C.H. Robinson Worldwide (CHRW) 1 Nov 232023 Q3 Earnings call transcript

Good afternoon, ladies and gentlemen, and welcome to the C.H. Robinson Third Quarter 2023 Conference Call. [Operator Instructions] As a reminder, this conference is being recorded, Wednesday, November 1, 2023. I would now like to turn the conference over to Chuck Ives, Director of Investor Relations. Please go ahead.

Thank you, Donna, and good afternoon, everyone.

Operating me Officer; Dave Financial Mike Arun our with and our Officer; call Rajan, Executive Chief Zechmeister, Chief the today Bozeman, is President and On Officer. our Chief

open expense comments. then our Dave will our call to results XXXX the will our third our improve provide will we and our an and experience leverage. update quarter initiatives carrier questions. Arun guidance customer operating for provide and on provide a will for introductory XXXX, some Mike up summary and of

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

know Our follow specific which the referencing. prepared refer to slides, to not information do comments intended slides. on If you we slide are we're we the let will

also today non-GAAP measures with today's X forward-looking presentation. results expectations. And I'd in call that, reconciliations of contain cause our management's measures Dave. included you remarks I'll over to remind may factors presentation remarks to actual differ list and certain that in from those are the measures, our turn contain to also the that GAAP could to Slide Today's statements. like

joining Good Chuck. you, you us for everyone, and Thank today. thank afternoon,

participants and market with to low has market been resulting in QX, contractual route and well-documented quarter. the result a are loose global ample spot depth indicates to most providers to in XXXX remain our freight X.XX tendered by service many primary accepting of levels weak freight carrier freight spot fewer guide opportunities. demand low the with them, that business managed As near of Load-to-truck continued in combined in in observers, industry be This, third the capacity ratios continued rates. of

and to vessel and forwarding airfreight. rates freight ocean exceed for market, continues the In in resulting suppressed demand, capacity airfreight ocean

and to focused building waste and streamline delivering our staying touches, our providing by management. and on our processes removing service and executing employees control by carriers, and to our enable can relationship to what customers exception customers their superior manual are carrier-facing we time tools on that We to plans allocate

year Our automation customers our in has to improvements validated focus from freight with highest meetings by such and reflected the increased visibility on record us market. this very up are we Net company, with positive for on that delivering believe Scores as which positive my Promoter inflection the the quality and well the in for enhanced customers feedback and eventual been customers, sets

greater that as taken Our work customers has value reliability providers the shippers financially not needs. who whose had to to exposure This and on stability importance a they we provide models their viable. to transportation quality, optimize were business transportation

customer solutions partner, an and enabled on people, deliver team. and over scale who to partners experience. carrier with it's During have serve C.H. They a people the partners my invest have is with clear who and the they through technology discussions their that to customer experience. can cycles combination many of extension an that unmatched that Robinson X in financial provide want customers by also of rely months, expertise the technology they to as and strength past prefer innovative

per Transportation meaningful As an targets. In our year-to-date waste The are increase streamline Surface our and improvements to gains removing on in and ahead person productivity our I we're cost by that has our manual into per day. our business, of business earlier, North mentioned have processes shipments result translated stated American executing touches. XX% productivity been plans across reductions our

QX of pullback this volume we seasonal are improvement typical or meet to on a of in XX% year-over-year QX, track exceed target year. Assuming our by

year-over-year of QX despite year-over-year expenses, operating by In restructuring our business, $XX.X slight a excluding of decline operating declined increase a million overall only $XX.X QX XX% of volume. QX decrease year-over-year enterprise, the restructuring to perspective, of a cost the charges expenses million operating in XX% XX% for declined reduction compared Global shipments. And full volume we X% number a in Forwarding and NAST From expenses, charges X.X%. versus excluding reduced

serve, customer we be the eventual continue that experience the As and freight rebound. improve headcount. our to on cost adding focused I'm volume growing means market This to for ready ensuring we'll without

improved concurrent our also the some a company speak-up some made, strengthen streamline team's We them saw by increase productivity they decision-making employees clock their though to response through the to the eliminate experience that lessons create on believe speed to that validated desire daily remove greater I started forward on confirm our and structure impeding items pleased optimization. employees rate and highlighted efficiency our team opportunity with order efforts. I've I'm us The areas the was work to touches what manual in share and to are that opportunities. We're deliver in incredible focus streams on the there. of and addressing has our of our the speed to improvement exists. We're leverage process culture continuing and of to now efforts our bottlenecks. driving highest their on response asking Even handful focus processes to an customer adoption has progress gets team bringing where mechanisms and past company-wide processes. The drive challenged new

