Good afternoon, ladies and gentlemen, welcome to the C.H. Robinson First Quarter 2023 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, the conference call is being recorded Wednesday, April 26th, 2023. I would now like to turn the conference over to Chuck Ives, Director of Investor Relations. Thank you, Donna. Good afternoon, everyone. On the call with me today is Scott Anderson, our Interim Chief Executive Officer, Mike Zechmeister, our Chief Financial Officer, and Arun Rajan, our Chief Operating Officer. Scott and Mike will provide a summary of our 2023 first quarter results and our outlook for 2023. Arun will provide an update on our efforts to improve our efficiency and operating leverage, and then we will open the call up for 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 Scott. Thank you, Chuck. Good afternoon, everyone, and thank you for joining us today. Our Q1 financial results reflect the softening market conditions that have transpired in the freight transportation market over the past 12 months. With shippers continuing to manage through elevated inventories amidst slowing economic growth, the balance of supply and demand has shifted from a tight market a year ago to one that is now oversupplied. As spot rates approach the breakeven cost per mile to operate a truck, the market is likely at or near the bottom of the industry cycle, which typically results in capacity exiting the market. Contract rates are also declining as transportation providers adjust to the changing market. During this transition, we've continued to increase our focus on delivering an improved customer and carrier experience and a more efficient business model, and we're taking steps to foster profitable growth through cycles. In his prepared remarks, Arun will provide an update on the progress we're making on increasing the digital execution within the life cycle of a load by streamlining certain processes that are core to our operating model. Mike will give you an update on our continuing restructuring effort. We are executing on the plan that was initiated in November, and we're lowering our 2023 personal expense by $100 million at the midpoint of our guidance, reflecting actions that have already been taken and additional opportunities to further reduce our costs. As I've transitioned from my role of Board Chair to the Interim CEO, I've met with many of our employees who remain highly engaged and motivated to win as we strive to amplify their expertise with new tools. I've also met with several of our customers, and I'm confident in the power of our commercial engine and our ability to deliver superior global services and capabilities and solve complex logistics challenges for our customers while continuing to execute on our sustainable growth strategy. I'll wrap up my opening remarks by providing an update on the search for the new permanent CEO. Jodee Kozlak, the Chair of the Board and former Chief HR Officer at Target, is leading the search committee. With the assistance of Russell Reynolds, this role has attracted a strong pool of candidates. The committee is choosing a proven leader with broad operational experience who will accelerate our strategic initiatives and execute on the opportunities ahead for the company. The process is moving along as expected, and the board anticipates naming the new CEO in the second quarter. I, along with the senior leadership team, am actively preparing for a smooth transition to a new leader. Let me turn it over to Mike for a review of our first quarter results. Thanks, Scott. Good afternoon, everyone. As Scott mentioned, our Q1 results were impacted by a soft freight market. Prices for surface transportation and global freight forwarding have been declining with the weakening demand and excess capacity. With these macro forces as a backdrop, our first quarter total revenues of $4.6 billion declined 32% compared to our record high of $6.8 billion in Q1 of last year. Our first quarter adjusted gross profit, or AGP, was down $221 million or 24.3% compared to Q1 of last year, driven by a 45% decline in global forwarding and a 16% decline in NAST. On a sequential basis, total company AGP was down 11%, including a 15% decline in NAST and a 6% decline in global forwarding. On a monthly basis compared to Q1 of last year, our total company AGP per business day was down 23% in both January and February and down 27% in March, as the typical seasonal acceleration in March did not materialize this year. Far in April, we've experienced similar freight market conditions to those we saw in March. In our NAST truckload business, our Q1 volume declined 3.5% on a year-over-year basis. Within Q1, average daily volume in March was weaker than January and February, resulting in a 1% sequential decline in Q1 compared to Q4 of last year. Our AGP per truckload shipment decreased 19% versus Q1 last year, primarily due to a decrease in our transactional or spot market truckload AGP per shipment. During Q1, we had an approximate mix of 70% contractual volume and 30% transactional volume. Routing guide depth of tender in our managed services business, which is a proxy for overall market, declined from 1.7 in the first quarter of last year to 1.2 for the first quarter of this year, which is the lowest level we've seen since the pandemic impacted second quarter of 2020. The sequential declines in truckload