C.H. Robinson Worldwide (CHRW) 2 Nov 222022 Q3 Earnings call transcript

Good morning, ladies and gentlemen, and welcome to the C.H. Robinson Third Quarter 2022 Conference Call. [Operator Instructions] As a reminder, this conference is being recorded, Wednesday, November 2, 2022.

Good morning, everyone.

On the call with me today is Bob Biesterfeld, our President and Chief Executive Officer; Arun Rajan, our Chief Operating Officer; and Mike Zechmeister, our Chief Financial Officer. provide outline of actions. some will quarter XXXX Mike and results new and a our summary Xrd Bob cost reduction will and on across update questions. the provide and for Arun occurring development call the up our we then innovation platform, will open digital an

be website presentation earnings at can investor.chrobinson.com. supplemental the Investors earnings release to Our on our section are and slides found of our

our we the could If will comments remarks contain cause you call Our you like over on intended we slides. Slide with from do not statements. the that results information today’s actual also And refer X differ are slide prepared to to Bob. the in today may that which our follow management’s slides, factors let turn know I’d we’re specific presentation I’ll to lists expectations. to referencing. remind forward-looking that, to

in today. half about freight, and Thank in joining second in were in quarter the you, weakness everyone, that second demand see you thank expecting call housing verticals large X market Chuck, market. XXXX July, including the good we and to further us in our On deceleration retail and in late the I of slowing for morning, earnings for a talked

market of the digital now to Throughout while foster processes experience continuing declines at cost changes freight to play us freight be efficient overall fourth of taking their of customer actions more rates quarter on coupled more other in in an we’ve our resulting We’re and seeing freight our surface out to million lower headwinds allowing of scaling that to our XXXX. at pay Compared such the currently compensation, by model price annual cost focus of markets. $XXX $XXX peaks generate are with map expectations the result offset successful and of slowing take demand such $XX expected to increases quarter and both our in million structure. fourth and to digital scaling and those the and on with a sustainable to as from transportation and freight third maintained in cost will improve slower annualized as forwarding to we operating year. carrier cycle, incentive road partially the cost in basis disruptions. believe on our net normalized reductions tailwinds gross annualized many million our conditions, next we expect Today, markets that pandemic quarter profitable and directed entering savings we’re headwinds savings expenses, we’re XXXX expected more the fewer in are changes actions cool to time economic continue reduce are Inflation, where to model structurally gross endeavors These net will with operate operating by reliably growth, growth.

and to Operating of his speed contributor Officer. has new and our Chief organization, Arun continue to think we in critical Arun act to leading C.H. differently been We these product the accelerating carriers Rajan to customers our digital marketing into these will and organizations, technology leader the opportunities to and the functions strategy. and operationalize single-threaded scale positioned our product XXXX, these deeply functions us we’re Since Arun our helping needs both under put single accelerate at Robinson. To accelerate for digital bringing in responsibility model. enterprise-wide X to the joining to direct In needs, is and business while a teams execution, drive together operating presidents of allow critical design Arun’s the unit our and teams structure, efforts. also organizational integrate identify strategic has product units vision well work with meet Arun our impacts business role will the promoted the of pace as and transformation greater us expanded that directly across role, ensure and digital have impact addition of the been to leadership and to to of strategy of Robinson of center more a C.H. to

of decline year-over-year the van In was in a me a turn let results our Global we of Transportation Volume quarter a with Forwarding. drop albeit and NAST to our for offset our row, North growth quarter a Truckload X.X%. Now partially control overview and modest volume dry high-level for our Surface American business, volumes. growth third sixth shipment flatbed temperature in by in trailer, grew

July we and quarter, increases in August freight the declines September turned demand saw mid-single-digit weakened. in volume to as Within

AGP of second remains the historical Our from our in customers pursue above the The AGP spot to in down due spot the adjusted with basis, volume came we AGP spot saw Truckload where procurement declined particularly and was shipment market, per the we increased decline profit a year, the the per increase in pronounced quarter collaborated average. continue in market quarter, contractual our as but shipment their our our XX.X% market third XX% per sequential XX% per strategy. last record part meaningful as shipment Truckload or gross versus to shipment. sequential On of our peak a AGP

mix had overall load-to-truck pandemic transactional an second the second the we’ve third quarter level same Changes is period Routing in XX% we market, the year. compared services depth drive-in lowest approximate declined reflect from also our guide tender XXXX. XX-XX impacted of of a freight which the last X.X in the ratio volume mix During managed of since a softening national seen of in environment. for the the is XX% contractual quarter, in quarter and business, the which in to the the to quarter, volume proxy third X.X the

in cost latest sequential declines XX% it quarter, October, declined our approximately week of costs haul year-over-year the This third throughout first was excluding third this between and truckload line carriers, the throughout mile in X.X:X linehaul to we The X Truckload that for the has ratio with X continued While XX. saw price approximately resulted in of paid fuel. second X and decline most and in per in quarter. to quarter average reading

