Good morning, ladies and gentlemen, and welcome to the C.H. Robinson third quarter 2022 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. As a reminder, this conference is being recorded Wednesday, November 2, 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 Operating Officer, and Mike Zechmeister, our Chief Financial Officer. Bob and Mike will provide a summary of our 2022 third quarter results and outline some new cost reduction actions. Arun will provide an update on the innovation and development occurring across our digital platform, and then we will open the call up for questions. Our earnings presentation slides are supplemental to our earnings release and can be found on 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 2 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. On our second quarter earnings call in late July, I talked about a deceleration in demand that we were expecting to see in the second half of 2022 in three large verticals for freight, including weakness in the retail market and further slowing in the housing market. We're now seeing those expectations play out in the slowing freight demand and price declines in both freight forwarding and surface transportation markets. Throughout the changes in the freight cycle, we've maintained our focus on continuing to improve the customer and carrier experience while scaling our digital processes and operating model to foster sustainable and profitable growth. Today, we believe that we're entering a time of slower economic growth, where freight markets will continue to cool from their pandemic peaks and will operate more reliably at more normalized rates with fewer disruptions. These changes in market conditions, coupled with many successful endeavors on our digital roadmap directed at scaling our model to be more efficient, are allowing us to take actions to structurally reduce our overall cost structure. Compared to our third quarter operating expenses, the actions we're currently taking are expected to generate $175 million of gross cost savings on an annualized basis by the fourth quarter of 2023. Inflation, other headwinds such as annual pay increases, and tailwinds such as lower incentive compensation are expected to result in net cost headwinds of $25 million in 2023 that we expect to partially offset the gross savings, resulting in net annualized cost reductions of $150 million by fourth quarter of next year. We also continue to identify opportunities to accelerate our enterprise-wide digital and product strategy. To drive greater impact and speed of execution, Arun Rajan has been promoted to the role of Chief Operating Officer. Since joining C.H. Robinson in 2021, Arun has been a critical contributor to and strategic leader of our digital and product strategy. Arun is helping us to think and act differently as we accelerate our pace of digital transformation and scale our operating model. In his new role, in addition to leading the product organization, Arun will have expanded direct responsibility for both technology and marketing organizations. Bringing these three critical functions together under a single vision and leadership structure will allow us to integrate these functions more deeply into single-threaded teams and to put the needs of our customers and carriers at the center of our organizational design to ensure that we're positioned well to meet the needs while accelerating the impacts across the business units of C.H. Robinson. Arun's teams will work directly with the business unit presidents to operationalize these efforts. Now let me turn to a high-level overview of our third quarter results for North American surface transportation and global forwarding. In our NAST truckload business, we grew our year-over-year volume for the sixth quarter in a row, albeit with a modest shipment growth of 0.5%. Volume growth in drop trailer, flatbed, and temperature control was partially offset by a decline in our dry van volumes. Within the quarter, we saw mid-single-digit volume increases in July turn to declines in August and September as freight demand weakened. Our adjusted gross profit, or AGP per shipment, increased 20.5% versus the third quarter of last year due to a meaningful increase in our contractual truckload AGP per shipment. On a sequential basis, our truckload AGP per shipment came down 15% from the record peak we saw in the second quarter, but remains above our historical average. The sequential decline was particularly pronounced in the spot market, where our AGP per shipment declined 25% as we continued to pursue volume in the spot market and collaborated with our customers to use the spot market as part of their procurement strategy. During the third quarter, we had an approximate mix of 65% contractual volume and 35% transactional volume compared to a 60-40 mix in the same period last year. Routing Guide depth of tender in our Managed Services business, which is a proxy for the overall market, declined from 1.4 in the second quarter to 1.3 in the third quarter, which is the lowest level we've seen since the pandemic impacted second quarter of 2020. Changes in the national dry van load to truck ratio also reflect the softening of the freight environment. While this ratio was between 3-to-1 and 4-to-1 for most of the third quarter, it has declined throughout October, with the latest reading approximately 2.6-to-1 in week 44. The sequential declines in truckload line haul cost and price per mile that we saw in first and second quarter continued throughout the third quarter. This resulted in approximately 17% year-over-year decline in our average truckload line haul costs paid to carriers, excluding fuel. Our average line haul rate billed to our customers, excluding fuel surcharge, decreased year-over-year by approximately 13%. This resulted in a year-over-year increase in our NAST truckload AGP per mile of 15.5%. Consistent with historical patterns, we expect to reprice approximately 60% of our contractual truckload business in the fourth quarter of 2022 and the first quarter of 2023. Encouragingly, our win rate on large contractual bids in the third quarter improved year-over-year as we pursue profitable share gains and respond to a changing market. In our NAST LTL business, we generated quarterly AGP of $161 million in the third quarter, up 23% year-over-year. This was through a 24.5% increase in AGP per order and partially offset by a 1.5% decline in volume. The LTL volume decline was driven by decreases in