CHRW - Earnings call 4 2023 | C.H. Robinson Worldwide, Inc.

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Operator

Good afternoon, ladies and gentlemen, and welcome to the C.H. Robinson Fourth Quarter 2023 Conference Call. [Operator Instructions] As a reminder, this conference is being recorded, Wednesday, January 31, 2024. I would now like to turn the conference over to Chuck Ives, Director of Investor Relations.

Charles Ives

Thank you, Donna, and good afternoon, everyone.

Financial me Officer; Dave Operating Arun Mike our with and our Officer; call Zechmeister, Executive Chief Rajan, Chief the today Bozeman, is President and On Officer. our Chief a Dave and and expense for guidance of fourth quarter our summary XXXX. Mike results our provide will company. will update the management, revenue the initiatives diagnosis and will share on Arun from to and his customer of on the provide increase improve experience, focus an findings initial carrier operating our improve leverage and Dave From the there, open questions. we up for will call

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

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

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

turn call that, I'll the with over to And Dave.

David Bozeman

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

address demand quarter results we of battle our continue meet Our through including our did charting environment. initiatives, made important But pricing expectations, we me a first. forward. as results fourth progress let not on number poor and But to a path our

volumes fact, follow in On our that could truck occurred. third And quarter what NAST QX we earnings normal that is seasonal call, the indicated pattern. in

is X.X%. index in Cass shipment years the sequential over past average decline XX Specifically, the QX the freight

X.X%. and XXXX, shipment the truckload less Excluding LTL our and shipments the X.X%. index average declined the In pandemic-impacted decline XXXX, XXXX sequentially, at was the index of combined than declined and X.X% sequential of QX years QX

well, increased fourth our a are they down they but were we year-over-year sequentially In a quarter. on shipments basis, as ocean as typically Forwarding, Global in

sequential decline. decline a in declines this total, $X.XX EPS versus For QX, and in to our the equated in volume AGP sequential sequential the QX X% drove enterprise our of

and reduction we expenses provided on were Below personnel towards the high Sequentially, range. expenses QX due profit, call, expenses guidance compensation that were guidance to personnel in down the were but within our gross increased to on SG&A end our QX, accruals earnings the personnel above incentive our expenses our of didn't although QX ranges that SG&A our slightly of expect QX was earnings we of in the as call. repeat guidance. midpoint QX explained sequentially

$X.XX The the in increase decrease total, expenses, to combination In EPS sequential drove expected, operating changes AGP income. in operating equated sequential which of decline. X.X% all some sequential expenses of these the operating in our were of and

sequential items income, operating noncash remaining there as our were namely, income on a XXXX in as of negatively these more tax higher rate. of our on on losses drove impacted couple decline that operating a $X.XX EPS, in provide ultimately expenses. the Mike share and well will results details Below the currency guidance call, adjusted our foreign financial significant and Later revaluation

sequentially declined versus QX QX. addresses that So results why our

Surface provide on Global I'll North our details businesses. Now Forwarding QX additional American Transportation some in results our and

competitive elongated to In result and excess year-over-year sequential demand a X.X% market. a volume basis. our our NAST with on in environment capacity, continued The declined business, carrier truckload X.X% QX an weak trough, approximately in market very combined

more the has the truckload spot the the X seen higher. half X:X. quarter around in ratio weeks second purchased in van moved as dry we more seasonal With overall the load in With truckload in in this seasonally was And volume October the lowest was of the sequential a load-to-truck the in environment and the whole. industry to of a past the market expected, per the in in improvement tension. capture quarter could market QX, AGP QX, transportation as due for to cost Profit led as years. exception per we where December at our profit of holiday play targeted and load This declined November

mix moving we our For in in business, transactional December. past of XX% contractual mix XXXX XX-XX quarter, to November volume had since XXXX cost of we the an through volume XX% linehaul per have that over sequential continued of QX approximate The seasonally compared truckload seen higher and the quarters. X mile before a our in declines truckload

billed basis, a in average Due with in of truckload the XX.X% this linehaul higher surcharges, AGP to in customers, resulted cost, XX.X% a time With year-over-year excluding our coming our or surcharges. per XX.X% decrease year-over-year to paid off to decline cost on a price declined to a than price cost, changes associated follow load. average fuel rate spot mile truckload fuel excluding the our these a usual resetting year-over-year approximately base basis. we pricing of On carriers, lag market per contract decline QX saw linehaul the

