 2024 period, pressuring costs. He said the company widened its “cost of hire” advantage and pursued higher-margin spot loads to partially offset contractual margin pressure. Management said these actions helped hold truckload adjusted gross profit (AGP) per mile flat year over year and contributed to improved NAST gross margin, with Bozeman noting NAST AGP margin improved by 20 basis points year over year.
Global Forwarding pressured by ocean rate declines
While NAST posted growth, the company’s Global Forwarding business faced significant rate headwinds. CFO Damon Lee said total company revenue and AGP declined approximately 7% and 4% year over year, respectively, in the fourth quarter. He attributed the AGP decline primarily to a 13% year-over-year drop in Global Forwarding AGP, driven by a “significant drop in ocean rates” tied to declining demand and increasing vessel capacity. Lee also noted that the February 2025 sale of the Europe Surface Transportation business contributed to lower AGP, partially offset by a 2% increase in NAST AGP.
Lee provided a monthly cadence for AGP per business day versus the prior-year quarter: down 5% in October, up 6% in November, and down 12% in December. He said the December performance was “heavily influenced by ocean rates,” adding that Q4 ocean AGP per shipment declined 15.2% year over year and was most pronounced in December.
Even with the ocean-rate pressures, Bozeman and Castagnetto said Global Forwarding expanded gross margins by 100 basis points year over year through improved revenue management discipline, while also moving the business toward a more centralized model supported by standardized “Lean AI-enabled” processes.
Cost reductions, productivity gains, and margin expansion
Management emphasized continued productivity and cost optimization as a key element of its transformation. Bozeman said the company delivered a double-digit productivity increase in NAST for the full year and a high single-digit productivity increase in Global Forwarding. Castagnetto added that since the end of 2022, NAST has achieved more than a 40% increase in shipments per person per day, measured across the organization.
On expenses, Lee said fourth-quarter personnel expenses were $337 million, including $15.2 million in restructuring charges related to workforce reductions. Excluding restructuring charges in 2025 and 2024, personnel expenses were $321.8 million, down $28.8 million, or 8.2%, due to productivity and cost optimization efforts and the divestiture of the Europe Surface Transportation business. Average headcount fell 12.9% year over year in the quarter and 3.8% sequentially, which Lee said illustrated the company’s efforts to decouple headcount from volume growth.
SG&A expenses totaled $138.7 million in the quarter, excluding $0.9 million of other restructuring charges in 2025 and a $3.1 million net benefit in 2024, and declined $11.8 million, or 7.9%, year over year due to cost optimization efforts.
Lee said operating margin, excluding restructuring costs, expanded 320 basis points year over year, and that NAST expanded operating margin, excluding restructuring costs, by 310 basis points year over year. He added that the company remains confident in its 2026 operating income target updated in the prior quarter.
Lean AI, agentic automation, and capital deployment
Executives repeatedly pointed to “Lean AI” as the foundation of the company’s approach, describing it as the combination of a lean operating model, proprietary technology, and experienced logistics professionals. Chief Strategy and Innovation Officer Arun Rajan said the company’s “builder culture” supports its ability to develop custom AI agents in-house, noting it has more than 450 engineers and data scientists. Rajan said owning the technology helps improve scalability, reduces marginal costs per transaction, and speeds implementation compared with relying on third-party software vendors.
Castagnetto offered a specific example in LTL: AI agents launched in 2025 to address missed pickups. He said the agents track missed pickups, determine actions to keep freight moving, and collect new data that carriers can use to improve operations. According to management, the tools helped freight move up to a day faster, reduced return trips to pick up missed freight by 42%, automated 95% of checks on missed pickups, and saved more than 350 hours of outsourced manual work per day.
On guidance, Lee reiterated 2026 operating expense expectations, including personnel expenses of $1.25 billion to $1.35 billion and SG&A expenses of $540 million to $590 million, with depreciation and amortization of $95 million to $105 million. He also said the company expects 2026 capital expenditures of $75 million to $85 million and a full-year tax rate of 18% to 20%, with the Q1 tax rate expected to be below 15% due to stock-based compensation-related benefits.
Lee said the company generated $305.4 million of cash from operations in the fourth quarter and ended the quarter with about $1.49 billion of liquidity, including $1.33 billion under credit facilities and $161 million of cash. Net debt to EBITDA leverage was 1.03x at quarter-end, down from 1.17x at the end of Q3. The company returned about $207.7 million to shareholders in Q4 through $133.3 million of share repurchases and $74.3 million of dividends.
During Q&A, management said the cost pressure seen in December carried into January and reiterated it does not provide quarterly AGP guidance. Executives also discussed “optionality” between margin expansion and reinvesting to drive further market share growth once mid-cycle margin thresholds are achieved, citing targets of 40% for NAST and 30% for Global Forwarding.
About C.H. Robinson Worldwide (NASDAQ:CHRW)
C.H. Robinson Worldwide, Inc is a third-party logistics provider founded in 1905 and headquartered in Eden Prairie, Minnesota. Originally established as a produce brokerage firm, the company has since expanded its offerings to become one of the world’s largest freight and logistics intermediaries. C.H. Robinson leverages a global network of transportation providers, technology platforms, and in-house expertise to connect shippers and carriers across multiple modes of transportation.
The company’s primary services include truckload, less-than-truckload (LTL), intermodal, air and ocean freight, and managed transportation solutions.
