CHRW - Earnings call transcript Q3 2017 | C.H. Robinson Worldwide, Inc.

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Operator

Good morning, ladies and gentlemen, and welcome to the C.H. Robinson third quarter 2017 conference call. At this time, all participants are in a listen-only mode.

Following today's presentation, Tim Gagnon will facilitate a review of previously submitted questions.

As a reminder, this conference is being recorded, Wednesday, November 1, 2017. the Relations. to turn Director Gagnon, now Investor of will conference Tim over the I

Timothy D. Gagnon

Donna, good Officer; you, Andy of be the Thank our and Financial will John today our Chief results. remarks Wiehoff, will provide call third some Chief on John quarter Executive Officer. and prepared Clarke, morning, Andy and everyone. highlights On

John, call note Relations We to in that at which or our Robinson C.H. earnings after questions we contain comments. will follow located to received The slides discussion. that like others these the forward-looking Andy in may are subject the our presentation statements, with yesterday. chrobinson.com. uncertainties. facilitate is by will a and that Please slides response I'd accompany be that accessed are our to referring to section Andy, the pre-submitted John be website, and you there risks release to representing can prepared their remind of which slides made comments Investor

contain over to it differ X, review third Our SEC expectations. on results cause begin prepared turn management's I'll results. comments of additional could that filings a his that, quarter slide With John from actual to to with factors about our information

John P. Wiehoff

highlighted income and from organic. and was $XXX third Global income accounted was was income down $XXX the year, count quarter. Total like our APC and be X% from pricing, volume the driven morning, transportation and quarter, last last our revenues in quarter, a quarter, X% Thank $X.XX highlight quarter, Diluted revenue revenues good us The significant earnings last we X% our per that third to Average of revenues a and share the in have most industry, year net of they and fully X%. this impact Tim, you, will in increased increased up million, operating net Thank listen remarks. that third the was Milgram was through quarter X.X% outpaced $X.XX through income. APC in talking be acquisitions quarter, net you time and for quarter. I'd down million that, up the XX.X% will with across resulting costs cycled third now the head Hurricanes the net as the year's by this the us, approximately too. hear to and decrease you'll year-over-year Operating remainder start Total a to total versus but for about higher last themes expense couple our everyone. results compared all right our the net year. growth growth services, net Forwarding first for X.X% quarter. increase Andy last in where in will he be acquisition. deck revenues business third in taking I'll to the did in event segment, approximately the to down year. This morning, integration call like our obviously organic Operating in growth our company the before and results of quarter does were throughout APC fuel Logistics in increased by most with X.X%. added

through to going our the is on these Our of take to them circumstances by our culture, difficult Robinson all to have We our commitment challenges offices to thanking while emphasize often their work the for it to in make serve and care want of place, teamwork gave incredible with I members Florida hard beyond to of their in customers. above it critical in and people, Texas, there catastrophes. and the start effort right Louisiana, some customers. deal how examples are to and Robinson personal extraordinary team and had business and continuing team Many storm.

impact We product lost net and our or had storms orders the on there impact due most NAST and gained terms we to in hearing the of shipments two immediate were the be financial about. to impact of areas that the impacts those Fresh. estimate net negative types Robinson, is more where division storms. a impact positive The In you Robinson likely of a will impacts on

due The to our storms of truckload commentary adjusting results, we resulting to discussed, market. how price we disruption. the In transportation truckload American increases is other the the QX the on length, rising from and impact our in North were the cost storm at the market

possible impact in our the pricing increases how cover increases escalation While they quarter. for further price escalated hurricanes, the contributed metrics the it's throughout not will price of and truckload of on us clearly Andy they to QX. to isolate

these were does incremental create experienced While also trends impacts QX pricing The impacts. pricing our it compression can adjustments and market more length accelerated we committed rapidly market to rising quarter and activity, discussed by the prices of hurricane last conditions arrangements. We often create in required spot results. continued that on both margin at

to in regards The increased other from on theme us that to focus is expenses. operating you hear will reducing continue our

operating efficiency We are committed that will expenses productivity help in to future continued us gains our and reduce periods.

and on of expenses longer to last quarter, our focus similar time. net periods we at rates over stated we revenues As growing continue

efficiency diversifying continue very to we business, and cost driving in and also on acquisitions, focused invest technology, will gains. our we control be As

it to So, will with I comments, introductory over turn Andy. those

Andrew C. Clarke

continue In the the their storms responded devastating at Tim. I to up volumes revenue challenge. to Good the third and grow work. to efforts and rather Thank digits John's and thanks to quarter. you, results net chaotic Robinson echo like you, a Globally, double would the stepped created impressive network and praise and quarter our America, and thank morning, hard John, in the pace, their environment, North everyone. an reflect our teams in for

times, organization Zealand, remains & and and completed but purchase successfully Additionally, we Australia delivering Milgram of long-term New Busy of entire lapped on in the the in APC the Canada. focused shareholder first value. anniversary the acquisition Company