into our use market with on Arun surgical bit, profitable focus cost intend management in portfolio. XXXX, to a revenue a and but and advanced our will in growth. substantially contract navigate we more and future, conditions focus disciplined revenue in contractual tools as better changing and will approach more pricing we Moving a management share increase the our align little to we on this objectives on

in that the basis business, temporarily driven market This and on lower soft LTL resulted the basis, LTL QX LTL market. shipments the in AGP by X.X% declined increased X.X% per the prices. our were AGP down primarily per cost exited have primarily sequential in fuel X.X% year-over-year a assets On increase a sequential X% the order QX, order. driven capacity conditions and and on purchased price of in In and sequentially. transportation by market basis, a a year-over-year

by per X% was increase XX.X% In shipments. offset XX.X% business, be of ample that declined the a driven our by our Global in AGP to demand a continue year-over-year, and AGP QX, in Forwarding capacity. by forwarding partially imbalance soft impacted results decrease In ocean by shipment

pre-pandemic and the technology that customers leveraging we talent, Compared differentiated share the service grown of of providing to new to we levels, customer and and serve. lanes ocean investments and verticals have trade leading in in by market solutions diversification by addition

In water and vessel Panama capacity. is which of extended ocean times levels in conflict the wake a transit chains Sea putting the rerouting, and Red global low facing the the interruptions ongoing on supply Canal, strain in global are transit causing and

While lanes impact the adjust trade on routes extending lane to demand. other been the shipping as most Asia-to-Europe affected, is carriers based has

North trade QX As a result, in sharply lanes, Asia and America. to increased rates several ocean Europe on including Asia have to

line the be resolved, disruption Sea it without capacity spot will New strain and continue on expected clear elevated time of While are when through any continues Year. least Chinese rates Red at to the the the

situation logistics pricing them customers resilience enter the a evolving and in we navigate strategize the expertise will At to to highly in ensure supply global XXXX. provider point, flexibility As with scale vessel our plans, loosen and new as help and market their the expect implement that with contingency ocean engaged and we're to capacity some chain. continues

first the in similar of any to not volume the quarter, quarter characterized ahead, volumes. decrease the a is in ground sequential upturn Looking freight do a future. that, typically by immediate transportation global indications In see fourth we

past sequential was average in the XX X.X%. years decline freight over the fact, In the QX index Cass shipment

and value-added seasonal, can customer remain on delivering market and As time cyclical our processes geopolitical that factors, we enable to carrier-facing what freight by to allocate management. by service carriers, providing solutioning tools fluctuates to we focused building, our customers manual the streamlining due removing and relationship exception waste control and their and our global superior touches, and to employees

XX% progress as on our year-over-year XX% our areas touches. improvement waste in shipments month. also fruit that day in we've made of person indicator Global per Forwarding per QX in Our other removing a and QX target manual in per the shipments stated achieved is efforts their key person and an of improvement These NAST business, are XX% per bearing exceeded

one to XXXX. and cost, enterprise-wide Our momentum improvements address optimize is our we to productivity into on plan of continued our part carry expect our focus structural and productivity

and the to good which be believe the of market. the by eventual the ahead puts deliver in to with rebound were position continuous a continues in improvement us commitment customers Promoter Net our freight company, XXXX quality that customers we highest for Our record Scores in validated to on

needs can by to rely who as Our their and experience. strength of cycles that customers their meet logistics breadth continue serve work complex to a to want providing reliability and provide their increasingly solutions, They and to enabled they financial of expertise on a extension can team. they innovative people and by also an technology as optimize a transportation invest the partner value in needs. want They we the customer that quality, has stability who the partner through ability

an C.H. scale unmatched all of Robinson value-added retail cross-border needs, people, With with freight, that their solutions partner. meet and including technology deliver to consolidation. customer capacity and combination experience breadth for a and is logistics trailer a drop of capabilities to

we to rebound, structure and growth ready market that cost I'm eventual with count volume we'll ensuring head be the from As on customer drives operating durable focused improve cost to and continue leverage. growth experience the our that freight serve, for a decouples

I of to work improved These an further changes made have process work on so leadership concurrent focused in to customer eliminate growth focus that our an we're team through order handful for areas, experience the will how business. focused in position are leverage that and a core In deliver bottlenecks ourselves productivity of example highest streams drive the optimization. we streams

our profitable faster, improving more delivering more Our and experience solving problems and eliminating customers from in that and growth. make inefficiencies service flexible will commitment customer company leverage to customers, continuously our a for carriers us of and operating is creating better our the agile and processes

to strengthen leverage. over and provide our management Arun customer operating I'll to and more our revenue experience efficiency turn to efforts our on and practices it and improve our carrier now details