the pursue large first to of excluding our quarter changing partially and and rate the reduced was quarterly mile business of ocean expect have historical a and controlled X.X% linehaul quarter approximately AGP our gains air in reduced we respond has in the decreased on the business, we’re year-over-year due fuel LTL per our rate in bids win by with our been rising a to order AGP billed final in we season in carrier by increase led a mile, decreases flat average which our to year-over-year our share the by contractual was inflation freight. spending to muted and Truckload offset High import contributed market that This $XXX Consistent through the surcharge, This fourth customers, In AGP correction Our reprice Truckload seeing patterns, all XX%. XXXX approximately consumer XX% LTL our in to a year-over-year. increase contractual decline quarter of business, and resulted of Forwarding improved third XX.X%. is peak have third XXXX. and of business, Global prices volume. consolidation The while temperature NAST market. of demand volumes. as for we in quarter, profitable LTL also Encouragingly, generated in per million anticipated. had year-over-year to component inventories, now common XX.X% XX% In declining up a volume decline driven largest which NAST

For in of the versus XXXX. representing a Forwarding of quarter, year-over-year a a quarter AGP XX% high third record $XXX.X third for Global generated million, decrease

the growth lane. XX% congestions and in X.X% AGP ease. verticals diverted and our year-over-year. our metric and by This decline year-over-year, aggressively was prices in XX% shipments. the new This lanes rates frequent volumes of more allowed and is in results, forwarding trade million and of compared decrease a driven diversification lanes demand freight Coast new trans-pacific business Activity year. and other the commercial to the volumes longer declined service, in slowdown has transit increased to these per was declined AGP $XX evident and the and quarter, and ports other a last to In lower ability and X.X% lanes. global improve ton most lanes of air due third continue differentiated in XX.X% capacity XX% customer Airfreight AGP The Coast, has lane. conversion and the metric $XX.X accept on continued demand to XX% West demand shippers This ocean. with ocean industry selling our a resulted or of West stronger U.S. the freight also additions drive XX% to shipped. solutions shipment in forwarding trade customers team market trade trade the decrease as impacted by where relatively flights. due Within slowdown global to on to transatlantic airfreight declined tons third times in further continues example, AGP be the more stronger quarter business belly East pricing. air than million some for trade of U.S. reliability generated ocean by the port in from from for to a per was than or from decrease Overall, in AGP Coast capacity to remains leading a and the schedule shipped Improving on many driven ocean in freight in in back combined volume provide to

Australia. ocean the India of the obtained and we’ve status U.S. to from Additionally, leading to forwarder the U.S. freight the from being

sustainable earnings on lanes shown capabilities in geographies industry presence As trade an and of important XX part strategy. Slide of expanding growth and verticals, our our key our is presentation,

and us our suite share our believe call more walk we experts our combining deliver our turn enable and enable our enterprise, I’ll value global for and growth. customers logistics regardless will of solutions that, the uniquely innovation We positioned across marketplace network For the With our now and business, you platform. digital strategy that’s to Arun and are the turn, carriers continue the full of digital for in win services, development with to shippers advantages of believe to in sustainable product market increase that our we conditions. through and to competitive to more multimodal occurring create profitable market through

X-sided to and marketplace. our and Thanks, I’ll marketing adoption our between role look building teams to of as excited expanded further that Operating both Chief our good the integration sides by on to an saying insights strategy and digital company’s our I delivery everyone. features and technology meaningful begin accelerate Officer. product forward and Bob, I’m morning, to take the products, of

XX% quarter, third of digital continue have the to place with been platform, penetration of digital carriers offers extending digital QX the delivered, that to the compared and our number from and in QX while third increased with to Navisphere a QX. improvements deliver carriers carriers enhancements digital During offers product and to experience which Navisphere the last our quarter we our providing loads, capabilities customers. we to XX% carrier Carrier, Navisphere looking to sequential improves the of Carrier year. offerings our saw our via the both Due enhanced in the productivity, Since loads increase

quarter this Broadly compared point backwards XXX,XXX on operationalizing that business XX% QX working by deliver in about execution such our bookings is that which solutions in to focused through during bookings year, backhaul of recommendations QX, information load is from at experiences the with is automated the in their and improved $X.X alone. digital service and we’re carriers scale increase needs. Truckload scalable our carrier data an for of NAST carriers. digital providing same Much our levels and features as of speaking, represented billion Another advantage customer progress last demonstrates fully

cost the Scalable On to and IQ productivity one the our to and model. to turn cycle core including IQ us life financial to and giving cash we about make the financial processes. operating gain customer our review digital will order that our And appointments, of the Rate and market of laser-focused ultimately it’s Mike insights the these side and side, the are I’ll automate gives third we share products. tracking, processes on touch to and delivering that the call in serve flexibility digital decouple the advances do scale to accelerate headcount opportunities a coverage. new lowest self-serve around execution Procure all specifics processes to pricing growth marketplace the documentation are includes now Market quarter targets. over price enable increasing Scaling volume are our and increased margin while drive performance. to long-term management, in of in-transit this and processes way customers or load foundational which of growth points the This operating to being operator is us

