CHRW - Earnings call transcript Q2 2020 | C.H. Robinson Worldwide, Inc.

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Operator

Good morning ladies and gentlemen, and welcome to the C.H. Robinson Second Quarter 2020 Conference Call. At this time, all participants are in a listen-only mode.

Following today’s presentation, Chuck Ives will facilitate a review of previously submitted questions. [Operator Instructions] As a reminder, this conference is being recorded, Wednesday, July 29, 2020. to Investor conference Relations. like Ives, to now of Director would turn over the Chuck I

Chuck Ives

Thank Donna, you, and good morning everyone.

with at and can in section Chief results. Presentation call Chief be summary of Mike found the me that chrobinson.com. second Bob a our is of On quarter XXXX Biesterfeld, will Executive provide Officer; Relations Officer. accompany Mike the Financial our slides Investor our Zechmeister, website Bob and today our their remarks

with responses after in comments contain call that, with the from pre-submitted yesterday. We like could received their turn will Slide will you today’s I may to questions we’ve factors differ that management’s remarks cause our I’d expectations. X to follow lists forward-looking over the Bob. statements. today release our And earnings presentation to that actual to remind our results

Bob Biesterfeld

Chuck, Thank and everyone. morning, you, good

wake our have nation to I across CEOs support our of justice of Before take recent needed seen justice end address calling Immediately momentum the in and civil for in we death needs And and heart building have message calling we’ve values committed contribute social quarter and our this part Floyd’s employees at Robinson events to Minneapolis all make I racial around want work ensuring and our death, the are changes belonging condemning we a change. just this I our to of death. we the be hometown globe. a to to able program, and built are we social true single do. that for of jump it’s culture is Mr. people movement sent our importance in of and following we’re a more all following and that in initiative joined his into inequalities Recent inclusivity other to It’s to at work a and to with gain our the thrive. into At that but May. the his change, that and time DNA. senseless employees in underscored of and edge the to this where committed recognize Floyd results, of lasting to in seen that, order or Robinson, with we C.H. than the order ingrained truly the to know second work, we’re unrest racial perpetuate sustained and in do George killing all

in second now freight quarter, Turning industry. the the volatility unprecedented we our results. to saw In

the C.H. largest portfolio, to able diversified would experienced deliver our decade. tremendous we’ve our solid environment, across number net intra-quarter This own team the been the Despite Robinson we to members this have over changes business volatile were in of early decrease net our to purchased as Our declined, efforts followed of that deliver revenue few the reopened, of performance shipment their of these for a per cost substantially a through that expect our net due of on a to we per piece each carriers From as our per in that significant causing of shipment to over the past key the to fluctuations broadening and truckload market as these revenue increased in forward. is and was of the portfolio honor commitment soft a market due and increased volumes years freight of Robinson active standpoint, fell grow as we changes. increase volatile sharp shipment demand. revenue we’ll customers I growth story, The continued in demand move the a quarter the purchased transportation, by the businesses outpace world. continue our services around transportation cost

make to on continued gains progress initiatives and During strategic the market long-term our productivity we share improvement. around quarter,

declines in quarter the and industry a Freight as X.X% results market second in gains share XX% measured volume and Index. decline X% the NAST with Cass Our in of quarter, LTL, sixth volumes compared by truckload in included consecutive to a

our recent the from acquisition headcount between NAST of full-time basis-point Prime truckload XXXX indicated strong, Excluding Distribution as in be continue business. the favorable change metrics productivity in Services, equivalents spread change in the by our and to volume

transformation a in said metric has focus and investments past, and we As our key important this our been technology efforts. of the

drive include year. Our XX% few increases technology A quarter of examples of to to increase second a in automation. fully-automated bookings, compared initiatives also this in last continued truckload

XX%, up and were our ago, X over small offering the we XXXX. on continues transactions grow for Freightquote by digital to transactions late on in digital pace platform, Robinson a to traffic now product year. self-serve for we’re year compared the C.H. Our introduced that businesses billion to exceed And

relied supply second the airfreight revenue. was airfreight. larger ensure the equipment of year-over-year air in scale unusually chain goods in a charter growth Our moved were personal as at forefront helping increased critical high normal urgently and sizes, inexpensively net our an global to quarter rates increasingly on in advantages quickly as cargo as capacity, by Global Shippers resulted impacted XXX% with flights Robinson’s which This and The expertise possible. was environment our for Forwarding and data business reduced market world shipment and efficiently. and than get protective created

short-term to greatly for to of a structure match suspension business at cycles learned plans controls serve carriers We’ve were short-term, in and and network half executive benefits to on evaluate and agile, business work communicate organization through ability more global in furloughs to and in flex result our of a these in and most workforce new how our cost manage reductions, U.S. how short-term have put were our reductions. as of included ability virtual Company pandemic as the ways, our demonstrate differently, to cost place approximately discussed well temporary volumes deliver service customers are and change. quarter’s our and These reduce efficient our superior be as and to our and managed These become efforts of customers we cost sell technology to one to As we ensure our members, when the call, carriers. teams? the in harness to to our we while the down. elimination to we reduction work and our how about this continue furloughs also manner non-essential a continue as transformation, our how took retirement the a and officers of investment to collaborate Board reduction for our Canadian last while our Company business across permanent headcount costs time effectively, they temporary We’ll lot they inventory and employees. travel, As our operations more compensation steps the a needed we’ve to

the responsive generated flow operating of quarter. during second business model and million cash $XXX resilient Our

Our the balance we and sheet is second strong $X.X with quarter exited liquidity. billion in

are uncertainty economic second ahead, emerge I’ll well-positioned will financial difficult We the we the stronger performance. our call Zechmeister time. quarter this in weather to to now from and to the review months Mike turn