Arun Rajan

Thanks, everyone. Dave, and good afternoon,

are at are reducing eliminate to experience. entry. improved customer and response work concurrent streams manual As on significant areas, an process productivity execute a to higher our optimization Two productivity time the on touches and map addressing the bottlenecks that of continue to streams Dave both to are road said, and driving opportunities handful deliver and market order aimed customer of faster customers, quoting work we and speed to we In engagement.

in their by customers fills from our gen and order process generative we're customer's and In work their past vendors addition and In heavily Excel to customer-specific into prompts entry entered on our system. This teams PDFs stream, scenarios the to to unstructured on and utilizing e-mails, learnings, we're frontline receive orders deliver who know translate files AI leaning our solution customer-specific structured on requirements business. and improvements. more based we that AI history past

scientists data to the frontline models models customer teams large puts power than AI for solely of unique language train our Gen of hands rather on requirements. the relying into

While an method And means, order in customers e-mail is via their to API or even are still receive choose structured structured this our other how an us. interaction allows an they large via to customer new have variability order preference when means is transmitted. electronic though order to electronic to as we receive there orders

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

facility across is the also might area peak appointment transit most entire XXX,XXX to levels, amount charge-backs from money optimal This AI time or them freight uses we've such late. too we've data for of by lanes, technology windows our shippers dwell capabilities the our to early avoiding time, shipments too on or advancement introduced in achieve where arriving Another determine time considerable automate shipping where saves touchless saves as to a face and enables service technology to based millions advanced appointments, This and the data they them higher carriers. due of fines time convenient process.

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

per earlier, As in surpassed person with shipments NAST improvement XX% Dave our achieved XX% a we goal per XXXX of year-over-year QX. day, mentioned improvement in

Forwarding, XXXX As the with additional of to improved our and XX% deliver an cost supports Global we benefits process NAST compounded optimization plan of experience, XX% we and customer processes. structure and improvements in that deliver people productivity further technology in

the science capabilities us our course As to of technology revenue pricing Dave better conditions market. is a also and dynamic this the focus investment in with mentioned, difficult we've now navigate developed. market management With key tools in continued as and management for to XXXX, contract over a freight we respond position we're

will and these tools, underpin we and can management surgical we carrier how In function and and in revenue discussions individual our These in discipline with more customer and XXXX, based rigor disciplined propositions. of through together which how pricing increase customer relationships, and profitable value growth capabilities. be we the application strategy implement approach tools our our scale, we on a data customer

over I'll that, With review to results. fourth of the turn for quarter call Mike our a

Michael Zechmeister

Arun, The Thanks, in XX% compared basis, quarter per XX% AGP, in billion November, XX% and a total NAST was to which soft of $X.X decline afternoon, Forwarding. down decline of our of year-over-year, and resulted $XXX.X XX% business down by outlined a a fourth company gross million, driven day December. AGP adjusted by good profit, QX XXXX, monthly down everyone. Global market down freight in XX% revenues in Dave and October, or in was and total in On XX%

expenses. expenses our personnel to peso completing including Turning of operations prior divestiture Argentina. were Forwarding $X.X the the Global QX adjustment, in million primarily by of restructuring to driven favorable devaluation Argentine a significant charge million, the $XXX.X

down Excluding lower and cost expenses XX.X% our our compensation. these efforts variable of primarily to were due QX reversals, personnel million $XXX.X optimization year-over-year,

XX.X% head Ending XX.X% Our Other Forwarding was count down count year-over-year, down to NAST, head was and Corporate double-digit decreases QX year-over-year in and average All our XX,XXX. including Global segments.