making on progress will Our I that we're generative in our improving ourselves our this solving from better carrier customer indicator creating result and and and business. Ultimately, continuously operating waste utilizing workflows a of growth. customer in XX% customers, these driving about more for flexible and an is how so service and making. more experience our and focus for streams to focused to changes that removing providing is shortly it that problems agile growth improvement share the our more core the leverage position we AI, but company the and in quicker, profitable team are year-to-date how an we're I'll example over of productivity work focus and Arun are already turn leadership

work employees I'll that, about Robinson's reinvigorate more we're carry efforts I'm turn I'm our leverage. operating on to will it customer and winning strengthen that over that shareholders. With provide the confident and we to efficiency and together, and experience and details doing customers, Arun our to improve excited to win for our culture, our carriers,

afternoon, Dave, Thanks, good everyone. and

alignment Dave with product, our process teams we've the owners experience. mentioned, science experience work engineering, eliminate accountability. A leveraging process identified areas, improved a As who shared examples to couple are customer significant engagement. handful market our on work and concurrent customer are and goals, incentives are are speed business data of addressing manual deliver work with the touches leading both that streams an and order of these we roadmap higher of each and and dedicated process to resources work entry. assigned to streams of and across We're bottlenecks to In faster strength and of quoting single-threaded AI response of customers, time stream these these opportunities reducing along driving and cross-functional streams productivity optimization productivity

the to addition there's less learnings, provide efficient AI deliver process incomplete transactional were we're using in more in week requests heavily generative more Gen where time days has from to this provide and leverage to last stream, the and our the a bring quotes to the this than and the e-mail. In fill the via which X to X and quoting have unstructured quote automated minutes quoting In process, leaning in received created more improvements. In work on quote capability we ability as minute, past time to information XX,XXX transactional a utilized from grow Gen hours approximately and opportunity X AI our an of blanks we've the reduced AI to is week. to area over we a day, to quarter, a significant customers, respond request XX scale a agent,

advanced harness more other With and that to look opportunities. on and to pursue technology for have continue power capitalize advantage to further opportunities history our leverage now and information we offers data we'll to those the XPL, this any

increasing engagement, person reducing quote customer per This an to to in thereby shipment measured of to service operating leverage. number per digital the and shipments in critical and life touch from for terms creates productivity execution these day, improvements order tasks improved the per manual time tasks. efforts of cash, are the our of addition which of cycle In translates points

translates volume combination Either growth. example, that an to ability XX% less And creates growth grow to a these growth of to would headcount productivity target a than reduction. target volume and support our XX% is adding operating achieved headcount improvement For volume of volume through The without by leverage. XX% XX%. be

XX% Dave year our per with surpassed of improvement mentioned achieved goal QX. year-over-year by an through year-to-date XX% improvement shipments earlier, As of this QX person we per day a in

experience, customer our benefits that, turn quarter productivity deliver XXXX that over our of Mike on the bar the for with process an third raise results. deliver clock our we beyond processes. With plan optimization further call of and improved review and and to the people our speed a supports compounded to additional improvements technology I'll As we

Arun, everyone. Thanks, afternoon, and good

to soft resulted total revenues year. of Dave quarter in $X.X outlined third XX% last down The market QX freight by billion, compared

down Our or XX.X% decline and by or a a partially day in offset other $XXX NAST, driven was basis XX% of in profit, per our in third XX.X% August, million, September. a down XX% total QX down our AGP, company XX% quarter was monthly decline by Global in a last adjusted in year, business gross increase X.X% compared to business July, and also AGP and in Forwarding, units. On year-over-year XX% down

NAST less year-over-year basis. versus both third on second and quarter and our business year. In NAST last contained QX approximately business volume year truckload a day of declined per sequential per a quarter X% X% X.X% day. business X volume On truckload this business, our third and increased than of QX The day basis, quarter X.X%

our off cost coming to linehaul built on market During sequentially. likely that down quarter. In per per LTL decrease per load. last On in basis, mix of QX XX% year-over-year sequential down row the basis, temporarily primarily the load to truckload all per AGP a market. a needs truckload XX.X% XX.X% we increased driven cost on cost, a year-over-year By follow XX.X% a decline rate usual soft this in spot declined meet LTL has in a XX% time or in of per relatively truckload sequentially. average purchased a X% of this we orders sequential through truckload conditions day of customers, service XX.X% capacity our year-over-year the AGP LTL were by contractual mile our saw driven prices. On in have these access were With linehaul in that a we resulted truckload per transportation X.X% business, a high basis, and costs, mile X% AGP QX, the in since a volume on price mile market and QX, and order. by volume approximate average year our exited LTL, Due basis, resetting truckload in declined in to with of suppressed. increase X.X% in year. On fuel business to year-over-year and The QX fuel broad into to surcharges, fuel basis paid third our order price in a and up spot XX% our our continued in changes we an than QX year-over-year primarily our our year-over-year level. price surcharges. QX was modes the decline was the excluding at orders business of approximately AGP the market X% our associated to linehaul QX, a carriers, transactional flat as contract excluding LTL seen lower our per declines decrease pricing market and base remains Within per higher our basis. quarter AGP resulting a had were cost a customers' capacity able leveraging of for This lag

