Transport Takes: Our Thoughts on Broker Risk, 2027 Rail Pricing, Shipper Feedback + Framing the CN / UP Agreements

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Transport Takes: Our Thoughts on Broker Risk, 2027 Rail Pricing, Shipper Feedback + Framing the CN / UP Agreements

Global Research

25 July 2026ab

Transport Takes Equities

North AmericaOur Thoughts on Broker Risk, 2027 Rail Pricing,

Shipper Feedback + Framing the CN / UP Transportation Services

Agreements Thomas WadewitzAnalyst

thomas.wadewitz@ubs.com

+1-212-713 6116

Large jury verdict & pressure on CHRW: we see opportunity medium term Michael Triano

Analyst

In an 8k (link) CHRW disclosed a jury verdict against CHRW for $604 mm related to an michael.triano@ubs.com

accident in Texas. CHRW stock was under pressure on Friday falling 9% vs the S&P500 +1-212-713 3822

which was flat. The verdict clearly feeds into investor concerns about increased risk for

Michael DiMattia

brokers resulting from the recent Supreme Court decision on the Montgomery case. In

the Texas case, CHRW provided additional information including that the carrier they michael.dimattia@ubs.com

used had hauled 270 loads safely for them and they have a Satisfactory safety rating +1-617-748 5628

from the FMCSA. We believe it will take time to establish precedent through court

rulings and to develop a clear framework for what actions and processes will protect a

broker from negligent hiring accusations. Guidelines from FMCSA could also be helpful

in guiding / enabling brokers to manage this issue. While headline risk related to

additional potential court rulings is a consideration, we believe CHRW and other large

brokers will work through this issue. In our view, the pullback in CHRW stock provides an

attractive entry point.

How should we think about rail pricing in 2027?

Framing the opportunity for stronger railroad pricing in 2027 was a popular topic on the