final mile, temperature controlled, and consolidation, while our common carrier business, which is the largest component of LTL, had flat volumes. In our global forwarding business, we're now seeing the market correction that has been anticipated. High inventories, reduced consumer spending due to rising inflation, and a muted peak season have all contributed to reduced import demands, which have also led to declining prices for ocean and air freight. For the third quarter, global forwarding generated AGP of $248.4 million, representing a year-over-year decrease of 20% versus a record high for a third quarter in 2021. Within these results, our ocean forwarding AGP declined by $55 million or 26% year-over-year. This was driven by a 24% decrease in AGP per shipment and a 2.5% decrease in shipments. This is compared to a 12% volume growth in the third quarter of last year. The slowdown in global ocean demand was most evident on the U.S. West Coast, where rates and volumes declined more than other trade lanes and allowed port congestions to ease. Activity on the U.S. East Coast remained stronger as freight continued to be diverted from West Coast ports and due to relatively stronger demand in the transatlantic trade lane. The improving ocean schedule reliability and the ability for shippers to accept longer transit times has resulted in conversion of some air freight back to the ocean. This, combined with the slowdown in global demand, has impacted air freight volumes and pricing. Air freight capacity also continued to improve and drive prices lower in many trade lanes due to increased belly capacity on more frequent commercial flights. AGP in our air freight business declined $12.5 million or 21% year-over-year, driven by a 16.5% decrease in metric tons shipped and a 5.5% decline in AGP per metric ton shipped. Overall, the forwarding team continues to provide differentiated solutions and customer service, selling aggressively in the market and leading to further additions of new customers and diversification of industry verticals and trade lanes. In the third quarter, for example, 60% of our AGP from new business was generated from trade lanes other than the Trans-Pacific lane. Additionally, we've attained the status of being the leading ocean freight forwarder from India to the U.S. and from the U.S. to Australia. As shown on slide 10 of our earnings presentation, expanding our capabilities and presence in key industry verticals, trade lanes, and geographies is an important part of our sustainable growth strategy. For the enterprise, we continue to believe that through combining our digital solutions with our global network of logistics experts and our full suite of multimodal services, we are uniquely positioned in the marketplace to deliver for our shippers and carriers regardless of market conditions. We believe our strategy and competitive advantages will enable us to create more value for customers and in turn, win more business, increase our market share, and enable sustainable, profitable growth. With that, I'll now turn the call to Arun to walk you through the product innovation and development that's occurring across our digital platforms. Thanks, Bob, and good morning, everyone. I'll begin by saying that I'm excited to take on an expanded role as the company's chief operating officer. I look forward to further building integration between our digital product strategy and our technology and marketing teams to accelerate delivery and adoption of our meaningful products, features, and insights to both sides of our two-sided marketplace. During the third quarter, we continued to deliver enhancements to our Navisphere product platform while extending the penetration of our digital offerings with both our carriers and our customers. Due to the digital improvements that have been delivered, the number of carriers booking loads via Navisphere Carrier in Q3 increased 77% compared to the third quarter of last year. Since providing carriers with enhanced capabilities to place digital offers on loads via Navisphere Carrier, which improves the carrier experience and our productivity, we saw a 34% sequential increase in digital offers from Q2 to Q3. Another data point that demonstrates our progress is the execution of 658,000 fully automated bookings with carriers in our NAST truckload business during Q3, which is an increase of 87% compared to the same quarter last year and represented $1.2 billion in digital bookings in Q3 alone. Broadly speaking, we're focused on providing scalable digital solutions that deliver improved customer and carrier experiences and service levels by working backwards from their needs. Much of this is about operationalizing our information advantage at scale through features such as backhaul load recommendations for carriers. On the customer side, it's about giving customers insights around price and coverage. One way to do this is to scale our Market Rate IQ and Procure IQ products. Scalable digital processes will enable us to decouple volume and headcount growth and drive increased productivity, and we are laser-focused on opportunities to automate or make self-serve processes that are core to our operating model. This includes increasing the digital execution of all the touch points in the life cycle of a load, including order management, appointments, in-transit tracking, cash advances, and financial and documentation processes. Scaling these processes are foundational to being the lowest cost operator, which ultimately gives us the pricing flexibility to accelerate growth and gain market share in the two-sided marketplace that we serve while delivering our long-term operating margin targets. I'll turn the call over to Mike now to review the specifics of our third quarter financial performance. Thanks, Arun, and good morning, everyone. Our Q3 enterprise results reflect truckload volume growth in NAST, along with sequential and year-over-year price declines on softening demand in the freight forwarding and surface transportation markets that Bob referenced earlier. Our third quarter total company AGP was up $43 million or 5%, with growth in NAST partially offset by the decline in global forwarding. On a sequential basis, total company AGP declined 14% from our record AGP in Q2, with declines in both NAST and global forwarding. On a monthly basis compared to 2021, our total company AGP per business day was up 20% in July, down 1% in August, and down 2% in September. Q3 personnel expenses were $437.5 