be of Forwarding Forwarding Global AGP approximately XX% our continued business, million, of capacity. generated Global conditions market decline $XXX QX, year-over-year. behind weak plenty to soft In a an In demand and

XX% by in decrease decline year-over-year, shipments. per these a our X.X% by in a forwarding XX.X% shipment and ocean driven Within declined results, AGP AGP

adding On and new Compared to sequential our investments grew we and diversifying in a pre-pandemic have and ocean grown trade leveraging levels, technology basis, lanes ocean share through talent. volume customers, verticals X.X%. market

Turning to expenses.

that us enable to on personnel reduction million exceed million, XX.X% $XXX.X continue compared $X expense last restructuring was expectations. QX of QX initiatives deliver of were productivity year. including and expenses charges, down to Our our and to

the compensation. XX.X% Excluding charges, optimization QX were restructuring to our variable lower our due year-over-year, expenses efforts and down personnel cost primarily

was headcount XX.X% down to also in down QX QX. XX,XXX. was to headcount ending Our QX year-over-year X.X% ending sequentially compared

$X.XX to progress $X.XX our that XXXX $X.XX optimization expenses billion, As we be billion the we a expect to cost now below personnel result the provided. previously of on $X.XX our range to efforts, billion billion

our excludes reminder, guidance restructuring expenses. As a expense

$XXX.X primarily Global to restructuring Operating Forwarding related million $XX.X impairments divest in Argentina our devaluation by Moving instability driven economic to strict of charges, SG&A. QX expenses will included operations has to to asset the and were Argentina. our in and to million region. its conditions become and in that due exposure help policies increasing mitigate currency monetary deteriorating challenging divestiture this political and rapid decision our

we service of for divesting or customers to our a ensure are that agent part shipments a agents path Argentina, pursuing local As a operations continued our in in region. with to independent

worker in SG&A of and million charges, $XXX.X X.X% expenses settlements. restructuring contingent QX reductions primarily approximately declined legal those year-over-year to due expenses Excluding

previous SG&A including near is be expense $XX expenses to toward of our $XXX XXXX guidance and to be our of of $XXX amortization previous our expect expected million. depreciation that guidance the the high million million end of to midpoint We to million, $XXX

cost As by you our rate annualized from compared year. QX commitment of year QX of of earnings net million to annualized our savings last run cost QX we to the savings raised call, $XXX of this recall

reduced market $X higher at on and majority help our updated interest rates these million structural freight QX and are With of operating last to as to of million million our $X.X year. leverage demand returns. QX interest improve sequential QX in $XXX in to be debt our a on $X.X expected up margins savings a balanced savings expense Consistent $XX.X year million, the to date the cost approximately interest guidance expense, track on decrease strategy, drove a reduced variable The longer-term interest versus more initiatives, versus XXXX changes. progress operating a load. of the QX will our productivity cost our with $XX.X cost of with other savings totaled midpoint due last of we and against QX basis. million million in up expense load debt included deliver

earnings Our to came benefits to was tax tax be XX%, XXXX. XX% lower compared to Adjusted tax pretax charges XXXX in XX%. primarily rate the We to XX.X% and of credits. restructuring our lower driven $XX.X last QX $X.X range of QX foreign XX.X% in per million from was to excluding of now from provision share, previous rate associated XX% by million compared and The tax rate of guidance of in full income down year. expect XX% benefit or at non-GAAP tax our down $X.XX, QX tax effective incremental year

which freight Turning and cash cash make the to was investments cash demonstrates from meaningful our generated QX $XXX soft million, generate continued to operations flow market. flow. despite ability

we last capital by a cost decline had compares sharply QX to of capital. changes by driven net flow QX Our working million The in year. flow in driven cash sequential decrease year, and In of operating the price net was transportation. of purchase in primarily working declining million operating QX $XXX in year-over-year last our cash $XXX

capital more of our share cost of in our this year, income, year, expenditures We capital. decrease the expect QX to versus to a million return driven of returned QX, lower $XXX operating million and in by now net In to but we price had in capital be sequential repurchases. XXXX of million QX shareholders QX shareholders down was were million million With XX% expenditures $X $XX.X last in used the million to our The million. We toward compared reduce $XX moderated and declines cash end million QX working of year. $XX through previous $XX.X cash sequential of the of in to XX% QX $XX net cash last debt. cash million guidance equates $XX to of $XXX dividends of to