improved compensation. Now, as detail rising results last of was plans on in and as $X.X related Milgram the this the allowance a declining quarter. performance. year the by expenses million for higher review head company were last up the accelerated on the as quarterly and business services an increased during quarter, includes million. and past result increasing in million, The X.X%. quarter, revenues of a percentage were X.X% revenue increase the results from X% net be segment expense that income to million; July, mentioned and adjustments addition progressed, is basis. revenues The million; in Personnel September The our when increased the the up drivers in XX.X% dramatically while and in increased expenses increase slide quarter. but head are statement Total in I I from variable of last following: last trend personnel year's We've driven the September. million. our of of to estate provide costs Year-to-date, the will which in $X X. approximately XX% count doubtful annual, $X.X in Operating $XXX of year's amortization; adjusted $XX year. claims X.X%, $X of real XX.X% the income by net are compensation more September. quarter APC as expenses per to August, the quarter day a million X.X%, summarized $XXX SG&A Net on an improved in XX.X% X% to accounts results of in compared explained count a higher increased can for

of this over was net one However, third have The it is less revenue. QX million of compared year. from in last up to We effective equates points to which this day tax quarter year, $X XX.X%. year-to-date, rate quarter, in the and XXX business third basis XX.X% when did year's

year variability as to rate rules election tax new our result last compensation a accounting has stock had related Our XX of some APB the and year. through

will driver volumes, tax working the financial have and the quarter in rates. to $XX.X our tax down Slide expenditures. the million receivable effective and generated year million ways including in We increased in largest $XX.X costs transportation, in of look The last operations accounts to was versus Increased continue and for the in capital. expenses resulted drive in X cash during and from We growth information. other capital in the rates, decrease prices, cash of customer fuel quarter. flow manage increase

accelerating we top finished do just to line to million a working of drive We our is grow in While QX. from it to customers need up better with growth. DSO, down with job $XX periods cash, over during million receivables $XXX quarter the see of normal our

and needs. of increased up $XXX million since balance as is Milgram billion, debt the a capital working acquisition Our $X.XX result QX,

million approximately shareholders. just $XX $XX approximately be capital the we slide $XXX year, shareholders expenditures on to the to to under in in expect returned X, approximately million distribution with quarter, our capital total and to In dividends On For quarter, million. million We revenue shareholders. stated our and Year-to-date, income objectives. share net now, we by was $XX returned to service. our slide XX%, in line to XXX% with repurchases. is have X of annual which in returned the And net

of of increasing truckload quarter, the this in I for for fuel, time As business throughout our cost while most Slide The about percent versus per On North price revenue purchased The slide business and the mile, up rate truckload the is light continues quarter, the increase margin change make to of QX but North costs. change X.X%. sequential costs in of detail, the prior snowstorms the the review per costs cost dark services. and all versus and year-over-year per year transportation this North a XXXX. year, X.X% service quarter, The and the we to chart. year's the mile America since in July graph, Customer a third the also through line, and of represent America cost the United various of will segments. fuel revenues in rather and mile August, In blue represents increased lines the rise in services rate, units. blanketed customers this both pricing slide in of saw but last carriers course, X, within net this net reminder, lag transportation was when great our in XXXX, change this last X.X% and and net comments price did September. America XX% all truckload the gray States. cost was in increased not

however, QX. this X.X% were fuel rising basis prices in all $X.X our up quarter, Versus the NAST in last Global shift of Our the in total X decline. over decreased The most X% offset services share in the lower of prices. net XX.X% basis last an NAST points mix was total XX of year's third higher higher for XX million revenue drivers in revenue Transportation results. both margin segments. of all now, revenues, third total the third increased slightly transportation revenues North when and of NAST to quarter net XX.X% last approximately higher the from Global slide than XX.X%. Net September net revenue transportation transportation Surface compared Slide margins quarter. down and increased service sequentially and partially billion The segments points on strong The American revenue reportable was and services. in $X.X net had margin of margin were margins In revenue were year. as transportation XXX to year. billion to September growth our transportation our Forwarding increase in decreased volume of $XXX revenues revenue lines net a quarter, year, NAST And across segment, the result our last This revenues year. that and XXXX Forwarding quarter. the growth

lower margin the service increased the improve XX The year-over-year costs lines. basis primarily truckload were result However, transportation purchased of and LTL sequentially. in did both points margins

margins business late business, contractual in truckload the lower improved Our the quarter quarter. in transactional which significantly had compared to

both compensation award This and tens a thousands of of an fulfilling business. those our unique pricing last is account operations contracts, quarter, of the of and market NAST increased million. personnel doubtful additional and increase we in quarter. when outside income result increase as in expense The of compensation X.X% higher on year's down personnel by the third and higher The opportunities was cost, a from was cash always the spot head management SG&A and allowance SG&A As XX.X% expenses. explained for at rate. in when contractual increasing quarter, sequentially. of count overhead increase well environment the last earlier, variable as management from Operating in count we mentioned last focus a higher and compared a an have we importance expenses priority X,XXX, an of driven was to related XX.X% XX.X% and to from development. as of are higher a account in nice I a technology job in while to in flat year. $XXX was operating Employee managers accounts the up result increased commitments from our X.X% charges last margin quarter, expenses year's commitments was increase NAST did spending third down reminder,

