CHRW - Earnings call transcript Q1 2019 | C.H. Robinson Worldwide, Inc.

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Operator

Good morning, ladies and gentlemen, and welcome to the C.H. Robinson First Quarter 2019 Conference Call. At this time, all participants are in a listen-only mode.

Following today's presentation, Bob Houghton will facilitate a review of previously submitted questions. [Operator Instructions] As a reminder, this conference is being recorded Wednesday, May 1st, 2019. to of conference Investor like Houghton, to now President Vice Relations. would turn over the Bob I Thank you, sir.

You may begin.

Bob Houghton

Executive Wiehoff, Thank everyone. you, Hagen, and website Corporate be John Financial quarter Slides Interim that and On our morning, Biesterfeld, Chief Chairman our call Controller Operating accompany John, Donna, Scott today will Scott provide chrobinson.com. will and Officer section Officer, Bob good Chief Chief and Presentation Officer. at the commentary on Relations remarks results. can found Bob and our in Investor XXXX first their of be

Robinson of for statements. Xst. actual And new April with We segment will our factors and comparison, our presentation today in transportation Fresh a Other two the could will sourcing Fresh to cause information follow produce, questions to call fresh over remaining that and provide primarily management's that the turn would our you under forward-looking today's release with remind responses contain results under earnings like are results received may The on from Slide in differ include I issued Corporate to certain the which provided segment. remarks press release yesterday. like the marketing lists would I expectations. that, remind we you we organization results, John. basis also to to be Transportation North after that will segment I historical now Robinson pre-submitted included that reported All To the Surface our category. American in have

John Wiehoff

our for first morning, good and Thank you, Bob, you Thank joining quarter call. earnings everyone.

improved and Operating single-digit in high achieved and operating basis quarter. in growth we double-digit the margin points earnings both per quarter, net revenue income the growth share. XXX For

growth Our and Surface double-digit both expansion margin business Forwarding in North revenue Global we our net NAST Transportation significant and delivered businesses. operating generated American

Cargo of the expanded our Spain and with Colombia Space in also The We presence Group. acquisition Global Forwarding

line operations capital, working our earnings, We which generate returns million in us to improvements $XXX make to a and about and increased expectations. over highlight the our first feel allowed from our couple macro increased to are to I results longer-term they combined and continued of would also We and impact with like our cash flow themes with they goals how cash good business. shareholders. quarter in in

services, first theme into XXXX half truckload. XXXX, back increases pricing. had increases in price around the meaningful our In and The including is we in all of unprecedented of

Many hire and of our are data. we today last year, public a seeing a ago and including lines, cost So truckload. data quarter, we Demand service many far are public indicating pricing sources we that consistent were of market has softer price declines this is and declines that declines. our than resulted and market or cost year in in in with has of the even softening been that view are

Although capacity the strategically of American a majority procured, the in growing and percentage our capacity truckload we purchased North spot is planned our market. of

of generally is overall reflective market pricing our conditions. So

than X% a typically when us less share our contractual in transactional our do reflection also more we service volumes versus When scale, increase balanced, in market pricing transportation with markets With freight. market but the lines, the engage to market, in in tight, we and of terms seeing lead move both are contractual of customers are more our truckload of typically each modest markets transactional and We in are are lower, capacity. meaningful a of not mix. volume

focused Regardless good and feel of taking on to share, manage that. to market understand flow. positioned and with conditions network's changing improving leverage cash our current adapting of we conditions. view as do and we through job are it We and greatest customers carrier are execution, help continue is operating to achieving One cycle, how market primary about high strengths our we cycles to partners the of levels freight our

marketplace. confident will to Corporate turn Scott creation introductory in the continue are comments, financial and those our Controller review We long-term value to With now CFO, our ability it strategy over in I to our Hagen, in statements. win and our Interim to

Scott Hagen

good Thank you, John financial Slide results our and quarter. morning, four everyone. the shows for

driven X.X% quarter declines margin First across improvements $XXX and quarter of in in X.X% million, to net $X.X primarily line. transportation truckload by air. our increased decreased to revenues Total service volume in total pricing the most lines billion, Company from our service lower revenues

SG&A first by Achieving primary last and bad drivers to million were headcount in debt X.X% expense. remains January Personnel increased million. per increased from growth expenses C.H. increase day Total $XX XX% the increase Cargo and margin up priority up a to margin as expansion. quarter. services, last growth. business partially $XXX in performance-based due a the operating These last quarter, expenses for was increased in equity about were and were software the offset integration a a The leverage purchased February, our in million, top of purchased occupancy. operating headcount in fourth bonus related First was to March. to The reduction up compensation, claims year. of operating the Total representing Space contributed Operating increased in relatively including quarter primarily quarter growth average consistent of remained percentage X.X% X.X%, both operating year, consecutive addition X.X% over XX.X% fourth rate when year. the rate organic compared particularly points quarter the were revenue to and up with year. and point to expenses prior increases headcount Robinson. net flat $XXX margin The in basis compared XXX the X% monthly income expenses X.X versus

net last year. of versus income million, $XXX an First quarter increase was XX.X%

covers Slide items. income diluted year. Our per the from share first statement in X earnings other was XX.X% $X.XX $X.XX up last quarter,

program. We was the last incentive effective quarterly in The from rate related lowest the stock first typically deliveries tax rate effective primarily year, each quarter quarter XX%, of experience to year. first tax XX.X% up our from

between full-year rate our XX% XX%. to be tax expect effective We and

other First $XX.X biggest quarter the of the due the $XX.X in was to up expense primarily a remainder in million year. weighted currency, expense million average the interest cash impact last from prior million and quarter, year, key from higher $XX.X totaled to against to continue in currencies will income rate. of majority coming continue RMB. functional to we in from up net million, $X.X Interest Chinese is and impact balances The related currency increase and currency. this the A with including of interest our quarter, will quarterly out weakened quarters. U.S. of working Movements our foreign several the break of to dollar revaluation capital on future have impact an expense this

count our share quarter of plans. equity was compensation by impact in down the partially offset activity Our X.X%, in the share as repurchases were

had $XX.X cash we working quarter XX% drove X, million the quarter. cash generation. Slide in with Cash totaled to earnings increased fifth expenditures first operations totaled capital year, Turning consecutive improvement. quarter, combination another versus for the strong quarter representing up flow flow Capital performance from million last double-digit the of improved of and A the $XXX growth.

