Good morning, ladies and gentlemen, and welcome to the C.H. Robinson fourth quarter 2021 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 one on your telephone keypad. If anyone needs assistance at any time during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded Wednesday, 2 February, 2022. 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 Biesterfeld, our President and Chief Executive Officer, Arun Rajan, our Chief Product Officer, and Mike Zechmeister, our Chief Financial Officer. Bob and Mike will provide a summary of our 2021 fourth quarter results and outlook for 2022, and Arun will outline the innovation and development occurring across our platform. Then we will open the call up for live questions. Our earnings presentation slides are supplemental to our earnings release and can be found in the investor section of 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 will let you know which slide we're referencing. I'd also like to remind you that our remarks today may contain forward-looking statements. Slide two in today's presentation lists factors that could cause our actual results to differ from management's expectations. With that, I'll turn the call over to Bob. Thank you, Chuck, and good morning, everyone, and thank you for joining us today. Within our industry, 2021 will be remembered as a year with some of the greatest disruption and tightest capacity ever seen. For me, it will be remembered as a year in which the global supply chain was at the forefront of conversations and where our organization effectively helped our customers and carriers navigate the unprecedented level of supply chain disruption, allowing us to provide the superior level of service that global customers have come to expect from C.H. Robinson. The strength and the resilience of our model was evident in the fourth quarter and the full year as we generated record annual financial results in 2021. The positive momentum of our business remains strong as demand for our global suite of services and for our digital freight platform continues to grow. Now let me turn to a high-level overview of the results. In our NAST truckload business, we saw strong demand for our services with a 6% year-over-year volume growth in the fourth quarter. Our adjusted gross profit, or AGP per load, continued to improve in both truckload and LTL as we repriced more of our contractual portfolio and focused on profitable market share. This repricing enabled us to reduce the amount of truckloads with negative margins in Q4 to their lowest level since Q2 of 2020. Yet that level does remain above our historical averages, and we remain focused on reducing them further. For the quarter, NAST truckload grew AGP by $57 million, or 22% year-over-year. This was driven by a 6% increase in volume and a 15% increase in AGP per load. This was the third consecutive quarter that we delivered year-over-year growth in both NAST truckload volume and NAST truckload AGP, demonstrating balanced growth in an extremely tight market. Truckload volume growth was driven by a 2% increase in contractual volume and a 12% increase in spot market volume, due in part to an 85% increase in volume that was driven through our proprietary dynamic pricing engine. Nearly half of our spot or transactional business was priced through our dynamic pricing engine in the fourth quarter, where we delivered real-time pricing with capacity assurance from the largest network of truckload capacity in North America. For the full year, approximately $875 million of revenue was recognized through this digital channel, which was a 193% increase over 2020. During the fourth quarter, we had an approximate mix of 55% contractual volume and 45% transactional volume in our truckload business, which is consistent with our mix in the year ago period. We saw a routing guide depth of tender in our managed services business remain at 1.7 in the fourth quarter, as it did for most of 2021. As a proxy for the industry environment, this occurred despite all of the repricing actions that occurred throughout 2021, reflecting the extended period of market disruption. In Q4, our average truckload line haul cost per mile paid to carriers, excluding fuel surcharges, increased 18% compared to the fourth quarter of last year. Our average line haul rate billed to our customers, excluding fuel surcharges, increased 18.5% year-over-year. This again resulted in the highest cost and price per mile on record at a 19% year-over-year increase in our NAST truckload adjusted gross profit per mile. In the fourth quarter, we continued our efforts to attract carriers to our platform and achieved a new record of over 10,000 carrier sign-ups. Carrier utilization of our Navisphere platform continued to increase as well, with a 40% year-over-year increase in both daily and monthly average users of our carrier products. As we continue to introduce enhancements to our digital products, we expect the carrier experience to improve and the usage to continue growing. Looking at the market, load to truck ratios still remain at historic highs, driven by the structural constraints around the expansion of truckload capacity, strong import demand, persistent congestion at the ports, and the impacts of Covid and winter storms. We do expect truckload capacity to remain tight, and we expect to further increase the volume we handle in this environment. In short, we expect stronger for longer as we look at the market into 2022. In our NAST LTL business, fourth quarter AGP grew by $21 million, or 18% year- over- year. This was delivered through a 23.5% increase in adjusted gross profit per order that was partially offset by a 4% decline in volume. The Q4 decrease in LTL volume was mainly driven by normalization of business levels as our LTL volumes in the fourth quarter of 2020 were bolstered by a few large customers that benefited significantly from some of the stay-at-home trends during COVID, which contributed to roughly 20% LTL volume growth in the comparable quarter last year. Overall demand in the LTL market remains strong, with capacity remaining at a premium. Our value proposition in LTL continues to resonate with shippers of all sizes and across industry verticals. For the full year, I'm proud to announce that our LTL adjusted gross profit exceeded $500 million for the first time. Now transitioning to our forwarding business. The team here continues to execute well and provide creative solutions in an environment in which demand still exceeds capacity. This resulted in year-over-year AGP growth in Q4 of $130 million, or 72%, and marks the seventh consecutive quarter of year-over-year growth in total revenues, AGP, and operating income. Based on low inventory to sales ratios, robust demand expectations, and the potential for further disruptions at West Coast ports due to upcoming labor negotiations, we believe the current forwarding environment will continue