Mike Zechmeister

by $XXX position. to to morning, In good about begin solid liquidity approximately to adding comments liquidity Bob, million billion. the like Company’s I’d Bob’s $X.XX Thanks QX, color some and we increased our everyone. by

facility, Our XXXX. in billion October undrawn liquidity $X credit of is of which under is matures of and comprised committed funding our

receivable which December. million also matures and our $XXX of from have available We securitization, is undrawn accounts credit this

we in our leverage debt EBITDA X.XX And $XXX gross QX with Finally, times. finished million to cash. was

of Our volatility. during flow business deliver periods solid to significant model continues operating cash

costs. and to the X.X% compared Our Company primarily largely gross to This as lower benefited last second service second margins due compared from XX.X% quarter last truckload LTL to to the business net in net lower due due a primarily same our decreased per our decreased truckload truckload revenues anticipated net was in revenues quarter in last revenue higher Total falling year, load to lines. contractual revenue quarter QX quarter, year. year pricing carrier

quarter. As Bob revenue we mentioned, net in volatility significant second in experienced truckload

X% to Our periods in the April, day May revenues business year. and same net XX% then last were per QX in down XX% Company compared June, total down down in

QX May second in per increased the spending. This Company QX XXXX, quarters the relatively XXXX, reduction per we our day year, shipment net $XX last and of the across June efforts partially decrease and year. cost from and of short-term expenses April, QX periods million of a on non-essential year, X% last million the due reference, in primarily offset revenues in $XXX.X loss For total an personnel experienced SG&A NAST revenue the million, down $XXX.X to In by X% quarter. business. term in QX prior our company-owned first same was compared poor primarily to due XX.X% our elimination from X% to sale short expenses net the business and approximately generated down cost savings leaseback two high travel truckload in of totaled project data reductions in non-critical center. X.X% of variable Overall, were $XX.X compensation. million,

As and entertainment, project plans primarily we reductions the to U.S. savings, match from of personnel Canada. cost initiatives elimination generate communicated put spending, actions, we our and place of previously, to travel company retirement short-term in takeout in noncritical the and to suspensions

reductions income versus second communicated $XX As declined savings last approximately the compared down and to a XXXX, the primarily QX of XX% of we expenses. on margin last increasing to $XX by cost to call. revenue leaning net due was in are year dollars initiatives offset result million takeout operating by year, to XXX the depth, into and with Total operating quarter in QX approximately savings points SG&A greater estimate the basis of these short-term our and we compared partially personnel in million decline

year. totaled rate. modestly was in lower Second average expense due QX last $XX.X which quarter decreased and million to from in other QX last interest a interest from $X.X up QX million, million interest $XX.X year, $XX.X million, primarily expenses

gain Our a currency down $X expense the million, in revaluation, gain in was QX to compared million from of which $X.X year. $X.X last million QX included

rate last to quarter second effective in tax year. XX.X% XX.X%, Our was QX compared rate a

diluted $XXX.X rate was to range a delivery previously. the per XXXX XX% second $X.XX large quarter XX% we included to tax prior granted the year X Net now in from rate of in year. and a award XX% to benefit rate down to expect one-time QX tax from to last effective XX%, related effective earnings QX points CEO QX, We was approximately full our XXXX. to in that be that Our stock our income XX.X% down share the totaled deferred million percentage communicated of

the primarily to Turning Sequentially, increase increase now from was changes cash The million XXX% cash cash flow $XXX capital. operations favorable last an driven year. our million, of versus was in approximately $XXX by flow. QX QX in working also operations of generation quarter indicative on cash volatility with is second has this expectations Neither first low quarter flow quarter. year own our the from of exhibited going high and its forward. in generation cash

of to we if the more $XX.X $XXX $XX expenditures expect is of low which our look flow, of million million, year-to-date you our XXXX to expect expenditures We be that going past at quarters, to forward. would four $XX delivered QX totaled operating capital capital However, in on full-year million $XX the spending January. cash range capital we now million. bringing indicative communicated the million what we end

driven year. last prioritize continue We which pandemic. repurchase by approximately the risk-adjusted a from almost of posed technology by billion our represented the technology million QX March and an consisted We economy versus in committed shareholders XXXX. the a and highest The remained entirely the out abundance initiatives to $X was of of we’ve returned basis, returning XXXX dividends hold QX, investment in on QX to share uncertainties we given to caution, decrease to in program $XX.X the in decline placed our XX% on

Over to the our long-term, share we value. remain and quarterly dividend committed shareholder enhance to repurchase

of We opportunistic share program quarter repurchase the to expect fourth our in resume year. this

sheet balance some onto highlights. Now,

I we with in million QX mentioned, $XXX finished As cash.

accumulation repurchases. strong absence operating cash from share Our flow resulted of in the cash

we Over intend needed carry only operations. fund the long to to term, the cash

represents $X.X versus all variable of penalty. year, at QX that we billion, our $XXX our quarter-end debt debt, paid approximately pre-payable without million off which is last rate was as Our debt down balance

X.X% rate quarter, X.X% interest the was last QX in to weighted-average in year. QX Our compared

$XXX listening end long-term business in and continue savings, to force that model. seek million our for automation least deliver will related cost those we’re savings the business Of long-term of we into into savings and that, deliver expected to savings to our Thanks through the that actions We out annual morning. this referred XXXX, confident in we on Bob NAST earlier. process will the one-third in have redesign taken short-term to reductions to opportunities some With of XXXX. by of convert cost of primarily drive efficiency at

to the Bob turn I’ll business. the on some additional context over back to provide call Now,