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

QX $X.XX paydown year. at the million debt end of last versus balance QX debt Our $XXX includes billion, of was which

leverage QX X.Xx, end of debt-to-EBITDA the X.XXx end net at up QX. at the from of Our was

strategy is average investment-grade weighted rating, optimize which grounded capital in to cost Our maintaining our credit of capital. allocation us allows

Our that and liquidity our Keep maintain helped $XXX cash million credit that we amount strong use in repurchases. position debt generally of rating. reduce share in cash for paydown the debt investment-grade mind to reduces the

Over alignment in EBITDA remain the long-term our long we to growth. our dividend quarterly cash growing term, committed with

take share we repurchase make ability on leveraging generative we final increase AI important reduce forward operating over on learning the that leverage are even our and look by to of combined capability the to levers are waste value I'm that our level, encouraged for to progress that, his and positioned enhance Our to machine to to progress the and Robinson dividends comments. productivity by turn an to shareholder further continue higher our program shareholders. With back with to for build initiatives Dave value. Overall, and well people I'll call

Thanks, Mike.

carriers. and it's a our this our freight deliver months leverage digital-only powered of Robinson's balance work and clock proposition, have the full innovative our well concludes position Donna for more waste outcomes and first Q&A The experience improving with advantage and growth, to carriers. market doing eventual increasing and for tech-enabled This Robinson our our replicate my by people to in for deep to expertise efficiency strong. rebound the benefit improvements solution. Robinson Over to increasing customers speed, accelerate here, secret shareholder and our for overall turn company portion with by X are accelerating improved future. information people our back operating Combined the for us and continues our we're and and reduction be value continue to an profitability. the sheet our call. not productivity improve value through carriers should investments strength making shown of has our excited the easy sauce customers model and combined customers now is prepared create cycles, has and to its for with sauce This apparent. improving we're provide incredibly shareholders. I potential with and to relationships their secret about solutions dataset, long-standing technology a our able The with large I'm returns the our to and strong it who to freight become C.H. operating of the the see reach opportunity market share, that margins the market remarks. I'll

[Operator Today's question is first Wetherbee Instructions] from of coming Chris Citigroup.

exits maybe keeping To start, Could get the it's have from in of helpful AGP. of sense how you breakout to some trending, some is changes a maybe there headlines obviously, that market. give kind within us been the some of dynamics in the monthly high-profile mind October there's just about brokerage,

Just some provide? about strength customers some how that to prepared you we remarks kind Just and out you are that how if seeing want the volume mentioned guys think of October. the playing get of Dave, of sense is curious your in back valuing are a that's stability maybe October in move I trending. And Robinson. to

we're break of you just Yes. in let some Chris. kind of what I'll give Mike and seeing. details

then jump in. You let's set up that question just well,

Yes. market. soft Overall, seeing We we're a that. referenced freight

to QX, tech, customers meaningful way the market on our yet the in providing lingering. or from processes, rates. We're approach And the our in feel we gaining is not in we to pursuit our But focused add the think any It we are that hearing we our with leverage, is our all of seems outperform seeing our volume regardless operating market. this fronts. of improving I also streamlining I inflections amplifying be on you've others. would been cycle, where progress those and expertise share. made to We like service exceptional remain people that

into kind at. about October, You going we're of asked where

season, normally Generally speaking, carriers going happens looking that spending bit. a some forward, seasonal think during be a will some little the that I bump nothing we there's in and holiday the there driven upcoming spot that there's time something holidays and suggest consumer impact holidays. market that the But see to different. the or rates off in would something QX, taking over by mostly extended sustaining

have that trends I speaking, think generally consistent. seeing we're pretty been the

The from Stephens next Atkins question of is Inc. coming Jack

process your the So approaching kind I bid kind of next of XX here I would Obviously, spring to kind market days the we are and as over extremely How get there. begin about out it's of of next think XX guess guys to an thought love year. broadly challenging bid the that? season you season

think out market the freight XXXX. How in capacity market I about the year? the the you freight expecting in here? preserve perhaps and How profitability the and the into share you of are are to additional going at potential out are come most turn folks balancing to we capturing we need versus some to season the turn for business that bid were next guys as process if market see head point thinking