NAST. to second and were the from we quarter price call, tight the $XXX On NAST were X.X% XX that slide last revenues within truckload million, Now, and capacity environment. net by our results service we rising adapting mentioned year. down

were by the in a efforts partially for the outbound support lower freight quarter. volumes year. in business inbound as during week as on The and to routing committed manufacturing shipments X,XXX higher net customer were of LTL in X.X% and volume overall, million. market quarter, our flat early September to We in though and essentially spiked national fact this in largest wasX.X in the support the guide often year-over-year contractual new volatility. and decline routing in hurricanes relief year, benefit as to the two year. most e-commerce performance quarter, markets routing highlight sectors cost August business Strong third X.X% quantify drove additional our continue performance opportunities will relates that decreased in We have offset guide year's The the putting the the of added We added the benefited volumes customer over third cost actively to offset freight third lower transactional September. was increased certain early our new routing opportunities since Managed basis, XXXX. Intermodal in carriers deteriorated. in X.X% carrier volumes the part to demand a by approximately the the in in last growth late number of in last increased to last X,XXX to compared seen moved the transactional quarter. the X,XXX down growth guides in revenue and volume driven X by quarter did Truckload the On third Service measured relief well. generated quarter estimate last of rising last XX,XXX, month efforts year, compared of approximately net is as manage volumes honor this routing when our from revenues count these the with new quarter, truckload LTL carriers loads, impact were volumes We were LTL same compared pressure business, and the $XX.X to the have volume volatile The Though guide to we and the Volumes volumes large margins. up XX%. commitments, represented deteriorate. guides and of moved and this year's purchased our transportation the offline in markets. increased

Over have the at lower bit Forwarding. quite business from transactional we a last margins, while our growing year's past third And are volumes quarters, quarter. been several now contractual Global to down

in $XXX quarter several organic quarter XX.X% Milgram First, the versus operating for were million, solid record let Global the achieved last Total third maintaining and APC to in growth year. both in the and entire the Forwarding organization income over Global for team, segment up acquisition integrating remarkable. while successful The quarters. revenue a revenues last second were Forwarding congratulations They proven the net has results me whose say row.

and operating XXXX. XX.X% Milgram revenues and up XX% contributed from just and Company increase slightly net from down Global Logistics year. up APC last while quarter, quarter teams, the operated approximately to business. effectively. representing XXX team impressive quarter increased million, Headcount Milgram XX% a Forwarding the including in $XX very Again, XX.X% the to dramatically were to the congratulations over was XX% with Company. & revenue margin was & an as were and from of year operations margins million, was third of APC additional employees XX.X% from in the head the Net Income growth quarter. APC count growth, XX.X% organic Milgram the our year, in last XX% the quarter Third last or XX.X%, $XXX.X in compared to

XX% the approximately the net Moving on the growth. during decline to as shipments did grow to lines with air approximately revenue XX% and XX% the with up APC cities. Ocean on continued in in to slightly to our contributing with in revenue margins approximately net XX% and Customs quarter XX% Global the our the Net growth. Air acquisition quarter. on XX% Air the growth. increased we Milgram in the third net air Forwarding service revenues increased contributing execute quarter. acquisitions shipments transactions gateway in Ocean were the strategy approximately XX.X%, services slide revenues contributing to acquisitions density the quarter. to increased volume XX. Customs XX% XX.X%, of this increased increased

As revenue and quarter mentioned, the is of network. one into agent the the in business of integrations both of going are conversion and our Forwarding drivers Global the the well, APC former of net growth Milgram APC

the conversion, impact by expect comments to start impact negative hurricanes Fresh a We on successful in albeit slide volumes net Fresh cases The acquisition. on with hurricane the Transitioning smaller had Robinson both organization. our and Milgram the agent a Florida on in my Texas the will XX. I Fresh on Robinson touching Robinson to base, the quarter. and business revenue

was to down shut rest as customers them revenues of down the of from truckload total and $XXX job the were X.X% a XX that with increase the for last storms. locations working of challenging quarter. organization, million, these net revenues Net of $XX were X.X% were both their in did Fresh decrease team the this result time. of great facilities providers assist X the Fresh million, an a center in service in for The the the days increase quarter. increases SG&A Robinson increased during primarily was Like Robinson have both to revenues expenses. We third expenses X.X% was and primarily was The personnel third year. the due primarily quarter. in Fresh The in in reason of an Slide net operations increase Robinson to quarter. the decrease related of Income revenue increase declines SG&A sourcing third result the operating expense a head and million, total in X.X% XX. to count average Robinson X.X% warehousing increased in revenues from facilities. expanding the $XX.X Fresh in Fresh decreased XX.X%, quarter.

