Mr. Lindbloom: Definitions of third-party logistics vary, but when we look at our business and consider what we do, we think of ourselves primarily as a multimodal provider of transportation and logistics services to our customers. We don't own the trucks, planes, ships or trains that move the freight. We contract with approximately 47,000 different transportation companies to meet our customers' needs.
One of the reasons we think we're a key provider to our customers and their supply chains is that we don't have a bias towards certain modes of transportation or equipment because we don't own transportation assets that we need to utilize. So when we are looking for ways to meet our customers' logistics needs, we gain an understanding of their situation, including any problems and challenges they're having, and try to find the most cost-effective way to meet their service requirements. It's more of a solution-based sell than an asset-based transportation supplier, who's going to focus on filling their equipment. It's much more geared towards what the customer wants and needs, rather than focusing on asset utilization.
TWST: It's an interesting business model. How did the company get started? Where did the idea to become a third-party logistics provider come from?
Mr. Lindbloom: C.H. Robinson started as a produce broker in 1905, and today about 10% of our business is still the buying and selling of fresh fruits and vegetables. We started out representing the growers of produce at different wholesale produce markets across the country. As part of that, we also got into brokering the transportation of the produce. Then as time evolved, we got into buying and selling the produce, and buying and selling the transportation of the produce that we were delivering to our customers.
Prior to 1980, truckload transportation was much more regulated in the United States. The transportation of produce was largely exempt from those regulations because of the perishability of the product. In 1980, when significant changes were made to truckload transportation regulations, a whole new market opened up for us and others to buy and sell transportation services. And since we were already doing that for produce, we had a bit of a head start. This deregulation was a big turning point and the start of us going from being primarily a produce company to a broader logistics company. And those logistics services have grown to now be a much greater percentage of the total company.
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