with increased repurchases the and versus quarter between shareholders of year increase be to full-year, technology. expenditures $XX returned a a share dedicated to the $XXX the million quarter. primarily million through combination million spending in capital dividends, expect to We continue the and X% for prior $XX We to first

We our returns ways to employees will value shareholders. network in our and and will carriers that and generate to evaluate of continue deploy for add capital customers our and

our companies quality fit acquire to that reward model to look we dividends. will and We and strategies, our through and shareholders buybacks culture, will continue business

Slide accounts revenues the receivable. Now onto balance driven decreased decrease in working the the seven, year, X% sheet capital prior lower resulting by on gross and versus

future have interest of balance impact morning sheet. On the income my quarter a billion. and look $X.XX lease change the quarter, X. In rate debt, our obligations on with our trends. at notes, material included facility, policy balance first on asset was our with to our now adopted to securitization the leases. standard will senior related new up quarter wrap will debt credit right-to-use This weighted comments the not Our on our at current was AR in X% I the a first accounting our and Starting Across quarter. private XXXX, we Slide modestly placement down are statement. this average

per truckload comparisons net day is truckload business XXXX revenues Company of decreased consistent X%. X% day Our April to and approximately per revenues have increased share business volumes have volume. and practice net approximately NAST

our XX%, revenue you over now appreciate We additional and context year's May net to day in last segment this June, and As per business XX% turn and provide will on I April, morning, increased a performance. XX% to listening Bob respectively. reminder,

Bob Biesterfeld

our percent on NAST Scott, carriers, and of in the truckload state our represent billed per Slide mile lines market begin fuel North change contract I blue rate cost of . by morning, operating our the over performance and to truckload everyone. remarks good current costs to current customers net highlighting the paid per decade. the the dark X, mile Thank segment my light and America will On you,

includes a from more to of falling cost cost guide truckload both mile quarter. cost Fresh normal reported routing truckload segment. while the the and ago in quarter of in in tender, environment, in benefited per where Robinson contractual a price changes price As to XX%. to cost reminder, improved NAST and the increased truckload price the together. shift And this per a depth market-based in cost versus both over lead generally in changes and impact mile revenue We Slide price, returned as time move over net performance year our in volume declined previously period, business a the first margin resulting tend

truckload in routing measure the the depth which representing the carrier from routing X.X, in shipper's average the $X first represents quarter, under that depth a on is roughly cases. guide Services of market freight tender business, use routing first average shipment conditions in we executing most was of was metrics billion the One guide our management. guide Managed to In

in of in demand shown Slide. the on and we modest mentioned, As as this evidence and are a costs John capacity, softening by reflected increase seeing reduction price

that to maximizing conditions, best revenue ability we our feel net the market continue current set to growth. while reflects We pricing freight drive

our current environment and guides. near to So we moderating, reflect routing adjusting the to customer's our we are ensure route of top the with prices depth are guide

NAST XXXX, the customers our price represents to truckload previous to shows Slide. of underlying fuel, Slide cost average graph to per carriers, XX, the data and paid net billed from mile per this mile and Moving since

price scale Slide information. actual proprietary mile the mile excluded per our have and to We protect cost per on this

price about cost the per increases in annual trend and cost decade. per line levels, year-ago the X% rate quarter and versus returned averages below mile have While they current mile are the last absolute and to moderated which over

consistent we and in of carriers competitive response model and business America, and the marketplace shows the non-asset-based and a periods customers our in freight of our business activity. even highlights that North Our combined network have over price cost, with conditions. pricing the largest adjust between spread to of in to gives the market model high time volatility strength changing in chart us aggressive of flexibility maintained periods This

Slide net XX, American revenues to by truckload. business, to increased XX% Surface double-digit NAST North our quarter in Turning led first Transportation growth million, in $XXX

revenues net in NAST net transition a driven in see Our $XXX expansion quarter A a drove we by more first cost freight first business year-over-year lines Freight basis contractual compared and environment in in margin typically revenue mix toward Index. expansion both margin. service results our quarter in in quarter, shift volume XX.X% the million included balanced to Truckload XXX market we as the point a growth falling share, the increased changes market. and also growth when in LTL freight truckload to to Cash

approximate Our contractual ago resulted in contractual transactional year XX% mix volume XX% the shift XX%, quarter in the mix versus XX% and toward the in volume of period.

include the contractual of current conditions, activity impact modest our reflect price to results reprising with including quarter awards in customers. declines of first several Our market

our negative a at X% First contractual growth This quarter business day NAST increased truckload on reduction volume XX% impact year, a basis. the loads of NAST quarter. mid-single-digit increased for the associated approximately and includes with for versus per Profitable volume in shipments. volumes last rate increased X.X%

This also increasingly are to successful to help to provide a fleet to increase added quarter. of continue largest new provide additional Robinson the first on in the quarter, their to capacity effectively carriers our freight Carriers enables last We be solutions add carriers network, carriers first North America. in them further year's them We driving X,XXX motor owners. us that new that more customers approximately XX% over expansion with supply of relying business C.H. chains. allows execute our