virtually by were third to volume a in of offset quarter. revenue flat decline revenues year's when margin net Sourcing last X%. was slight increase compared A net case

the transportation to higher driven NAST. Robinson case volumes The third the of in Fresh business business negatively mentioned, XX quarter. decreased Fresh net truckload XX%, net in their revenues versus transportation significantly And Robinson Robinson quarter. Fresh truckload impacted Fresh slide margin in customers. business. a the of contractual now of Fresh of portion higher revenues XX.X% As within of quarter of compression due its a the XX%. XX.X% net committed by revenues and the concentration of however, increased has growth portfolio primarily truckload declining Fresh revenues business total result is transportation volume and Robinson Robinson hurricanes to the XXXX,

in the in see a and Robinson quarter. strong growth had services, net with to which business, the a revenue third increase transportation transportation quarter X% XX% Other include continue LTL year-over-year Fresh We intermodal, growth. good volume with

our year thanking the to during increased truckload was to process, net of provided XXXX personnel net slide for as this made business, revenue The increase period Surface by Managed build in established on business. remarks revenues well Headcount surface was quarter XXXX supply look how to and led QX, my in us of on right and million. America in for compression. North chains and the morning. by of All volume of Other Managed right improvements with resources, well third as people, Transportation XXXX, the simply Services $XX.X Moving make to the in versus some third X.X% go aided X.X% into We to Transportation before result Managed in Other large the we you miscellaneous on was the Services, perform this Surface performance was of unallocated increase I will glimpse again primarily Corporate by don't. Managed organizations other All the of third in turn revenues, same compared Robinson $XX.X I comments Other as will primarily Thank truckload closing we John European and of quarter technology This the outside corporate those up to Europe, an the revenues our with technology, close XX.X%, disruption right enterprise in when as some The strong Surface new XXXX. increased in revenue includes revenue in transportation as other and category the the increased answer to XX, business. the Transportation, XX. increase their growth and million. net Slide Services. offset everyone the expenses. Services team a increases XX.X% the by conclude net continued some quarter. to the quarter the performance for Other your result in net result a listening questions. European quarter of partially out and it back margin

John P. Wiehoff

Thank Andy. you,

I does business total to to move X% per Milgram up we day. comments. revenue company acquisition. October wrap things before So, net This final our include revenues increased with has those In from questions, additional will the some date, approximately

to of our thoughts date. that share. key priorities and regards on, focused are initiatives we October Our to are couple current there flat North growth With American volume is truckload versus to a

into about, talked Forwarding Canada network. is acquisition our in integrated Global was As being Milgram our

been our very and in results, successful As you've global network. Global momentum at our seen Forwarding has good our team expanding has

be a as in Global us key couple it next changes in market integration to Adjusting and continue to the this our be We the we priority truckload go will will well, important Forwarding. the very pricing and growth over for expect quarters.

quarters change practices, contributing we including events, to Our with storms last new some we around to ensure the service requirements growing increased account our market, as new volatility pricing change. and consistent core and the all focus share operating the two in growth our customers. how but we of committed us. bullet The customers, to serve and at and of and servicing component market markets the We on changes business areas points including an focusing need the get price over creating the value. ELD and truckload always priorities. model price several is have are our for The not right management Selling, continues be expense current control of ideas, our next important and market December, are how to approach to definitely

gains significant our go-to-market market for our share believe and of are operating All divisions we there company. strategies, opportunities across have updated

and few visibility, and our vertical capabilities expertise to new a have priorities. management, We of name analytics, order

Day will aggressive you worth Efficiency how and services. thinking that our our and and remain also to of expense a introduced year. Investor tie control growing control. is but idea, transformation our network Many priorities sharing strategies we're our We initiatives new at directly and not digital to cost this about in earlier productivity we innovating and

with the of efficiency internal goal Those As to digital networks Navisphere iniatives significant consolidation, platform we operating driving office invest exchanges automated and in shippers gains. include and are automation capabilities, some increases our continue process Navisphere. in evolving with carriers, supporting and in we our

to and continue platform, be in people our our also we'll and efficiency Navisphere gains. we As for elevating invest productivity our goals

administrative new also for I the focus will we for my to the to are That it reduce turn well. and that, back personnel comments, categories questions. to operator goals, we general answer concludes opportunities to and can addition as In pre-submitted the so look efficiency creating all with costs prepared cost

Operator

floor Mr. Gagnon, the yours is Q&A the session. for

Timothy D. Gagnon

Please to quarter, taking questions contract for evening. truckload Donna. growth. you, John discuss by question the possible, versus If investors the frame jump quarter? volumes Andy, was it provide I'll Was a volume the can and spot first time it the over some Q&A in And NAST many up into to flat for of submit to kick Thank last and thanking the right or question now. off idea in us turn and the is analysts that and right here resulted we'll freight and the I'll how between you contractual tradeoff much Andy. transactional during other an freight factor? volume there And

Andrew C. Clarke

account and thank and particularly volume levels length you. for during management, pretty quarter last two as business out into about of talked saw to continued and We've the in Yeah, The September. – at having every the the managers grew on and as September conversations weeks routing July, were guides that quarter market spot actually progressed day the we volume time that and their August consistent August, growth our there management award period. and with some the and in deteriorate, cases, committed account outright September And basis failed. our than greater a result, customers,

Timothy D. Gagnon

Andy. Thanks,

Next question for John.

historical Given mirror space, you this about thinking other prior have Given cycle that times how to the your are would cycles point experience, relation current there your Are you any experienced? the potential characterize environment? market? maybe how experience could you the you current duration transportation in of in to

