C.H. Robinson Worldwide, Inc.

Good morning, ladies and gentlemen, and welcome to the CH Robinson second quarter 2020 conference call. At this time, all participants are in the listen-only mode. Following today's presentation, Chuck Ives will facilitate a review of previously submitted questions. If anyone needs assistance at any time during the conference, please press the star followed by the zero on your telephone keypad. As a reminder, this conference is being recorded Wednesday, July 29, 2020. I would now like to turn the conference over to Chuck Ives, Director of Investor Relations.

Thank you, Donna, and good morning, everyone. On the call with me today is Bob Bieserfeld, our Chief Executive Officer, and Mike Zechmeister, our Chief Financial Officer. Bob and Mike will provide a summary of our 2020 second quarter results. Presentation slides that accompany their remarks can be found in the Investor Relations section of our website at chrobinson.com. We will follow their comments with responses to the pre-submitted questions we received after our earnings release yesterday. I'd like to remind you that our remarks today may contain forward-looking statements. Slide 2 in today's presentation lists factors that could cause our actual results to differ from management's expectations. And with that, I'll turn the call over to Bob.

Thank you, Chuck, and good morning, everyone. Before we jump into our second quarter results, I want to take time to recognize the recent civil unrest we have seen following the killing of George Floyd in Minneapolis at the end of May. I and CH Robinson support the movement calling for social and racial justice that we've seen gain momentum in the wake of his death. Immediately following Mr. Floyd's death, I sent a message to our employees and joined with other CEOs here in our hometown in condemning his senseless death and calling for changes needed to address racial inequalities and social justice across our nation and around the globe. At Robinson, our people are at the heart of all that we do. And with that, we're committed to building a culture of inclusivity and belonging where all employees are able to contribute and to thrive. It's built into our edge values and it's part of our DNA. Recent events have underscored the importance of this work, but we know that in order to truly make lasting change, this work needs to be more than just a single initiative or a program, and we're committed to ensuring this work is ingrained in all that we do in order to perpetuate true and sustained change. Turning now to our results. In the second quarter, we saw unprecedented volatility in the freight industry. Our truckload net revenue per shipment increased substantially early in the quarter as the cost of purchase transportation fell due to soft demand. This was followed by a sharp increase in the cost of purchase transportation as businesses reopened, demand for freight increased, and the number of active carriers declined, causing a significant decrease in our net revenue per shipment as we continue to honor our commitments to our customers through these volatile market changes. From a net revenue per shipment standpoint, each of these fluctuations on their own would have been the largest intra-quarter changes that we've experienced in over a decade. Despite this volatile environment, we were able to deliver solid performance across our diversified business portfolio due to the tremendous efforts of our C.H. Robinson team members around the world. The broadening of our portfolio of services over the past few years is a key piece of the Robinson growth story, and I expect that we'll continue to grow and deliver volumes that outpace the market as we move forward. During the quarter, we continued to make progress on our strategic long-term initiatives around market share gains and productivity improvement. Our results included a sixth consecutive quarter of market share gains in NAST, with 4.5% and 2% volume declines in truckload and LPL, Thank you for joining us. This is an important metric and a key focus of our technology investments and our transformation efforts. Our technology initiatives also continue to drive increases in automation. A few examples of this include a 56% increase in fully automated truckload bookings compared to the second quarter of last year. Our digital transactions were up 55% compared to a year ago, and we're now on pace to exceed over a billion transactions for the year. and traffic continues to grow on our FreightQuote by CH Robinson platform, the digital self-serve product offering for small businesses that we introduced late in 2019. Our global forwarding business was at the forefront of helping the world get personal protective equipment urgently and efficiently. The air market in second quarter was impacted by reduced cargo capacity, increased charter flights, and larger than normal shipment sizes, which created an environment with unusually high rates for air freight. Shippers increasingly relied on Robinson's global supply chain expertise and our data and scale advantages to ensure critical goods were moved as quickly and as inexpensively as possible. This resulted in a 100% year-over-year growth in our air freight net revenue. As we discussed on last quarter's call, we also took steps across our organization to reduce costs in the short term while industry volumes are down. These cost reduction efforts included furloughs and workforce reductions, elimination of nonessential travel, a temporary compensation reduction for our company executive officers and board members, as well as a temporary suspension of the company match to retirement plans for our U.S. and Canadian employees. These short-term cost controls were put in place at a time when they were greatly needed, and they demonstrate our ability to flex our cost structure as our business cycles change. We've learned a lot as we've managed through the pandemic about how to be more agile, how to work and to sell differently. How to collaborate and communicate more effectively and how to serve our customers and carriers in new ways while we work in these virtual teams. As a result of this and our ability to harness the benefits of our technology investment and our network transformation, approximately one-half of the short-term furloughs have become permanent headcount reductions. We'll continue to evaluate our global business operations to ensure we manage our business in the most efficient manner and continue to deliver superior service to our customers and our carriers. Our resilient and responsive business model generated $447 million of operating cash flow during the second quarter. Our balance sheet is strong and we exited the second quarter with $1.6 billion in liquidity. We are well positioned to weather the economic uncertainty in the months ahead and we will emerge stronger from this difficult time. I'll now turn the call to Mike Duckmeister to review our second quarter financial performance.