our in in was the guidance. included our mentioned, Dave expenses As personnel increase sequential QX

guidance were in to end objective expenses certain bonus they achievement due targets, at within results initiatives. came delivering for our range, of personnel example, higher reduction QX the Although cost the on

of Argentina. million operations expenses the also driven SG&A. charges reversal deflation Moving to prior to divestiture Forwarding QX Global in were the by million, our $X.X of $XXX.X a including completing restructuring peso

to primarily worker a Excluding due the reversal, million, of were expenses $XXX.X in reductions year-over-year, decline and were SG&A sequentially. contingent X.X% expenses, X.X% down

annualized April, by from cost from we when million QX compared earnings QX run net call to the is XXXX was to $XXX as savings in was rate cost savings of recall originally the our defined you of $XXX XXXX, of As which commitment million, made. annualized commitment which raised the our QX

long-term we savings With the cost freight of leverage the in structural charges, progress Consistent expected to million improve on $XXX initiatives, and margins our help strategy, as a XXXX return. we changes. will for cost restructuring our with operating market productivity year, with full these delivered excluding savings savings majority these demand the be our and our balanced believe more

guidance. Turning expense to annual XXXX our operating

volume our related to personnel the include decouple billion growth. $X.X be improvements our is and The to X growth expect the expenses $X.X improvement incentive team other. XXXX are across compensation continues count We as midpoint, the productivity count in to performance billion, of each of offset will personnel lower financial that drivers excluding restoration target At head by business to charges. continued total XXXX expected and expense to $X.XXX offset to head the in up X.X% restructuring The expected billion. compared items be this

expected XXXX excluding $XX the are to range SG&A $XXX of depreciation $XXX amortization the includes be XXXX. This million million. that to charges X.X% $XXX million expected in million, the in expenses at XXXX restructuring down and midpoint, expense is to to be

offset to we reduction SG&A our inflation, most subject are of efforts the continued cost expect impact. to Although expenses inflationary

Shifting operating to below income. expenses

$XX.X of debt of by million, or year-over-year. interest XXXX. versus was compared to $XX.X down Our which $XXX $X.X QX was which and million XX.X% of other or million interest expense XXXX, reduction QX totaled included million QX driven XX.X% expense, QX of $X.X down million

foreign in a drove losses, weakness to compared dollar. and currency of driven currency foreign Another loss euro revaluation was and other QX The $XX.X million is peso loss QX which was million Argentine by an relative loss and to realized $XX.X gains factor the the in on expense that XXXX. primarily QX U.S.

of Argentine intercompany and and to basis, impact related a exiting of assets $XX.X had included a million losses unfavorable As noncash in gains predominantly to FX significant an late peso reminder, December. related impacts to the liabilities. devaluation On $X.X an the and are business the FX prior loss our million sequential

challenging earnings in recall The monetary our strict exposure operating increasing its from Argentina to our third deteriorating divestiture the and policies mitigates due instability As the you devaluation. become and political quarter call, economic currency had to in region. that conditions

part a with that customers service to in As of a the Argentina, agent ensure to in local shipments business region. the of operations our independent continued we divesting converted our to

There also our a QX. of items that were results onetime couple large tax-related in impacted

million divestiture. a million Appeals IRS in the tax XXXX. with included related incentives the years tax $X.X Argentina settlement, QX domestic to to came of position of $XX.X expense Our tax regard to and tax tax related million an a settlement to XXXX company tax of the $XX.X investments provision for division In on agreement the the through

our were that maintain supportable deductions, we Although only partial a investments settlement. offered software we were

in advice experienced companies positions eliminated The it settle that in has issue. the no as have to we code unfavorable financial in challenged relating other interest who beginning was it similar to deduction, from have specific of XXXX. results, this and company best litigation, ongoing Factoring cost expert decided was tax the exposure our

tax XX.X% XXXX. for XX.X% year, came the in and tax Excluding at our in for effective quarter compared these onetime rate the to expenses, XX.X%

Our in benefits pretax lower our incremental primarily lower tax credits. and rate tax foreign was driven income XXXX from by by --

XX% rate in to our of effective expect We the XX%. be tax to XXXX full range year

onetime million divested expenses, and share foreign on restructuring reversal adjusted $X.X of charges. operations, Argentina $X.X non-GAAP earnings $XX.X per of currency the million losses QX or $X.XX tax of excludes of million

$XX in of $XXX working net cash $XXX net sequential flow capital. a driven was $X declining sequential operations by had The year-over-year working million we transportation. generated primarily decrease million driven million flow increase QX purchased changes XXXX, In by had QX cash of we capital, the was of XXXX. QX price in operating flow. working by operating in QX capital. and sharply million compared of a cash XXXX, operating net cost decline to Turning to in In in

In XXXX. capital QX, of million our expenditures to in $XX.X compared QX were million $XX.X

We XX% returned decline million. shareholders million of be to $XX the operations. to was capital $XX million from $XX which to due We down cash expect expenditures in to year-over-year, in primarily QX, cash XXXX