First the LTL net in million, X% business less able Despite revenues weather in led one controlled the Midwest in we growth day, X.X% were our quarter and businesses. quarter. LTL by increased and disruptions growth consolidation deliver to $XXX volume to temperature

related mix in LTL of service We to X.X% line, pricing drove renew a income as performance. for Slide in volume quarter to decline lane truckload a an our our intermodal offset in XX This with higher was our awards expect largely add to growth new continue shift quarter. precision as we customers the reductions net declined scheduled change decline the In and in to intermodal railroading combination pricing from NAST volume in existing Intermodal decreased quarter. outlines the customer industry volumes revenues a accelerate and operating second truckload. by XX% customers. and

improved $XXX the increase in and quarter. in performance points, the This investments increased XX.X% headcount the benefits operating operating strong net XXX XX.X% in of of quarter modest First combination basis revenue double-digit of million. growth Operating technology. by margin continued driven our a income reflects to

in learning investments artificial Our capabilities and carriers. expanded our intelligence customers insights our and and are providing to machine

network. Our and our increasing to in investments operating supply our shipper for and of level of automated the year-over-year employees technology match consecutive ability carrier helped four demand advanced data generate and improving quarters the expansion interactions business. are have further algorithms advantage us our NAST margin profitably across These

our XXXX of process accelerate transformation employees. and to carriers continue of for digital our to provide balance and we'll the Over drive beyond to to our efficiency and benefits network customers efforts

that headcount NAST We the flat will be slightly to for year. down our expect

increased Forwarding Turning X.X% the business, Forwarding revenues for quarter, the Global quarter volumes revenues to in our X% In XX, increased first driven Slide net $XXX our ocean million. and line, were margin flat Global mostly expansion. to quarter. service by Ocean net

of ocean decline increased shipments. shipments impacted customs air increased fourth of quarter, for tariffs X.X%, offset believe net many quarter margin ahead customs of revenues We anticipated the XXXX. in transaction as First the in around our volume in quarter and was revenues net enacted our Customs X% first was customers expansion we the world. X.X%, worked X.X% continue to quarter in negatively first inventory driven by that largely as air growth as quarter to our a performance of presence build XXXX, by increased of first by the expand

freight Space our one Cargo from quarter first provider leading Our logistics and customs brokerage includes and results in also forwarding, month of Group, a acquisition of other international Spain of The services Colombia.

and history great cultural We Space in have with feel we the that to Cargo an integration the Spain, as extensive is on to operating brought start. The have and Robinson. about agent we off a team compatibility great our talented

the companies conversations implications and Enterprise overall supply results As the these tariff Cargo's and impact the acquisition closed potential redesign customers, or a to In are continuing on did not Space activity our on February have for of material Global Forwarding chains. results XXth, for plan our our global global quarter. with

and them are our the tariff engaged with Global help to the impacts actively quantify landscape. changing understand of customers Forwarding We

from are service our strong net Asia, our first where line air. ocean and benefiting for ahead revenues quarter both grew Southeast in We of growth well total presence

income trade Given performance. Forwarding our an our that global customers service well continue offerings, of Global ever-changing win outlines we to operating portfolio positioned XX in our Slide broad help to environment. we believe are

XXX quarter in First year, million, headcount. points a by to net operating XX.X% last driven decline XX.X% income X.X% revenues operating average basis of $XX increased margin increased and higher versus

revenue quarter margin so average operating below typically year, our As first our the is the the a typically quarter well for year. is smallest for reminder, first net the quarter

in and will same geographic reach significant We business. the Forwarding we Global our to efficient. our time, At see more opportunities continue technology drive deployment increase of processes to level make scale to our

a we that combination expect to volume growth exceeds investments cost deliver technology forward, Moving operating operating to in and through expansion margin growth efficiency. of headcount drive

performance, margin segment. will we the confident the companies we deliver remain leading forwarding other Over global that with long-term, operating in consistent

All to on businesses Other and XX. our Moving Slide Corporate

miscellaneous As unallocated outside and expenses. All surface America, transportation Fresh, revenues other of reminder, corporate Managed now North Robinson a Other includes Services,

existing Robinson net declined weather year. million Fresh driven First million, X% X%, without to investment primarily fixed customer related the process in from reductions. last and driven Managed $XX a or the management services by continue technology. allows increased XX.X% revenues quarter, wins. by their revenues new complex them quarter volumes additional net customers combination $XX people value in Customers selling to transportation to Services' our chains offering, manage Case which supply selection were crop in to required down system carrier of

Service new continued we million, opportunities European by revenues expect a got quarter as through Surface Managed growth our Other growth and single-digit of mid the in move in driven X.X% pipeline increased business have to primarily the Transportation We year. we in $XX revenue volume business net net strong truckload.

quarter, LTL, gains share basis first day and XXX truckload the we During in margin deliver a net per of margin operating market double-digit and basis revenue revenue growth were able on net expansion in to NAST points. excess and

We in to increased a an successfully and rapid returns evolve continued dynamics to continues marketplace to shareholders. operations employees landscape million in where the results strong at also $XXX reflect competitive pace. ever-changing of These both ability cash market generated from navigate our flow over our the

carriers marketplace. on on and on focused objectives. Because our for to engage are keeping we the strong financial continue win companies in the we continued of our center this performance To the we to network our customers platform, for forward, three committed remain commerce creating people Our value them unique of accelerating focus and deliver focus. moving ensure of at core that

each share time, and to in lines Over to we and have continue XXXX beyond. expect our our share. to market gains committed are share market taken in service we expand we largest First, of taking market

long-term deliver processes third and in our on growth reduce businesses. expect to cost automate operating to core Over we revenue intently We leverage growth. and serve, that we of committed targets our focused to operating our Investor shared also growth the are revenue X% while XX%, and to XXXX. Day continue improving our time, to our at exceeds net cost net we'll And remain annual Second, with customers income excellent our to to providing we sell carriers. across service

achieve firmly this are our will investments continued and to margin expansion and us We believe automation committed in technology process objective. to operating help

strong cash to We to and over in are committed to growth per share time. earnings annual also double-digit returns deliver expect shareholders