through at least the first half and potentially through a greater portion of 2022. In our ocean forwarding business, we grew our AGP by $97 million, or 87% year-over-year. This was delivered through a 78% increase in AGP per shipment and a 5% increase in shipment volume. Ocean demand continues to exceed the industry's overall capacity with limited vessel and container availability, compounded by a continued backlog of ships waiting outside of U.S. ports to unload cargo. Strong U.S. import demand is expected to persist as the ports work to de-bottleneck, which will likely cause ocean pricing to remain elevated and conversions from ocean to air to continue. Our team has the existing foundation to continue to provide excellent service to our customers and to work with them to develop flexible multimodal solutions for their shipping needs. Finally, our international airfreight business delivered AGP growth of $31 million or 92% year-over-year. This was driven by a 38% increase in metric tons shipped and 40% increase in AGP per metric ton. Airfreight capacity also remains strained, but Robinson has been supporting our customers' needs by leveraging our broad network of air services providers. The forwarding team continues to have a large backlog of new business to implement from both new and existing customers and expects to continue to grow wallet share. Our customers and our results are benefiting from the investments we've made in digitization, data and analytics, as well as our global network, which supports our expansion initiatives in targeted geographies and industry verticals. Before I transition to Mike to go deeper into the results, I would like to welcome Arun Rajan, our Chief Product Officer, to walk you through the innovation and the development occurring across our platform today and into the future. We continue to believe that through combining our digital products with our global network of logistics experts and our information advantage driven by our scale and data, that we are uniquely positioned in the marketplace to deliver for our shippers and partners regardless of market conditions. We believe our strategies and competitive advantage will enable us to better create value for our customers and in turn, win more business and increase market share while delivering higher profitability and return on invested capital. A key unlock in our ability to effectively deliver on this strategy at scale, allowing us to lead in a digital environment, lies within how we are reorienting at the intersection of our growth strategy, our engineering and technology strategy, and the needs of our customers and carriers by really evolving to being a more product-led organization. You know, as I searched for the right person to lead this change and to be our Chief Product Officer, it was critical for me to find someone who had experience at leading digital companies that participated in two-sided marketplaces. Arun's a seasoned and inspiring leader who brings nearly three decades of product and technology experience, developing and deploying products that enrich the customer experience and creating value at industry-leading companies such as Whole Foods, Zappos, and Travelocity. Arun's deep product and leadership experience will be invaluable as we drive the next generation of innovation for our company while creating sustainable long-term value for our customers, our carriers, and our shareholders. With that, I'll turn the call briefly to Arun. Thanks, Bob, and good morning, everyone. It's nice to have the opportunity to address all of you today. I was really excited to join Robinson five months ago as I believe in the mission and see a clear opportunity to help digital transformation at scale within an industry-leading company. My professional background has almost exclusively been in leading product, data, and engineering teams in digitally native companies such as Travelocity and Zappos. I've also spent time in product and engineering roles at companies and industries that were going through a transformation, such as Whole Foods more recently and Sabre earlier in my career. This is in addition to serving the CTO and COO roles at Zappos and my 10 years across the Amazon enterprise. I understand the importance of amazing customer experience and service and putting the customer at the center of everything we do, something that is core to C.H. Robinson. Here, the role of product is to relentlessly address customer needs and carrier needs and to go deep with data and research to inform technology investments in service of our customers and our carriers. C.H. Robinson exists at the center of a broad two-sided marketplace in which we need to provide value to both carriers and customers. Both sides of the marketplace are demanding more real-time transparency, information, and innovation. In response, we will be more intentionally connecting our business, data science, digital marketing, and technology teams to bring meaningful products, features, and insights to both sides of the marketplace and to our employees. We will also be taking a lean approach to delivering products and digital features, testing our hypotheses, and iterating our way to deliver the outcomes we seek. As one example of this, we will soon launch enhancements to our Navisphere carrier product that are focused on improving the digital experience for carriers, including features that will personalize a carrier's experience, bring more liquidity to the marketplace, provide the ability to digitally place offers of loads, and deliver personalized load recommendations based on the unique behaviors of carriers on our platform. We will rapidly test and evolve our digital offerings as we iterate on features and functionality. Providing a strong self-service solution for our carriers will give us access to additional carriers and create greater loyalty, which is critical to our ability to continue growing volume. Access to more capacity gives us the opportunity to cover more freight on behalf of our customers by meeting carriers where and how they want to engage with us. In a cab, we direct our tests and investments towards products that drive up the acquisition, retention, and growth of carrier share. I believe that positive impact to these metrics will be the clearest signal that we are making the right investment decisions in the context of carrier-facing products. The digital investments we are making and the rigorous test-and-learn approach we are taking to inform these investments are essential to our continued and future success. The products we develop will aim to strengthen relationships with customers and carriers by delivering value on their terms. When we couple innovation and value with high performance and excellent service, we create customers and carriers who return again and again because they trust us. The success of every new product, feature, or insight that we deliver