Bob Biesterfeld

slide Thank per lines represent mile to the presentation, X customers you, the our change NAST blue per carriers, current in dark truckload rate cost On costs the Mike. over light our fuel of and and contract paid billed to percent our mile decade. excluding

growth the During retail, industry to net X.X%, and the instances the Costs vertical commitments of manufacturing, reopened mile declines early of But, to of last our We the declined declined spot demand billed most in this of on purchase our compared demand quarter directly continued Through quarter, agreements tell quickly it and in transportation of experienced by was automotive, market then of carriers volume freight we’ve mile with this quarter volume and despite fuel the our year-over-year cost the due for industries second seen to and and disruption, impacted in customers, and our the in how food key not July. of component businesses into paper per technology, we year, chemicals environment a of increased. verticals is all with such a have story. pricing COVID-XX. and volume as our as high averages commitments do the changes reasons in contract X%. and mentioned one our while to healthcare, quarter over retention and our increased Meeting energy. to XX% customers contractual offset honor price per cost and volatile as We where truckload sharply by the soft customer also is such were at that declined our carries XX% swings a higher large rate quarter of our in times truckload we pricing. combined the by of through as experienced demand, with percentage it and negative it margins, was on earlier, impacted we’ve ever customer brand perhaps exceeds But, whole the the I progressed beverage, combined resulted depending and current truckload truckload the paid base. cost quarter files

industry comments. pandemic, final extent supply providing First, few the decision of beginning our third, our our to half costs As and safety costs a up health and prices re-price three chain industry and the of carriers; that ensuring begin protecting expect in is driving environment the with the Rose declined, our expiring back the rates of the key pillars and of our contracts possible. balance the year. the prepared rates we guide current quarter, route throughout on greatest we to our for the gaps will that follow acceptance as Historically, guideposts began morning security customers also remarks rise. of team the trucking Since our as continuity this the COVID-XX adjust on wrap making: second, employees; to to for people I’ll economic focused

pillars believe way are We keep of our our to these the evaluate organization. decisions the health our right that to long-term on and continue focus to

maintain essential in have role within to Our us by investments in our and environment customers enabling market and And economy, carriers, technology goods critical safely home. in our remain uncertainty the we to remote a delivering committed employees the still our enabled without vital to is there chain to supply while the disruption broader freight our from global work services. work global while or and effectively

true and decisions. our health guide the that decisions Company, make we’ll measured As a the are of the our and of thoughtful employees, our in the to best long-term customers, pillars while values interest our to carriers continue our business company, remaining that and and

best balancing with Importantly, of by technology, continue creation. efforts in act and prudent we’ll driven investments to in and long-term short maximizing by also the long-term interest growth our reduction shareholders value continued cost

Donna, thank of that, do it deliver to we to to excellence world best-in-class I’ll to company. back providing And the answer while and to these support finally, stronger As and that of transformation our an unprecedented for continue That carriers, broader submitted and that And we’re the of as our uncertainty so around the of and effort all customers committed I of market to this C.H. to dedication the our employees what and times. from they the live the driving time communities them provide continuing with can emerge comments. in continues the to grow they I’m even we customers, and market all our service our work in. proud Robinson recover, freight questions. the to incredibly turn prepared we share economy concludes

Operator

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

Chuck Ives

you, Thank Donna.

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

will session, I response. frame then up turn Q&A over or and it today’s the Mike For question a Bob to for

question is analysts. Bob first Our several for from

about number business brokers to routing of your how sense about market of you so, margins is low in mean We have unsustainably market course a are that heard over are can business several in would like and in is July? point. the next brokerage over you this season walk that earnings at July what us truckload talk what break the feels and tight are truckload down? a seeing the quarters? how you course the through tipping for conditions the levels beginning are at of Can And, If your guides your it talking

Bob Biesterfeld

confidence, and our we try are into spending But, it’s in consumer of uncertainties things the other stimulus, the unemployment, carrying states, potential topic some in operationally months, the quarter. potentially seeing some address continued shutdowns business. the several that going July to for would extended stimulus in where the I an COVID-related given or next or of I’ll certainly around all hard trends phase important challenges. say, are second Yes, to tell

business Regarding or over XX a routing performance of weeks in guides, our have the we routing degradation Services so. guide Managed last seen sequential really

reminder, large the freight pretty routing recent number shippers in trend when week. how decline the of seen into about across a billion see under a proxy high, routing performing, close As around for that we’ve first in week. from the $X performing guides it’s to how to we X.X most rates, that to in tender in from business And a XX% recent decent XX% you about industry. at tender management. acceptance We that represents believe When look to most that translate are X.X the move guides depth we range are

So, that Services the our those in as on like does in lanes we’re in I NAST it things aggregate loads data as around that awarded past business. When Managed at coupled market. bit bids, in the negative look we’re with at some encapsulates of seeing preliminary the percentage from points, demand a of margins, an shippers weren’t we inflection feel of well point the that resulting

some That margin our moving support really when around the a load selectively reprice perspective, in at for end to to low though guide benefit compression opportunity revenue assets spot per last those we back From And recovery open headwinds and commitments a we we providers of our a margin to hardest volume that do acceptance priced how the hit business should choosing in fourth higher other to customers of translates on The which forward. consistent the contracts what first Based obviously on that year, potentially segments quarter quarter up quarter, in be pressure of where which to or that until their quarter. continue of to our the in more opportunities where and are forward. of offset that in seeing saw industry our we half our of in terms today, to those I’d were second is carry truckload may not in honoring results is is some to that the to is tender that overall range, performance. some those expect we and continue historical that third year. the In opportunity expire market routing it the margin deploy got volume us, net to see means we’ve networks. that the expect contracts

market been said where honoring some prepared outperformed basis. as on on of Additionally, relative in and I our a period remarks, intent the commitments managing volumes really this in we’ve have the