Jack, Yes, there. things on touch me let some

cover carriers. breakeven of than near bouncing is less really first market really at in the when capacity all, at the And the the pricing like process. for this I pricing the has, maybe cost just so it is has The capacity point have expected -- bottom we're been think contracting, would along So but I'll or we the side. carrier

terms a has the costs season the profits exit business their be they or may slower of big approaching of a the little that subsidize we're bid it. and subsidies made maybe been and how So ability or up result that coming whatnot. But government because year a in lower ago to of operating their the

pursuit Let's to share. in is our both be margin gain and clear,

at. But were seeing the It's of cycle, I the think of market. are aggressive And X that per been environment, are of And going to with hard now the we're by. past. And ago was business, this on we're in than and prices that within record competitive it we're got got. Volumes see they've seeing struggling what we're to other going all-time the would expect generally operate that high out shipment. to very where sure, the And brokers after. And market. more approach appears come spot more I and a brokers only being we've as so given AGP it that season, we we've in the for quarters kind in in market we that that's side

said, Our our and got sure balance to the a market. protect job to is margins we've we've make between I like that outperform two. And got good the

The coming of Kauffman Partners. from next question is Vertical Jeff Research

David, Lunar other Year some you progress. your appreciate we at overview curious, your just bodies brokers incremental kind the volume New to of 'XX. your capacity turn, on direction of count able the there think is what I'm without early to the starting employee season, holiday having out to of down, or this if to it's handle add saw with after do shut With point? a excess whether down operations, be

talk good Yes, about often. that question. something we It's

of capacity, start say something day. that really feel I all, First I'll execute and each on and strong we about our it's

eventual we ourselves building up, eventual you know, matter to of the headcount And keeping capacity have rebound, we're while the for our in that check. rebound fact, a need as market. of As the

capacity and recovery. would And feel bottom about been our a installed recoveries. happen, or of recoveries for capacity, the installed that I very the about different sufficient feel But we good For execution be types where styles talk capacity we are. we is mild about on aggressive line me, talking our installed we've about for what certainly, it's capacity. like have normal We base, will

puts position I turnaround for in think the here. eventual that bold positioned us we're well

then. Glad you ask feel about question. at. We good where good So we're

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

help I an a looks QX understand what's right tell? And just big step QX. the step from was up to slide based rate down that is truckload personnel then But Are it a So per from costs. guidance, on like us into 'XX. understand going with confident takes QX shipment Is is is run the on separately, basically right? personnel early trough? all-time then Or heading There to just low. your we're too we it for at what to QX. want at to personnel profit just the just with that And

chime me Scott, Yes, let those. in on

kind of we at. about all, of the first and we're marketplace where So talked

You're right.

that X the quite think some this bouncing along been the are and points deck we cycle, I Slide for the at where in in it's point, time. to bottom we've

what's of a point -- so opportunity reset unusual, this the in comes. an And cycle them it about as we've now. question we've when kind contracts the board, about rebound much think of know. it's couple to reprice the so across had And comes, you things And happen, I pretty we've when our is a

So costs to move exit or different would market. versus impact when we the of the and that's our demand start in business, in And that contract prices the comes obviously capacity combination or the up. a two, expect to markets the spot that, the has market back

So let contract me take first.

the -- the more But associated up, the normal pressure per and we're the those spot we'll margins for AGP contract same we'll On prices go with those. news better market as get on side, demand because shipment locked in contracts on is both the back, on different the terms, time. at good the as comes feel demand

it impacts Robinson. in works not So the market. there's this And of unique way kind there. offsetting to That's that's

where where And towards year, contract unusually quarters us XXXX, to closer actually were now talk back and to in XX% XX% more is we so our about in were of cycle. But second one see contract and again, that's Well, we go turn, where the at one the tilted of contract leave in where is XX% just have I given has mix that spot. there. -- which we that spot been, truckload I'll volume maybe to you'll as market Your things how are point, right soft those three we are spot. for XX%

that the to go. Over you impact helps on and personnel when that can kind beneficial, contract think show you're an a on costs, to there's just how it dimensionalize that's and that costs that's So turns right. an turn, when of impact there's I that's price spot squeeze and

reduction I expense. in you're billion $X.XX just $X.XX in recap, at over think is we represent a is but we of increase And that the which a what you're a the doing the billion, $X.XX at as personnel to billion that We $XX $X.XX to about midpoint, does QX. X.X% to midpoint, looking were billion took QX guidance down at off that million provided.

of a couple So things.