I'm forward, continue to solutions for XXX,XXX we'll on global I'm also provide industry-leading shareholders. companies our that that continue Moving the to over our generate Thanks confident strong deliver business this for we'll for and capabilities rewarding listening that opportunities to platform. employees and returns conduct career morning. confident our

support this evolved excited Before to has Executive as and globe of all around great serve. and and last and to honored organization say, And Company, has for it John will the upon have to C.H of chapter while leadership, our our with John's to by Chairman shareholders, globe, leadership his leading and a On for wanted I with back Robinson our created want I a Company supply call opportunities I'm thanks customers, team time, powered to to US I all produce Under people to turn value and the into years. providing XX forum for process under strong past John, of Robinson you next from lead foundation technology. this people, back the tremendous build your and the around chain the over John. success. turn learn, of leadership, our to John's the XX,XXX truck grow done to all moment take our thank a to John. Together brokerage behalf I that, the in global for employees our for carriers

John Wiehoff

will I wrap Bob. a remarks with our you, prepared Thank up final few comments.

and we closely to the carriers has to always freight cyclical can them our understand market. our achieve and network working pricing meet to reflective ensure the both nature commitments customer help of go-to-market customers with of customers core help strategy the focused adapt marketplace of Our the been market, to understand We on our conditions. remain and

in global increase to system We the solutions processes invest of will we . supply of technology continue to chain our to legal people, deliver companies our and over the XXX,XXX value

insights provide levels We our people will set cost efficiency, we with focused and leveraged our of remain customers, on and our increasing operating and capabilities, and to an higher for carrier our driving will also to transformation our digital employees partners, service expanding shareholders. execution returns of

that in they our team are and us stronger. get allow to and advantages competitive platform continue Our the win to marketplace the will

us to ability ahead a I'm our and for stakeholders. confident of to have of future in continue highly We create great value our all

as of Officer XXXX, As I to intention Chief retire announced Bob Robinson. of February my referenced, in Executive C.H.

Bob announced Chairman. moves will a Chief process, Board on May of of Company. will are Executive remain I Xth. Directors part our the As Both on also long-planned that succession next the as we of Officer Biesterfeld week become next effective

as organization. He record to technology of Robinson, core his his deployment and across exceptional our Bob is almost Robinson's force driving demonstrated results. and delivering decades committed in of digital vision C.H. the success. values and for to Bob's a the highly Robinson's consistently extend passion has long track accelerating transformation the behind an C.H. confident culture pace I'm efforts, knowledge, ability who leader, and innovation deep been During C.H. has two strategic industry our

XX-year As I of what reflect very we Executive Officer accomplished. I'm Robinson, have Chief tenure of on as proud my

for to trusting our global To I'm accelerate third-party dividends. us drive and $X fivefold logistics Company. help increased thank thank global buybacks contract and total our you Over We for But network customers, carriers success suppliers, continue to all to have and business shareholders for we revenues culture Robinson, you your have to share and commerce, period, employees C.H. created our over the XX,XXX and in who become shareholders, we your today. overall, over aggressively investment expanded your and most in of to billion comprehensive a this the service through proud have winning our offerings right achievements. the our XX around work demonstrate your take next for you at And congratulations years. world, Robinson. C.H. the hard excited over pride I of thank marketplace. prepared as people, we That that, results processes employees our our right remain and every the And ever day turn operator, immense and answer on confident the the growth very the win to see technology that in continue as you to last so comments. concludes our chapter to I we the right questions. to to I'm can I with the have it in back the that the submitted will returned

Operator

Houghton, session. Mr. floor the is for the yours and question answer

Bob Houghton

Thank you. Donna.

taking would the to thank submit I for First, time many after questions analysts earnings like release investors and yesterday. the to our

Scott For a that our both with frame-up cyclical we over received turn years, in today's and then topics to we are then more have the over business performance. This will a earnings Q&A John, session, to or nature. questions secular morning, cyclical and secular I it calls Similar question Bob few the to transition and regarding response. questions will for previous begin

the announcement the Amazon term, first for space, Our to question from impact business Bob, term? competitor willing how regarding the this several to And comes to do no in a brokerage Company does your analysts, recent might longer by profit? how truck business short react the enter

Bob Biesterfeld

Bob. Thanks,

week, doing to guess network. we to but trade assumed that seen in start, from space I directly the that their some time, known again new publication good any last Amazon There quite haven't industry are be was they internal So have an morning stated everybody, for or new. this as optimize actually to Amazon as work they I announcement something anything actually

instances we in I public, certainly we to To the in out So been that a the do around look never disruption zero. would years. and really in I disruption has over competitors to this bare model our to competitive of in rapid we tenure play market. as this landscape question of another last If competitive XX several to and approach really with landscape. case have our as each willing Robinson, since who approach Robinson business for seen that past been no is really or here margins these have of have over drive our not the change instance been my going And what seen be step entrants, being on history, profit, at in at back the going a years creating several value it's the are new our disintermediate down always look

through each true is of constantly and XXXXs, these it of value our the our one we in advent for to values, of so The creation. the evolving core the arrival phases early stayed have managing the of But Internet. And business was which long-term price board cost with the brokerage. XXXXs, was and transparency market public. going rates upstart freight disintermediate to take to order load in in actively bring either pricing large In that sell and below or mid had we XPLs to shippers, order share go to

at tech have start by disintermediating we of improving And fueled have cost of we got and no recently, Robinson. these a first friction brokerages tech directly promising targeted Robinson relatively or efficiency. And margins be roll-up launched, equity. done high But consistent. capital of been our reducing on or to range seems this what long margins, really by have endless zero strategies private whole seen We near low cycle has numerous maintain what again as these have curve the fueled an source hype through is seen,

have of We share market. the our increased

We we to and have shareholders. increased our have diversified business return our

and that we marketplace or incredible have to ignoring actually we come the us We industry our the are catalyst got competitors the into not competitive have say ways this levels new are So this focus, competition for tremendous that that respect the it's evolving of think positive infusion doing a for entire and entering and of industry. business talent talent, of that been today. for has really

conceding industry. is this that and had are some success competitors other We our industries assurance success at of the in immediately of just point across really transferable these not have that

