CH Robinson Worldwide Inc Q1 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Alex Johnson - Evercore ISI - Analyst : Good afternoon. It's Alex Johnson on for Jon Chappell. Maybe a sort of maintenance type of question first, if I can. At some of the trucking companies and other trucking-related companies commented on weather impacts in the month of March, in particular, I don't think I heard you comment on whether, I know volatility in weather and trucking market can have an impact. Just wondering if you saw any of that, how you would sort of crane that? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 30, 2025 / 9:00PM, CHRW.OQ - Q1 2025 CH Robinson Worldwide Inc Earnings Call

Question: Alex Johnson - Evercore ISI - Analyst : Thank you very much. I'll get back in queue for more outlook type of question. Thank you.

Question: Jeff Kauffman - Vertical Research Partners - Analyst : Thank you very much. Well, first of all, congratulations. It's a terrific result in a tough environment. I'd like to hone in a little bit, maybe it's the tail wagging the dog here, but I want to hone in a little bit on the international markets and global forwarding. You're one of the top NVOCCs out of China, Southeast Asia to the US. There's a talk about customers shifting from air to ocean, and there's a talk about what happens if these tariffs go REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 30, 2025 / 9:00PM, CHRW.OQ - Q1 2025 CH Robinson Worldwide Inc Earnings Call or if they don't, and who knows what the answer is. But can you kind of talk through some of the scenario planning that you've done on the scenarios you see and how that could potentially affect the forwarding division, particularly the ocean from Southeast Asia, the US?

Question: Jeff Kauffman - Vertical Research Partners - Analyst : Just to clarify your comments, and thank you for that answer. For the purposes of our modeling, I guess my takeaway and what you're saying is we've downshifted Transpacific a little bit, and it's possible that Southeast Asia, the Rest of World could offset some of the decline from Southeast Asia to US. But would tariffs result in higher customs revenue as a result and we should think about maybe customs, get some support here and then make your own assumptions on, Arun, on ocean?

Question: Jeff Kauffman - Vertical Research Partners - Analyst : Okay. Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 30, 2025 / 9:00PM, CHRW.OQ - Q1 2025 CH Robinson Worldwide Inc Earnings Call

Question: Brian Ossenbeck - JPMorgan - Analyst : Good afternoon. Thanks for taking the question. Maybe I just wanted to -- I'll give you both at once. Just can you give us any sense of what April looks like so far? I know you typically don't do that, but we're obviously not really typical sort of market. So anything there would be helpful. And then maybe for Michael, do you think we're finally starting to get to the point where truckload capacity starts to exit and stays out or at least starts to accelerate in that trend? Are you seeing any signs of that? And it does seem like perhaps we've got some more volatility with tariffs and the import cliff if it does arrive, that could potentially accelerate that, but of course, lower fuel prices are throwing a lifeline out there as well. So just wanted to see thoughts on April and then if you've got any color on capacity and where that's headed. Thank you.

Question: Brian Ossenbeck - JPMorgan - Analyst : Right. Makes sense. Thanks, guys.

Question: Ken Hoexter - BofA Global Research - Analyst : Hey, good afternoon. Dave, I guess earlier, you talked about the AGP deceleration, right, so from 14% in January down to minus 2 in March. Can we talk about that? Because I know you said it was just tougher comps. Is there -- is that tariff implications, your thoughts on as pricing stays weak here, the opportunity to ramp that up? And I guess you lowered CapEx. I guess, is that just looking at, again, same thing the market deceleration. Is there something more to that? Maybe just your thoughts on the backdrop here?

Question: Ken Hoexter - BofA Global Research - Analyst : I guess if I could just -- David, if I can just follow up on the first part. I guess I'm just trying to balance out what's going on with contract pricing in the middle of bid season here. I was trying to ask like how do you balance that, I guess, with the spot we've seen spot really come in, given the weakness in the market. Are you seeing that weakness? Are you able to take advantage? Are we seeing AP that should reaccelerate given that? I'm trying to understand the back I'll turn it over to Michael to give you some color there.

Question: Ken Hoexter - BofA Global Research - Analyst : Thanks for the time, guys. Appreciate it.

Question: Tom Wadewitz - UBS - Analyst : Hi, good afternoon. So I'll give you the two upfront. So just on head count, I think the sequential decline was a bit greater than we were anticipating. So I just wanted to see if you could give us a sense of does that keep moving down or we think stable going forward? And then I guess to the comments you had about volume and approach to the market. I mean, we heard some things that maybe CH is getting more aggressive in the market and just going after volume a bit harder. And you saw a pretty impressive amount of improvement in gross margin and profitability over the past 1.5 years. So it kind of makes sense, you could shift. But I wonder if that is the case. And if so, is there also a move to maybe leverage the transportation management capability, the TMC and say, hey, we can bundle a bit. And win some brokerage business leveraging the transportation management as well. So I guess kind of two different questions there. Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 30, 2025 / 9:00PM, CHRW.OQ - Q1 2025 CH Robinson Worldwide Inc Earnings Call

Question: Tom Wadewitz - UBS - Analyst : Yeah. I guess just a short follow-up to make sure I understand it. I mean, it seems pretty interesting to leverage the RMS capability and used to be the and combine that in brokerage in maybe a way that you didn't do in the past. So I think that's my understanding is this is new and this is -- it seems like a pretty interesting labor to drive growth. Is that right to think of it as a new approach, putting those two together? Or am I not -- or is that something you did in the past?

Question: Tom Wadewitz - UBS - Analyst : Okay, great. Thank you for your time.

Question: Bascome Majors - Susquehanna Financial Group - Analyst : Arun, you're still obviously generating quite a bit of progress with some of the tech projects on both the net revenue line and the operating expense line or operating efficiency within NAS. Can you talk about on both the pricing driven items that are helping you on the net margin and some of the efficiency-driven items that are helping you on your operating efficiency. What inning or other analogy are you are on some of those projects? And maybe, Dave, if you could cap off that discussion? I know continuous improvement never ends and lean, but how deep into this do you need to be before we more in the continuous improvement stage versus the stair step improvement it looks like you're continuing to see here. Thank you.

Question: Bascome Majors - Susquehanna Financial Group - Analyst : Thank you all.

Question: Chris Wetherbee - Wells Fargo Securities, LLC - Analyst : Hey, thanks, guys. Good afternoon. Maybe a little bit of a bigger picture question. As we look out over the course of the next couple of months, we could be seeing some softness certainly from an import perspective, and that might be coming through in both your Global Forwarding, but also maybe your NAST businesses as well. I guess, as you think about what we're just talking about with productivity optionality, I guess, how do you think maybe about positioning the business for the next couple of quarters? I wouldn't expect you to do something overly dramatic, but I guess as you see that opportunity where maybe volume is a little bit softer, are there some other levers you can pull on the productivity side, a little shorter term that could generate potential savings down the road here?

Question: Chris Wetherbee - Wells Fargo Securities, LLC - Analyst : Okay. That's helpful. Appreciate it. Thank you.