million, up 9.4% compared to Q3 last year, primarily due to a 13% increase in average headcount. On a sequential basis, personnel expenses declined $7.2 million due to lower incentive compensation. Our Q3 ending headcount also declined 1% from the end of Q2, which is consistent with our stated expectation of flat to declining headcount in the back half of the year. For the full year, we continue to expect our personnel expenses to be approximately $1.7 billion, which is the high end of our original guidance. This excludes one-time restructuring expenses of $15 million to $20 million in Q4 related to the cost savings initiatives that Bob described. Moving on to SG&A, Q3 expenses of $162 million were up $28.5 million compared to Q3 of last year, driven primarily by increases in legal settlements, purchase services, and travel expenses. For 2022, we now expect our total SG&A expenses to be in the high end of our original guidance of $550 million to $600 million, including the $25.3 million gain in Q2 from the sale and leaseback of our Kansas City Regional Center, which is largely offset by non-recurring legal settlement expenses. We also now expect 2022 full year depreciation and amortization to be $90 million to $95 million, which is down from our previous guidance of approximately $100 million. Interest and other expense totaled $16 million, down $0.7 million versus Q3 last year. Q3 this year included $20.8 million of interest expense, up $7.7 million versus last year, primarily due to higher average debt. The increased interest expense was partially offset by a $5.2 million gain on foreign currency revaluation. In Q3 of last year, FX revaluation was a $3.8 million loss. Our Q3 tax rate came in at 16.9% compared to 16.0% in Q3 last year. Our year-to-date tax rate is 19.2%, and we continue to expect our 2022 full year effective tax rate to be 19% to 21%, assuming no meaningful changes to federal, state, or international tax policy. Q3 net income was $225.8 million, down 8.6% compared to Q3 last year, and we delivered diluted earnings per share of $1.78, down 4% versus last year, but up 78% compared to Q3 of 2020. Turning to cash flow. Q3 cash flow generated by operations was a record $625.5 million compared to $73.5 million used by operations in Q3 of 2021. The $699 million year-over-year improvement was primarily due to a $359 million sequential decrease in net operating working capital in Q3, driven by the declining cost and price of purchase transportation in our model. Conversely, Q3 of last year included a $412 million sequential increase in net operating working capital as costs and prices were rising. From the end of 2019 to Q2 of 2022, our net operating working capital increased by approximately $1.5 billion. As the cost and price of purchase transportation have come down, we have realized the benefit to working capital and operating cash flow on a lagged basis based on our DSO and DPO. To the extent that freight prices continue to decline, we would expect a commensurate reduction to working capital. Capital expenditures were $31.3 million in Q3, compared to $22.7 million in Q3 last year. We expect our 2022 capital expenditures to be at the high end of our previous guidance of $110 million to $120 million. Driven by the increased cash flow in Q3, we returned approximately $607 million of cash to shareholders through a combination of $536 million of share repurchases and $71 million of dividends. The Q3 cash return to shareholders significantly exceeded net income and was up 156% versus Q3 last year, driven by the record cash flow. From a capital allocation standpoint, we remain committed to growing our quarterly cash dividend in alignment with long-term EBITDA growth and using our share repurchase program to deploy excess cash. Now on to the balance sheet highlights. We ended Q3 with approximately $1.1 billion of liquidity, comprised of $896 million of committed funding under our credit facilities and a cash balance of $188 million. Our debt balance at the end of Q3 was $2.2 billion, up $472 million versus Q3 last year, primarily driven by share repurchases due to our expanded capacity to borrow given our EBITDA performance. Our net debt to EBITDA leverage at the end of Q3 was 1.36 times, down from 1.39 times at the end of Q3 last year. Finally, as Bob discussed, we're taking actions to reduce our costs by $175 million. When including expected net headwinds of approximately $25 million, driven by inflation and merit increases in 2023, we expect to realize net annualized cost savings of $150 million by the fourth quarter of 2023. This savings is in comparison to the annualized run rate of our operating expenses in the third quarter this year. Related to these actions, we are expecting non-recurring restructuring charges in the fourth quarter of this year of approximately $15-$20 million, which are incremental to our 2022 expense guidance, as I mentioned earlier. These net annualized cost savings are intended to be long-term structural changes. Investments to scale our digital processes, particularly in NAST, enable us to take these actions and adapt to changing market conditions to foster long-term profitable growth for our shareholders. Now I'll turn the call back over to Bob for his final comments. Thanks, Mike. As inflationary pressures weigh on consumer discretionary spending and global economic growth, we continue to believe that our global suite of services, our growing digital platform, our responsive team, and our broad exposure to different industry verticals and geographies, supported by our resilient and flexible non-asset-based business model, put us in a position to continue to deliver strong financial results. We also need to continue evolving our organization to bring focus to our highest strategic priorities, including keeping the needs of our customers and carriers at the center of what we do while lowering our overall cost structure by driving scale. The work that our team is executing on related to scaling our digital processes and operating model while working backwards from the needs of our customers and carriers is entirely focused on driving improvements in our customer and carrier experience, which in turn will drive market share gains and growth. We're focused on improving productivity, which in turn reduces our long-term operating costs and increase profits, leading to continued strong returns to shareholders. This concludes our prepared comments. With that, I'll turn it back to Donna for the Q&A portion of the call. Thank you. 