we have some of did incentive in the got lower number one, So of because QX, performance reset costs that business. down

was accruals to bit we're with a continue. broadly, repeat productivity our benefit that But not expecting to just explains those to more initiatives that. of a so then want QX little that I And that QX, reinforce maybe down,

We that QX. lower a We it pipeline work QX ongoing. would efforts than was in will headcount be the of we little have is -- and the expect to in

So lighter favorable. reinforce volume. then about of is And us point quarter that terms in be made earlier just to should for maybe seasonally a QX a

So made that's of your that. to be covers that speaking, personnel. point I inside generally just think another But

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

maybe like or temporary then you market, earlier to assuming Mike, assuming LTL, said the rebound in It that rebound exited I are you noted clarify a a think you comment Dave just were capacity. in sounded capacity in that. the a you

the that want understand LTL. on Just to commentary

was season season? worse we talk maybe that to -- NAST Is just spot guess, through the up Or million that? it that's a I freed Do to about down you're Does off the ease Convoy of not squeeze. mean see the remaining I peak guess gross constraints here, the brokerage load. that this as from just into XX.X%. move same before the go getting you the to you starting season, market, that saying gross weak that rates I just per guess suggests want on holiday follow-up that's I that revenues, on into then, gross right as talking guess, Jack margin And capacity With we're that understand, as Mike, into I the bid about. environment? profit $XXX easing that anything

Yes.

-- second of talking out the on on you couple going a were and part does impact comments the about the market I'll So how that, the make of that and think Convoy that. I market of

our all, material on that of size doesn't have first the a results. of impact business So

like fits there's came with the winning being volume of where we've announcements be participated that We've that Now available made. as said, and model. our had business loads, certainly that. in that longer And the certainly in kind certainly of some certainly, business. profitable were participating to been We that

runs, all is And we would an business for me sweet picked in a not that, But other that up. business. overall that of not having the of around density that that's other multiple just lot say the compete profitable obviously impact I spot of remind terms also us the geographies. it's -- on given getting certain volume. localized market for But runs, a Now short then the is in question. And size while

LTL guidance.

will idea the market. up that capacity come out. went by while process hubs of back and came Yes, the assets capacity there and probably redeployed are some that temporarily into there is Yes, new leaving new The for LTL useful the There the picking point. that out be was thanks still business Yellow through point. on where at a then ownership market

probably a that make so intent extent the temporary into the word the they'll new still a their and new and And that are assets was home, the system. to owner, back find way viable useful of the

then, around expect to you sticking in... market, you pressure if then pricing just continued in So see clarify that capacity would

Yes.

I in move LTL of an to what in seen of AGP positive near part per to term were market they terms because the side, that we've related shipment that the in has the a bigger On capacity of think increase in terms serve. been

the we it and impact Convoy a think example certainly did -- that more unlike I meaningful did so is it. see And

or and additional that extent. opposite effect How an out capacity to capacity that think, long out? are and long market, have that Now say I of will how the they or back question, term, that capacity would those provide is is is land I into where the some word does longer which temporary, come hubs how when do will in rooted service, that if

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

Regarding target the is XX%. year-over-year improvement per in XX%, to per day person the or shipments up

mid-cycle how a I to new cycle? guess, You're of mean you're could And the of metric that equate high confident go? then continues through as What's does go, productivity that there. the as margin the XX%, could already about low to build. How cycle it operating kind we percentage? as in beginning Or for, and the I a guess, it think an what

I start. can

targets improvements, setting XX%. end the In and Having XX% years we pretty for at to year expect XX at terms year-to-date, -- confident we rate. of in we're at similar feel that, said productivity subsequent a

I in we on over similar XX% of plans, next expect our be the a XXXX that improvement, So and would year end target improvements. we're productivity will operating compounded working by productivity of terms

the I measure right? So up pretty volume, what you my the next feel prepared in I asked question volume way So said is of if that remarks, productivity good considers Dave, a this about goes is your that. and Productivity ultimately year. --

XX% that goes up any are have that wouldn't and So sort we to productivity XX% volume. add headcount XX% of volume to year our improvements next additional

way However, reduction. X%, if XX% we'd count get other we grow then by of the head just

and we I productivity we'd think volume. on it would measure based adjust So of cycle, regardless