to either side of our marketplace will be evaluated on its efficacy to increase the rate at which we acquire, retain, and grow share of customers and carriers, which in turn serve as the primary input metrics to power our future growth. I'll now turn the call to Mike to review the specifics of our fourth quarter financial performance and outlook for 2022. Thanks, Arun, and good morning, everyone. As Bob mentioned, Q4 was another solid quarter of year-over-year growth and record annual financial results as we continue to execute on our Tech Plus strategy. Our total company revenue increased 43% over Q4 last year, and our adjusted gross profit, or AGP, was up 34%, reaching another record high at $856 million. AGP increased across each of our segments on a year-over-year basis and compared to the pre-pandemic quarter of Q4 2019. Note that Q4 2021 had one less business day than Q4 2020 and 2019. On a per-day basis, Q4 total company AGP improved by 3% sequentially, 36% year-over-year, and 50% over the pre-pandemic quarter of Q4 2019. The AGP increases year-over-year were driven by both higher volumes and higher AGP per shipment in ocean, truckload, and air as we pursue profitable market share gains. On a monthly basis compared to 2020, our total company AGP per business day was up 44% in October, up 32% in November, and up 31% in December. For the sixth consecutive quarter, prices and costs rose across our North American truckload business, and for the fifth consecutive quarter, they reached all-time highs. In October and November, costs per mile rose due to increases in load-to-truck ratios and average length of haul. Our NAST team navigated through this environment in Q4 by growing spot truckload volume approximately 12% year-over-year, which marked the sixth quarter in a row of double-digit spot market volume growth. We also grew our Q4 contractual truckload volume by approximately 2% year- over- year despite the rising cost environment. We continued to manage our load acceptance rates to optimize contractual volume returns. As we do each quarter, we also repriced a portion of our contract portfolio to reflect the updated cost of purchase transportation. As we repriced the contract portfolio and captured more spot volume, our truckload AGP per mile continued to improve. Q4 marked the fifth consecutive quarter of flat to increasing AGP per mile, which remains above both our five-year and ten-year averages. Truckload AGP per shipment improved by 6% sequentially and by 15% compared to Q4 of 2020. In our LTL business, Q4 AGP per order also improved by 23.5% compared to Q4 of 2020. AGP per mile and AGP per shipment are key metrics that we use to run our changing market cycle pricing. For those following AGP margin percentage, it is important to factor in that contractual price changes lag cost changes in purchase transportation. That is, if or when the market loosens on the backside of the current cycle with greater than half of our truckload volume on fixed price contracts, we would expect to see an expansion of AGP margin percent and dollars as we typically have in past cycles. We continue to focus on overall AGP dollar growth by optimizing volume and AGP per shipment across our service offerings. With our customer-centric focus, strong team, and our digital investments, we expect to drive long-term growth and efficiency into our model. Now turning to expenses. Q4 personnel expenses were $420 million, up 35.8% compared to Q4 of last year, primarily due to higher incentive compensation costs, higher headcount, and the impact of short-term pandemic-related cost reductions in Q4 of last year. On a sequential basis, Q4 personnel expenses were up 5% versus Q3, with ending headcount up 4%. Our Q4 average headcount increased 11.9% compared to Q4 of 2020. Despite the tight labor market, we were able to attract the talent we needed to support continued growth, particularly in global forwarding and NAST. Looking back at 2021, in Q2, we began responding to demand that was stronger than expected by adding personnel to support the business. With annual enterprise transportation volume growth of 7.9% versus average headcount growth of 4.2%, we delivered on our goal of growing volume faster than headcount in 2021. In NAST, despite an increased level of hiring in the second half of 2021 to support our future growth in our 2021 NAST productivity index, which measures the difference between the year-over-year change in NAST volume compared to headcount. Before I get into our guidance for 2022 personnel expenses, let me provide some perspective on our expectations for the year ahead. Similar to the way 2021 played out from Q2 forward, we plan to add more people to support growth opportunities across the business. We expect these additions to be weighted more heavily in the front half of 2022, but still result in growing volume at a greater rate than headcount for the full year. If growth opportunities in the market play out different than we expect, we'll adjust accordingly. We're also prioritizing the importance of retaining our talent by increasing base compensation in line with the market in order to maintain high levels of service to our customers and carriers as we value the plus part of our tech plus strategy. In 2022, we expect a year-over-year decrease in our incentive compensation expenses to partially offset the increased headcount and wage pressures. Recall that in 2021, our enterprise performance led to significant equity vesting due to the 70% year-over-year growth in our annual earnings per share and above target bonus and commissions payouts, driven by the 63% increase in pre-tax income and 31% growth in AGP. Taking all these factors into account and assuming current market conditions, we expect our 2022 personnel expenses to be approximately $1.6- 1.7 billion, up approximately 7% at the midpoint compared to our 2021 total of $1.54 billion. Moving on to SG&A expenses. Q4 was approximately $149 million, up 19.6% compared to Q4 of 2020, primarily due to higher technology-related purchased services and travel expenses. For 2022, we expect total SG&A expenses to be $550 - 600 million compared to $526 million for 2021. The approximately 9% increase at the midpoint is primarily due to a higher level of spending as we expect travel spending to return to approximately half of our pre-pandemic levels. 