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. We do ask that you please limit yourself to one question to allow as many questions today as possible. Again, that's star one to register a question. The first question today is coming from Todd Fowler of KeyBanc. Please go ahead. Great. Thanks, and good morning. Bob, I guess maybe to start, you know, if you can maybe share with us on the cost savings that you're expecting going into 2023. Yeah, maybe some comments around the buckets where you see those savings coming from. You know, how we should think about those across segments. And as you think about kind of this initial stab on the cost side, you know, do you see additional opportunities as you move beyond this? Do you have to wait until you get to the end of these cost savings before some other opportunities, or can you identify some things as you continue to move forward? A lot kind of packed in there, but maybe you can share some thoughts on that. Thanks. Yeah, I can start, and I'll let Mike weigh in a little bit too, Todd. You know, in general terms, if you think about our cost structure right now, it's about 75% personnel, 25% SG&A. Generally, I'd think about the cost reductions kind of following that same approach. You know, as we look forward, I think there's really kind of three drivers in terms of what's driving these cost reductions. Obviously, you know, we're seeing a changing marketplace. We're seeing supply chains operate more efficiently, more effectively with less disruptions. Over the course of the past couple of years, we've had to really ramp staff in order to deal with many of those exceptions. Just it required more human engagement, more human labor. As supply chain ease, it will allow us and afford us the opportunity to make some difficult personnel decisions there in order to take costs out of the model. Additionally, as Arun talked about, a lot of work on the digital endeavors to scale the overall model and drive efficiency in the model. That too will provide us those opportunities. Yeah, I think that covers it. You know, I think I'd put an additional emphasis just on the digitization efforts. While $175 worth of cost reduction initiatives, net $150 is important, for our model, it's not where we end. You know, it's just an articulation of the progress that we're making, and that digitization is really the key for us to continue to drive costs down going forward. I think, Todd, too, you asked kind of by segment, and I would just state that, you know, this will be broad-based, you know, primarily NAST and forwarding related, but there will be cost reductions, you know, across the enterprise. Okay. Thanks for the thoughts. Thanks, Todd. Thank you. The next question is coming from Jason Seidl of Cowen. Please go ahead. Thank you operator. Bob and team, good morning. Appreciate you taking my call. You know, we've been seeing a lot of talk about spot pricing in the truckload sector, and there's been some talk about maybe it finding a bottom here, if you will, for a bit. Would love to hear some of your thoughts on that. Maybe if I can squeeze one more in, just thoughts on that 60% of the new business being generated from lanes other than Transpacific in global forwarding. I thought that was rather interesting. Wondering what's behind that. Yeah. I'll talk a little bit about the cycle and spot more specifically. You know, we often use the TMC Routing Guide as a proxy for kind of where we see the industry overall in terms of routing guide performance. Obviously it's critical to understand how effectively routing guides are holding up in the contract space to kind of get a sense of the unplanned freight that moves into the spot. You know, the TMC Routing Guide depth of tender was hovering around 1.3. In September, it dropped to 1.24. When we look at that from a historical context, from a load acceptance perspective, that's really reflective of times like 2009, 2019, and the first half of 2020. I think that kind of helps to paint the picture of the current, you know, contract compliance that exists. In terms of where, you know, we see the cost market going, you know, in general, as we think about 2023, we think that, you know, the cost forecast that we have, you know, the beginning of the year and the end of the year looking pretty similar, but with a deceleration in spot pricing and truckload pricing in the first half of the year with a slight re-acceleration on the back with, we kind of think that that floor, the cost floor comes in kind of that April-May time period. There is very little unplanned freight in the spot market today. I think, you know, we are seeing a number of shippers intentionally use the spot as a mechanism to capture lower cost savings in keeping some freight out of the contract market. You know, as it relates to your second question around forwarding, you know, we're certainly proud of our leadership position on the Transpacific. We continue to add business in the Transpac, but we've also been very focused on diversifying the overall global forwarding portfolio, so as not to be so reliant upon that. You know, seeing strong growth in Europe and Southeast Asia, Oceania, Australia, LATAM, India as examples. You know, we climbed to the number one spot as the leading forwarder from India to the U.S. as well as from the U.S. to Australia. Hopefully that gives you some color. It was more a concerted effort to diversify yourself as opposed to just where the market was going in general? Yes. Perfect. Thank you very much for the time. Appreciate it. Thank you. Coming from Brian Ossenbeck of JPMorgan. Please go ahead. Hey, good morning. Thanks for taking the question. Just wanted to come back to the conditions in the contract market. Bob, you had a 55-35 split. You had spreads with spot market contract kind of widening out through the quarter, but margins came in a little bit weaker than we would have thought, or at least that would have historically suggested. Was that the compliance aspect of it that caused some of that weakness? Was it just less spot market volume than we would have thought? I mean, it does seem like it declined fairly quickly. Just a quick clarification maybe for Mike on that legal settlement. Sounds like that's in the SG&A guide and offsetting the other charge-offs. Wanted to see if you could expand on that and perhaps where that was located from a segment perspective, because that was a fairly large number you just called