linehaul cost and price per mile that we experienced in Q2 through Q4 of last year continued in Q1. The declines in Q1 were the largest that we've seen in over 10 years on a percentage basis. In Q1, we saw a 28.5% year-over-year decline in our average truckload linehaul cost per mile paid to carriers, excluding fuel surcharges. Our average linehaul rate or price billed to our customers, excluding fuel surcharges, decreased year-over-year by approximately 27.5%. With the price decline coming off a higher base than cost, these changes resulted in a 20.5% year-over-year decrease in our NAST truckload AGP per mile. Market conditions in our global forwarding business were also soft behind weakened demand and plenty of capacity, combined with the extended shutdowns around the Lunar New Year holiday. This contributed to significantly reduced import volumes and prices across the trade lanes for ocean and air freight. In Q1, global forwarding generated AGP of $177.9 million, representing a year-over-year decrease of 45% versus the record high for our first quarter last year, which was up 50%. Within these results, our ocean forwarding AGP declined by $111 million or 50% year-over-year compared to 63.5% growth in Q1 of last year. The Q1 results were driven by a 41.5% decrease in AGP per shipment and a 14.5% decrease in shipments. Despite the soft market, our forwarding business continues to have success adding new customers and strengthening its geographic diversity behind many of the investments made in technology and talent over the past several years. In addition to our strength in the Trans-Pacific trade lanes, our forwarding team generated over 50% of new business AGP from customers outside of the U.S. in Q1. Turning to expenses, Q1 personnel expenses were $383.1 million, down $30 million or 7.3% compared to Q1 of last year, primarily due to our cost optimization efforts and lower variable compensation. Our Q1 average headcount declined 2% versus Q1 of last year and 4% compared to our Q4 average. Another point of reference, our Q1 ending headcount declined approximately 6% compared to the end of Q4. Our cost optimization and restructuring efforts that began in Q4 of last year continued into Q1 as we found more opportunities to help ensure a more competitive and sustainable long-term cost structure. We indicated on our Q4 earnings call, we continue to expect our headcount to decline throughout 2023 as we streamline processes and leverage technology to allow our industry leading talent to focus on more important work like growing the business. A result of the progress on these cost optimization efforts, we are now lowering our personnel expense guidance for 2023 by an additional $100 million at the midpoint. We now expect our 2023 personnel expenses to be in the range of $1.45 billion-$1.55 billion compared to our previous guidance of $1.55 billion-$1.65 billion. This updated guidance excludes the Q1 restructuring expense and additional restructuring costs that we expect to incur during the year. Excluding the restructuring charges in 2022 and 2023, the midpoint of our updated 2023 guidance for personnel expenses is now down approximately 12% year-over-year. These expense reductions are primarily long-term structural cost reductions, with a lesser amount attributable to softer market conditions that we referred to earlier. Moving on to SG&A. Q1 expenses of $141.5 million were down $5.9 million compared to Q1 of last year, primarily due to a decrease in credit losses and a reduction of purchased services, including temporary labor. We continue to expect our 2023 SG&A expenses to be about $575 million-$625 million. 2023 SG&A expenses are expected to include approximately $90 million-$100 million of depreciation and amortization expense. As you recall from our Q4 earnings call, we committed to $150 million of net cost savings by Q4 of this year compared to the annualized run rate of Q3 last year. Our updated total operating expense guidance for 2023 now represents approximately $300 million of net cost savings compared to the annualized run rate in Q3 last year. As mentioned earlier, the majority of the expense reductions are expected to be long-term structural changes to our cost base. Q1 interest and other expense totaled $28.3 million, up $14.1 million versus Q1 last year. Q1 of 2023 included $23.5 million of interest expense, up $9 million versus the prior year due to higher variable interest rates. Q1 results also included a $9.6 million loss on foreign currency revaluation and realized foreign currency gains and losses, up $8.1 million compared to Q1 last year, driven by the translation impact of the various foreign currency denominated intercompany exposures that we had in Q1. As a reminder, our FX impacts are predominantly non-cash gains and losses, which is why we're not actively hedging them to reduce volatility. Our Q1 tax rate came in at 13.5% compared to 18.4% in Q1 of 2022. The lower tax rate was driven primarily by the incremental tax benefits that we typically see from stock-based compensation deliveries in Q1, as well as additional U.S. tax credits and incentives in proportion to the lower pre-tax income. We continue to expect our 2023 full year effective tax rate to be 19%-21%, assuming no meaningful changes to federal, state, or international tax policy. Q1 net income was $114.9 million, and diluted