2022 SG&A expenses are expected to include approximately $100 million of depreciation and amortization compared to $91 million in 2021. Fourth quarter interest and other expense totaled $18.4 million, up approximately $6.4 million versus Q4 last year, due primarily to the impact of currency revaluation. Q4 results included a $6.5 million loss on currency revaluation compared to a $1.1 million gain in Q4 last year. As a reminder, these are non-cash gains and losses. Interest expense was up $1.8 million due to a higher level of average debt. Our Q4 tax rate came in at 14.5%, making our 2021 annual tax rate 17.4%, which was lower than our expectations, primarily due to a favorable mix of foreign earnings and U.S. tax incentives and credits. We expect to receive less benefit from these items in 2022, resulting in an expected 2022 full-year effective tax rate of 19%-21%, assuming no meaningful changes to federal, state, or international tax policy. Q4 net income was $230.1 million, up 56% compared to Q4 of 2020, and diluted earnings per share was $1.74, up 61%. Turning to cash flow. Q4 cash flow generated by operations was approximately $76 million compared to $162 million in Q4 of 2020. The $86 million year-over-year decline was primarily due to a $200 million increase in net operating working capital in Q4 compared to a $92 million increase in Q4 of 2020. The Q4 2021 increase resulted from a $279 million sequential increase in accounts receivable and contract assets, minus a $79 million increase in total accounts payable compared to Q3. At some point in the cycle when the cost of purchase transportation and subsequent pricing come down to their, from their current all-time highs, we would expect a commensurate. [uncertain] receivable and contract assets were up 6.7% sequentially, while total revenue was up 3.8%. The resulting 1.7-day increase in days sales outstanding or DSO was driven primarily by the mix shift associated with higher revenue growth in global forwarding, where our DSO runs at approximately double that of our NAST business. From a quality of receivable standpoint, our% past due and our credit losses both improved compared to Q4 a year ago. Over the long term, we expect AGP growth to outpace working capital growth. Capital expenditures were $18.4 million in Q4, bringing our full year capital spending to $70.9 million. For 2022, we expect our capital expenditures to be $90-100 million, primarily driven by technology investments. We continued to return a significant amount of capital to shareholders, including approximately $223 million in Q4 through a combination of $154.4 million of share repurchases and $68.4 million of dividends. We repurchased approximately 1.6 million shares at an average price of $96.90 per share in Q4. The board of directors also increased our share repurchase authorization by an additional 20 million shares in December, resulting in approximately 21.6 million shares of repurchase capacity remaining at year-end. For the full year, we returned $886 million to shareholders, which equates to 105% of our 2021 net income, and was up 119% compared to 2020 when we paused our share repurchase program out of an abundance of caution due to the pandemic. Cents per share from 51 cents beginning with the quarterly dividend that was paid in January 2022. We have now distributed uninterrupted dividends without decline for more than 20 years. Over the long term, we remain committed to our quarterly cash dividend and opportunistic share repurchase program as important levers to enhance shareholder value. Now on to the balance sheet highlights. At the end of Q4, our cash balance was $257 million, up $14 million compared to Q4 of 2020. Over the long term, we will continue to look for ways to efficiently repatriate excess cash from foreign entities with the intent of only carrying the cash needed to fund operations. We ended Q4 with $732 million of liquidity, comprised of $475 million of committed funding under our credit facility, which matures in October 2023, and our Q4 cash balance. Our debt balance at year-end was $1.92 billion, up $825 million versus Q4 last year, driven primarily by increases in working capital and share repurchases. Our net debt to EBITDA leverage at the end of Q4 was 1.42x compared to 1.39x at the end of Q3. From a capital allocation standpoint, we continue to be diligent and thoughtful about high return investments on a risk adjusted basis as we drive further growth and efficiencies into our model. We remain committed to disciplined capital stewardship, maintaining an investment grade credit rating, and generating sustainable long-term growth in our total shareholder returns. Overall, 2021 was a year of record financial results for Robinson. We look forward to building off of our strong foundation for long-term growth. Thank you for listening this morning. Now I'll turn it back over to Bob for his final comments. Thank you, Mike. While global commerce continues to face supply chain disruption, at C.H. Robinson, our integrated non-asset-based business model has demonstrated resilience, growth, and profitability through the cycle. We will continue to benefit from our investments while delivering on opportunities to integrate our services to help our customers solve their complex supply chain issues. Our Robinson team, their responsiveness and their ability to provide true value continues to be a key differentiator in our ability to win in the market. I'm energized by the positive momentum that we're carrying into 2022. Our company is differentiated by our ability to deliver diversified growth across our intentional combination of modes, services, and geographies. As I've said before, customers are looking for solutions that span the globe and cross all modes. An ocean freight solution alone doesn't solve the problem that our customers are facing, nor does a standalone truckload or LTL solution. One relevant data point that illustrates this is that over half of our 2021 total revenues and approximately half of our 2021 transportation adjusted gross profits came from customers where we provide both surface transportation and global forwarding services. These top customers keep coming back to us, as evidenced by a 99.6% retention rate in our top 500 customers. We are uniquely positioned to orchestrate an end-to-end supply chain success for these customers and help them not only navigate these markets, but to succeed in these markets. We're continuing to invest in smart customer and carrier focused products, and we're excited about the talent that we've added to the team and the runway that we have to launch several new products that we believe will benefit both our customers and carriers as we continue to build out the most connected supply chain platform. That concludes our prepared comments this morning. With that, I'll turn it back to Donna for the live Q&A portion of the call. Thank you. Ladies and gentlemen, the floor is now open for questions. If you would like to ask a question, please press star one on your telephone keypad at this time. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. In order to allow as many people ask questions as possible, we do ask that you please limit yourself to one question. Once again, that is star one to register a question at this time. Our first question today is coming from Todd Fowler of KeyBanc Capital Markets. Please go ahead. Great. Thanks, and good morning. I appreciate the comments on thinking about the difference between looking at Adjusted Gross Profit as a percent and then looking at it on a dollar basis. Bob, can you share with us any thoughts on how you're expecting Adjusted Gross Profit margins to trend as we move into 2022, given the spread that we're seeing with buy rates and sell rates, and then also your expectations for contract renewals as we move into this year? Thanks. Yep. Thanks, Todd, and good morning. Yep, good morning. Our overall adjusted gross profit dollars, either if you look at it per load or per mile, are now kind of above our trailing 10-year and five-year averages. If you peel that back, though, our contractual portfolio is still underperforming our expectations, weighed down by the continued increases in cost of purchased transportation over the course of the past several quarters. While we've, you know, continuously been repricing week-over-week, month-over-month, quarter-over-quarter, you know, with the rapid ramp-up in costs over the course of the past few quarters, you know, we simply just haven't been able to catch up to that in the contractual portfolio. You know, as we enter the year, this year, you know, markets remain tight in North American Surface Transportation. In January, the first couple of weeks were a lot of things out of alignment. You know, all-time high load to truck ratios in the first couple of weeks, moderating a bit in the past two weeks, but still at high levels. Our anticipation is that, you know, this market, as we think about pricing in the contract market in 2022, we think it's kind of a low single digit increase. You know, we will be aggressively repricing through the cycle here in the first quarter and beyond. Once we start transportation, that should really help the profitability of our overall contract portfolio to allow us to participate and win. We see very favorable conditions. Great. Thanks for the color. Question is coming from Christian Wetherbee of Citi. Please go ahead. Hey, great. Thanks. Morning. I wanted to touch on operating. This trending out. I know. It looks like at least on the NAST side that maybe. Can you talk a little bit about kind of what happened from a cost perspective in the quarter and then maybe how we see that progressing and kind of think about the first half? That'd be helpful. Yeah, let me take that. You know, obviously in operating expense, personnel is the primary driver. When you look at NAST, as 2021 unfolded, we saw opportunity that was greater than our expectations and began to staff up to help support that growth. You know, primarily operations-related roles. You know, that was really to aid the business. You should expect to see us continue to do that. Where we see opportunities for growth, resources, and headcount to deliver on that growth, you know. Conversely, if the growth opportunities don't pan out, you know, we'll adjust accordingly. When you look at NAST personnel expense in Q4, you know, we grew about 300 basis points more than the enterprise grew in NAST. The drivers are really three. Incentive costs were high for 2021. You know. In NAST, equity, for example, was about 3x the expense in 2021 for the year that it was in 2020. Now it represents about 10%-15% of the total comp, but it's averaged quite a bit lower. That was really driven by enterprise results, which were driven by GF. As you can imagine, when the enterprise is performing, once those costs that come in, equity are also allocated back to our NAST business. Bonus expenses in NAST were up about 75%-80%. Those are driven by the performance in pre-tax operating income on the business for the year and also for the enterprise to some extent. Commissions were up about 20% or a little more than 20%, and that goes along with the AGP growth that you saw on the business. The second primary driver is headcount. Talked about that a little bit. You know, for Q4 at NAST, the average headcount was up about 7.5% to a little over 7,000 employees. For the year, let me say for the quarter, I'll remind you that we did have one less operating day, so volume growth and truckload for NAST. A year ago, we had done some short-term cost savings initiatives related to the pandemic. The primary impact on Q4 last year was the suspension of the match plans in the United States and Canada. This year, with those restored, we had a year-over-year for NAST as well. Those are the primary drivers, on NAST. Mike, I wanna just pile on a little bit if I can, too. You know, the year-over-year increase in personnel expense in NAST, too. I think that we realized as we weathered the pandemic in 2020, we cut pretty deep in terms of headcount in NAST in third quarter through furloughs and things of that nature. You know, in retrospect, we likely stifled some growth through those actions that we took to reduce headcount to the levels that we did. Some of this is adding back getting back to those levels and a little bit ahead in order to ensure that we've got, you know, the appropriate number of capacity reps and operations reps to deliver the service our customers expect, and to ensure that we're not stifling growth artificially by, you know, really artificially constraining headcount against the opportunity. Okay. That's super helpful. Just in terms of how quickly maybe some of that unwinds, particularly some of the incentive comp stuff in 2022. Incentive comp standpoint, we expect to go right back to a target level. You know, that will adjust as the year unfolds based on results. We would expect the ability to adjust headcount would be aligned with the way incentive performance will go as well. Chris, I'll just add one more. Yeah, I'll add one more on EPS. Based on what Mike just shared around you know, kind of the go forward on personnel, specific to NAST, we do improve next year in a meaningful way off of, you know, from where they finished in 2021, even with that incremental potential expense. Great. Thanks very much. Appreciate it. Thank you. Our next question is coming from Ken Hoexter of Bank of America. Please go ahead. Hey. Great. Yeah, I appreciate that's really key. Maybe just flipping over to the top line, your gap shrunk to about 50 basis points to 18.5% versus your 18% costs, versus 100 basis points it kinda stayed strong. Can you maybe talk about what you saw accelerating or did your ability to price relative to those costs decelerate? Just wanna Yeah, I mean, without going too deep week by week through the quarter, Ken, we definitely did see markets tighten on the back half of December around the holidays. It felt like a lot of drivers, you know, this is anecdotal, but it feels like a lot of the drivers took the last couple of weeks off, if you will. There were some really tight market conditions around the holiday that really influenced the upward swing in cost of purchased transportation. It did moderate a bit from Q3 to Q4, but, you know, still favorable in terms of positive spread for