out? Yeah. You know, if I go to the truckload AGP, what we saw in the quarter, Brian, was continued strength in the AGP per truckload shipment in our contract business. That was up considerably on a year-on-year basis. The model is reacting in the contract business as we would expect it to. Our spot business, you know, as we continue to pursue share and grow volume in the spot, you know, we've had to get really aggressive in that area in order to grow volume. You're seeing a pretty significant drag on the overall AGP per shipment just based on that 35% of the volume that's in the spot. Our margins in spot, our AGP per truckload shipment today in spot are much lower than they are in the contract space. It's really the inverse of where we were in the third quarter of last year, where the margins in spot were far greater than that of the contracts. That's kind of flipped as it sits right now. Net-net, our AGP per truckload is up considerably compared to Q3 of last year and continues to be above the historical average. Yeah. Then Brian, just to add a little bit of clarity on SG&A. You know, we were up 21% in the quarter, 28% overall, guiding to the high end of our original guidance, including the $25 million gain on the sale-leaseback of our Kansas City regional facility, which was in Q2. We also had called out, and your point about, non-recurring legal settlements in the quarter and, on the year, largely offsetting, that gain from Kansas City. Just a little more specifically in the quarter on the legal settlements, you know, they represented about a third of that increase in expense in SG&A for Q3. Mike, which segment in particular did that impact, or was that more corporate line item? Yeah, it's a corporate line item, but impacting, you know, the NAST business. Okay. Thank you. Thank you. The next question is coming from Bruce Chan of Stifel. Please go ahead. Yes, thanks, operator, and good morning, everyone. Bob, you know, just going back to your second quarter commentary back in July. You had some pretty cautious outlook comments, especially with regard to global forwarding. You know, it looks like that caution was on point. You had, you know, division EBIT down almost 50% sequentially. I guess we were a little surprised to see that you were still adding headcount there, you know, up about 100 people quarter-over-quarter. Just, you know, maybe you can help us to reconcile those two things. You know, why you were adding, you know, when the outlook was so conservative. Yeah, it's, you know, in forwarding, admittedly, we likely got ahead of ourselves in terms of headcount. We certainly did not expect that the market was gonna come down as rapidly as it did. We were certainly cautious. You know, a lot of the headcount, the way that we pre-plan our workforce plans, Bruce, we're hiring in advance of opportunity. So many of those hires were already in, I'd say, in flight leading into the quarter. There were offers that had been extended and accepted, and we didn't feel like it was the right thing from a talent brand perspective to be rescinding offers in that environment. You know, as we talk about, you know, the cost reduction initiatives and kind of that balance between SG&A and personnel, that will clearly, you know, deliver a drawdown in headcount commensurate with the cost reduction. As I said before, that'll be focused primarily on NAST and forwarding. Okay, fair enough. Just maybe to follow up really quickly, can you give us an update on how you're thinking about the portfolio just in terms of, you know, strategic alternatives that maybe you consider what businesses you see as core or non-core, and whether you have any kind of processes in place to maybe monetize, you know, some of those assets? Yeah. You know, Bruce, I think it's really prudent to continually review the business portfolio and to assess the best way to create long-term shareholder value, right? That goes without saying. You know, as you see in our earnings deck on slide 10, we continue to believe that global growth and continuing to drive share gains through our integrated solution design between forwarding, surface transportation, Managed Services, and Robinson Fresh are part of that sustainable growth strategy. Each of them, in its own way, kind of feeds the flywheel of growth overall. You know, particularly across NAST and forwarding, as we look at instances where we engage customers with both of those services in comparison to where customers just engage one or the other, we see on a five-year CAGR, we see over a 450 basis point increase in the five-year revenue CAGR growth rate of customer revenue when we integrate both services with those customers. We see greater growth and greater retention. You know, again, we continue to review the portfolio. We continue to, you know, take the view that we have to do what's right for the customer and for the company and for the long-term value of our shareholders. There is nothing to update today specific to the portfolio. Okay. Appreciate the color. Thank you. The next question is coming from Jack Atkins of Stephens. Please go ahead. Okay, thank you. Good morning. I guess, first just a quick housekeeping item. Mike, so was the legal settlement in the third quarter about $8 million or $9 million? Just wanna make sure, is that in NAST or is that in corporate? That's my, I guess, first part. I guess secondly, when we think about the $150 million in cost savings, can you help us think about, you know, why is that taking four quarters to implement? I guess bigger picture, you know, Arun, as you execute on your technology initiatives within your purview, I mean, would you expect that number to potentially expand over the course of the next few quarters as you see additional efficiency opportunities? Yeah. Jack, let me just start off and cover your question about the legal settlements in Q3. Yeah, the legal settlements were $9.4 million. They impact NAST, the business. Yeah. Jack, in terms of timing, you know, we're gonna take the appropriate pace to this to ensure that we're able to not disrupt the business, not disrupt our customer relationships, and not put future growth at risk. You know, Arun can talk about the roadmap and kind of some of the things around operationalizing. You know, we've talked about kind of making self-serve automating and eliminating some of those legacy tasks. Some of this will phase in as those are delivered as well. Yeah. Jack, so right now we have a clear roadmap to increase productivity in NAST