John P. Wiehoff

XX the pricing. spoke cycle. learned years at cycle, history presentation This So, I to be that to there's the there. There's and history about where anything is we're guess in to our is where of if pretty in to X to on slide at critical how kind information that Andy in we about think group referring trying decipher this would of looking by start back I back at we're

blue this a the pointed XX-year increase. if So, is average those out you slide that on look at average ten-year and activity, previously and lines X, of dark we've about X%

in is inflation of across of cost average a maybe increases time. periods and bit ups in little and the So, that the greater downs than here, period while cycles during there's past terms both customer

XXXX, early in you we're the when into back cycle might think pricing will think study during is past observations today. the about what and learn question to how we When that and long looking more the cost from snowstorms I and answer you we last this specific and that behavior, late upward our it, a see and racing couple -- would pricing XXXX the in this lines two term. XXXX, of two-year northward, you where that look of almost recovery early share, I during financial long if cyclicality off the where are other the was average we the was below the very coming crisis, see similar activity, a XXXX, XXXX guess, that period it the period pricing I felt pricing and to is racing X% periods that the of full at

So, been below adjustments the a the of expect coming to price industry there's I've doesn't think meaningful period into XXXX. And there don't to that anybody long-term spoken this in were year, I that average. increase fairly had prices that in

upward you significant different So in as obviously, and continued are be item about this clearly, cyclical December time changes well, what and the When regulation a movement. pending too. secular for might think changes, some momentum and around, the ELDs

of sort normal ELD XXXX will a increases experiencing versus and So, is, year, the longer. question even I changes cycle changes of the secular biggest this this probably that think in make might a unanswered pricing part we're upward bit the cycle in or capacity-related they the cycle peak of little are extend these

changes also long some that these not is may upward there summary XXXX, history as to periods feel then XXXX, are a but guide price – of are kind this the questions where be last. interesting good cycle may of time So, how similar there to where

Timothy D. Gagnon

John. Thanks,

conditions spot XXXX? versus truckload Andy. transactional transactional material materially expect change Next volumes during NAST you question is third third the truckload was this Given the shift in do What mix quarter, the the split during towards contractual quarter? for of in to volumes during

Andrew C. Clarke

The answer XX-point approximately question to we swing the contractual spot. ratio is first or saw to committed a in of our

XX% where on just committed which we just XX%s spot. market, ratio being above contractual the on in under high had quarter the that and on – seen slightly our committed, XX%, in XX% XX%, So, ended to business the from the the is earlier the XX% XX% of in spot year so, we and that and down

see Q&A, that of the So, see shift, we that we first as did part the shift. mentioned that did I in

the expectations customers. great conversations every it slides. news, account just as wonderful there is with are that year have will the John what And comment Now, we was or of managers with I relates the day dovetail referencing the out salespeople for the in and that's their rest having to XXXX, and that saying last

are conversations we a specific with have And those don't we having view. at corporate, the customers. So,

and rising there are Our talking conversations, account having managers out those prices. we're about

to are about a committed our be or and scenario. are in guides, about talking want spot routing We talking we a customers market where

even XX% QX and so going conversations on to going it today those into where Roughly those prices we conversations QX. in than the the are having fourth quarter on between we're cadence happening are up. in customers which the day, but out, And depend about less and have is just XX%, where we happen talk it those out next conversations. starting shakes every and And end viewpoint And where the rotation will shakes with our year. it those balance and

Timothy D. Gagnon

Thanks, Andy.

the does the of growth, At for automation point of to ever? the enable count what Next scale elements process question if brokerage back company various John. head

John P. Wiehoff

understand important automation gains. is around seen that some this out with our feel be. we do that our count already digital One and in related a thing and we the technology should business, lot meaningful This question head and productivity benefits expectations and have is the that productivity applying like of we and to trying to transformation wrestle is the what to our figure growth

diversification pretty topic. relevant segment of is to the Our business, implementation this I think, reporting our of and

over been market Forwarding look we've you lot a are where lot our taking in several while share, and have very the we've last processes years at Global the different. of in count the grown where world, equation come parts If additions of head a labor the other

own a have it. invested as to opposed technology building lot in buying We our

count and making as where proprietary So, head we're our purchasing you different. just head tools hiring additions opposed significant And to you more see business, growing are see others. with Managed of Services where IT people integrated combined additions that software and from a solutions developers, and count lot and area, it in training also in we're our

of of back person that more productivity number some certain per already of level activities and more job aside the has the digital kind take you processes families, automated gone of look to those the if brokerage improvements we seen So, much significant that the of in have kind do, shipments activity and truck in core and we of on.

the leveraging we As carrier feel, scaled leveraging centers I invest with about in and mobile mentioned the comments technology do to continuing platform, and we look can gains productivity forward that are my job think see API and that in significant to technology, prepared more, and those within greater it. and impact opportunities select where families, technology a on more make going we greater in

best business, components transparent the So, automation efficiencies. investments can having are them are what the various on and and and around be do we going the technology their of to impact to we the outcoming

Timothy D. Gagnon

the strong were revenue is Global organic What drivers Thanks, for question the next the net in John. Andy. the Forwarding growth And for business?