I these think, have events. our think we showing going deepening relationships us sets clients pricing with well into future business we’re our that further to that for long and which their our and term, I up both really relationship,

we’re to that maximize So, order to in our with continue long take our view term going to results. customers

Chuck Ives

there Fowler The and structural results? Todd Barclays, Brandon a could next question curtailed level net Bank permanent similar cost more personnel travel takeaways asked quarter Ken with Mike, is permanently, the quarter current question. results? learned Going improve be with expenses with KeyBanc, Stephens, revenue on be entertainment America more from can of Atkins current and Jack with and to at be were Hoexter permanently other Are based lower Oglenski that of implemented forward, from what margins? reductions

Mike Zechmeister

it guys, good like one. questions in sounds four Thanks,

Let On us travel our environment business. the pandemic-related areas would in two more them QX, entertainment, to me in parts. a our cost reductions, within and rethinking and work transition that a learnings few has say remote permanent, structural I tackle

First relates efforts. to productivity

gave in remote technology successfully implement environment. work process and definitely confidence Our enhancements us QX QX ability progress in standardization in to our a and

has enhanced Similarly, saw pandemic with productivity has work and technology outside looking ability light estate cases, shed on headcount. between our with from across and and technology we remote our had effectively and office the travel where travel. for change customers. gap very limited engagement real closely basis-point X,XXX at NAST, the to In we’re expenses. working leverage many You The to percent the volume in in favorable our results our entertainment change footprint, percent

term personnel net as part to to expenses a a without percent reasonable say of a workforce reductions of travel both around that reductions fully revenue. we’re outlook, The was is meaningful next certainly consideration. are to the While long-term remote longer ready not question under

to at work. I few would forces point Here, a

in revenue. First We’ve a results which about our lower certainly journey talked there, as a percent net productivity. expense personnel of is

a forces one, suppressed working However, expense an as we’ve couple variable bonuses to of the opposite personnel in also XXXX-XXXX. instead compensation enterprise equity of of related direction, as -- been in our has component the and

to would we Healthcare a to we component is personnel year-over-year. expectations headwind expect incentive with QX that incentive While expect in year. in in QX, QX. be a XXXX, expense as sizeable of XXX came compared in similar saw of results QX in a expense business also and along other total roughly expense, basis-point of benefit lower personnel last percent Healthcare QX versus QX better

was Let level a employee of normal as that revenue. to me when we the that elective get in that the expect I personnel, total would repeat more as subsides. healthcare and continue to healthcare QX saw percent back pandemic not procedures net a visits levels not

Chuck Ives

rise revenue questions. in about from Our Air How demand Scott for windfall, with we awhile? which asked with Wolfe with could operating freight Capital should Air Forwarding or see the Global Forwarding similar net sustainability Jack with BMO next onetime belly Forwarding Markets, more and think Credit Atkins while Bob should question driving this think this Chamoun we Fadi Research, capacity services, your a return, and is for passenger perhaps be sharp the about we margin? Is Group Stephens, Landry Suisse, Allison of

Bob Biesterfeld

from market. from the airfreight the revenue peak QX, quarter. seeing strong we for carry expect constrained constrained has experienced I charter are demand we’re remain is that does go subsided net space as Pricing been increase a question no and absent normal. capacity But, we into certainly So, to belly “normal” to largely seeing gate environment XXX% the that and good airfreight continued still our clients in the but a be in our that or optimize need, that our don’t the service meets in forward new third feel clients’ relative in air our a has to our the passenger in their in charters, mix and LTL basis. opportunities our in demand traditional We and to got can pretty their go or capacity that service forwarding to ocean operate about forward best supply expedited whether meaningful we’ve provide wave, ability interest [ph] way service or ensure services. we chain, really the increased on market a

operating but business. do In margins to have we terms the of that times and that a have believe forwarding that of said our we industry-leading work operating number in through business, margin in before, we ability

obviously this we be that XX% extremely quarter is margin long-term our we results a in said, is think saw kind in goal strong target. But, there. operating of You range to forwarding

Chuck Ives

Morgan, new carriers question Bob for add brokerage next asked The with Schneeberger continues Ossenbeck network. the Brian comes question. Robinson a with to the from JP does Oppenheimer similar capacity Scott curtailments to look at this dynamics different capacity or point any in in well been the above aggregate? individually seasonality, COVID-XX? is there considering of the meaningful year, when around the demand play Have How

Bob Biesterfeld

to with the large utilized to changes that quarter, however, On the new those signups year-over-year XX% we’ve saw changes Thanks, it X,XXX new made seen by carriers order lowest through the of added in the less we’ve and terms in total freight carriers. obviously in in absolute Part carrier a the Brian number carriers these of at pretty that which some is numbers our and Scott. the in have numbers, from of largest meaningful marketplace. It basis, one makes actually to year-over-year. it is capacity carrier does we seem we like than read our in to carriers both that XX% the -- drive well difficult we’re carriers the opportunity to made closer which call we being quarter several of seeing sequentially what quarter, active of a some that But, during we numbers advantage drive is If highest around We look network. and number of award or down we that performing space saw quarters. carrier in and the the carriers sequential program, we of what and the number XX past which drop as number of drop trucks. trend the small exit

the to total number So, that by the carriers in quarter. some has Robinson of used impact change likely active