by roughly 15% by the end of 2023, which all ladders up to the $150 million that Bob described. As it relates to additional opportunities, you know, if you recall, we've talked about the life cycle of a load. Starting from order management to appointments to in-transit tracking and financial documents, et cetera, right? What we're focused on as part of this initial unlock, 15% productivity improvement is on in-transit tracking and appointments. Having said that, there are certainly the other opportunities that are starting that are probably earlier in the cycle. We have more confidence in the 15% based on in-transit tracking and appointments. As we gain confidence in other efforts, there's likely more opportunity, but we don't have line of sight for that just yet. Okay, thank you. Thank you. The next question is coming from Jordan Alliger of Goldman Sachs. Please go ahead. Hi, morning. Maybe just following up a little bit. Can you talk a little more about the timing of the cost savings as they roll through next year? Is it evenly spaced? Is there a way to get some sense for what SG&A and personnel expense could look like in 2023 after all these savings? Then finally, you know, I know you don't give guidance per se, but holistically thinking about this plan and the productivity savings you just mentioned, you know, can that EBIT margin stay north of the 30% level for the total company? Thanks. Yeah. Just in terms of the timing on the expense savings initiatives, you know, we obviously wanna get after those as quickly as possible, but as Bob said, we've gotta do it with the right cadence in terms of what we're delivering on the business, the market conditions, the pace of the digital efforts. You know, we, in our normal course, will come back and give you guidance on many of our expense line items on our Q4 earnings call. Yeah. In terms of, you know, kind of the operating profits of the business, you know, we will continue to work backwards from our stated operating margin targets of 40% for NAST, 30% for forwarding and mid-30s% for the enterprise. We're using that as a guide as we continue to move forward here and kind of a sort of. That in itself will help to kind of determine the pace in which the cost reductions come. Okay, thank you. Thank you. The next question is coming from Ken Hoexter of Bank of America. Please go ahead. Hey, great. Mike, just to clarify, because I know we keep getting on this cost, I guess, because it wasn't as explicit as possible. The $25 million gain last quarter is just partially offset by the $9 million legal settlement, right? It wasn't a full offset. I just want to clarify that from your earlier statement. Then, I guess looking at the difference, Bob, on the profitability and on NAST and then in truckload in specific, was there just inordinate fuel gains last quarter that added to this? I'm trying to figure out why the decline, sequential decline in these margins. What shifted here to make that? I mean, your percentage went down from on the spot from 40% to 35%, right? You went up on the contract. You said the contract margins were much, much greater. Just trying to figure out why that margin then overall went down so dramatically. Is it worth then chasing that spot volume business? Is it still contributory? Yeah. Ken, let me take your first part of your question just to make sure we're clear on that SG&A. You know, the comments about Q2 and the Kansas City gain were in the context of our annual guidance being at the high end of the original guidance that we gave on SG&A. With that, we had one-time legal settlements in Q3, but we also had smaller settlement in Q1, and we're really talking about what we believe will happen for the year. The comment about, you know, non-recurring legal settlements largely offsetting the $25 million gain was really a comment about the year in its entirety, all of 2022, not just what we experienced in Q3, which was a $9.4 million charge for non-recurring legal settlements. Hope that's clear. Yeah. As it relates to the contract business, you know, as you know, the contracts are constantly repricing, and so part of the drag on the contract, you know, AGP per shipment in third quarter was caused by, you know, bids that we repriced in the second quarter and through the third quarter that are resetting at lower AGP per shipment. You know, we've seen costs, you know, they came down precipitously, if that's the appropriate word to use, you know, in the second quarter, which caused that record spread that we had, the highest AGP per shipment in our history. You know, as costs have normalized, as contracts are repricing, you know, we're still in a place where we feel very good about the health of the contract portfolio. The spot market business is still contributory in terms of pursuing those share gains and those volume gains. Yes, it's down from second quarter. We certainly didn't look at the second quarter as being a sustainable adjusted gross profit per shipment, and certainly we're not building any plans around that. To be clear too, there is no fuel impact to our truckload business. It is a straight pass-through. There is headwinds and tailwinds with fuel in our LTL business. When fuel is going up, it tends to benefit our LTL business. When it comes down, it's a headwind. Just to clarify on the $150 million, Bob, is that a shift in incentive comp pay and commission structure, or is that just reducing the people, as you mentioned earlier, given the digitization? Just to get started for the follow on. Yeah. It's gonna be a component of all of the above to that. You know, we think there's puts and takes, headwinds, tailwinds in terms of next year. Incentive comp will be a tailwind. You know, reduced headcount will be an impact. You know, as I said kind of at the onset of the call, you think about 75, 25 being the split between personnel expense and SG&A. One way or another, it will likely closely follow that. All right. Appreciate the time, guys. Thank you. Bye. Thank you. The next question is coming from Bascome Majors of Susquehanna. Please go ahead. Just going back to forwarding. If we look at the sequential trend, gross profit was down $75 million or so from 2Q to 3Q, yet operating costs were up $6 million. Can we drill into that a little more besides the headcount question earlier? Just, you know, how much of this is a lagged ability to respond and how much of this is a structural cost increase? Because if we look at spot rates, it seems that that pressure will