Arun, Thanks, everyone. and good morning,

volume price Bob year-over-year results in growth NAST and along freight that the demand on referenced in declines sequential Our softening QX reflect earlier. truckload markets enterprise and transportation with surface forwarding

up up XX% September. compared quarter July, expenses million, or expenses with both NAST from a compared due AGP AGP in third Forwarding. a was basis, by to compensation. million average total primarily and with Forwarding. $XX in in QX a the our in Global in NAST On total company company to XXXX, in headcount. down decline lower million business Global Our QX and AGP growth X% last partially sequential due company to monthly XX% declines up total in increase On $X.X X%, per XX% record our personnel QX declined AGP down declined basis to $XXX.X in X% offset personnel August X.X% On were day a year, sequential basis, was incentive

our X% also QX with the is which the the flat stated declined QX, of declining year. headcount from of in end half Our back expectation to ending headcount of consistent

$XX full -- to $XX continue high billion, Bob million personnel the our to For end which cost of is million year, onetime expenses to restructuring related guidance. of original of excludes to that savings expect QX be our initiatives the expenses $X.X This in described. approximately we the

expenses travel purchase expenses. million compared year, settlements, of last on million QX QX SG&A. to services by primarily $XXX up Moving in to were $XX.X of driven legal and increases

to now For from and guidance the Center, expenses. $XX.X QX our expenses we by Regional million SG&A including the of which million $XXX largely our is in of high expect the $XXX settlement end nonrecurring legal million, XXXX, our original City to leaseback total of gain be offset Kansas sale in

We QX of also is $XX year $XX million. million, million, approximately last to and million million amortization of down expense Interest and down now guidance other was depreciation $X.X higher to FX revaluation. In $X.X $X.X up this million expect year. interest XXXX last included foreign $XX.X previous year partially offset interest to versus million by loss. a debt. million last year, year, gain primarily a full versus $XX revaluation increased be from our $XXX million expense, of expense average $X.X currency totaled on which due QX was The QX

came QX in Our XX.X% compared rate XX.X% QX to tax year. at last in

but of down year X.X% diluted QX last last income versus net compared $XXX.X million, no X% delivered tax Our changes compared or state XX% to was of year, per and earnings share QX to full year-to-date year we XX%, our rate assuming and expect continue we XXXX XXXX. tax be tax QX effective is rate meaningful federal international up to down to $X.XX, to XX% policy. to XX.X%,

record used costs $XXX as of our working in $XXX cost and million transportation cash flow $XX.X compared XXXX, to $X.X last our increase increased $XXX to QX year approximately in The capital billion. XXXX was rising. From operating net flow. operating driven capital in in million model. of improvement in by a working were of operations sequential and capital price purchased due net a generated end year-over-year of million a QX to by QX, net the Conversely, included to working operating million of QX QX prices million was by $XXX.X cash declining sequential the operations by Turning primarily decrease XXXX.

benefit and lag Capital capital a extent we would DSO million the To cash to our million a prices $XX.X expect year. were to we compared that operating have commensurate freight last continue in capital. reduction decline, on and working on transportation based down, of cost flow come has the and purchased to working in As $XX.X to QX expenditures the DPO. basis realized price QX

QX, We return million. From increased driven using repurchases approximately dividends. $XXX returned of XXX% of was of QX expenditures year, shareholders The and combination we $XXX million guidance with flow the high $XX income to deploy million our cash excess be shareholders million program cash dividend end net standpoint, $XXX and up of the Driven $XXX cash. expect cash our through a our cash our a quarterly to versus of previous at of repurchase share capital by QX remain to capital cash flow. in share million XXXX growth we by long-term record to exceeded last to significantly EBITDA and the alignment allocation growing to committed in

on We liquidity $X.X of with credit billion Now committed to million of of million. approximately a QX and $XXX facilities cash of our $XXX sheet comprised under highlights. balance balance the ended funding

of at end repurchases QX Our our expanded due $XXX million was performance. QX to up primarily the versus debt driven given $X.X balance billion, capacity share year, last EBITDA borrow, to our by

at Our of leverage X.XXx, end down was QX QX from the X.XXx of the debt-to-EBITDA year. last end at net

discussed, Finally, this million realize the annualized us growth the costs XXXX. including our our our to we our operating and are million. we headwinds scale market which to is approximately digital $XXX adapt run our comparison rate these actions of million to annualized processes, the in conditions net this shareholders. changing as actions, quarter we long-term guidance, charges to expect take to long-term expense savings in year cost cost profitable for When intended structural earlier. of NAST, XXXX, Investments I quarter net particularly savings mentioned Bob year. enable actions by fourth in merit and increases by of reduce inflation expenses million, to incremental in are $XXX to Related to are expecting This as third foster of quarter to These net of by annualized $XX million, expected taking XXXX of to these approximately restructuring fourth are be to $XX changes. nonrecurring the in savings $XX driven