Bob Houghton

focused is Jason traditional being you a the and John John, more brokers characterize Seidl with Stanley, entrants? the incumbents space, among they Shanker tech question and Cowen both with similar you next from environment The Company, price Morgan asked brokers? on more new running with in are for Bob. Thanks, than if so, aggressive Are competitive Ravi into and question, how would

John Wiehoff

competitors. I when little Managed and look various in from comments are and overall backing by across of different standpoint, list services, on we Trans, get is different within to there what the our licensed build still have doing we a the will just in business, up business, the Bob's world services, So, our over fresh a our our somewhere largest of and diverse of you even Service at source North a lot completely and When we When European America an out around reminding business bit different is everybody of In get monitor landscape and various how there and competitive do a XX,XXX business, the American Surface and very truckload North set there. in that maybe it revenues, LTL you geographies, position competitors. our carriers our segments XXX,XXX competitors. down have the brokers within we

thousands a within So come and also In landscape. time. including for our relationships, the times variety highly this are for competitive ways into will, you when see last it's price-competitive. of focused a we several have decades, in landscape you of and that people if throughout relatively have buy core share, fair part is fragmented, we we analysts that decades. in mentioned more entrants new or a of have most thousands in There us been of on, that programs get very the being of including competitive of churn source periods leaving seen into space, to good a that bad, of and much amount shareholders, people entered market that that short Bob of revenue

brokerage broad about there their can Many to competitive. in fragmented gotten broader, into large more market try to ways their and marketplace a business try think who of brokerage capacity available lanes have you variety over this dense capacity by be of how If leveraging carriers to start that asset-based that join is year, the ways. you the direct the evolves, and

that in mode, who That involved start-up, relationship, shippers You last Bob more get start-ups a of some in optimization pure of to high try years, try spend we the to the some manage. digital a start-ups, tech I are especially start-ups other seeing say to around themes because the to see over tech the might all different benefits commented on things or available And leverage the more to we connectivity two the with shippers start-up areas leverage in and typically capabilities, compete. and in you the try or there their creating maybe price five are scale and are explosion world, forth. more focused back some four, faster of that with more the in would to that would desire experience mode. some digital and of sales with are scale some be also get information of with acknowledge, a the a of digital carriers of there

a investing remains somewhat it, in level a trying that. churning scale change to of those our competitive similar a step we and platforms do continue technology making being are and overall, take in terms terms fragmented, remains So, the focus to in digital high back it broad, of new it start-ups. models the we of it are us really really if overall, some those in But see competitive of serious and in monitor. to of that you landscape it large who of with capital start-up some of some a performance landscape to changes very that the industry from go the some But fragmented, of

Bob Houghton

brokerage KeyBanc on available Oppenheimer, additional in Schneeberger been now Fowler question have Bob, Jack the Thanks, the from ask market. with digital freight options for questions. of Todd Scott adoption and accelerated of with technology John. Atkins the market to with matching The next seems comes Stephens, similar

percentage you where a guys goal terms next metric this Robinson, customers? for solution few stand in do digital booked for C.H your your offering a What of the what and is digital over of platform years? For loads is through

Bob Biesterfeld

the seen burden. no more is starting versus to in from is greatest really broadly a as the win the marketplace. them doubt small technology us shift is be been a recently that for which I more technology for small are in we community, And have has the There adoption carrier think carriers accepted use that see of great the

carriers we Europe small as America for we via tech and mobile become creating are enabled in really offerings well And so, value more provide do of seeing toward carriers web, others that, those where and as the other we in the or as here business. North and parts world gravitate both

and agnostic been customers customer customers focus meeting has want Navisphere, proud are it on they digital about connectivity. to engage really Our really to comes also are we how engagement and but where when somewhat and with us platform we of

focus Our journey that on automating real is possible. as that ensuring frictionless customer it and is

technology you investment all space. this have As, in I in know, increased greatly think, we our

we $X tech years. billion We five and on have over would are the decade to billion spent four over spend tech last about that going $X expect next to we the on about

And pace for develop which are we in customers. accelerating our this so, digital we platform the

data end fully us million points year then, algorithms, really our every matching for load end. mentioned say at automated question important drive which from driving customers, new kind tune Today, the to about disruption are In the on that of that to are we this supply further our in that you John about can terms understand of to digital run tenders and era, digital system shipments in use automated XX% that imprints XXX end. XX% XX% fully of are that's front algorithms, our are the shipments direct through About scale where are in with could journey? we our to ways. of about of And chain our the so digital of

automated value swipe and freight meeting the and a smaller of for at our in through have for world that of end online a motion got customers' book some and inventory just come and customers that using experience, a shipment shippers. our how want for quote mentioned chain get shippers, pricing they our visibility lives that the real-time supply many digital of Navisphere rest, process, want our have buy, that Robinson and infrequent for our infrequent to we that to streams larger And end card in shippers automated for created those LTL fully really or fully are platforms, experience. in I have for today As largest and companies where truckload, unique to we credit

booking. we process digital carrier freight side, are to of digital continuing evolve and On advance the matching the in and

a seeing and of doing into tours multi-stop uptick coming transactionally booking from dedicated Navisphere, whether loads, there are it earnings. self loads We be booking carriers nice or the space and in

our of this all are booking. improvements seeing portfolio, across digital automated So in and we

to to invest with drive really but are happy are are today, continue forward. and going we we We where

Bob Houghton

Bob. Thanks,

to business more spot that next from in Bernstein. of question The brokerage volume in John are cyclical transition mix now will declines the the We the or seen is How topics nature. contract Dave Vernon shifting? for is Are in business? April