earnings per share was $0.96. Adjusted or non-GAAP earnings per share, excluding the $3.7 million of restructuring charges, was $0.98, down 52% compared to Q1 of 2022, which was up 60% versus the prior year. Turning to cash flow. Q1 cash flow generated by operations was $254.5 million compared to $13.9 million of cash used in Q1 of 2022. The $268.5 million year-over-year improvement was driven by a $235 million sequential decrease in net operating working capital in Q1, driven by the declining cost and price of ocean and truckload in our model. Conversely, Q1 of last year included a $289 million sequential increase in net operating working capital as costs and prices were rising. Over the past three quarters, as the cost and price of purchase transportation has come down, we have realized a benefit to working capital and operating cash flow of more than $1.2 billion. That benefit highlights some of the inherent resilience in our model. In Q1, our capital expenditures were $27 million compared to $26.2 million in Q1 of last year. We continue to expect our 2023 capital expenditures to be in the range of $90 million-$100 million. We returned $125 million of cash to shareholders in Q1 through $73.4 million of cash dividends and $51.2 million of share repurchases. The cash returned to shareholders exceeded net income, was down 50% versus Q1 last year, driven by the $101 million of cash used to reduce our debt. On to the balance sheet highlights. As we have demonstrated through the ups and downs of the highly cyclical freight market, the strength of our balance sheet and business model makes us a reliable partner for our customers and allows us to invest through the cycle. Our customers value the stability and reliability that we provide as they work to optimize their transportation needs. We ended Q1 with approximately $1.5 billion of liquidity, comprised of $1.22 billion of committed funding under our credit facilities and a cash balance of $239 million. Our debt balance at the end of Q1 was $1.87 billion, down $293 million versus Q1 last year. Our net debt to EBITDA leverage at the end of Q1 was 1.39 x, up from 1.29 x at the end of Q4. Our capital allocation strategy includes maintaining an investment-grade credit rating to allow us to optimize our weighted average cost of capital. With the anticipated earnings reduction in 2023, we have reduced our debt to deliver our leverage targets. As you would expect, the cash that we used to reduce debt generally reduces the amount of cash available for share repurchases. Over the long term, we remain committed to growing our cash dividend in alignment with our long-term EBITDA growth. Our dividends and share repurchase program are important levers to enhance shareholder value, as is delivering quality customer service more efficiently than anyone in the marketplace. I'll turn the call over to Arun to walk through our efforts to strengthen our customer and carrier experience and improve our efficiency and operating leverage. Thanks, Mike. Good afternoon, everyone. As I mentioned on our last earnings call, we've increased our focus on opportunities to streamline processes that are core to scaling our operating model. Streamlining these processes will enable us to decouple volume and headcount growth and drive increased productivity while simultaneously improving the customer experience and service levels. Shipments per person per day is a key metric that we use to measure our productivity improvements. We achieved a 4% sequential improvement in Q1 as we progress towards our goal of 15% year-over-year improvement by the end of Q4 of 2023. In order to reach our 2023 goal, we have accelerated the digital execution of critical touch points in the life cycle of a load. In Q1, the progress we made was primarily driven by increasing the automation of in-transit tracking and appointment-related tasks. Increased digitization and automation are key elements of delivering a superior customer experience as well as operating leverage. These efforts include operationalizing our information advantage at scale by giving customers insights around price and coverage and providing features to carriers that improve their utilization and cash flow. Streamlining processes and improving productivity creates operating leverage. Operating leverage gives us the pricing flexibility to unlock and accelerate market share growth while delivering on our long-term operating margin targets. With that, I'll turn the call back over to Scott now for his final comments. Thanks, Arun. As inflationary pressures continue to weigh on global economic growth and freight markets present cyclical challenges, the competitive landscape has changed. With lower available demand, the competition for volume is intense, and shippers are looking for stable and innovative logistics partners. We've shown the strength of our model through cycles. Our balance sheet continues to be strong, and we plan to continue investing in initiatives that we expect to provide innovative solutions and generate long-term profitable growth. At the same time, we're continuing to evolve our organization to bring greater 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. We expect this initiative will continue to drive improvements in our customer and carrier experience and amplify the expertise of our people, all of which we expect to drive market share gains and growth and lead to improved returns for our shareholders. After my first 100 days in this role, I'm even more excited about C.H. Robinson's opportunities and future. We have some of the best people in the logistics industry, and they're dedicated to solving challenges for our customers. As a result of the exceptional service that our people provide to customers during the period of extended market disruption, our customer experience scores are very high, and we're having more strategic customer discussions about our ability to provide an integrated service solution. While the near-term freight environment presents some challenges, our differentiated value proposition and strength of our people, processes, and technology provide many opportunities. 