back his Now turn Bob for final to the comments. I’ll call over

Mike. Thanks,

weigh our digital priorities, to on keeping inflationary of responsive to economic center driving continue our carriers need broad platform, model while As that position and do, supported the lowering scale. cost to The and processes continue in driving business and our will digital customers we our structure growth. we our the from strategic financial our to on resilient our continue pressures is needs in needs including on verticals focus exposure carriers entirely what evolving related our flexible organization customers to services, market growing model work a of and growth, carrier focused is and executing backwards team our gains global customer industry by our non-asset-based team the working while But and scaling which operating believe and of and discretionary at highest in to and our spending geographies, put consumer to different deliver strong suite to by that global our results. we us also improvements experience of turn share overall drive our bring

focused strong turn to the with back comments. call. costs leading I’ll of our productivity, And profits, it Donna and to on long-term portion returns continued improving This shareholders. our We’re Q&A operating that, concludes reduces turn the to in for which increased prepared

is question questions. for of coming Fowler is KeyBanc. open today first Todd Instructions] [Operator The The floor from now

you initial from? think us those maybe where And you Bob, of opportunities of maybe see beyond additional to into So on the the savings side, you some on get as these kind you the forward? thoughts savings packed that maybe for How to in think wait on move you see you we around with to opportunities? cost comments expecting share start, those about going you that? I until about have buckets there, you stab across can you’re can a Do you should Great. the this? to as but you coming cost share as end if ‘XX, Or other this segments? things guess maybe lot some cost identify kind savings of do move can some some continue

and In too, XX% it’s weigh you Yes, let Mike I about personnel, I’ll a bit, SG&A. if XX% little can structure cost start, right in general now, terms, our think Todd. about

the same And generally, cost of kind reductions that approach. think so I following about

As changing forward, cost driving of these terms we seeing reductions. kind drivers look a what’s Obviously, really think there’s X I we’re marketplace. in of

operate less supply efficiently, with disruptions. seeing We’re chains effectively more more

in human over so past course required many And to order as the cost take the staff and in it us some couple just it us exceptions, more supply chain afford will the more opportunity to of we’ve with years, engagement, labor. personnel of make ease, to difficult deal had human of those And decisions of model. the out really allow to there ramp order

opportunities. of about talked scale and work model too the the and lot on us a the Additionally, model drive efficiency digital provide to overall will Arun endeavors those that

Yes.

I covers think it. that

put XXX It’s additional that efforts. cost cost I’d is making for that net end. think we progress the to for down key digitization initiatives, going articulation forward. to the I an an And digitization emphasis model. really reduction of worth It’s and us we’re the continue where just not XXX of drive our just is while on important

just but broad-based, primarily reductions And that I forwarding of related, be segments. the Todd, and this state across kind asked will there you NAST And be I cost think, X would enterprise. will

Jason is Cowen. question coming from of next The Seidl

Truckload then love maybe operator. you, about will, and taking here, for And the seeing and if call. in. if Bob pricing a We’ve finding that. team, some there good of can X squeeze about I Would to talk thoughts some more maybe I a hear bottom you has your appreciate sector, been on bit. spot you talk in of my been morning. Thank lot a

of that that. interesting was from thought new generated Forwarding. behind trans-pacific being business thoughts what’s lanes wondering XX% than other Global that rather in on Just the I

Yes.

of understand of the a was critical spot. proxy We routing where about So industry effectively kind often of into up I’ll TMC contract The And as depth to hovering routing guide holding terms get moves it’s it September, a more and the guide unplanned the to freight spot X.X. are bit in in kind a specifically. space dropped for little to tender use around see the obviously, we cycle performance. X.XX. overall routing the of talk guides sense that the of guide In how TMC routing

we load context, that of when perspective, first really from a so from the at a times acceptance XXXX historical look And and that’s of reflective XXXX, half XXXX. like

I exists. contract So think to the kind picture that helps of the compliance paint that of current

of terms where that market of In about with going, XXXX, and we cost we think the of beginning similar. see the But have in -- general, end the as year the we forecast and of in we half deceleration that cost period. think looking with the year the the the pretty -- comes a that with pricing kind first floor, in cost think May slight the of of in floor April, that reacceleration the that, pricing back truckload kind year in we spot the time

spot freight is unplanned there today. market little the in so And very

to lower of are use we out number shippers the savings seeing some market. of and capture the a freight mechanism as intentionally think cost I spot a contract keeping

around we’ve transpac, on add but position we’re focused in of And As also overall diversifying business portfolio. been we the proud to forwarding second certainly it question -- continue your we’ve to our relates in global transpacific. the the leadership very forwarding,

that. upon to so not it’s reliant be So

Australia. as as to And from U.S. in as so India the leading you’re forwarder We the India to Australia, Europe, #X in Southeast strong spot well LatAm, the climbed Asia, U.S. the Oceania, from as seeing growth to examples.

gives So some color. you hopefully, that

diversify So opposed just more market yourself it in was going concerted was where a to the to general? effort as

Yes.

comes from Brian The of next Ossenbeck Morgan. questions JP

market, I want conditions XX-XX you a So back just split. in the contract to the had to come Bob,

margins SG&A spreads would out weakness? does if quickly. compliance have quick mean fairly than I quarter legal have a thought? declined it Was for it charge-offs. segment but it that a that just aspect fairly expand at And of called had we to could would Mike it market we suggested. in number spot that was some perspective that the like a weaker that’s because volume maybe was thought on kind that would perhaps less came sounds the in the little least widening guide offsetting market spot caused located see on from out. with You have seem then and of large historically settlement. clarification, contract just wanted Was other just than through bit and or of the like you a I that It that where that you

Yes.