us. You know, our net revenue per mile, you know, in looking at that, continued to improve throughout the quarter, every quarter in 2021. It's a metric that we'll continue to look at and through, you know, getting back a little bit more help. Is that something you see accelerate? I just wanna understand, I mean, 'cause, you know, given this market, it seemed to stay strong. I get that it tightened at the end, but wouldn't your pricing have adjusted for that given the strength of the market on the pricing side? I mean, if I'm looking at a chart here of the last six quarters and, you know, year-over-year cost change of 16.5%, 32.5%, 33.5%, 47.5%, 26%, and, you know, 18%. It's pretty tough to stay ahead of those things when they're moving that quickly, when you've got over half of your portfolio, you know, tied into contractual longer term commitments. If you think about our spot market business, we certainly stayed ahead of those, and we were agile and moved with the moving market. When you're, you know, kind of selling long and buying short, if you will, in the contractual business, it's hard to catch up there. We would expect to be able to get ahead of that and stay ahead of that. All right. Thanks, Bob. Thank you. Our next question is coming from Scott Group of Wolfe Research. Please go ahead. Hey, thanks. Good morning. Good morning. You guys gave us some pretty specific cost guidance. Can you talk about what if costs are up 7% or so based on the guidance? Is net revenue up more or less than that? Bob, just big picture, when I look at NAST net operating margins, when you guys first started reporting them, they were at 45%. They're now at 33%. I think they've only gone up once in the last six years. How should we think about these net operating margins going forward? Yep, appreciate the question. I'll start with the net operating margins. You're right. I mean, I think if you look at the past seven years, the average is still 40.1%, but they have declined from the first year we reported to today. You know, 2019 was the last year that we achieved in excess of 40% in our net operating margins. I think 40.2% was the year-end in 2019. You know, Mike talked about some of the specific drags in the short term. But we still have a very firm belief that we can deliver 40% net operating margins in the net NAST business. Mike stayed very focused on the cost side of it, and I can build a bit more on that or add some more color. But the drag on our contractual portfolio of our customers on the truckload side has been an equal to or greater force. You know, if we get, quote-unquote, get that contractual portfolio right, it does more than offset the majority of the cost closer to that 40% operating margin. Profitability back in the contractual marketplace. The contractual book of business. Mike talked about 2019 to 2021 just using kind of that as a baseline the last time we were at 40. You know, net net, 80% of the increased personnel expense in NAST over that two. You know, if you go back into SG&A, is incremental investments that we've made into warehousing. It's not material per se, but as we get further into consolidation and cross-border, that is gonna continue to be a part of the SG&A moving forward. We think that that's good business for us. The other piece that I would maybe mention is just the technology investments over the course of the past several years. That's another part of the SG&A investment of NAST that had a drag on operating margins over the course of the past couple of years. We've talked through how investment comes before return in these programs. You heard from Arun and the approach that we're undertaking there in tech and product development. We expect moving forward the benefits of these technological volume ahead of the rate we have the past couple of years, improve the profitability of the contractual portfolio, increase the pace of delivery of tech resources that drive growth and efficiency. Some of the cyclical things like decreased cost of equity and performance compensation, you know, based on how those cycled in 2021. We see a path to get there. It's gonna take some work, but we still believe in that as being the right target. Just to follow up. If it was 33% last year, I mean, directionally, does it get? The first part of my question was just about you. You must have some net revenue assumption based on your cost guidance. If you have some directional thoughts there. Yep. We expect that, Scott, operating margins in the NAST business are gonna improve next year. You know, whether we get back to the 40% next year is TBD, but we're certainly pushing hard in that direction. You know, we're not gonna give the full guidance on revenues, but just know that if we expect operating margins to you know, you can draw your own conclusions on our assumptions on revenues there. Okay. Thank you, guys. Yes, thanks, Scott. From Jordan Alliger of Goldman Sachs, please go ahead. Yeah, hi. I was wondering if you could give a little more color or detail around where you are on your tech spending slash rollout. Specifically, now I know in the near term, there's been a lot of hiring needs. Specifically, I know, you know, in the medium to long term, there's sort of all the talk about leveraging the technology, you know, need less headcount, need less people going forward to, you know, that was sort of like the positive of doing more of the digital strategy. Maybe give some high-level thoughts on the tech side and when you think that you could really start to see the leverage from that relative to how you can drive. Yeah. I'll try to answer at a high level and then I'll ask Arun to. The key thing that we drove visibility on and inclusive of, you know, driving $875 million in truckload revenue through our algorithmic digital pricing engine, right? That's a big transformation for us in terms of our ability to connect to customers electronically, give them real-time pricing. It allows us to generate tens of thousands of quotes, you know, so that we can increase our win rates, drive profitability. You know that the utilization and integration through TMSs and ERPs was up over 200% last year, close to 200% last year. You know, the automated bookings, obviously a big conversation about the ability to automatically for carriers to engage with us, book freight on our platform, you know, over a million, 1.2 million automated bookings last year, up 65% year over year. To your question too, Jordan, you know, kind of the shipments per person per day or, you know, the decoupling of headcount from volume growth. You know, even though that shipment per person per day metric that we include on slide eight of our deck has come down the past couple of quarters, we're still ahead of where we were in the 2018 to 2019 period of time. Still demonstrated a positive 620 basis point spread there this year for NAST. You know, as we move towards more of a product-led