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3PL stocks fall after Texas verdict targets C.H. Robinson
C.H. Robinson dropped 9.3% to $186.50, while a Dallas County jury awarded about $604 million in compensatory damages that the company expects to appeal.
Investors sold shares of U.S. third party logistics companies after a Texas court verdict directed at C.H. Robinson triggered broader concerns for the brokerage industry, according to Yahoo Finance. C.H. Robinson fell $19, or 9.25%, to $186.50, after trading two days earlier at a 52-week high of $210.33.
Other 3PL stocks also declined in the reaction: RXO fell 7.71%, or $2.14, to $25.63 after hitting a separate 52-week high at $29.90 earlier in the week. Landstar dropped $7.65, or 3.68%, to $200.32, versus a 52-week high of $228.46 set last month on June 8.
The underlying case, Lipe vs. Lupus Superior, followed a 2021 crash that killed three people and the employee driver of carrier Lupus Superior, which had been hired to move beverages for Arizona Beverages through C.H. Robinson. A Dallas County jury awarded approximately $604 million in compensatory damages, which the article says is structured so it most likely falls on C.H. Robinson, and the company said it plans to appeal.
Yahoo Finance also cited analyst commentary that framed the ruling as a negative for brokers, with the research team at TD Cowen calling it the first domino to fall. The article adds that C.H. Robinson had previously relied on an argument that 3PLs were protected under a safety exception in the Federal Aviation Administration Authorization Act, but that defense was rejected after the Supreme Court ruling in Montgomery vs. Caribe Transport II.