So our we the contract the if was Brian I -- in go saw our truckload to strength what Truckload business. per continued in quarter AGP AGP, the shipment in

So that considerably on basis. up year-on-year a was

we the reacting model in is it contract expect the So as business would to.

as Our in that we’ve spot business, pursue get in to in really the spot volume. volume grow we order had continue to share grow and aggressive to area

you’re the shipment a the the significant of so that XX% volume And that’s in seeing pretty on drag spot. overall AGP per just based on

margins our are compared they year in AGP third the were spot of shipment today much in last where lower of per spot, It’s really space. the than quarter contract we margins our now. in are continues as kind in per that truckload the in sits to the So up net-net, the last right inverse AGP where spot were far flipped the above But historical QX and that’s average. considerably year is contracts, our greater truckload to of and it than be of of

sale up then, guiding original largely which QX. to legal from had the high we point bit about out including also gain of Kansas Regional was on facility, little the And We were million and guidance, gain in the end that in offsetting City. City clarity on leaseback nonrecurring to XX% settlements of on the add your just of in our called But Kansas quarter XX% our year, quarter, $XX Brian, SG&A. a Yes. overall, in the

in QX. a And specifically X/X of for represented SG&A They quarter just legal so the about more the increase that expense on in settlements. little in

impact? Mike, And was particular, which item? Or did in that corporate the that line more on segment,

Yes, it’s impacting a NAST corporate line item, but business.

The next Chan question of from is Stifel. Bruce coming

comments, especially looks operator, back Thanks, your to on July, with Global Bob, going it you some outlook regard just in second quarter was Forwarding, and good everyone. that caution and to had point. Yes. like cautious morning, commentary back pretty

XX% division sequentially. EBIT almost You had down

So headcount were XXX to still were quarter-over-quarter. little people I you surprised adding guess, we there, a up see about that

can Just help so were us the to reconcile you those -- Why was adding maybe X when outlook things? you conservative?

we got we the in count. that groups, terms forwarding of not A advance down We of we’re certainly were in We was hiring preplan of head it way rapidly did admittedly, It’s headcount, come cautious. market the we of going lot that as plans Yes. expect in the as ahead opportunity. ourselves certainly our did. to likely workforce

already And those a extended and into feel the offers had like I’d was hires environment. rescinding perspective were quarter, that talent been didn’t we there were so be offers right that accepted. And in brand thing in, in-flight it leading from to many of the say,

So SG&A as reduction deliver and between about a the will kind headcount and said personnel commensurate initiatives Forwarding.. of focused NAST as that with I we and cost the And drawdown that clearly cost that in primarily in talk balance reduction. will be before,

place core whether you Fair strategic you’re consider maybe Can what you us an those really terms in the update maybe monetize about thinking up that any processes alternatives portfolio how in follow And of maybe have to of quickly. then kind Okay. give you just enough. see as of or assets? you noncore? And some businesses on just to

That and shareholder the create to Yes. goes to to prudent review saying. right? way really Bruce, value, think continually without assess business best the it’s I long-term portfolio

own look continue trans, on as in rate each drive that we integrated a growth believe customer are we global flywheel As fresh services services, Forwarding, XXX see and X-year where solution sustainable XX, a when customers We share both both engage or increase earnings them strategy. managed we feeds its the NAST X-year with with in other. of basis point see customers. at just revenue growth particularly of to instances gains the And in integrate on continuing CAGR, we and our you one customers to way, and revenue we deck those engage the overall, of of over of growth through forwarding, those where comparison that CAGR surface design kind between to services of growth across see in our part Slide

and So retention. we growth see greater greater

we again, review portfolio. to continue so And the

to take and specific to we to for our the of update nothing the and value do We long-term for view for shareholders, what’s the there to portfolio. company customer the but right the that today continue have is

coming is Atkins The Stephens. of next from question Jack

think technology settlement potentially just or part. want first, savings. housekeeping within make about when Mike, $XXX that So cost million additional quick that’s to X execute think number quarter in to the expect a your first And in I then on you you is Arun, purview. NAST initiatives you course next about help my picture, legal $X the taking us to the efficiency expand why few about opportunities? see I that secondly, million. guess, the over I I as corporate? just is that you your is bigger that quarters Can mean And implement? we guess, of third -- quarters so guess was would item. as a in $X guess, million the I sure, or

me off million, they were impact The just settlements and Jack, legal about legal settlements QX. the cover Yes, settlements $X.X NAST, the legal your the business. in question let start

able we’re Yes. to appropriate business, the timing, put And customer future we’re ensure our disrupt not the terms and not in that Jack, this to relationships disrupt talk and of eliminating the those making things of map to legacy at the and talked going some we’ve operationalizing about not pace kind growth to road risk. around automating self-serve of of tasks. of kind Arun and some about can take

this of will delivered those phase are as well. some so as And in

Yes. Jack.