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

Our of down $XXX debt $X.X balance billion, XXXX. of since at the was which end end was the QX million

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

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

cash million $XXX that XXXX we Keep the of cash share amount and mind that for debt pay-downs QX credit helped reduced to generally debt Our reduce maintain in of liquidity our use has the strong since rating. position investment-grade repurchases. in

XXXX by build that XXXX. encouraged I'm plans the in and in on the much-needed was initiatives place productivity that progress our on to Overall, progress made

XX% the productivity XX% with to productivity Global Forwarding delivered productivity over compounded XX% XXXX, of XX% and the in improvements NAST in improvement of each and the additional an XXXX, better or With expected combined improvement XX% business deliver period. Forwarding X-year NAST is in in in expectation in an Global

to operating and drive back turn operating reduce With margin comments. of elimination our to the deliver people with higher upon. I'll on combined leverage income learning take expectations. Dave the leveraging continues level, long-term even that, Robinson generative the technology By waste initiatives an structural positioned his help capability our and acted waste pipeline robust changes of cost for AI final further machine over A improve that be call to is process and well to to

David Bozeman

some Mike. peers doing And that although of happy and in work still to winning reinvigorate share presents Thanks, sentiment We challenges the goodbye excited culture. to I'm our some we're that the we're say Robinson's about same of XXXX. headwinds, the XXXX to of

taking revenue on cost, X seek need level, first value generation and here, we're chart a my to customer initial need actions focus aggressively both Over structural forward. to At completed balance. optimal our path and to my months and we diagnosis, our the our and proposition I we high

Let's review my findings.

our we much during grew First, continue improve. to progress pandemic, and it that XXXX. significant reducing to structural made cost on But cost in the needs structure too base

the embedding productivity capabilities. will We This will to practices, in optimize enable provider. order strengthen in most that be expanding removing our our digital us the lean efficient organization's value to highest do by and to and operator waste structure our addition

I the and and and it's our has value-added as to vertical-centric deep Second, solutions. customers, to required with freight are capabilities Robinson are found clear their power needs that I expertise robust have logistics complex, that market becoming increasingly listen in C.H. people expertise and outcomes. better and but leveraging we deliver relationships job our our with advance customers of do competitive robust advantage is long-standing trusted technology market-leading carriers. and cutting-edge a a our information to This capabilities more can advantage, and unique

Third, modes, modes. on growth we North focus in solutions value-added and market X air, LTL addressable new eroded to through expanding core our engines volume and and as and ignite profitable the services the to and that segments in truckload by our American core share global drive need to reclaiming ocean growth

synergies how versus to unified do accelerate as One showing of units. that by improving to going And distinct company we're business up is fourth, management to portfolio we one profitable we way drive this as need to account our market growth. across better services with go

fronts. the action unlock these of portfolio to all journey we Our on our take of as power is underway

the critical approach to of Program continuous learnings addition our create strategic leadership principles lean deeper from us continuous our improvement and expert in of is help success and to example leadership the improvement in well-established organization will this brings One launching priorities. reputation our of a senior our Jim the experience for and he company and Reutlinger at and planning a Jim to Enterprise strategic improvement. his Danaher, into team lean with Strategy growth methodology, office is recent activities. the an Management continuous Jim lead and drive

its efficiency, create our opportunity for structural reach the market value I'm win proposition, operating cost, for potential customers, and about our increasing and improving employees improving growth, shareholders, and our we our and future. share, an shareholder company by carriers, confident profitability. excited see margins will more to I'm reducing to value incredibly and accelerating further full our continue that together, our I

concludes portion the This call. Donna for of Q&A now to back I'll the our it turn prepared remarks.

Operator

Instructions] first coming question [Operator Ossenbeck JPMorgan. Our today of is Brian from

Brian Ossenbeck

Dave, maybe to I to can give around more just a the you of little spot more ask rationale pivoting the context market.

running longer. bit been You've little in harder contracts a

just to then what given So went the changed that really that, negative headwind -- market files. see And the wanted focus a big happens what could when the Robinson from in Last revenue terms especially important, get of all management had squeezed. route. pretty contracts on recovers, things why to tying you know be we cycle, maybe what

if that new eventuality potentially wanted as to turn. hear So was to the limit market this you focus I see going

David Bozeman

Brian, I'm question, address the going to by have Arun way. jump your the in Thanks and for question.