organization, we do expect to deliver faster in a more lean, you know, manner and eventually take costs out of that process. I don't know, Arun, if you would add. Yeah, I would just say that, you know, the level of rigor we're applying in terms of the data and research we're using to inform our investments, as it relates to any of the above that Bob talked about as an example, automated bookings to drive up productivity of our employees. The idea is like, you know, we have a toolkit for our employees. They have their current ways of booking loads, but we also want to, if we can, drive more automation through that channel, which we will, as we sort of take a more rigorous approach anchoring on sort of science, engineering, and digital marketing all coming together to drive that, we should see some improvements. Yeah. Jordan, obviously not lost on us that as we've been making these investments for the past couple of years, that ultimately we expect to have positive impacts to operating margins. You know, we haven't realized those in the past couple of years, but we do anticipate that we're on the right path and that, you know, ultimately this is going to drive greater efficiency, greater productivity, greater market share growth, and ultimately greater returns in NAST, which- Go ahead. Great. Good morning. Thanks for taking my question. So Bob, I guess productivity comments earlier on slide eight. You know, I guess when you think about that chart and how it's trended, a lot of moving pieces there, but do you feel like what we're seeing today is more representative of sort of the more of a steady-state run rate of the improvements that you've been making from a productivity perspective? Or really, is it more like what we were seeing in the first half of 2021? And I guess as sort of a tag on to that, you know, you talked about the rollout of these enhancements to your carrier booking platform. I know there was some news in the press yesterday about that getting delayed a bit. You know, do you think that can provide a step function change to overall more about that? Thank you. Yeah. You know, the chart on slide eight, you know, is obviously a backward-looking chart. Our goal with that is obviously to make that, you know, continue to go up and to the right and to continue to drive that spread between NAST productivity and headcount and volume growth. We can't have that be the only metric, right? Ultimately, we've got to drive top line volume growth, top line AGP growth and bottom line, you know, returns for our shareholders. You know, the piece that came out yesterday, unfortunately, that piece lacks completeness of information and context, but we feel really good about the product that we'll bring to market this week, the personalization that will come and allow our carriers to interact with us even more effectively. You know, Arun, I don't know if you'd add color. Yeah. I think it's back to our. Like, the one thing I would say is that it's not meant to be a big bang step function type of approach, right? I mean, we're wiring together our science and engineering in a more meaningful way to drive personalization and recommendations for our carriers, and we'll see improvement. We'll have to study the data and use that to iterate, and Bob talked about a lean approach that we'll be taking. So we'll see improvements, but it'll be. It's not a step function improvement. You shouldn't expect that. I think it was mischaracterized in some of the press. I wouldn't, in that piece around us, you know, want to eliminate the other, you know, using tech to eliminate people. I think Arun said it earlier. Our goal is to provide the most comprehensive suite of, you know, truckload matching solutions, whether it be via our people, via our technology, integrating with our customers, integrating with our carriers, and just create greater liquidity in the marketplace so everybody wins. You know, and that's really the goal. It's going to be through and with our people for sure. Thank you. Our next question is coming from Tom Wadewitz of UBS. Please go ahead. Yeah, good morning. Bob, I wanted to get a bit more of your sense of how you expect C.H. to perform in the market. You know, I think in how that ties to your headcount additions. You know, I think it seems pretty fair to say 2021 was a pretty strong market for brokerage. I think on your volume growth in truckload, you probably underperformed the market. It sounds like when you're adding headcount, you're probably looking at maybe outperforming the brokerage market in 2022. Is that the right way to view it? And just how do we tie that if we should be on volume? Yeah. You know, if we think back to the first quarter of 2021, you know, we had a belief in how the year was going to shape out. I certainly don't say that we called, you know, the dramatic increases in pricing, but we certainly thought that the market was going to continue to tighten and that pricing competitors were thinking about it. We started out kind of digging out of a pretty big hole in first quarter, where our volumes were down mid- to high-single digits. Since then, we've recovered and kind of been in that mid-single digits volume growth range through the balance of the year. You know, looking forward, you know, we feel like we've got some wind in our sails right now with three consecutive quarters of both AGP improvement in our truckload business, volume improvement in our truckload business, and doing that in a market where, you know, I'll use the DAT load to truck ratio as just kind of a market indicator. You know, growing volume and AGP improvement in an environment of a tight truck market like we've seen, you know, you honestly, you kind of have to go back in time a little bit within our model to see that happen on a consistent basis. Typically, you know, over the course of the past five years or so, Robinson has grown their volume, you know, at the highest levels in times where markets were loose, not necessarily where they were tight. So One of the things that I've talked about in the past few years is getting us to a point where we can grow volume through cycles, right, grow volume not only in the loose markets but also in the tight markets by having that balanced focus on both our contractual portfolio and our transactional portfolio. You know, three quarters doesn't necessarily make a trend. Obviously, we've got some easier comparisons last year into this. Looking into 2022, we expect to continue to build on the momentum that we have in growing volume on a year-over-year basis. We believe that the health of the contractual portfolio will continue to get better as we reprice in a more moderate inflationary price environment. We think the market will be tight and still allow us to benefit in the spot market. We see a pretty favorable construct for 2022 for our NAST truckload business. Okay. Just to make sure I understand, you think