have by the roughly Bob the $XXX to end described. million map So NAST up of all XX% right now, increase road which by XXXX, productivity in that clear to a ladders we

to opportunities. it relates additional As

a recall, we’ve the talked if cycle load. about So life of you we’ve --

that starting from we’re improvement focused certainly are So unlock, on tracking this order is that are transit are XX% initial financial appointments management the said documents, appointments. starting in part and to the So of what et on cycle. as there right? probably other opportunities in Having and that, in-transit earlier productivity cetera, tracking

and We appointments. based in-transit the on have more confidence in tracking XX%

As but more we just yet. efforts, likely other we sight is line there to gain in of don’t confidence that opportunity, have

of coming Jordan Sachs. is next question The Goldman from Alliger

year? sense of all in of get look next a mentioned, total north timing bit. some level Can just I talk of give XX% a little cost the that Or don’t know you you productivity the company? to the thinking margin finally, more Maybe a just but roll se, the EBIT these and it after following they to savings through can evenly like for up stay for savings the what is XXXX holistically then personnel And as way plan could savings? guidance per And there about this little you SG&A is expense spaced? and

Yes.

[away] many on earnings the the after the the as in we’ve of cadence as got initiatives, pace terms timing of our of we it digital what guidance We, get to delivering in the will business, of expense want the our on do market give come items Just in to QX possible. Bob conditions, obviously expense back But and normal efforts. line you savings said, course, with terms as right on call. we’re the on those our quickly

Yes. will in profits XX% operating the for backwards we of mid-XXs NAST, XX% stated from targets And of the operating to Enterprise. our work business, and terms for continue the for of of margin Forwarding kind

guide solve continue a we’re as in kind reductions that using cost and of pace move so And and the as that here help to in which will come. for forward the we determine so to itself of kind

Ken Bank from Hoexter question America. The of coming is next of

Great.

because getting sentiment, offset million as to is guess, by $X the because signed keep quarter it wasn’t gain just just a right? explicit Mike, full last $XX a as So million way this possible. partially legal up. cost, It you we on I The wasn’t clarify

your that earlier last to at difference, decline the XX%, that inordinate I’m trying contract. went right? the quarter I your So gains percentage the the Truckload that? from from NAST was added -- I down on on to want on to in in statement. I -- on and guess just this? here What shifted out And margins. Bob, just looking you profitability then why clarify sequential there the make mean these to decline went to up figure spot in So from specific, XX% fuel

said much, so much contract were And margins the you greater.

Is that went so it chasing down that overall dramatically? Just why contributory? then business? then trying worth out is And margin figure spot still it to volume

gave part the the of of the original annual your Yes, make context in SG&A. clear just that end at question the the we’re QX high guidance Ken, guidance our Kansas take on that let and our gain me about to sure -- first being City of SG&A. on we The comments were

And had about legal so also had the that, settlements what we QX, will with year. and we’re believe in onetime but for smaller settlement talking we we really happen

not nonrecurring that’s the about settlements So nonrecurring all XXXX, the entirety, hope really year was $XX in gain charge comment of offsetting QX, million was what which in for we experienced comment the largely a about its million settlements. legal a legal I clear. just $X.X

Yes.

Yes. it contract business, as contracts repricing. you are And relates know, constantly as the to the

in AGP that health which shipment AGP costs. contract kind the of business quarter gains. so came contract share of down quarter appropriate are and through that word part spread those per normalized have are of at good second that still by place is we so And was we They gains the that’s the in bids caused quarter contracts record in pursuing the and second We’ve to market in in as the per of those AGP our highest the seen third we’re quarter, contributory portfolio. where the drag the we in shipment a if costs volume on still per use spot caused very the terms precipitously third repriced shipment. lower about that The had, repricing, history, and feel resetting

tailwinds being profit plans at and impact tends LTL benefit adjusted a it too, quarter. we’re it’s to shipment in headwind. Truckload going and look headwinds no not business business. gross our the certainly clear, comes to didn’t LTL a certainly, any is down But So it our fuel per when around yes, our straight up, is from that. is pass-through. a sustainable It’s There building it’s We when be fuel down, second second quarter with there as to business fuel

incentive in people, is I just as to and the Bob, commission clarify shift earlier, then that that sorry guess -- Just digitization? the a And the pay you for Or follow-on. is $XXX comp on given reducing just the structure? million, mentioned

will the takes, an be all It’s component above impact. -- that. count be going of be tailwinds in of year, a puts there’s tailwind, Yes. We terms to a headwinds, of next be reduced comp and there’s will to going incentive to head think

think -- follow the kind expense of a there’s XX-XX will you onset SG&A, being call, of personnel that. the as between way closely So it I the one at if said, split about likely another, and or

is Susquehanna. from The coming Bascome next Majors question of

is how to million. costs Just million much at going this to from And you count lag we we look XQ Forwarding a that, quarter. Can being being a so West this call but will more gross it, of a XXXX down the seems the $XX last the certainly back sequential Just than question and it operating spot quarter was we ability that earlier? Forwarding, with this how that structure that if $X besides XQ, trend, and respond? Coast of this to, much at OpEx or way cost that pressure is and all little cost above structural increase? as into Because more the be were rates, profit up if XX% look levels, yet back drill

really on thoughts any would helpful. So that be

Bascome. Yes, it’s almost exclusively expense, personnel

that the And ability control to forward? going

of There a plan that this, to -- as in there part place moving is control forward.