Arun Rajan

Yes, Brian.

mean, went profitable is I get go. opportunistic, it the way And the at an in market, where we'll right? it's look opportunity we we so I -- was demand, there. think we the where spot can there

our term. market mean, as I have the customer perspectives, we a to low, term, different so what commitments. X the low. have environment. of different I have up on have holidays a is there's we and revenue sort bit As the our go the about, this targeted long inflection winter ultimately, expect to reality then from management customer we cost soft, think settle this it's around the relates on are a don't regardless, kept we revenue then think perspective, it short see situation when costs back prices the elevated. revenue certain based the objectives, is year and also we management seasonally, and certain But an think a down. the short short is, market. where everybody and term proposition to the reprice we such in competitive And And to in so we What's right? And lanes. In And make and very, term, value know, costs are in is attributes, management, contracts, you very the I is storms determination

making revenue market, a -- other So we're market. yet. and that major see the repricing not triggering sure will really we our spot don't management the true in if trying the than can volume in we to quite sustained kick sort grab as inflection really there's any of as discipline But much in we're

Operator

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

Jack Atkins

Great. Okay.

that First, business I with this. Mike, in would with say, the impacted How AGP go you point, Could bit? first on in squeezed ways -- with January? your want the so maybe Are as to phase here to just through business -- through of could up we has tightened to have well. broadly We've you're markets year? as does us really what get things that guess, impact guess, career. I I you just in you a quarter. winter lot far the to your January move congratulations how storms. seeing the seen some you, had volatility the a enjoyed your seeing walk Arun, working global this forwarding of on and different next I love I your get thoughts We've

Arun Rajan

building I of think -- holidays. we all my we to There's response market capacity as on out have for the January, this Sort a of know Brian, comes increase seasonal this. the cost

January has week by mid-January. But are affected there of been We Well, weather. adverse latest haven't by expect or not to second down where in seen settle that the by pressure, markets. that essentially, load-to-truck markets seen what those that that. mile we we've that generally in capacity or unexpectedly that what increased ratios, just we're lot -- storms weather cost was increased were pressure unexpected worse expected, than and, were seeing cost per of is And a

see up and ease we're sort of the that to dissipates. Now as weather dissipate starting

a we perspective, non-weather-impacted suggests that that weather. purely are the I that And in in like that Because function see so increases have of strain regions. from our this we said, we versus saw any cost capacity everything areas data see January weather-impacted

expected we down, dissipate year So in mile terms these storms costs. this comes we're of cost think per and back as where -- to I be but to back

of terms long management the we honor about think decision term, commitments changes in we reprice short as in are to is so the to make in idea so term. and could how And customers. But a that, revenue the costs short go

will in. However, revenue based will the sort sustains, customers our management attributes, customer targeted this objectives, have revenue if and to value provide that of management see on we repricing. we do we kick And our

Jack Atkins

been Okay. well? as side could the it on Just Arun, Got Forwarding Global maybe there's And volatility then, you touch because it. there of too.

Michael Zechmeister

for first comments. is thanks Jack, of The that. feeling appreciate all, I'll chime mutual. Yes. on I it. your And in

Just contract in in before side. cycles at in one about just aren't QX maybe the we're think have the And trough that our its this the back the still and and to and I impact on down you're both from point go for into in into on comment contracts as coming higher elongated portfolio look the the you past And then pricing. older as at where is AGP that on you prolonged, have business particular. your coming if be a then emphasis in us, that's add January, ocean, about coming point made I truck up,

pretty has portfolio. trough time that we've One here much this caused elongated entire of to repriced the differences such pass is our

have And really trough. have more we even And an normally of that's is different normal it's would margin cycle. in point price elongated at current mechanical now with than a market activity just contracts the we at this what's reflection So suppressing underneath. the

ocean consider to led be really I over got the would be lot you on And wanted there in side, disruption the as which a January to that really issues increased that that to capacity in read also. Then both end has throw the in a at we caused the a to Obviously, about think we at a capacity there. depth going on ocean rerouted, on QX yes, going side, point, of temporary I see being temporary Canal. don't lot disruption. Sea. what's it's of We've probably just the some think and this which then marketplace. I driven demand Red So water pricing, and has the on the into capacity in Panama that

normalization Year see with XXXX, think New capacity and we some kind the there. after you'll that's I think additional coming of I Chinese So also past in, get in

ocean is I'd is spot The have we business other what very that than of from point in different to make that truckload. the composition on contract

to In opposed contract we side the were the at quoting we're about on XX%. only fact, on XX% as ocean truckload side, what