Jon will to as Arun driving hit do it add is whichever is focused we're as driving that. key there well in that. productivity it in just on on combination growth, the one laser and

as that rebound And focus important. express and headcount and So that productivity market be enough is important separating will well. that's that a This ready it's volume I -- super that rebound. for laser perspective as and super the -- we from extends this this growth. get can't to

is Bruce next from The of Chan coming Stifel. question

a don't reason some then. able going industry AGP get customer know, are to and AGP any good to to baseline better for you're the -- thinking on you've AGP based discovery the in now? Is to be lot When the you the believe I back changes here market. see business the some lower there around on digitization cycle would of costs, capacity but of of can structural of for great. think to make trends. be of there since in bit. future to result Any a Nice with of a Obviously, the you lower a about some as serve. maybe up cost in maybe out maybe tough structurally a about direction Wanted the talk had AGP of comments was Is that through what that mid-teens? cycles, a seeing I these zoom ago, to should two closer higher progress pressure as cycle be result about a price How the or little you

Yes.

that Let me one. take

I you pressures add perhaps price when the would industry talk of Generally, the on realities AGP think and kind being are about your are even marketplace. transparency load and observations accurate. length that in I of

focused other we're on what that regard. things are Now that help us in

a So buy the seeing talked in right ability to the better. now. also, competitiveness plans, And that we're about little bit our I

I the and I is given I in bit that this that statements part sits in think strain lot the You future. But sheets to income fragmented pretty this of out the here of that shake brokers at of little a always there's the the And substantial. would point on think at the see a expect this competitiveness marketplace. balance cycle. unusual aggressiveness near in of universe

anecdotally. I think we're already seeing it

And thing. so that's think a I

a talked the side. little about I the Similarly, on capacity bit capacity

I think to shake that things anecdotal would suggest there. evidence capacity out that out. expect We've that see got already we'll some there's coming

of that's last what One QX, than sign-ups, carrier less look is in X,XXX new our of in we year. and points at it half QX the here data we're was about

I on longer, that margin So shipment that when referencing. demand to back the persist get think AGP the capacity averages comes long-term close as That's AGP per you're and back. you comes out, for to these rates lower

example, relative on where see So And puts the we're average. been buying doing for But marketplace short also there on I respect the tailwinds AGP the average, and to the then that it's that of closer little it come a of work ourselves the buy work doing with side we're can we automation help to to into improve a where that, some that margin. our where X-year extent would will to XX-year probably to probably on that's a up out. shaking it's been

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

processes, a how cetera, about versus is digital et technology roll ready out take there front? are which to more So need much place much and/or of I'm still Or cetera, go? you automation et just processes, to the additional Or on much things how pretty and the bit optimizing is do? helpful. still fair tech on very curious, is the tools, essentially to talked to ready spending development it

Yes.

over it got then little executing We've pipeline. great and Let bit on the a me pass Arun. We've hit to pipeline. that a been

I think it can see results. our you in

If savings we back to you cost talking go savings increased against year. of to that about. at We now We're started $XXX run talked about $XXX last initiatives million million. the rate We some QX million. cost $XXX

their pipeline our initiatives our see through can that working results. you So way the productivity had we've in

And so yes, it's there.

It's future Arun Arun levels. the project just a let heard similar thing. I'll on again productivity project elaborate just kind not kind a a thing. in You of that one at many talking more. about It's of bit

Gen can like continue and is year, when said, XX% we look we XX%, that to continued new have whole way we a leverage, would in believe I operating we this have The focus we lean. a is is got we we've to where XXXX. we just AI, improvements -- And backlog We the years, opportunities. it said in tools Yes. we've got target productivity Mike's unlock and talked of in roadmap and subsequent another we a productivity to big point, got this improvements multiyear this, we've -- at our point bunch of what on we've toolbox, got about significant

to road on to terms our we levels continue increase expect of will current map at we in but the stay don't the that So technology year-over-year, spend, of have. spend execute we technology spend and

Yes, really driving that. the good it more on is of Jordan, arms this up clock really out, just really to us Dave. waste well less and definitive, the more speed decisions initiatives, touches. locked I -- add on I'll just new sets speed and in there feel Everyone's embracing manual kind really of teams around driving

that. And we good about so feel

it's good question. So a

David The next coming Vernon of question is Bernstein. from

we team Are about a you volume maybe So lot beat value. market. the talking are trying Mike, does if I on to about as you could talking wonder elaborate mean? talked or about that a And just what we

worse the little is is think from better per on the a pricing a and I volume think than I shipment Cass a bit lot mile basis. index

or corrects kind So market you'll how share? for other the on and be NAST you how approaching Are at just volume the end of we when thinking market? are you're that figure also value out going it focusing about should you

Yes, Dave, super important question. thanks for It's the a question.