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 the handset before pressing the star keys. Today's first question is coming from Jack Atkins of Stephens. Please go ahead. Okay, great. Good evening, and thank you for taking my question. I guess, Arun, maybe this one's for you, but, you know, Scott or Mike, if you want to chime in, please do. You know, I guess, would be curious to get, you know, your take on, you know, how you're looking at the market for the balance of the year. It sounds like April is trending kind of in the same ballpark as March, if I understood your comment correctly. You know, if I think back to the last time you guys updated us, the thought was maybe the market would be troughing sometime in the second quarter and then beginning to see some improvement in the back half of the year. Any sort of update to that view? Any update to what your customers are telling you about sort of their business plans? I think that'd be really helpful. I'll stop there and hand it back. Thank you. Yeah. Thanks, Jack. This is Scott. Why don't we have Mike kick that off, and then I'll give a little color on customer sentiment. Okay. Yeah. Thanks for the question, Jack. You know, obviously, the market here that we're experiencing is a pretty soft market. You know, we're seeing pretty good competitiveness, particularly on the truckload side on the bids that we're involved with. You know, we've been able to maintain our win percentage. It's actually up this year in Q1 over last year. It was up in Q4 over last year. I think we're competing effectively. What we're seeing inside those bids are, you know, reduced total demand. The customers are just not seeing the volumes that they've had in the past. You know, that's reflective of this soft freight market environment. There's still, you know, a lot of customers still working through inventories. You know, they're not running the plants as aggressively as they have in the past. We're seeing a pretty soft market overall. You know, when we look at our NAST business in Q1, I think, you know, there are a few themes that I'd point to there. You know, I think we feel like we grew share, despite being down 3.5% on truckload. That's really, you know, with respect to the brokers, the 3PLs out there. I think we did a pretty good job. We also got improved productivity, and we talked about that 4% improved productivity against that 15% shipments per person per day target for the year. We did that in a soft market. You know, it's generally a little bit easier to get productivity enhancements when, you know, the volume is really roaring. We're able to do that in a soft market. The last thing, you know, we talked about was our customer service, and we really felt like we had best-in-class customer service there. You know, the themes are overall soft market. You know, you talked about, you know, how we. Described April relative to the quarter. You know, when we look at enterprise AGP per shipment or enterprise AGP per day, you know, we certainly had a better January and February than we did in March. You know, again, if you kind of translate that over to the truckload business, we were, you know, our volume was down 3.5% in the quarter. April kind of has played out similar to where we were in March. Probably market share gaining within the brokerage universe, but certainly down versus our original expectations, driven primarily by the soft market that we're experiencing. You know, and inside, you know, I'll talk a little bit, I guess, too, about the contract environment. You know, one of the, I think, changes that we've seen in the contract business versus Q4 was, you know, if you go back and look at Q4, customers were about half bids at 12 months and about half bids that were less than 12 months. As we got into Q1, those RFPs were really more leaning into 12 months. We've gone all the way up to about three-quarters of 12 months in those. You know, you could say that that might be the customers seeing bottom here, trying to lock in rates that are lower. You know, that is, you know, that's another kind of data point indication of where we're seeing the market. With that, I don't know, Scott, if you have any more you want to say. Jack, maybe just a little customer feedback. I've been lucky to be in probably about 20 meetings in the last month and a half with our top customers. I would say sentiment's pretty consistent with what you're hearing, with retailers and sort of higher levels of inventory. But it's really dependent by vertical. There are areas of strength, automotive, healthcare, are some. I would say a common