Andrew C. Clarke

the great focused go-to-market team of Forwarding the a a now, to building mentioned wonderful great customers. they execution on when on leverage They in continues their management our number forwarding. of to my We quarters. areas team global points Global to the status a conversations have go over in our coming China account obviously, cities. those time, on They've job customs one strategy. job of platform, The the and And We're on and their remarks, from I again second the have more and wonderful use staying side, and their we've we do customers. last focusing with retained gateway just -- ocean go-to-market and go got integrate several to staying had on built one our the up number a prepared our the as acquisition, has out focused States. out been and have NVO engage able at execution done same United yet

Timothy D. Gagnon

Andy. Thanks,

landscape. Next Please question the John. competitive discuss for

does been models? there traditional the does Has or environment, it create support market? or in that new opportunities entrants startups shifting providers, more nontraditional for Given the freight any discernible to shift

John P. Wiehoff

because shifts it is The conference a It's a expand who for to hundred that you're things you interact uncommon no, probably have that overall several fragmented, when there that. be didn't me competitive get when like not the carrier hundred activity providers let is to you more to have in them, but landscape. not to reminded constantly events invited very question landscape, bit in is go enough any of that the room, one several or we and of answer shipper's with the large little the seen competitive a on to discernible

doing So, or one we the vertical of competitive any on. or who's activity you other around be going what learn what much anecdotal what about based see does in may on landscape customer releases press hear more become and

Another that static, I now, and of rapidly, general, the is we're lower reprice stable I or during time. every to prices through to we right how where to thoughtful volume a route the like test when the more they in all relevant, more prices times there a or that go us, environments can guides in of do over declining probably flat to ever and the naturally they or freight. new to time of think rising comment for with shippers or renewing more on spots though, and that When prices, efficient increases cautious probably and about some think prices. in providers, where shipper keeping at might you stable about them, growing some traction get be typical them interacted and are Those volumes declining be participate and that or logical participants and pressure sure where are make of of puts shipper mitigate declining that in to the price it's is more see introduce to those are times kind marketplace. that opportunities entrants think, new happening is Almost get incumbents new and they to for put more particular if think pricings, and about period I've providers, in

out So, there an time route to service guide where of type provide and are increasing insert sort may this who or who in themselves longer opportunity and newer traction environment, be, where a a takes players over and in of can keep time. metrics gets to the are the others happy for significantly, period it the leaving then better prices customers really

Timothy D. Gagnon

John. Thanks,

for question Andy. Next on SG&A

to mentioned claims increase volume to nature warehouse in the increase bad cost. provision expense expense increases were simply the increases handled for related in and Was quarter? the or these You the debt, there an in during one-time anything tied

Andrew C. Clarke

related I of the little a be which acquisition expense to really to Milgram bit of consider quarter, during not had the one-time. material, would We

the several will see revenue knock our the number we'll is I expand as against to that like would as nothing in and on as allowance, relates not to one a balance that gross material what relates have the it And that bad our claims any allowance, we in volumes debt wood, change on increase, years, and there way there's a to we experience. over is bit arises, that As that it the in and allowance, seen, last time. write-offs. experience warehouse, actual little though, the

for writing the in our ever what the to that reserve more have of work, them, in, any you we write-off The that actual need fact revenue have. nicely, the growing quarter gross expense we against the is we're the way off balance warehouse fourth you we than not despite last when just put accounting So, mentioned, that of revenues, rules more those we're that is. but we year. It's

number would So, a in One, in the had, on – claims at be periods, in have a might during to the And greater than past. and, less of them basis Claims, we severity. future won't perspectives. frequency; a the year-over-year you we two, severe the two say, that. what I quarter, there experienced from look change

So, nothing unusual about items those either.

Timothy D. Gagnon

Thanks, Andy.

Robinson margin question the What in your is Fresh Next for forecast business? John. improvement for truckload

John P. Wiehoff

take next is repricing over cycles and length more XX book generally truckload much to the longer. business larger business, Because haul, transportation Fresh generally in improvement the forecast type the Our more be it's gradual will concentrated of shippers, broader quarters. business – freight. longer the several committed where than would margin temperature-controlled It is Robinson of generally mostly is XX

results, quarter the the compression in as did sustained dynamics this business you Fresh unique marketplace, it saw the than NAST. of some within margin the the Given Robinson truckload in in itself QX more

we within using just show to longer, adjusting be and techniques and the the quarters. market, will gradual have and several take account same hopefully, business, over will been little NAST the We like will a bit next processes, it improvement management the but

Timothy D. Gagnon

John. Thanks,

C.H. strong its on question Logistics, Next can Does business agent similar we Also, net the in demand and Europe trade in global APC progress bringing for core opportunities win With conversions business? APC to platform? regard the on create can Milgram APC? management year's to see of last update to agency from Robinson favorable acquisition expect business to an similar onto environment revenue provide a Andy. China the