to appropriate the We for that Forwarding operating margins that XX% business. continue of believe profitability is level

expenses oversimplify solve right? X don’t shipment? And what as we that the we what needed it’s support are -- in really to volume? personnel AGP the And per to for What but it, about I -- margin? in that, operating -- X mean trends that do levers, so the to it’s -- are how trends it’s think deliver And levels ultimately are

from coming is question Wetherbee next The Citi. of Chris

to ask sort Bob, volume growth. wanted philosophy you your on of I about

quarter, challenging to push continue in try think the it share I perspective. sounds to there’s been in was And market to that from through spot a fluctuations like NAST. gain this

it where just it. I to a about you’re to to you that. up markets might it sense sense to these do want about of Volume was an NAST. think impact you sense in make your on that you sort a maybe growth types Is can of do? pretty get get how end how you result? wanted in breakeven profitability think as seeing thinking on I of close Does So something

Yes.

volume accepting through level appropriate the play as But and so determining of we his component to be I expect in to the growth really we maximizing XXXX I yet team business, what and right? I work at a and that speak, we should the think look place is of the take talked run, the freight. we what which corridors the and Chris, volume and market in general, important mean, general, systematic through the on approach terms yield the lot about it under to likely that Arun have come, before, come an a as will marketplace health market. believe of contract is I And look we cycle which XXXX, if we’ve do, to overall say of different in like, depending conditions. to expect won’t we’re volume it will exclusively, going in but the grow likely to

to reprice so we’re have aggressive fourth pricing going and the of the quarter. business we’ll that know be around XX% in in Truckload our we drive Truckload events. those first there, to between And quarter And to order growth

directly on don’t Chris, -- that’s if if on I not, your but question, can build I so know that. hits And certainly that

to to market? that you might It contract share you does. It’s of helpful. relative on I actions Anything to with piece can of the aggressive what take the be able might that, in of the gets get point market think guess, share today to is where sort approach type sort that to you about need of how the that mentioned you to pricing.

to truckload -- what as would levels that in is to where quarter some see and haul through couple in pricing where AGP I early But -- to. this pricing of and speak we shipment we I seeing, that in we’ve freight below bids, is is I the drop our necessarily though going. these we’re demand areas last contract trailer we’re has responding to what signals mean, science, aggressively see renewals of short what feel our general, the won’t say But response how We improved coming and market been at clear in seeing our methodology we the approach that really per our quarters. and we’re in

going so volume to NAST XXXX, And in be again, it’s order to in fueled by in to have growth drive primarily. growth

question Group of next Research. The is from coming Wolfe Scott

million $XX QX? -- math for higher to doing of we’re $XXX savings, go versus few are the million follow-ups clarify, a legal? color and QX Or losses right, savings the our settlements than million normal And of of are the you. just if when then then including XQ, Mike, want the higher million, versus are I on at just Any QX? about is you -- corporate including the excluding SG&A, annualized you seems that does $XX you that you talk $XX just off basing reported legal so

Yes.

first, of backwards. I’ll So kind go

of So run just the is rate all, first as annual reported.

SG&A, legal to high we So not guided including the the end. The settlement.

$X.X from about which million a about corporate that XXX-ish. as primarily product by at that’s we income other results, asking and $XX our operations, been would corporate hold unallocated that compared have loss a the growth driven ago, our was year organization. what a expenses back all and $XXX And in the which our had XXX-ish end, look million, And of of so very year-to-date, end your the if think high kind I QX to you’d be number yes, to the we XXX, you of I is guess, high our first guidance higher seeing at level in the were loss to million question, take to get in what be plug investments QX of and think you then would than and in our

which are In like EST, income terms units, Fresh, are Services Managed also positively business versus year. in group, last those that generating up and the other included Robinson QX of and

positive X price stays QX. versus maybe then Bob, And cost that quick. still Okay. real Do in spread you The think points just, positive, into QX?

little that? Can out you that? a repeat Sorry, cut can you repeat You bit.

Yes.