So more means another immediately difference from mind. benefit side. in to market are that's keep to And than and that just ocean in we're the increased the truckload able on spot we

Operator

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

Jonathan Chappell

in seeing an any that's backdrop? either more creating you you And opportunities desperation kind out or pricing of even newer even secure of some as business. the Robinson market as as is. volatile So there the We've what's the or to some competitors an risks are that punitive has out market well, I'm go as elongated clearly, those not on now, that just tough this names year, environment? C.H. maybe financially type almost had impact of established as third bigger seen reaches are well others and if of wondering in this so,

Michael Zechmeister

Let me at take that. cut a

right, of advantage stressed is investing. putting And on pipeline believe in still to intended the a to market. we you're do. market we're We're that this be may down So the an it our we still one stressed projects money very that is us things that of

some as we we're those fact, clock to try In speed, projects increase doing of concurrently.

comment we to long how The we storm, front. stronger about been be are it. we've that there. emerge, there, anybody we'll better implications we've and been in hear hang where may pinched out the be it. on cut looking certainly there continuing wouldn't here, we're the But of come see clear, given out. I others to while in -- boy, weather with the kind we as inevitable ourselves the We so make in there idea when to And specifically turn

Operator

The next is from question Wetherbee coming of Chris Citi.

Chris Wetherbee

looks from XXXX, think if year-over-year. you be cost that roughly It guiding to OpEx perspective, flattish like a you're about

can that see think least relative the XXXX, guys near you you're at necessarily in a rebound expecting have term. freight as you also I said as coming not far in

a So as I lot guess you have noted. trying to added just that COVID, guys Dave, for square of costs up. was you I Obviously,

the might longer So on term like on for flat can you as get about perspective us you think what opportunity maybe XXXX? And a here, the look help some basis. cost is sort enough of

Michael Zechmeister

at Yes. that. Chris, a me cut take let

side, got inflation are XXXX There down so side, improve in we and absolutely incentive the to question. the down some on of it structure. up the your appreciate ex versus a little we've that. on -- X.X% landed got we've the we're at our our break X.X% in of we going we have So XXXX in SG&A cost And things normal personnel midpoint And restructuring and landed offsetting that's restructuring. ex But guidance we're restoration is that here. be versus to One hitting, where XXXX. just on specific offsetting our question, and is the where more midpoint about

that and on that NAST as generated, path. GF. continue the another in we XXXX. heard, on XX% XX% numbers you and continue productivity into NAST in XX% on GF, The We XX%

a on about the in both we're talking compound So over here businesses over X-year XX% basis period.

we've rebound we'll continue. the efforts there some do as down we've well. that some We path continue the volume been But the to in have So that expect got market on. head to pickup so

David Bozeman

structural as put after operating that this our we that as great leverage while position data to Chris, on is ourselves half for a to that add year, where we about in in have there. before, to creating a headed strong to driving is said good back looking pole we're Mike feel just we're structure have rebound. what position we to too, this costs And at the be position really said, we're start well as Best inflection, Yes. of market continue if we really cost seeing us go also balance.

that. good that really drive feel to that the putting I about in things we're and So place

the thanks So for question.

Operator

of coming next The is Stephanie question Jefferies. from Moore

Stephanie Benjamin Moore

on the the you in touch kind thoughts you're those today, get love terms Was it's side, on seeing on what going? hoping you're been that little seeing other maybe a to stands trending environment, have conversations And been could would what bit it your where on I and and how bid exits. of of capacity

are aware thoughts But so your on the have pretty all we last that exits of where love much think been demand going on, kind year, of for to hear what's would today. side. slower the on I stands capacity

Arun Rajan

Customers bids, customers different with of their in variety. and contracts. forms, want resilient a different their of in own come there customers there's lot terms are approaches. pricing In A

based to meaning, they that a some that be prediction Whereas market looks of such market what and us So others to contract point be ball. more aggressive have in, going want want price like to the at us crystal some of turn the know the is and to like understanding doesn't repriced. none that to on quote they want have today,

bid combination is so any that including in their of there's a a of and So of the a like contracts the of approach that, deliver. value terms attributes and we finally, variety the our the objectives, things environment. Having And pricing way management revenue we proposition customers obviously of the said lifetime contracts on. variety of value customer customer, these

take contract meets of sustain So the those coming have out that do we can the you we our in way on on respond customer capacity for, market, Mike, what based we such in want of balance, things to terms through all asking terms the consider in to that? of how is objectives. And that a