Andrew C. Clarke

start with I does question, demand around win strong business. Yes, revolves middle help global the global and us certainly, will which strong demand. others

the Zealand new agents or business to are with convert don't, some do you the APC, had customers controlled to gone business in you of identify they team, other RFPs, conversion in of would the type of whether had all to markets. that's The very or the it very of to marketplace, way have of worked our onto team company, regard identify We one all it's And through check helpful Robinson the your to in when the I are we're platform. identify that agents, it. to add – those that, our New in acquisition overall APC if the the and excess team the C.H. those and that company Europe a worked the in of business so It's there addition, independently, converted With that customers, in now store the one are over boxes to platform. always you that have bid well, With us we well that that not to customers respond allows to you right to Australia growing very Robinson have have part and Robinson our just growing not And C.H. on brand but respect own in and have markets yeah, both and to and C.H. report well a marketplace. global processes, the other that you well. happy also allow other Asia it's business. and APC virtually

expect getting are to and allow had a customers now access that, both level in they opportunities execute us growth to we have because agent. organic that But and not past, freight, because of We more the Robinson, in organic lanes beyond. that would now of lot business all to a C.H. that getting we and we each other's would that we were are XXXX are those lot access to continue and we into

to smaller from those the going company relates in Milgram agent base. smaller very again, progress As but see to is It expect than a conversions acquisition, very we opportunities Milgram, it are well. acquisition. the the is of early in APC, we It's a innings but do

Timothy D. Gagnon

Andy. Thanks,

months. Please the few last mandate's the over on ELD John. business impact Next for question discuss the

John P. Wiehoff

ELD we any about going and There's answered future I of be. significant have thinking the think there that number pricing that around past, the to you over lot December, expect we around few hours to ELDs is really question been two still are from year, seen changes or are any contraction or could will pending to given thoughts a changes helping capacity will how there but feel some that times discussion know and miles meaningful we capacity limit what possible first what, in will chooses view overall, a impacts mandate may that shippers capacity pricing the future, have quarter impact when QX around may CSA lots around to some people's impacting be. We may impact worked marketplace, of some marketplace reaction, it. will it, like be will their common really to there has an the in we be to The of is in do that service exit protests of be impact and regulatory similar regulations everybody the looking that a adjust and a the through that or it expecting the that attitudes been more be or we in estimates that be and happen haven't it, forward, and what of But get committed the their the The differently. the There route impact. be significant. few exception that people about not understand The market with or of date. last the months next in it

Timothy D. Gagnon

John. Thanks,

business margin Next average was net brokerage question on quarter? third revenue was the contractual better truckload than the for the in Andy. How business? it much spot What

Andrew C. Clarke

and which that committed. and truckload spot any more what do margins would We the stable to experienced those offer of I were stable for two we've the you is tend out side, not or revenue it's our months have periods, during broken net is walk committed historically business, quarter, on not on What lockstep. whether of see the spot first that in

during committed between And But, spot Irma spot. was August and and there the weeks that And two spot so, Harvey points get then basis September, and there's period. we not and a material margin then in time of market hit, the hit last market. difference saw the of several dislocation margins a jump hundred when all on you

Timothy D. Gagnon

Andy. Thanks,

fourth Next quarter What question for efficiency John. the beyond? for and planned controls operational and are specific targets

John P. Wiehoff

for all variable, of personnel-oriented, that it's our is inefficient we so much we metrics successful And we we that our we're rid drive than overall structure what means have of think growing forward, be, in statement from we the improve we're specific as hard of think about if the kind income net operations kinds metric be that the key trying When which improve areas too, is divisions, increased have good of. it's in expanding moving the get is to When gain can target that and our to down. on our cases, with costs and business. helps a that up much revenue it a of or us we performance, and which we cost challenges revenue, that many to lot well, to at so margins, margins, rather some we in are specific divisions are and that cycling cycle net targets smaller our of hope with because that those some larger it typically up our exactly cost One improvement overall to percent growing our that of going pricing as of metrics. for of pay is it's

by are that margins, about advantage So, periods show and of talked those and I our improvements taking of earlier, good efficiency technology leveraging metrics. of some time can cyclical our expansion where us process for hopefully improvement in we

like sort business of is a to key we've question that over of diversified years, pretty along metric. has The that other meaningful would our last the as XX that, component that on impact mix with this I reemphasize

the those business, lower If there. And and while it's you Forwarding we've at of in look you total, a is metrics Global improvement Forwarding the the adding look lot at the impacts since depreciation Global accounting Forwarding our of the than our back from segments I acquisition. the and separate, amortization you enterprise particularly acquired looking it Global deals, business, see and of the the operating a for at business think from lot

whatever relative our adjusted might that place, net plans metric income there operating and based improvements we activity M&A from to on in looking of cost be for So, be. for divisions is that have the the operations will we relationship and revenue all in efficiency core

Timothy D. Gagnon

John. Thanks,

those truckload for in to share flat? was that confidence season, bid there ability in Next CHRW's utilization per and with is improvement credited in were XQ in material gains NAST, data during essentially account during drive XXXX year's capabilities Andy. question in the awards Considering investments analytic XXXX's volume this considering advancements' any reduced sustainably