certainly be more this quarter than last. With the West Coast being all the way back to, call it, 2018 levels, but the cost structure and OpEx and forwarding being, you know, 50% above that this quarter. Any thoughts on that would be really helpful. Thank you. Yeah, it's almost exclusively personnel expense, Bascome. The ability to control that going forward? There is a plan in place to control that moving forward. You know, we continue to believe that 30% operating margins is the appropriate level of profitability for that forwarding business. As we think about, you know, how do we solve for that, it's really the three levels, three levers, right? I don't mean to oversimplify it, but it's what are the trends in volume, what are the trends in AGP per shipment, and what are ultimately the personnel expenses needed to support that, to deliver that operating margin. Thank you, Bob. Thank you. The next question is coming from Chris Wetherbee of Citi. Please go ahead. Hey, thanks. Good morning. I wanted to ask you about your sort of philosophy on volume growth. You know, I think there's been a push to continue to try to gain share through fluctuations in the market in NAST. You know, it sounded like this quarter that was challenging from a spot perspective. I wanted to get a sense of maybe how you think about it. Volume growth was pretty close to break even in NAST. Is it something that you think you can do? Does it make sense to do in these types of markets where you might end up seeing sort of an impact on profitability as a result? Just want to get your sense on how you're thinking about that. Yeah, I think, you know, in general, as we've talked about before, Chris, you know, we believe that volume growth through the cycles is an important component of the health of the overall business, right? Yet the play that we run, so to speak, is different depending on the market conditions. You know, Arun and his team have a lot of work in place to really, you know, take a systematic approach to maximizing yield and determining the appropriate level of volume and in which corridors and under what terms we should be accepting freight. In general, I mean, as I look at 2023 and what we expect the marketplace to look like, you know, if we're going to grow volume in 2023, which we expect to do, it will likely come, I won't say exclusively, but it will likely come through the contract, through the contract market. You know, we'll reprice around 60% of our truckload business between the fourth quarter and the first quarter. We know that in order to drive growth there, we're going to have to be aggressive in those truckload pricing events. That's—I don't know if that directly hits on your question, Chris, but if not, I can certainly build on that. No, it does. It's helpful. I guess that sort of gets to the point that you mentioned on the approach to contract pricing. Anything you can share with sort of where the market is today relative to how you might think about that? What type of aggressive actions you might need to take to be able to get share in that piece of the market? You know, we feel as though that we've really improved our pricing science, our pricing methodology, and our approach to response to these bids. We see some clear demand signals in areas of, you know, short haul and drop trailer that we're aggressively responding to. In general, I mean, what we're seeing, and I won't speak to how, where necessarily we see the market going, but what I would say is what we're seeing in early renewals in this quarter is that the AGP per truckload shipment is coming in at levels below where our contract freight has been through the last couple of quarters. Again, in order to drive growth at NAST in 2023, it's going to have to be fueled by volume growth primarily. Okay. All right. Thank you very much. Appreciate it. Thank you. The next question is coming from Scott Group of Wolfe Research. Please go ahead. Hey, thanks. Good morning. Mike, just a few follow-ups for you. Any color on the $10 million of losses at corporate just seems higher than normal. If we're doing our math right, is SG&A, does that go higher Q4 versus Q3? Just want to clarify the $150 million of savings. Are you basing off the reported three Qs, so including that $35-$40 million of annualized legal? Or are you excluding the legal settlements when you talk- The settlement. The SG&A, we guided to the high end. Yeah, I guess if you take the very high end of our guidance of $600 million and look at our year to date, you'd be seeing, you know, 172, 173-ish kind of number, would be the Q4 plug to get to the high end, which is higher than what we had in Q3 of, you know, 162-ish. Back to your first question. I think you were asking about in our all other and corporate results, our income from operations, which was a $10 million loss, compared to what would have been a $3.4 million loss a year ago. That's driven by unallocated expenses that we hold at the corporate level and think about that as primarily, you know, our investments in growth in the product organization. In terms of the other business units like Robinson Fresh, Managed Services and EST, which are included also in that group, those are generating income positively and up versus Q3 last year. Okay. Then maybe just, Bob, real quick, the price versus cost spread still positive, you know, 4 points in Q3. You think that stays positive into Q4 on truckload? Sorry, can you repeat that? You cut out a little bit. Can you repeat that? Yeah. Sorry about that. The truckload price cost spread down 13, down 17 was still, you know, positive in your favor. You think that stays positive in Q4? From where I sit right now, I would believe that to stay positive in Q4. Okay. Thank you, guys. Thank you. The next question is coming from Jon Chappell of Evercore ISI. Please go ahead. Thank you. Good morning, everyone. I think we've covered a lot, Bob, about the ever-evolving market here. It's changing awfully quickly. I was wondering if you can provide some perspective on this cycle versus prior cycles. Most especially, how are some of your competitors acting? You know, if you're going after volume aggressively, maybe at the expense of yield, are others doing the same? Is it more discipline this time? Does it offer you a better opportunity for, you know, Robinson specific market share growth versus prior cycles? Just any context to this, you know, upcoming maybe 12 months versus 2019 and 2016. As I think about these cycles, I mean, each