C.H. Robinson Worldwide, Inc.

Good afternoon, ladies and gentlemen, and welcome to the CH Robinson third quarter 2024 conference call. At this time, all participants are on a listen-only mode. Following the company's prepared remarks, we will open the line for a live question and answer session. To ask a question, please press star 1 on your telephone keypad. If anyone needs assistance at any time during the conference, please press star 0. As a reminder, this conference is being recorded Wednesday, October 30th, 2024. I would now like to turn the conference over to Chuck Ives, Director of Investor Relations.

Thank you, Donna, and good afternoon, everyone. On the call with me today is Dave Bozeman, our President and Chief Executive Officer, Arun Rajan, our Chief Strategy and Innovation Officer, Michael Castagnetto, our President of North American Surface Transportation, and Damon Lee, our Chief Financial Officer. I'd like to remind you that our remarks today may contain forward-looking statements. Slide two in today's presentation was factors that could cause our actual results to differ from management's expectations. Our earnings presentation slides are supplemental to our earnings release and can be found in the investor section for our website at investor.chrobinson.com. Our prepared comments are not intended to follow the slides. If we do refer to specific information on the slides, we'll let you know which slide we're referencing. Today's remarks also contain certain non-GAAP measures, and reconciliations of those measures to GAAP measures are included in the presentation. And with that, I'll turn the call over to Dave. Thank you, Chuck.

Good afternoon, everyone, and thank you for joining us today. I'd first like to acknowledge the challenges that many communities are facing after the recent hurricanes that hit the southeastern U.S. Many of our employees were impacted, and I'm proud of the incredible support that our company and our employees provided to help those in need and our customers. The commitment and compassion are truly inspiring, and it makes me extremely proud to be part of this team. Turning to the quarter, I'm pleased with our third quarter results that reflect continued improvement in our execution as we continue to deploy our new operating model. We are raising the bar even in a historically prolonged freight recession, with strong execution and disciplined volume growth across divisions while delivering exceptional service for our customers and carriers. I want to thank our people, one of our greatest competitive advantages, for their relentless efforts to embrace our new operating model and execute in a fit, fast, and focused way so we can keep pushing that bar higher. Due to a focus on constantly market conditions and optimizing yield, we improved the quality of our in Q3 and continue to expand our NAS gross profit margin. We also continue to push our efficiency to higher levels in both NAS and Global 40. And we remain on track to deliver greater than 30% compound growth in productivity over the two-year period from the end of 2020 to the end of 2024. Michael will cover the NASH results in a little bit, but I'd like to give our global forwarding team some recognition as well. In Q3, the team continued to be nimble and highly engaged with our customers to help them navigate various market disruptions and to provide excellent service. This resulted in a 7% year-over-year increase in our ocean shipments and a 20% percent increase in our air tonnage. At the same time, they've embraced the rigor and the discipline driven by our operating model, and they've decoupled headcount growth from volume growth, reduced their headcount by more than 10 percent year-over-year, and lowered their cost to serve. This improved operating leverage, combined with elevated ocean rates, resulted in a 230 percent year-over-year increase in Global Forwarding's Q3 adjusted income from operations. This combined with our improvements in NASS gross margin, productivity, and operating leverage resulted in a 75% increase in our enterprise Q3 adjusted income from operations. Our new operating model has changed how we discover and inspect root cause issues and quickly implement countermeasures to improve the level of our operational execution. The reliability of our operating reviews continues to increase as we leverage our data-rich environment to inform our decision-making and enhance our competitive differentiation. At an organizational level, we continue to cascade the operating model deeper into the organization and build operational muscle at various levels of the enterprise to deliver on our strategic roadmap. As part of this effort, an evolving toolkit is being used by our employees in the form of problem resolution, balanced scorecard reviews, daily management, and value stream mapping, to name a few. Empowering our people with the Robinson Operating Model is creating a flywheel of performance, talent development, and accountability that is evolving our culture to be driven by progress, execution, and proactive problem identification and resolution. This is showing up in improvements such as more disciplined pricing and better decisions on the volume that we're seeking. We are still early in our journey, but the operating model is helping us execute a solid strategy even better, and we expect further improvement as our team continues to embrace this new way of operating. As I've said before, I know from my past experiences of implementing lean operating models that improvement isn't always linear, but I'm confident in the team's willingness and ability to drive a higher and more consistent level of discipline in our operational execution. As freight markets continue to fluctuate due to seasonal, cyclical, and geopolitical factors, we remain focused on what we can control. including deploying our new operating model, providing best-in-class service to our customers and carriers, gaining profitable share in targeted market segments, streamlining our processes, applying lean principles, and leveraging generative AI to drive out waste and optimize our costs. We also continue to focus on ensuring that we'll be ready for the eventual freight market rebound with a disciplined operating model that responsibly grows market share, decouples headcount growth from volume growth, and drives operating leverage. I'll turn it over to Michael now to provide more details on our NAS results.