Another variable to marketplace intersects quarter. related Program some though is capacity capacity of Protection the Paycheck second we’re maybe in the and how watching in the buoyed around that the

still some that’s how remains going so, out and think in I And uncertainty, months around the quarters. to coming play

Chuck Ives

from in market if demand Atkins for and see the a your question sharp the in and versus revenue the Asked cycle this the prior next on automation the plus we volumes, cycles? To The to past better rates see Stephens. differently to is way, five profits any today over Jack higher, technology spot turn we ultimately Bob will months, rise few a XXXX-XXXX? over prepared truckload years in next another organization market cycle with than investments here is grow net capitalize move how position the and Company to extent continue

Bob Biesterfeld

Jack. Thanks,

footprint time. of our pretty NAST We’re the place rapidly. XXXX-XXXX. changing NAST today changes significantly a in managing really market our through intersected stages transformation. today, was with internal in market would in point changed It dramatically while early really during us. were really that than inflection And around Structurally we since has were that we changing different call, that That ton what frankly I a was of

at that greater for more us oriented time. greater the have technology efficient work completely freight standpoint, task to and quoting our important local test to maximize that us scale That’s fully of better more investment, we gives effectively. able an historic matching That advantage to today their got in for that And operations we distributed automated connectivity and and and less a manner ways more that allow more introduced leads at centers larger our We’ve lot drive From more to a in scale time, manual revamped And with more to been load into a so and operating digital makes versus Our scaled to that us leverage than technology opportunity. also manage quality capability markets. pricing tools we’ve since going market can scale us teams and new that connected that our efficiency. sales in intersect functions territory, ability and spot largely things easier and easier technology, allow us and from digital to centralized effectively so for didn’t facilitate From were it much capitalize exist we’re those ability model they activities, to platform we’ve intervention a the of aligned another our standpoint, customers management standpoint, opportunities a we’re like overall force. engage team, and and which national now team results a us the we’ve model. that the that much NAST and do on for component model, were, penetration time. can a in us a distribution across carrier a than they effectively. We’ve resized us

us a progress real converge all transformation. do I things demonstrate position more our these in to think way and in So, effective be to

Chuck Ives

employees around growth to question Tom to Todd next expectations for Jack asked work Mike hours normalize? Fowler The Morgan, questions. color furloughed back expect do UBS and with in Longer Brian can headcount from for is outpace NAST? Stephens, with JP come you to Atkins provide term, Ossenbeck volume Wadewitz you growth with KeyBanc, and with What similar

Mike Zechmeister

Yes. Thanks the question. for

progress approximately reductions. in to our our converted Bob long-term leveraging furloughs given and of technology process workforce mentioned, and were as So, investments, improvement half

returning employees For to furlough, week. returned remote, albeit this those vast work, majority from the

headcount commitment NAST growth continue Given way. in in technology our expect we meaningful a ongoing growth to volume to investments, to outpace

our volume and for between customers, simplify, the carriers productivity is widening Our on focus and the that automate to employees. and percent continuing standardize headcount change by percent change processes in gap in

Chuck Ives

is what on question with make you initiative you you Bob, asked customers currently give value of operations Bruce some impactful can from are next most The similar technology us more to And the Jack proposition you How, stand Stephens relative your is the underway? where have with that an give update efficient? would question. distinguish Atkins Stifel. track a the for a or you progress sense making? from KPIs to Chan

Bob Biesterfeld

that our here. makes way no new them magic initiatives in capability of read roadmap, each several technology with sense Across our it some one comes and or So, being there’s try with legacy underway change together process. in a coupled initiative business way digital a a to but got delivered, we’ve bullet, in I’ll

people value. processes about tech. about come just and to It’s together our our tech So, and isn’t outcomes how more transformation drive and better really

carrier investments tech network our before, are creation said three I’ve innovation, and against As efficiency. pointed really value around customer key areas

ways connectivity, mitigate they looking before are want customers to visibility, and want that supply new with global they for complex supply deal to challenges they need Our can them. They their in manage innovative to chain analytics risks. predictive want identify chains help problems

today. to those delivering them We’re

in of their miles their drive freight Our a frictionless to deadhead look and improve ways get access continue environment, for networks, models their to yields. to efficiency in more out carriers improve

focused our to them. opportunities so, on are providing efforts those And

us same top-line that do at more And into winning on those able Our perspective to minimum drive employees our well. need is for to perspective a tech the typically to tools model. same. process selling, more on count. the ways while a the shipment drive business. are matters, KPI, more pricing or to that about or today to as be efficiency have how and think be case, providing task with shareholder So, our [Ph] return If return the simple to this business an with a to that’s effective And to fuel workflows, in looking work either their a numerator allowing that at is in the them denominator to the internal I the or growth, we’re in we’ll equation is less time math investments the focus or and headcount from

that And to these said investments those workflows. turn Across able half is rapidly companies tech. number large workflow in areas from connecting in cost platforms about our And of we order savings connectivity. with. keys short-term rate to. spans efficiency about X comments, the transactions this the where year. prepared of we’re in for one of of over our three customer, engage our exponentially bookings how they and As that with benefits the us tenders and automated [indiscernible] digital is platform to quarter acceptance, we’re far to load want transactions of that into truckload can impacts and systems having they the carrier customers’ expanding or are our real so TMSs extend native fully were run and exceed those this time updates BXB converging processing billion we Think that furloughs to and focus, we’re the of The to ERPs permanent scale number and up BXB from the run location gamut of