John Wiehoff

question we price the No Maybe spot activity April a are decade in laid will points back decline seen expanding volume kind is up for the volume and consistently we market. and how we volume you little of have business, changes truckload of in I data the where refer North shift that last overall month's growth what are activity down terms bit, to truckload the business have the have current and are across X%. cyclicality changes we That being activity. our a a market seeing seeing revenue and net where terms in out we of X, from. and shared net around coming we Slide of America in those with X%, shared The revenue being

and committed the our and half, year our through freight. a have last pricing the dynamics changes Over talked executed we of

that kind back pricing, of that mix. market during where the see much period a will of the demand of nine committed. the If of unprecedented look And run-up of you of more you component quarters now over to and that and becomes activity at last decline market bigger become time pricing, the the couple much go Slide spot steady

our metrics We a compliant come era. more guide guides in have now route then the those that that way in the along freight market and much declines will execute shared see route we spot

is similar growth to the Our business April really quarter. first our functioning truck and revenue net through fairly is

shedding are a We for revenue volume we and net growth. reoptimizing are some

of has Our change in to growth we think do the the some just drop-off is early being first bit quarter of choppy. with part April being in April little versus more a really and other services that in

it's little a activity. say So like always risky share we that bit to mid-month

high in Easter the spot softening, changes. comparisons around levels the market committed guide decline that a the execution well, things environment, high shared have and to as are price freight We and that seeing demand I difference think, make we we earlier but that and due is highlights overall the market can other route are a compliance

Bob Houghton

volumes pricing Stanley. this growth? from continuing is is strategy part Thanks, Ravi John. to over Morgan question of prioritize are long-term why decline, The Shanker the volume next to Bob, of

Bob Biesterfeld

Thanks, Bob.

per in loads, profitable the So mid short day basis volumes answer is the growth truckload at volume that, decline, single-digit. that negative of the least, in On quarter X% on was eliminating the consider volumes for some and right. - were a didn't you first business quarter up when

focus, around margin. our clear over I and think taking I about revenue from operating volume different and lot in time So areas been improving a growth, headcount of of key our growth share forms have through decoupling volume

may we our any short term. it, time, profitable softer-than-expected that so in key why result, I is think to we little XX-day or as which we component had a don't in business success other April, about and a market. a words had due services. the over not think and of there XX-day we growth a to period mentioned is periods bit well be comparison measure as are If But volume that Easter, John our to in XXXX, going key represent NAST's

would the that's average range in back over second look of on of years the really past year. volume expect historical the be number about that half growth and we we been has the volume to our So X%

trade And volume. for so, price to answer not long-term to strategy the directly, is question our

focused. volume and volume-oriented are We

Bob Houghton

Citi. the the net The Can structure? operating XXX questions. opportunity expense year see basis and in quarter. the for Oppenheimer you progresses? talk as Bob, do first Schneeberger operating further you Thanks, Bob. year opportunities expanded last next operating about margin And the to expansion optimize similar also asked comes of versus margins Scott of Ossenbeck from Wetherbee Chris of Brian question points JPMorgan,

Bob Biesterfeld

Sure.

were last the XX.X% in quarter sequentially margins this QX operating fourth third So and second, XX.X%, XX.X%, XX.X% net of of in to compared year year.

development, units, Divisional growth. on focus modest that's that revenues, margins. net segments you tell and Forwarding, And our an against services. initiatives, increases flat they we to talk The their against any to of going wins operating each Global as down we across enabled add that we talked extreme to revenue in productivity for in to Managed additional is again, NAST with be come offset core market investment the growing come of heads and implement headcount in additional our in associated going to our planned to headcount Services, have of growth through, one if So the engineering to technology expanding largest heads we business IT, continuing you that In that's Presidents expecting ahead share and of science. further our have technology our about year are they data and would are

efficiency our business going are as eliminate refine is non-value and customers; processes, core internally in and our areas: steps focused within we our our much investments three what of it's in So really our employees to drive workflow. technology the added And is it's redundancy in carriers; at investment our that technology workflow. core it's and greater

Bob Houghton

talk the and about ocean thinking is forwarding Thanks, the the Bob. trends Chris the for John Jack of first of What how asked quarter, Atkins performance a are from next of Please forwarding? The you about in you question see business markets also and air question. during in for did year? Stephens. global similar Wetherbee the balance the

John Wiehoff

April overall, Cargo. years on have to largest acquisition our to been in our really did And potential the global continue think and down know, more at the as on we invest chop six the And made year part see, with capabilities making seven then lot Robinson, did we subjective Global mentioned goes shippers will strong positive continuing when normalize hard of Forwarding earlier activity, prepared as acquisitions, as Forwarding comments, confidence Space see momentum our again the pipeline some gain or as big more mention in we We the since a and the network some So and to decisions. you world. picture of are we in around build Phoenix, doubled competitiveness really forward. Global around It's some quantify we because and all all I our and out first that our division tariff we pull with all that of very quarter in feel our around that and of ocean follow that did this our ago on.

our about C.H. of relevant that continue to share and our to great more as in feel Robinson start part things more So, little we volumes Forwarding our forward take a year, XXXX expectations a that going we bumpy for overall, network, offering, the but and network. in competitiveness and more the bit of grow Forwarding of are are activities, terms the of Global our doing market and importantly, some and the long-term Global the

Bob Houghton

bid Bernstein Thanks, the also asked John. The are and Fadi questions. that also Atkins. to on the season, current prior to bid heart now compared year we different Have average Dave cycles, contractual about of similar season of of noticed have next given anything you backdrop? this bid seen trend in freight Vernon BMO, you compared this market year from Chamoun John, Jack pricing question how XXXX? comes