one has its own unique characteristics. You know, typically we see that the upcycle lasts seven quarters or so, followed by a similar duration in the down cycle. You know, as we think about the next few quarters, we're expecting downward pressure on contractual pricing. In terms of, you know, behavior of competitors, you know, I don't think that our strategy is unique to Robinson to say, if we wanna grow share next year, it's going to come through the contract market. I would expect to see, you know, aggressive competition and aggressive pricing in the market because that's ultimately, you know, where if in normal circumstances, 85% of truckload freight roughly operates in the contract market. You know, companies will be aggressive to gain their share in that space. Would it be fair to say the high highs of this cycle could potentially translate to possibly a higher floor, or does it just make the volatility more extreme? You know, it's hard for me to forecast that from where we sit right now. I think, you know, we believe that the cost floor is higher than where it has been in the past. If you know, if you take that, you know, then potentially it means higher lows, if you will. I think what we're seeing from customers today is, you know, in pricing, they're tending to move back towards 12-month duration of their bids. You're not seeing as many mini bids or short-term bids and such, so more normal pricing circumstances. You know, customer objectives in pricing is, you know, there's been obviously a lot of disruption to service and cost and networks over the course of the past couple of years. Working with shippers to, you know, try to get back to the quality expectations that they had pre-pandemic, in some cases, you know, back to the pricing expectations that they had pre-pandemic, and also helping shippers to kind of reevaluate their network and their network footprints to optimize their overall costs. Got it. Thanks, Bob. Thank you. Thank you. The next question is coming from Amit Mehrotra of Deutsche Bank. Please go ahead. Hey, everyone. I just had a question, first one, I guess, on the cost savings plan. I really appreciate the delineation between gross and net cost savings, but just trying to understand how much of that $150 net is actually realized in 2023 versus kind of run-rate. Then just maybe a bigger picture question for Bob. You, Bob, you said Arun has, you know, helped the organization think and act differently, and I wanted you to expand on that a little bit. You know, really, what is the appointment of Arun as COO accelerate and what's kind of from the financial implications? I don't know if you think about it that way, but that would be helpful. I'm just trying to sniff out if there's a real change going on because, you know, the company has a great market position. It's a high return business. I'm just trying to see if there's a real inflection with this leadership change at the COO level that we should anticipate as a result of the appointment. Thank you. Yeah, just on the first question there, I mean, you know, the run rate or how much of it drops to the bottom line in 2023, that'll be guidance that we provide when we come back on our Q4 earnings call. We'll, as we customarily do, provide you guidance for the year on personnel and SG&A. That'll help you understand, you know, how that drops and, you know, in comparison to the headwinds on inflation and merit increase and investments and all the rest. Yeah. Amit, related to, you know, Arun's role and his promotion, I guess what I would say from where I sit is Arun is a seasoned executive, and he's got experience in many facets of executive leadership that extend beyond just product and technology. While he's highly skilled and technical, he's also. From a leadership perspective, really a transformational leader that elevates the performance of people and teams around him. You know, expanding his scope at Robinson is gonna help us to bring together teams that are critical to advancing our progress in digital, which in turn is gonna fuel growth and improve efficiency, allow us to compete to win as our industry, right? Our industry continues to evolve and change at a rapid pace. We're, you know, really thinking about where is this industry going to be, you know, three years from now, five years from now. As I think you know, my technical knowledge is deep in the supply chain space, and his is deep in the world of digital first companies and building scalable platforms. You know, collectively we complement each other's skill sets and we'll work collectively with each of the business units to achieve our long-term growth goals. The work up to this point has been exclusively focused within the NAST organization, and this allows us a platform to bring together those critical components and work across the enterprise. Yeah. That's fine. The question I have though is like, does that translate to like greater drop through of net revenue, as net revenue grows, greater market share gains? I mean, like, that's the real question. How quickly can this acceleration or change in leadership at the operational level help realize that opportunity? Yeah. I would say 100% of the efforts today are focused on scaling procurement, scaling customer demand, you know, and operationalizing those internal changes and improving the yield in the overall marketplace. Creating that two-sided marketplace, so we can have the appropriate liquidity, the appropriate cost structure to deal with, you know, lower AGP potentially in the future on a per transaction basis than what we experience today. All efforts are focused on growth in customer and carrier, you know, acquisition, retention and growth. You know, completely, you know, focused on the digital transformation, which in turn drives the lowest, you know, operating cost structure in the industry, which we believe we can achieve through these efforts, which in turn enhances profitability. Thanks a lot, Bob. Appreciate it. Okay. Thank you. Thank you. Unfortunately, that brings us to the end of the time we have for the Q&A session. I would like to turn the floor back over to Mr. Ives for closing comments. Thank you. Yeah, that concludes today's earnings call. Thank you everyone for joining us today, and we look forward to talking to you again. Have a great day. Ladies and gentlemen, thank you for your participation and interest in C.H. Robinson. You may disconnect your lines or log off the webcast at this time, and enjoy the rest of your day.