engines for of the Jack’s tremendous our timeframe, the price and delivered gain And year, we that today NAST Our that all gain. respond share to based to those assurance pricing over seconds the X million during in the To capacity speed about helps really opportunity human to question first today, quotes algorithmic customers at in efficiency half drive of do earlier that driving and XXXX, have with automated do model. and would manually to quotes. we’re share in and to our without interaction, which thought have able had win manage comparing rates

parcel that. truckload automatically to introduced Our parcel continue in we’ve gotten on small about able customers freight feel We platform. users and business by manner. that emerging and good book about or really to LTL We’ve average C.H. automated our Robinson migrate an now quote to solutions the

key digital to and operating nature. I to together across enterprise and between and are and the and ability productivity our and showing volume converging long network spread along those are employee and really headcount to is demonstrative coming innovation to market growth results. that and margins, gains the of continuing So, three see monitor with cycles, transactions with share industry-leading that through communicate, sustained forces those take core bookings transformation the term, drive gain In of the really continue KPIs one here in that that metrics. digital in And deliver mass automation, we’ll things

Chuck Ives

from question Hartford Robert with W. Mike Baird. Ben is for The next

to to not in resume Regarding XXXX, them resume any reason share of QX the immediately? decision repurchases

Mike Zechmeister

Ben. we’re couple Great with environment treating the current another for of question. an The caution abundance Thanks, months. is short answer of

we most As Despite more to uncertain in have the conditions. generate low times. the these that, ample are solid than we market still and flows cash ability highlighted, liquidity, leverage volatile

placing term. the a we’re this liquidity program QX. we on And strength and in near higher sheet value So, balance in expect

Chuck Ives

asked Sachs with Could next Alliger second the year-over-year question. pricing The provide Jordan from cadence are Young of with Morningstar, the Goldman similar question you contract July? far seeing in thus color a comes and what some Matt you quarter, in on

Bob Biesterfeld

environment largely markets the I quarter. second contract were surrounding disruptive, described because pricing moving quarter is the so in the throughout quickly

as ahead five-year contract QX the resubmissions, and were second the shippers our bids. in well slightly perspective, rate both, for both the our I’d resulted bid ever-changing difficult many of was number which trailing our awarded dynamics, freight rate say it bidding carriers we navigate think, loads which several quarter, was in so to I win those in results for as of average.

Chuck Ives

The To volatility City within Ben any next dynamics Schneeberger Oppenheimer segment? Wetherbee question for with the even truckload competitive amid Scott monthly Hartford from Bob you NAST W. weekly with margins, questions. is from in Robert realize gross did Chris or asked and your what Baird, extent during in core particularly QX similar change

Bob Biesterfeld

second industry in of other verticals, the versus spot of are market. and transportation some absence quarter the of the demand it’s real of of macro cost industry pressure transportation observations the rapid dynamics the pricing, identify [Technical within guide in environment competitive and them, rise environment overall the I’d to the Difficulty] in quarter, demand to nearly extreme routing impacts [Technical impossible to and Difficulty] market demand progressed North that related say, [Technical the related and improving fall the on cost we terms truckload record along of American purchase performance market the verticals so quarter dynamics Difficulty] as as purchase try were to describe the in with

Chuck Ives

inside Are XX in Capital would seeing you Markets. this Bob If we for BMO in Chamoun a than trends next productivity we in up headcount? more have is to have with is question the Fadi NAST? transition quarter performance months, better a [Technical from Labor a next volumes NAST are XX% improvement The to improved add and Difficulty] productivity need while. sustained seen

Bob Biesterfeld

there believe delivered that not head, into efficiency the answer opportunities mix. a to in I get a answering Difficulty] QX freight It think so be the in digital The go continued environment, operate gains is And productivity really more believe favorable of a digital full the to that that question, equal, of spread delivered productivity over change gains and as as type [Technical speak. product particular can adoption freight change of we’ve variables freight all is dependent between in volume of headcount lot to the with So, a XX% top be our is do positive lot that, Difficulty] sustained. reach do forward and that NAST. has time. to this on these I in but to really Specific moving [Technical I our a that drive got spread question, sustained volume mix

Chuck Ives

is truckload with Difficulty] how gains share do Morgan. in of JP the be year? Where the share you will taking and believe in Robinson [Technical expect LTL do back these sustainable and you half

Bob Biesterfeld

were gains Our market quarter. broad-based pretty the share within

that analysts Volume there. that if well. you compare meaningful see had market our Bank can the a that, volume and truckload you blended index, you use a gains against gain index to Index We’ve meaningful If see as Cass share some as really LTL changes you U.S. market proxy. share conversations the really with even And prefer

well. volumes at our the LTL a changes tonnage companies LTL pretty quarter see outperformance that reporting in the many as improved space, the look strong you LTL of comparative you If versus in throughout

for the that our commitments that continue make how then our driven share to by those supply we clients value believe I them. are and we our commitments and create really the chain So we market gains demonstrate in honoring when

I sets volume up a the of from half future. us and year think into the the favorably in that back really perspective

Chuck Ives

for Mike capital Jason Cowen asked look? Scott and allocation Oppenheimer does question similar What Company. and from market Schneeberger the how Seidl your question. The M&A next from are a priorities with is

Mike Zechmeister

basis, close business. share that growth and we’re and the on investments making the gains our Despite talked remain share about hold opportunistic on capital allocation fuel productivity the our seeing longer investments a priorities purchase our top program, we risk-adjusted priority efficiency capital of those QX you’re The market the evaluate core those in and results that NAST. allocation XQ the same. We remains in on term in until the for

to time. committed also our We’re quarterly dividend growing over it and

right corporate that, maintain some certainly the [Technical outlook continue the discipline value financing of M&A needed, respect is front, that level Difficulty] to environment to our the the extent the current create that of rate creation pipeline. borrowing under favorable the from returns. pipeline we With we but is to continue a circumstance tax On a standpoint with hesitation. opportunities market on The around M&A and to will maintain strong our