John Wiehoff

year-to-year, the that's to back on nothing that too significant. shows and Referring down. our significant the that I up again the significant nine the I helpful chart a ramp in prepared most would ramp say, think is that deck in cyclicality Slide

that the If XX% last have year-over-year. we five kind go XX back there price of have that used unprecedented, increase really term hasn't last four been or that decline of then, quarters. And sort years, seen we the or you the over the XX

the questioning will I and what that in of there a prices certainly is where kind there market to processes of look because bottom is and fair if So and where that, anything the would say, different is bid of going like. amount are as concern

volatility, the and you period over decade are that it price so a short fairly have at when cost a of in have averaged and time, digitalization the a place increase times we to preventative probably X% of cost probably longer We to something number or in changes changes But that the ELDs that improvement a it of which is still put time around in in true these look maybe with ago, an a do that over increases rational. and remains has and year that. period seeing there some shared are X% pricing some range rule around

and of in gone the greater has are fragmented, out where process dialog similar going the to very of and increases headed over volumes declines again, come probably similar couple of remained processes of just So how and participation, of we for heightened fairly are years. high a very very around terms price volatility competitive, level of prices bids this last

Bob Houghton

for sell truckload and gross is percentage Young in a normalize Morningstar. fall a Matt rate catch rates and paid NAST profit question Thanks, margin year year-over-year from expect John. meaningful margins both recent to declines amount Bob to The begin increased with on to to sequential we basis. to up carriers? next Should as the the progresses perhaps

Bob Biesterfeld

deck So, in margin If I down. leads it the and change that price. gross the nine or expanded be have would the the it market average. cost at or price the we would And decreasing say for leads lagged will then, declines move contractual right, further, as look the that transactional in always to pull is it X% a The if pulled our time. In that cost that by what we would up go cost. up the take there seen price a back year price, leading typically and rate markets the contractual decrease in you indicators cost indicator down the either past And likely on see decade, spot about over decrease step QX market the that Slide and again in shows rate you in in market. in change cost the is that market

as think we be Slide realistic it I back that never would to average. think the I about we are are to markets in, line. market to back would we that It's get expect to nine, to is expect fall Given going going trend the that the somewhat linear, but that

that's tightly margin Slide the gross at that consistent revenue you the in has time, the revenue spread manage and We said still average per revenue that and be bound last high our the reprice, XXXX. on Looking XX, net XX, pretty have range, the more versus to can margin, been year to is bid first business, certainly tend we'd half side an of part which include as we us. that before, we months Slide really the appendix the going over dollars of to see to the relatively for seen course of that frankly over which we in such volume important the have over as are shows go come and to we net decade. they normal load expect is through why And season of back second of that a four

Bob Houghton

decelerated Citi. for Personnel expense growth in with Chris growth expense level next what for headcount lowest The you of this your category the or to Scott revenue Wetherbee Bob. for Thanks, question comes expectations net to is talk since Can about from and growth outlook relative volume? and the XXXX, XXXX. are

Scott Hagen

Sure.

volume be will improve based for NAST flat for likely be initiatives the is the year to year, on with be also expected that Global flat a Fresh work expect down done within margins. to Forwarding growth business. their to of the year-over-year productivity down Robinson operating headcount We with to the for basis, forecast down positive year. to

other The services increase likely other business and units, will shared IT, for the year.

be of year. overall or the determined variable and units to components minus enterprise. I to plus the be expect will compensation The performance the headcount for So, on entire would of overall, the flat business X%

Bob Houghton

acquisitions Bob, are more Todd to geographies you provide Robinson Keybanc. final specific outside as Thanks, with Fowler next Scott. Please to question service how The attractive? the comes or would update line C.H. haul? something consider think of e-Commerce about do what And on mile an in side from current the or environment? lines

Bob Biesterfeld

a And M&A. founder-led seven fit really starts it's mean fit, cultural approach that course are really services. over last that nicely been that beyond or the here are a we I of develop really our or So that the hopefully theme our existing businesses and six we are that current like profitable, healthy, years to that complement to foundational like

strength entire as Global We that continue for or going deals are Across the for characteristics. and we geographical us, really scale expand are space those for to the fill in to have space Forwarding in portfolio, a same services. we with look our looking

final mile want Valuations certainly are the In terms e-Commerce, deals high and and space. be are space. to area, question really around in short are of the mindful in long-term doing but looking. impact in exploring certainly extremely we that of active of We that we that

Bob Houghton

North Thanks, referencing asked measurement? is and Ossenbeck market Is Bob. this beyond? on truckload measured metric Brian this the JPMorgan in KeyBanc expand around please and market share Todd share about for Fowler by volume XXXX segment of with and another share. increasing growth primarily different comments outlook a with American or Bob,

Bob Biesterfeld

today the market being that those excites of I or more one of than we me number while X% is, of So, the or our Robinson we ocean a no truckload about in transpacific at think overall are of eastbound, are any LTL services, spaces. part and largest be whether what in

we tremendous or LTL, of really truckload, upside growth we modes existing ocean you share us focused are the through know, movers and needle bids, share in. space, services. regardless for that is and that to But are we across in our got and it growth taking each whether customers. organizationally us certainly and new within taking are and for be RFPs Volume So, important really growth cycle of as have the

to level this we that, that at. freight important a us under The really the metric of for other thing look about in is is at management digital era, internally talk macro concept a

Jordan So under Managed looks freight at to certainly Services specific the management business.

algorithms managers the the the enterprise, global at we that gives that collect the doing, look address advantage that it to And supply so that and the are again across also able the we our within we turn we an take really use one that data most can are solve gain to because We each value overall to us addressable account wallet chain. around of it think from help more that data we teams, advantage can that across as work issues. that of accumulate thinking they complex a and of supply their to customers or are about their our share account and micro-grain, At our chain and about market we customers.

level our emerging their working of opportunity all to and growth a at customer share and they customers that and actively are is cross services that share what the sell of So they into core their customers measuring with market wallet those serve. or measuring

