Strong quarters, slammed stocks: insurance and claims costs knocked 11% off C.H. Robinson and nearly 18% off Landstar in a day

Strong financial numbers released between Tuesday and Wednesday by C.H. Robinson and Landstar were overshadowed on Wall Street by concern over one particular issue: insurance and claims, according to FreightWaves on Oct. 28. For the day, C.H. Robinson stock was down 11.14%, or $15.99, to $127.60. Landstar's stock closed down 17.76%, or $29.98, to $138.80; its 52-week high was $228.46 on June 8. The selloffs were about what a crash now costs the company that brokered the load — the question the Supreme Court's Montgomery v. Caribe Transport II decision and the nuclear verdict that hit C.H. Robinson in Lipe vs. Lupus Superior, subsequently affirmed by a Dallas County judge, have put at the center of brokerage finance.

C.H. Robinson's underlying quarter shows why the reaction was about claims rather than the business. In its third-quarter report, the company said the average truckload linehaul rate per mile it charged to customers, excluding fuel, was up 31.5% from a year ago — but its costs per mile excluding fuel were up 33.5%, leading to a reduction in gross profits in truckload. Adjusted diluted earnings per share rose 28.6% to $1.80 on revenue of $5.36 billion. Operating revenues at its North American Surface Transportation unit were up 29.1% from a year ago, and the segment's adjusted operating margin rose to 40.3%. What spooked investors sat in a different line: the company's disclosure that its selling, general and administrative expenses were up 29.7% from a year earlier, 'primarily due to higher claims expenses,' though the company also had a real estate impairment charge — and insurance and claims costs at C.H. Robinson are carried in that category.

The guidance change is what turned a cost line into a selloff. Chief Financial Officer Damon Lee said selling, general and administrative expenses for the year are expected to be $585 million to $590 million, compared with an earlier estimate of $540 million to $580 million. While that is not all insurance or claims — Lee said depreciation and amortization will push the figure up as well — the comment appeared to catch analysts off guard compared with their own estimates of the company's insurance costs. Operating cash flow also fell, to $124.1 million from $275.4 million a year ago, which the company attributed to unfavorable working capital driven by higher transportation rates.

The company's own framing, repeated several times, was that the claims quarter is a spike inside a controlled long-term picture. Lee said C.H. Robinson usually benchmarks its total insurance and claims expenses as 50 basis points of its total gross revenue, and that year to date the company is below that number, even though third-quarter numbers were relatively elevated. Lee said claims expenses are typically linear, with some quarters higher than others, and that the company remains well within that guidance on a longer trajectory. In a post-call interview with FreightWaves, Lee described insurance expenses measured against gross revenue as 'de minimis.' Bozeman said the company is 'progressing nicely' through the 2027 insurance renewal process and believes 'this renewal will result in insurance inflation that is reasonable and manageable,' with the renewal completed by the end of December and an update on 2027 insurance costs shared as soon as possible — likely in mid-to-late December.

Landstar's call gave the same theme harder numbers. Chief Financial Officer Jim Todd said 'claim cost severity has been going up at a decent clip that we felt like for a period of years that (reserves) were sufficient.' The category of incurred but not reported reserves, however, was up 27% in terms of gross dollars from the fourth quarter of 2022 to the fourth quarter of 2025 at Landstar, Todd said — 'and that's on a declining truck count.' Todd spelled out several metrics showing how much Landstar's insurance costs have risen and said, 'We want to continue to book those higher loss estimates prospectively.' He also said two claims in the second quarter were in federal jurisdictions where there previously had been protection for brokers under the Federal Aviation Administration Authorization Act that was eliminated as a protection for brokers by the decision in Montgomery v. Caribe Transport II. Asked for future estimates, Todd declined to give them, calling the environment highly complex to estimate.

The practical takeaway is about who ultimately pays for the claims environment — because it will not be the stock price. Brokerages facing higher claims expenses, higher reserves and a 2027 insurance renewal they are negotiating under Montgomery-era exposure have exactly the levers this month's editions keep documenting: stricter carrier vetting of the kind Knight-Swift described Tuesday, deeper looks inside carrier safety files, and rate structures that pass liability costs toward shippers and, where the market allows, away from carriers. For a carrier, Wednesday's selloffs are a reminder that your insurance and claims record is now a brokerage's earnings-call problem, not just your own renewal problem — which is why a clean safety file, current documentation and a record a broker can defend to its own insurers are becoming commercial assets. For drivers, the December date matters: when C.H. Robinson reports what its 2027 insurance actually costs, that number will set the tone for how hard the whole brokerage sector pushes those costs, and those vetting screens, into next year's freight.