Chuck Ives

your is Jason The EBIT net is margins revenue what NAST long-term Cowen and term on from long with Seidl Company. your next question NAST and margins? what long-term Bob, -- is view

Bob Biesterfeld

pricing in the take the regard But, the but as most QX are So, over to in look year, some if and longer at margins down seen term, expect the the and some I those driven to short over industry, over when We’ve through [Technical in XX.X%, of year about we period, were XXXX XX% from time, down that to trade profitability. impact we of what respectively. roughly recent net and at from think they average Difficulty] NAST XX.X% last some the costs I really has attempting I materially, come this that revenue believe to [Technical anomalies really that margins if QX little by most it’s XXXX by of recent been XXXX. term share year from a don’t companies no and with five that Difficulty] half experienced

a that NAST XX%. north of in that is year terms business five period, of believe long same and margins, I the of which margin half term, achieve In can operating do more trailing operating the reflective

puts takes is Over quarter-to-quarter business. clearly there’s on income. for going XX% the So, that some a be to and target

Chuck Ives

point, would is if question in down at which your efficiencies, revenue profitability revenue the trend two as past revenue with XXXX Atkins Jack roughly your look think was in next some together the from margins $XX doubling, investments Difficulty] I aimed from Difficulty] are those Putting time. Steven’s. which you things is billion what Bob, prevent technology your double forward, thing? base. in [Technical [Technical The same at doing driving revenue with over is

Bob Biesterfeld

the today story, call based on and of management, a we’ve -- So, cost future parts the the the growth balance Robinson’s containment, cost growth talked cost of but important getting is top-line super structure. on right lot about

that the be And to no there’s so, think shouldn’t this reason case.

target a is that compelling got that total realistic think market, one huge $XX I compelling services and across work with. of for we us. and for our the this that becoming we’ve proposition And our is addressable more customers billion value suite global

coming the we’re penetration, trade the the maybe Transpacific of market about we’ve market and Eastbound think leading while the there’s organically. fit M&A as so some are around much going few the And structure U.S. how companies. talking years X% NVOCC to of in in somewhere lanes, You opportunities in Europe. Mike look logical or going room to grow I to at we’re think And we was got the that about X% just of be other in a our our also

are efficiency hoping So, it’s and for the management cost for somewhat that down team time. Difficulty] efforts characterize still management our worst best, as going come and [Technical a and over thesis to that enterprise margins is preparing so, the around the

And it growth top-line reality they’ve is bound a go last we think time. So, down margins up? I as I likely that the the with take the and over But, or achieving over structure supporting time. the our of to appropriate if past what a at five can to of Asking course here, next We’re would be question shareholders? we went like, our and lean to can scenarios start to question, for I’ve over decade. what of that our long cost now here? if lot $XX saying, cost pretty structure really I that framing returns so billion look need thought to really years to tightly range steps still before, while margins went aspirations and continue generate the target, our that the that What what stayed margins looking can said, how said

Chuck Ives

quarterly quarter spend excluding next this on Mike. $XXX million What is rate million the the non The expected changed is to JP question per with was during an it SG&A, from $XXX has quarter? for the adjustment, travel average large Morgan from Brian essential on XXXX? Ossenbeck of How spending

Mike Zechmeister

As travel I reduced expect and our $XX.X made as And how short the spending in QX we of in this Since the some reductions million, earlier, closer to has how we’ve QX mentioned to and a and QX. SG&A and palatable. excluding our the savings differently, learned center. would work total And data we’ve ways. sell expenses to serve were loss to new quarter through $XXX in managed nature, in lot million million QX spending in customers term and our we’ve be the $XXX per pandemic to non-critical more project carriers

Chuck Ives

next revenue Alliger The Ravi net Shankar Sachs Is was the Mike. a similar that increases Goldman is big of M&A? Morgan question the driver year-over-year Jordan for with NAST Global other Stanley with in asked in from Forwarding? and What question.

Mike Zechmeister

as Services Distribution to Yes. The Prime began Thanks acquisition. in increase net recall, results giving for you driven those. the contributing And NAST Prime opportunity our revenue us by the clarify is other in to March. XXX%

specializes The the oversized the in XX.X% projects The driven in other our other. in rolled heavy some via QX, flatbed by or So, is in within the ocean. up for into business comes LTL. of this the revenue Prime primarily on clarity, QX, rolled Forwarding moving or we month; that net increase component component of one entire up freight saw was which project logistics air is benefit large Global for And in we had is warehousing benefit that under business freight the quarter.