Michael Zechmeister

I'll Sure, that. cover Yes. Stephanie,

the little normal the come. but in that So news starting that coming in we has see It the space. bit expect differences significantly But delay interesting the yet, we out. kind out. pricing is coming capacity one There's hasn't cycle good to the to behavior, capacity this in on a that impacted been the are momentum truckload of of of

past by about the X,XXX less that, here carrier example, half year, QX. of one of a Last QX. half that that, of of we new things And sign-ups. Just track about we in we're were than way little is this in

When ocean story, where little a that the a on capacity I it's think bit think be side, about continue. expect on 'XX increase in you different probably to would I side. ocean So there'll the net

Operator

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

Jeffrey Kauffman

revisit I core to X. applying on in, to X particular, the in we want focus of simplify assessment the at the the implication eventually here and the there implication that those that we're the to drive? really we're are run? businesses be not core the long that we're David's and is not an XX/XX Is want here part business Robinson? rule, Or that then going you're if the X, And might structure in a

David Bozeman

want Yes, go. what said to implication about as a let that looking first little time. about we for more you on me It's here. the focus The bit we're double-click forward is where

businesses growth company -- to and that's mean really that focus of a LTL, for focus businesses this mean, key other I that that doesn't feeder lot our about. of. to going of the will spoke truckload, Our those help we type And of drive And is be have is I ocean what air.

and Now and focus operational of got particular say evaluate to truckload an ocean, best at But the long those air, LTL, is and the you've always and maximizing for it's feed the really about company and look businesses. term. what's things them perspective from about

that. really company I'm evaluating that's So on -- and the entire where constantly I'm doing

Operator

is coming today question last Bruce The from Chan of Stifel.

J. Bruce Chan

findings. talked your you big Dave, one about of

different could synergy #X how what about Maybe about like if a lines are thinking it using Or service your revenue the that love some better multiple drive be? just synergies could to talk you way, to and customers the as across being portfolio. you're opportunity of if color many opportunity where was that I'd get I think some could number too. in go? on the that, today

David Bozeman

really you customers. Global are Forwarding on and Forwarding. We customers use half. that, at Half focus our overall if Robinson, drive track by largest X today services look both our essentially NAST just NAST Today, driven which let's and kind businesses, for of of in our Global

some there noticed why suite that's a as our I at good, value more to this, we're at of up is while generating opportunity in focusing more more we're have think have while really solutions can that there customer. And solve la in showing we an for complicated, They looking by there, forward, carte solutions, than And something So synergistic want there's I customers the separates complicated wallet problems think share we the the that offer out. which to that. is really get that as by there, or services chain. they us I those value of up going deeper that. their kind supply a we what issues of as up is that on We individual we're But that's want that showing opportunity for potential I a think more look services. And fashion, that. showing unlocking

to We have that have value. of good drive and momentum we things and company we're doing that, structured and the energy unlock some some within already around that

Operator

Bernstein. question next from is of David Vernon The coming

David Vernon

kind sound you expect do It bad exit of numbers question. that's love year, your as we're quarter respect quick rockier? there. the which then the of thoughts the guys as how in get of can understand here any the is we doesn't profitability? terms out on for a like But I to And I'd on rate whether us giving it compound Or gets. translate we productivity into and thoughts fourth of sort a totally it are little uncertainty of XX% Just explicit given given sort any guidance

Michael Zechmeister

of on a say things would I that. So couple

We a the have across business. you history giving expense of guidance

really we don't volatility we business predicting this pricing because So drive amortization, and tax AGP the demand that we capacity experience in there. that rate, depreciation in CapEx, of the give difficulty all but elements SG&A, and the you and macro give and that's the personnel,

certainty. trough, the part that. And When question stay and website So our our here we're long on going. guidance know trough of we're in where parcel that, come last? to from how do doing we've out but it? very we things your some provide to about, away about the to we're to again, are tried to does We where is pricing difficult best with think we forecast those But at,

of to comments of truck. kind start are so half things made, when in think, turn around the year we've there the same I really the is And back that of element

Operator

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

Charles Ives

today. a call. earnings to you today's evening. concludes That for you, Thank joining again. Have look us forward talking to great We everyone,

Operator

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

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

C.H. Robinson Worldwide (CHRW) 31 Jan 242023 Q4 Earnings call transcript