it's actually a better environment for you to grow volume when the market stabilizes a bit. You might have better volume growth or better opportunity for volume growth in 2022 than in 2021. I believe that given the balance of our portfolio between both spot and contract, you know, kind of the 55-45 that we've leveled out at, periods of extended, you know, tightness in the market, we do very well in terms of volume growth and revenue growth. Okay. Thank you. Thank you. Our next question is coming from Jeff Kauffman of Vertical Research. Please go ahead. Thank you very much. I just want to go back to the cash flow and return on capital deployment question. Clearly, you're levered to a level that you're comfortable with. Given your view of improvement in the market and returns, what are your thoughts on capital priorities? I know you've raised CapEx a little bit. You're going to be spending a little bit more on tech. You know, and you mentioned the 20 million share reauthorization. In terms of the free cash deployment, how are you thinking about that split? Yeah, thanks, Jeff. On free cash flow, clearly, when we're operating in an environment where we have rising costs and therefore rising prices, in our business model where we get paid slower than we pay, we're absorbing working capital, and that's impacting free cash flow. You know, as I pointed out, you know, we've seen record highs here now for five straight quarters. That's a lot of absorption of working capital. As the market price, and we'll start to see that working capital come back to us proportionate to how the market changes. So that's a little bit about free cash flow as it relates to working capital. Now, capital priorities, you know, we do have a strong balance sheet. We have maintained leverage, you know, down. We're about 1.4 times on a net debt-to-EBITDA ratio here this past quarter. We've got a little bit of room for additional leverage. If you remember back to last year, when the pandemic hit, we pulled back on our share repurchase, and that took our leverage down a little bit lower than we normally would have operated. Our goal is to maintain investment-grade credit rating. In doing so, we do have a little bit of room on leverage to take that up. As far as priorities, the top priority for us is investment in projects on our business with great returns on a risk-adjusted basis. We've got a lot of good ideas that we can execute on those close-in opportunities that you're hearing about on tech in other areas of the business in NAST, in global forwarding. We'll continue to operate on. You know, the M&A market is also. There's quite a bit of activity there. While borrowing costs are going up, they're still low relative to historic averages. You know, where we see an opportunity there, we'd certainly participate. We've talked about that. We're committed to our dividend. We're committed to growing our dividend with long-term EBITDA value to shareholders through our opportunistic share repurchase program as well. That hopefully gets to all the elements of your question. Yeah, just to follow up. To your point, about an $860 million use of cash this year for working capital. I mean, that's extraordinary. Normally, when a business grows, you're a net user of working capital. You would say that it is not impossible that as you manage this and customers pay and this balance comes back down, working capital could actually be a source of cash in 2022, or is that more of a wait and see? Yeah, I mean, you know, it's certainly a possibility. You know, when you break out the growth of the business, excuse me, of course, the growth related to volume will be an absorbing part of working capital. The thing that has been most dramatic on our business over the past year is the impact of the pricing increases on accounts receivable driven by the growth in the global forwarding business. You know, when or if that pricing- Thank you. We're showing time for one last question today. Our final question will be coming from Bascome Majors of Susquehanna. Please go ahead. Yeah, thanks for taking my question. Sequentially, NAST profits were flattish quarter-over-quarter despite net revenue being up, and forwarding was down quarter-over-quarter on flat net revenue. I know you don't guide internally, but I'm curious if these were below or in line with your internal expectations. Yeah, you're right, Bascom. We don't guide, but your assessment on the business is fairly accurate. I mean, the forwarding business, if I think about their overall adjusted gross profits, you know, they grew from Q1 to Q2 and Q2 to Q3. Like you said, relatively stable three to four, or I'm sorry, forwarding was relatively stable really through the back half of the year. You know, we feel like we're in a solid place right now in both of those divisions in terms of where the revenue stands. Because we think at least the first half of this year in forwarding, the market conditions look pretty similar. Beyond that, it's a little bit probably too early to call. We think the market is set up really favorably in 2022 for our NAST business. Yeah. Bob, if I could just squeeze one final one in. From the board perspective, you know, you recently announced a bit of a refresh. Your perspective on that and perhaps a little bit of the short list on the skills or experience you're looking for in the new board members. Thank you. Yeah, you know, the announcement in the 8-K earlier last week was really all about continued focus on good corporate governance. The bylaw change was something that we had been considering for quite some time. It's a bit more of a shareholder friendly bylaw, so we did want to announce that change with the departure of both Wayne and Brian, who have been longstanding members of our board. Both Wayne and Brian have been with us for about 19-20 years on the board. They've been great directors, you know, have helped guide this company through a lot of change, but through best practices and corporate governance and with our own kind of board refresh standards, it was. We think about that from a board governance standpoint. We have been actively engaged with a firm. We've got a really nice list of candidates on the slate right now that we're talking to actively that we think could be great additions as directors that are going to be closely aligned with shareholder value creation and bring skills to the board that can help us to be even more successful in the future. Thank you. Thank you. Appreciate it, Bascome. Thank you. At this time, I'd like to turn it back over to you, gentlemen, for any closing comments. That concludes today's earnings call. Thank you everyone for joining us today, and we look forward to talking to you again. Have a good day. Ladies and gentlemen, thank you for your participation and interest in C.H. Robinson. You may disconnect your line or log off the webcast at this time and enjoy the rest of your day.