Chuck Ives

Landry heightened Brian Have last during consider internal of the appreciable over asked markets? noticed acquiring tech financial the the next few Would a at further brokers a freight development? you question. with is for do you behavior broker from of investments in or the digital Suisse to period Ossenbeck and The Bob. prefer for digital quarters Credit you question volatility Allison an difference a with Robinson, JP Morgan similar

Bob Biesterfeld

it that in entrants become overall as really So, new and shouldn’t an we the expect anecdotally, of if that lower stories dislocation. less sure comfortable I’m highest spot we’ve on construed the really period quarter, best of And a that’s One some is to share time. a than in strategy. I’m margins any be shippers that in see frankly, and some truckload would I not pricing, And strategy situational. the in our aggressive normally market the competitors, were commenting from but our it’s though, of use market per load heard have change pretty of in would of not on observation the basis

really there. a competitive So, it’s still truckload clearly marketplace out

return way footprint, basis. to In we’re at look on do, shareholders. for landscape or term capabilities, Based [indiscernible] Characterizing the and expect best culture it that risk-adjusted and need deal sustainable. terms we we with to capital us is the said, drive at actually our long Mike brokers. And know shareholder going to making at any [Technical Robinson term. of we look M&A, of M&A we of adding [Technical our really company to new be us, technology our across the the either of for like And be important M&A, to to a digital value the -- today, look culture looking improvements EPS is long expanding is to to accretive Difficulty] in that to the we deploy through needs Difficulty] global what our fit of we the consider always

Chuck Ives

segment Mike. Citi Which is or Difficulty] with question biggest in, [Technical loss for the next from The other? Global for was Chris accounted NAST, Wetherbee Forwarding

Mike Zechmeister

$XX.X included our was The our leaseback Other the and sale in Chris. Corporate million on of segment. data center Thanks, loss All

Chuck Ives

market? asked over from The next ahead in Morgan several resetting a held rationalized Bruce carriers Stifel Brian well of with Ocean passing Robinson months fairly Ossenbeck Can as or through JP Chan question continue last with Bob, similar capacity. rates question. have the for the rates is

Bob Biesterfeld

Brian done to overall managing and a available effective that blank demand job seems the sailings in we’ve capacity of their It through initiatives. other marketplace really aligning the

within allocations the current pricing say growth strong We able side. our dynamics and we’re past need our margins existing model and given appropriate the really product stay cycles change them while container procurement to [Technical core that’s blended procure As allows levels the our forward, is from business, pipeline don’t that steamship our in I winning lanes capacity strategy bound, to our in pretty business and really ocean you’ve margins service partners continue for and our still on new seen to in seeing tightly customers Forwarding to appropriate the ocean with today that’s we’re see in the for line Difficulty]. for our marketplace. our share we’re any ocean that meaningful our moving will really and take in we the

Chuck Ives

Ossenbeck The is JP capacity? additional next increasingly with shippers from Have bids Morgan to Bob. many secure question Brian released for

Bob Biesterfeld

Yes.

the the We have biddings rounds exercises of of past over with procurement few shifts months. some

by at guides. the new It’s mitigate shifting I marketplaces in think, order ways in unplanned tools chain. Difficulty] of help technology the of we’ve their to working and some [Technical to the time, some delivered, and I’d ways shippers cases, in a driven some data that’s good new way rapidly chains. that of identify natural the it with attribute deal risks supply for deterioration shippers supply routing leveraging science to to this during these Robinson, customer unprecedented changes within At new to to collaborate we’re

plans with volatility at customers flexibility. developing for proactively a We’re level and the adaptability our some anticipated granular and really for continued the quarters, upcoming need

Chuck Ives

question represent the it made similar and quarter, entrance new and a the of opportunity question. the within with from a Difficulty] with Stifel final asked does Difficulty]. Morgan. JP during is is over Our difference? noticeable What Noticeably, for Chan next a Bob Bruce Brian [Technical growth Ossenbeck have potential [Technical year, competitors

Bob Biesterfeld

the and Difficulty] transportation excited our years right those quarter and surface particularly strong. European in [Technical about Difficulty] quietly, for business [Technical now, second was

While roughly competitors here while European to like in we the XPLs in new do terms proliferation marketplace we impact the of have seen size U.S. marketplace, of in equal really that any trucking, U.S. of the haven’t that of doesn’t the

been past Difficulty] of truckload to surge for asset-free large [Technical core model of shippers. Strategically, so pretty provider more services of the And being our of to traction scale. over we’ve contractual years, in a unique role really is terms shifting and in European it’s few our a focus capacity. more Europe, backup gaining

to rather intercompany side implementation. next. levels are number lot this expect team, -- that or Our we local fuel our year team, tenders business line-haul EST And business between capitalize And improved a intra-country we call key looking our of of to that the Difficulty] European models, capturing mix at the in actively and this [Technical the trucking drive between nice units into There’s high NAST, so on in and in NAST we’ve the growth a able record technology business a the through needs at EST a of of and to them, continue the order blend and between and Navisphere differences in both on are is Transportation development returns to Surface deployment bottom-line our of continents now much in Europe between terms got as platform. [Technical back like made productivity that team, business to customers. are investments and level Difficulty] the pretty collaboration

Chuck Ives

section the replay concludes of chrobinson.com A Difficulty] call. today. Relations at Investor today’s Q&A at our approximately That [Technical earnings website of Difficulty] [Technical portion

email. or conference XXXX second you day. be a by Have [Technical have If reached our good questions, Difficulty] in call. quarter additional can phone I

Chuck Ives	Director, IR
Bob Biesterfeld	CEO
Mike Zechmeister	CFO
Todd Fowler	KeyBanc
Jack Atkins	Stephens
Brandon Oglenski	Barclays
Ken Hoexter	Bank of America
Scott Group	Wolfe Research
Allison Landry	Credit Suisse
Fadi Chamoun	BMO Capital Markets
Brian Ossenbeck	JP Morgan
Scott Schneeberger	Oppenheimer
Tom Wadewitz	UBS
Bruce Chan	Stifel
Ben Hartford	Robert W. Baird
Matt Young	Morningstar
Jordan Alliger	Goldman Sachs
Chris Wetherbee	Citi
Jason Seidl	Cowen and Company
Ravi Shankar	Morgan Stanley

C.H. Robinson Worldwide (CHRW) 29 Jul 202020 Q2 Earnings call transcript