Andrew C. Clarke

any Short that globe longer sciences. no. the the are that that the science the teams and of that with either the team United in the answer dealing data day we we that assembled, our analytics and pricing customers of develop, we information is advances algorithm, those have remain the them to general using. people back made, changes, having analytics people data across of and and supply it's is, confidence managers conversations algorithms in and into actually assembled, using The learning the not that floor. States and we've a science And as the new implications even every market and is account the the develops, we've bringing real-time the the and with confident the team the and we're feeding on are disruption. customers is arts information a that that the lot account into And feeding wonderful they that chain is team, it more that the the into art that feeding as reduced the lot as There algorithm managers answer the in management and or and back

it for a intervention. a human that's of you doing have on it's adjust So, us. learning we're real-time XXX-year real-time all don't. And we you of to the why That's we right? No, environment basis. But able have always this, the that history get why do

So, there. our we doing are with incredibly confidence what is strong

Timothy D. Gagnon

Andy. Thanks,

was for the day per X% i.e. revenue question much business non-Milgram? net growth Next in of John. October How organic,

John P. Wiehoff

the Enterprise we – about X% net of Milgram revenue The be the revenue. will net Robinson acquisition, from Milgram expect,

quarter. division, acquisition, but material X% The month to one overall Milgram Forwarding third So, a Global the enterprise. little the in included to the more only there's

And so, the of was month in than of less it October, terms X%.

truckload growth entirely comment, of this impact the numbers end good is more also the still we that you from -- there smaller the other kind less growth. to almost from of and and maybe quarter that later lapping Probably acquisition the significantly. October, change mid-quarter Milgram we things that. always of improvement that being have Global the division is within but the sort And organic with the can share of in remind caution quarter, these trends in So, APC we Forwarding

Timothy D. Gagnon

Thanks, John.

Andy. for question Next

to the many compliant? you in approaches? base world mandate an carriers believe your Have the how of noticed carrier you ELD-regulated approaching, ELD With fast change a as your do are adjustment

Andrew C. Clarke

QX, sequentially a base. last today, QX we're as over which carrier seen up carriers haven't of from We currently It's as well at active year. our – to both XX,XXX versus is change up

about carriers this that no as that – until of the to this prepared it's change talked XX,XXX, XX we there. did added last it's difficult of The many same carriers we are exact X,XXX that. remarks, But, give decrease. the So, on no technology, and did my surprise length, that always adopt the And QX December have in again, adopt have you is that year to to loads, number an difficult those year. amount of said in price compliant. of how I at are It's our news to ELD new good smaller of last adoption the currently always carriers continues X,XXX

of our of so, to And not the to expect adopt we be would this December carriers in an XXXX. cost year with barrier or issue

load. a John disruption. recent or all answer question a – to or a in how they recent perform There question how As mentioned be and will will a it of, shakes out, a there change be whether to they not take

hurricane. performed how during in that different similar regard I it's to fact to of issues, see a And very that company disruption. of the you our point only everyone All these periods would

secure continue going go be supply for customers that that capacity to and are their to We the sure operate. chains our ones out to the make

Timothy D. Gagnon

Thanks, Andy.

head question Next count on John. for

and into for what XXXX, the are Looking your early growth? head fourth expectations quarter count

John P. Wiehoff

some Sequentially, areas. I for expect in volume the the we earlier some have And flat growth that year, growth would we expect mentioned that productivity head remainder with gains. acquisition to of year this are are we experience, growth. we next seeing head into lower families and There that those job minimal of that XXXX we be will need count and -- show that, there minimal would are growing there several some count additions. of be that, the may year some gains. GF and other past will improvement, are head a Managed we for faster, be drive investments leverage efficiency where hopefully, able expecting there we we're count But Services to And are growth. year-over-year, areas of will and to our

Timothy D. Gagnon

John. Thanks,

or or sizable enough, M&A valued that Next question to Are could are year and we per accretive that good of attractively to for seeing immediately rate about be fits, finding EPS? Andy. are deal that Should you one enough expect accelerate? the pace at deals deals

Andrew C. Clarke

I guess, like anything, it depends.

do the terms active ability year. pipeline we more execute organization, have deal of than pace, capable activating as we, of a a In our And very about an to are a and deals. completing confident and feel

have to issues that two question is us. a just is And were fit do strong is a vet. vetting few rationale of important us. attractive, very the Business and we very to highly the us. process. issues However, mentioned are that sizable, to in are we important that Strategic important those accretive. Cultural And of model

through variables the and activate feel bring of And compelled complete when like go so, we be on into rigorous more all do we if But actually do, can issues equation, they and a we year. don't more than our a deal it process. deals, year to certainly deal if really have to they than those a a don't a to vetting these or deal we make

Timothy D. Gagnon

accessed quarter we chrobinson.com. this It and that be get X-XXX-XXX-XXXX for at call. today. replay call Robinson will available Eastern questions you, Time The Investor all entering will joining morning. the the apologize the XXXXXXXX#. can and section conference thank everybody, the be and Andy, participating our replay available dialing couldn't today. pass Relations code we also Unfortunately, you for of time, third website the we at by The approximately be of in XX:XX Thanks, are in Thank to out XXXX call for

Tim any have additional Gagnon, or Thank me, at Tim.Gagnon@chrobinson.com. you call XXX-XXX-XXXX If email questions, you, at by please a day. have great again,

C.H. Robinson Worldwide (CHRW) 1 Nov 172017 Q3 Earnings call transcript