Sorry about that.

you in XX, that in down stays the positive truckload XX still cost positive favor. Do your down spread price So think was QX?

would I I that believe in positive where right sit to QX. stay From now,

is Chappell coming from of The next question Jon ISI. Evercore

specific I Is you doing this your if this provide you here. about covered prior expense context a Just awfully changing think was Robinson can especially ‘XX time? yield, and upcoming on how versus same? after the of ‘XX. volume market more If perspective the quickly. opportunity it the some better going we’ve cycles? share maybe XX ever-evolving discipline most you’re of at versus competitors maybe versus I lot, It’s aggressively some for acting? market cycle months a offer cycles, growth Does wondering are others any it prior this to are Bob,

Yes.

mean I similar is a But unique last the -- So typically, as quarters cycle its I one about X see own we duration has the that cycles, by each think these in up or so, characteristics. followed down cycle.

we’re so next pressure downward we contractual And as the think expecting pricing. about quarters, and few

of unique is competitors, going Robinson want terms don’t say, we that strategy the to behavior it’s to if contract next to share think market. of In I year, through our come to grow

gain truckload that aggressive in XX% roughly freight expect to share market would aggressive space. of the I companies circumstances, their will that’s in see aggressive pricing contract in so ultimately to the because normal in competition, market, be -- operates And

possibly translate of higher the fair just a Would to say does floor? to it this make high could be volatility extreme? highs it cycle Or more potentially the

sit right to It’s now. where hard from for that forecast me we

believe been floor the where think I has that the cost is it in higher past. we than

lows, will. So from X-month what duration then higher move it take today bids. pricing, customers is you if of think their that potentially, And to towards you we’re they’re seeing tending back means if I in

objectives seeing not disruption past of or a over networks So normal some cost the many, couple of more bids pricing Customer and years. there’s as bids service course is, obviously been pricing and circumstances. the in sub many lot the and short-term to of

that to shippers reevaluate also their kind to their costs. the get in had And shippers pre-pandemic they network to overall so try back quality they pandemic, of their with to optimize and to helping network expectations back pre working footprint that cases, and to the had pricing expectations some

is coming question of Deutsche Bank. Amit next The from Mehrotra

just -- I savings I had Mike, plan. just question, guess, on first a cost the one, I

the $XXX actually growth of realized question kind appreciate in between how net Bob. a really I So run cost then much versus rating? just And picture that net trying understand million But for savings. is just maybe bigger to in of ‘XX delineation

I don’t just sniff have Arun little on know be great real what’s financial differently. So trying a the a has on to the help expand change that bit. you implications? as market And is organization business. you going helpful. Arun And if high-return Bob, It’s [indiscernible] because but appointment you and kind what think out of that you wanted I act a about I’m position. the that said And of COO would company there’s if it accelerate? really, a -- to way, has think the

level COO anticipate at we that of there’s So the result if I’m see should this with a change a real to the trying as just inflection leadership appointment?

Yes.

Just investments you for merit that our on first the will there, on customarily run or provide we drops in it QX you to we on That be Amit, year in the call, much and comparison question guidance as how and to the that help when SG&A that increase line do, of drops rest. earnings the bottom come how all provide headwinds back -- we’ll and the personnel we rate guidance the we inflation on XXXX. understand will

focused in collectively, is X and technical to up his achieve and evolve in and sets as and that related executive, is years of our to efficiency, NAST a we’re building he’s fuel And seasoned where also, I business the that what continues complement teams with right? work win thinking he’s I extend leader our And the really Arun us industry, at people he’s is in chain within in from of role compete going leadership industry knowledge his is our from now, rapid from around And going him. to scope I performance from allow Robinson point to industry and I pace. is my leadership this Arun’s years be where to is those about to skill organization, critical beyond and components Our supply and while now? that are elevates us each the think at perspective, to facets to got you together been technical, advancing experience each to promotion, said in of growth change in Yes. world executive to this a other’s work growth really a platforms The progress As scalable guess transformational this improve space to and and the allows we companies highly would work us of critical deep product technology. a deep X know say skilled is digital just teams goals. to turn the and exclusively and we Expanding a and his the many which help units enterprise. going bring platform has collectively across bring long-term together digital-first

Yes.

net But market of level fine. opportunity? I gains? like operational of to like that’s and help question greater is change like the So acceleration leadership quickly the translate that’s how greater the grows, that have, kind share can revenue in that of realize mean net at drop-through question I revenue kind though, this as or real does

are scaling improving overall the in procurement, changes of today XXX% and on the efforts demand say yield marketplace. would scaling and those the I customer Yes. operationalizing focused internal

that experienced deal per marketplace today. with we future can the a cost appropriate lower transaction potentially X-sided appropriate AGP that on the creating the So in basis liquidity, structure what have to than

cost acquisition, focused structure And and on digital can through the in efforts transformation, customer drives focused the all enhances so we are growth. retention in efforts, these which and profitability. which in growth turn believe the which, then lowest completely we And industry, in carrier achieve on operating turn,

the Unfortunately, Mr. the comments. Q&A that to would floor us time to like of closing have Ives the I turn we over the brings for for session. to end back

Have call. earnings and for everyone, concludes that Thank Yes, talking again. look you. you, Thank we today, today’s a great to to day. joining forward us you

participation thank for gentlemen, Ladies and Robinson. C.H. interest you in your and

disconnect your the off this I’ll enjoy may day. of and lines. You at your the webcast rest time, log