both be market margin. that is clear share me gain Let our pursuit and

margins I operating market market, gaining When being given about the it's beating able share. we're also market I'm maintain in, profitable about talk that to share. talking So our the market while

we're with day. We We coming that in to volume there, are in X% was you take day the where some want don't first. we let's index be quarter our operating truckload quarter. you like market a you less of But QX, volume that and forward down was basis because X.X% a look don't out our metrics have when on the at per look market share Cass -- at X X.X% down And at the down or down, obviously. look

just feel U.S. I Banks we little think index XX. That us want to that, grow. the makes to a out, that came was better but about almost close

that that margin. on That to the A evaluating in side operate we opportunities ways goal constantly terms is going market and our we're That this improve that lot other the Now doing forward. of margin. within to improve is work that, is are we of pricing, and pursuit. our of

dynamics lot given do I competitive to have a they aggressiveness broker that around the we've here, In think about, the some as are that set, really there's term the struggling. talked with short interesting

do even in the important model, point quarter, this I Now the for do are like of we I other that throughout generate this strong invest we because have in cash business make able and the we toughest would that to think is times market. a downturn is Robinson

market. make balanced confidence think may to make about be a returns compete, think and relative market And our when us more I worried we're entities' helps our viability ourselves ability basis, we'll where others to I to even this on with so better. about be And continuing a investments where their that to ongoing

The next UBS. coming Tom question of Wadewitz from is

look wanted ask we're figure I is out you, to one guess, try and Slide where to at that see, going. X an to Let's I intriguing

look get would gross and margin think of -- a bottom been down. where up, at I when eventually cycles, spot the I would when rates come percent NAST has move typically time prior there period

mix the -- referred think, so of I you being see you that's would larger And contract kind XX% where squeeze. to Mike, than and that normal, and

rates just -- down, is but am gross -- thinking cycle? And on I maybe to your well. different then revenue the a when seems as So on further that about is margin? cycle bottom, be Or that there could could I wrong on spot it pressure it quickly NAST like maybe the that thought it of to be consider there -- kind you some if in come know if close think don't Forwarding, a know that net you don't I we're have quick the

market first, the think your at prices of pace Yes. let the But there -- take is I increases those fairly which characterized is you've I some what come cycles, as me ability within magnitude as that elements first covered pricing back around normalizes. that. think to like get part the will Tom, squeezed. we've And really a matter come the or variety up, is cycle past the contract whether this space it which

the going usually But a -- it contract improve which our share If lot contracts. that, be heck the a demand greater. more again, on will market, of offset In as gradual I on with be spot and of comes will we'll side of that a competing will sharp our getting the there that slow well is and will So squeeze margins up they hold case, think that squeeze it's up increase. then a spike forward. we very

is network at about and back. doing different. the kind comes of work is preparations that we shoots which from. are the let's any past. And hit to So our changes greater here questions the to little we to share bottom of would growing little that -- on think there's a seen the there these GF just have than from cycle coming demand probably in I and alluded QX about has we've -- I bit about broker yet. there one speak is then say, around make to that the unique thing for feel we're them, where Certainly, meaningful the where But business team been we is this other on the GF, in say competitiveness what great side, generally, the we it's when a the that and generalizations that and is, every been haven't been green But GF that's no

last Jefferies. We're Stephanie showing final time question of from one question. is coming Today's for Moore

does and of you I you've for do or here. view these the the think help us on just then changes check rebound an examples kind tech outside Maybe headcount be technology your your will digital when give changes could it are of in might us here? the changes in market the kind year-to-date? And helpful you of looking that [indiscernible] that implemented that some keep

Yes.

do into be leverage examples. to appointments. we lot we customers, that Let me And essentially appointments reduce example. have actually That's customers with and set automate we where to our go have load appointments We through ability which to to one and say, give for in of dependence system. right? And a those certain to biggest schedule automation. One you our and a couple of the example terms into go unload, go on system, have customers carriers lot on our of scheduling systems a might scheduling we people work different of appointment make so a we

productivity unlock. pass we've it's customers in business is unstructured. without automatically e-mails various blanks or been and We're over different heritage respond way systems in quotes where's our Gen it is does order information Gen and -- requests ask AI more Not and to order done it experience, using customers call which including it we've truck. my work our us give talked at to don't with imagine such carriers We the into fill on depend trace. a about -- automated only to delivers give great. And only It's a that those humans improvements, and quote the and track significant the customer they're touch. enter is updates earlier with does our and with we one going up at and another to us year. recently, is the in e-mail. AI looking our That company, that us Another usually have that us similarly reduce Carriers getting sending human better ways, to not

to on to of are things improvements. work contributes each And So overall like of examples all them are there continue one we many productivity as it. those our more that

for At this time, the Ives like to back you. comments. to I'd Mr. floor closing turn Thank over

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

participation. Ladies your conference. concludes gentlemen, you This and thank for today's

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