Bob Houghton

The next a for this net How Thanks, question slower half? from of we Dave Bernstein. be be should is fiscal for revenue second about growth we Scott Bob. year, Vernon for should thinking bracing

Bob Biesterfeld

obviously, its, to and predict the future we do Well, difficult provide not guidance.

become year more in second us. of growth in the the challenging half across volume of second do we Our the the to half year believe overall comparisons key for of and all will growth our services be

Bob Houghton

of years Please Scott next compare from to conditions Schneeberger cycle? for The your question this this relative Scott. viewpoint freight is brokerage John Oppenheimer. with Thanks, other of current year's

John Wiehoff

balanced, about over things that, would unique of make seeing talked think about our forth overall cyclical is the model as swing strategies changes and we customers environment pricing - some the to last that ELD environment that, freight business have as Maybe and Maybe between and the other been a a a softening as that see the topics couple bears you seen points activity. different. sort while and more of customer kind secular continue maturity contributing reviews normal a years declining, capacity is are been brokerage that's year the that of to environment we of well may a the we levels Maybe normalized of is touch we of additions, to and some demand the positive the presence echo fairly do back have other I ago, the fact currently. marketplace. all receptivity freight we outlook there earlier is and mentioning, in implementations part more greater the or that thing of have of that the to most the of that from pricing probably never data on that, and few when and overall,

good has of as logistics as side addressable always that things for are of big outsourced of some offerings is we that some about bids ever. ever, competitive to popular doing remember it's opportunities Our threats teams to amounts and are ever our integrated are and seeing changes, When in, and in as the third-party positive growing. the solutions market as that, tremendous it as think as and participate and much you of the momentum the secular the

universe there the So, ever types out biggest the are changes, and we maybe of the of an of while the in some see to pricing that around call opportunities uniqueness’s marketplace. opportunities services that apply continue types and expanding providing of and is around that to regulatory we the are volatility, would they

Bob Houghton

place an question from on question. now you asked provide of year? for and and Bob point the over capacity for comments a JPMorgan. updated is Thanks, Scott that truck trends Could Brian similar view John. been impacts with Ossenbeck a The please has provide Schneeberger brokerage in drivers regulation ELD next

Bob Biesterfeld

Sure.

mostly mentioned and industry quarter about the in like well, network And seem incremental the quarter. that first which our during as we small it's X,XXX So, does carriers join is in increase it if space. in capacity had prepared coming carrier remarks, has about a we added new XX% the

implementation In ELDs terms impact the of of so of a year post kind ELDs. of or

I as their or adjusted have think bad I have expectations that that, were use for think problematic and lanes I the or devices, would actors of I by behavior shippers electronic well. their environment describe accepted drivers adjusted particular logging that the the the ELDs have mean,

when shippers equilibrium. of not back to logging the conversation it's And talk feels within general, of of any to it topic come really And to learned as work so, the carriers or in electronic kind though new we constraints They've to great market the a has an lengths. how devices. today

providing are ELDs as and differently real-time to well location again, opportunities data and services data aggregation and think as I associated with anything, think, location information about more if to communicating matching us real the with giving carriers. shippers, and services

we in the overall seen have impact general, business. So the positive to

Bob Houghton

U.S. Thanks, Forwarding question your Please tariff John for its on Scott on view China next Global from Robinson's influence the Scott. dynamic Schneeberger and recent C.H The share is of tariffs. business?

John Wiehoff

things, one an probably focus driving on is really are three tariffs specific elevated The compliance.

to those some things have working these potential the applied place. to and customers and tariffs that shipped So to be is very with are that in properly the tariffs busy acceleration would our has and applied before earlier, make compliance mentioned tariffs get and all to been the I properly product our apply. calculated right team sure

and impact well. longer-term supply third freight just redesigns. they the a an planning as and are what working the been long-term really or our we And chain volumes, of for to that will impact, will that's don't customers with. is on around this sourcing shipping So tariff on probably consultation stick patterns the is have there those leg business long-term and at been that forwarding patterns based We lot the believe impact point

and and a what most and think basis, their move like on planning holding those people what if there freight material to have exercises but may discussions permanent effect think could design our kind resolution things chain standpoint, breath future I are a like of certainly a might and supply on of look on going more for which to. tariffs about what where the look very scenario flows from waiting

three have We that wherever moves to-date. through are had I say, those tariffs probably and and Forwarding on that are there challenges, to main issues can and evolve that freight our working we to with make have impacts capabilities but customers business origins sure sourcing Global the that these international would our we

Bob Houghton

Majors for is Bascome an search? from provide Bob CFO question you your last question. our And Can update John. Chris Wetherbee asked Thanks, on similar with Susquehanna. a

Bob Biesterfeld

Sure.

space. on engaged we search a briefly in expected, that, have firm as So that

great in innings. the as Scott's describe team doing talent I things. interim. good we great going process the early feel would the I about in across And job finance extremely our have a are that today, they and entire our organization, strong leadership shared before. really think doing I

to a externally both and we unique evaluating of role candidates of are today, CFO Robinson. C.H that think next internally to the at each industries We multiple across talented would bring strengths really -- the slate diverse

we the and know, guys plans change. continue growth pace you of As to have got aggressive to we are going accelerate

I'm me that us for senior can team the leader right with the help partner that the of rest and most looking to to leadership do So effectively.

Bob Houghton

of our That replay Relations of Q&A call Eastern today's be available AM, website Investor today. portion section will chobinson.com the in Bob. XX:XX earnings concludes call. Time today's of Thanks, at at the A approximately

again you participating in Have conference If you day. first good have or email. for reached phone our quarter be additional questions, can call. by XXXX I Thank a

Operator

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

You at time day. and this wonderful your may have lines a disconnect

C.H. Robinson Worldwide (CHRW) 1 May 192019 Q1 Earnings call transcript