theme of these meetings, too, is just sort of the longer-term partnership aspect of working with Robinson and us helping them solve their logistics challenges going forward with our full portfolio. The one thing we're doing in a, in a softer market is we're really leaning into customer engagement and face-to-face meetings. Okay, guys. Thank you so much for the color. Thanks, Jack. Thank you. The next question is coming from Stephanie Moore of Jefferies. Please go ahead. Hi, good afternoon. Thank you. You know, Scott, I wanted to maybe get a little bit more color around the ongoing CEO search. I do think that in general, the market would like to see some certainty here. You know, now that it's been, you know, call it several months of this evaluation process, if you could just provide any update of what, you know, expertise you, the board, are looking for in the new CEO, you know, in the evaluation of candidates, maybe some that might have specific brokerage experience or just transportation experience, as well as the view of, you know, someone who might have experience outside of transportation entirely. You know, just maybe how the board is thinking about these factors. Thanks. Sure, Stephanie. You know, as I mentioned in my prepared comments, the process is moving as expected, and we expect to name the new CEO here in this quarter. The pool of candidates is diverse and strong. The board's looking for a proven leader, seasoned executive, you know, really with an operational expertise and someone who can drive positive change inside Robinson. I would say the search committee and the board is also committed to finding the right leader, and we believe we're coming to the conclusion of that process. Part of what I'm doing with the senior leadership team is really making decisions and not pausing on anything. We set this up for success for the new leader, and that leader can move quickly once announced. Great. Thank you. Then lastly, you know, I appreciate the additional color that you gave in response to Jack's question about what's going on in the NAS business, but maybe you could give us some color about what's going on in the global forwarding cycle. I think it started to deteriorate a bit earlier. Is there an opportunity for that to also rebound a bit faster too? Any, any color there would be helpful. Thank you. Yeah. You know, I think there has been softness certainly in both ocean and air that we've seen. You know, most recently over the past few weeks, there are some green shoots of more positive news and, you know, demand volume and shipments and the whatnot. I think it's too early to call that a trend. You know, I think the market has really, you know, been soft, and you've seen the pricing come down as a result of that softness, you know, pretty much across the board. I would add, Stephanie, we've been very active in the RFQ, process with customers back to sort of that strategy of leaning in. Obviously, you know, peak season coming, you know, we'll be prepared for that, and if it is soft, we'll also be in a position to adjust costs in that business, as we see fit. Great. Thank you so much. Thank you. The next question is coming from Jason Seidl of TD Cowen. Please go ahead. Thank you, operator. Afternoon, gentlemen. Wanted to talk a little bit about the cycle. Now, you mentioned that you think we're sort of getting close to it in terms of the North American truckload bottom, if we will. What do you guys need to do to prepare for that, you know, in terms of your mix of business? Then if you can comment on where you think we're at with the cycle with air and ocean. Yeah, you know, I mean, you know, one of the things that we do is we forecast pricing in the marketplace. If you go to our website and we give you a look at what we think the market's gonna be, you know, right now from a pricing standpoint, we kind of feel like we're probably at the bottom or very near the bottom of the spot market. You know, when you think about the contract market, the contract pricing will follow the spot market. There's still some downward pressure on pricing within the contract market as those contracts that, you know, were 1 year old come to reprice. There's still a little bit of that going on. You know, I think on the ocean air side, you know, we're just getting to the end, or, you know, nearing the end of the annual rebidding cycle on pricing in that market. You know, I think our team has been pretty encouraged. You know, in that business, we've been able to grow share here over the past few years. You know, that market is one that, you know, we participated pretty effectively in both ocean and air. You know, we brought on some talent. We've had some technology advances, and we've had some geographic expansions and some verticals that we've gone into too. I think we feel pretty good about the customer engagement there. We feel pretty good about the bid process. Coming out of this last round, I think, we feel optimistic that we'll be able to continue to grow share, in the market, on both ocean and air. Well, that's good color. Just a quick follow-up. You mentioned, you know, if I'm looking at sort of base pricing for truckload in the back half of the year, you guys would be forecasting that up from current levels then? Yeah. Down, you know, we're kind of feeling like we're at the low now. We feel like that'll come up, as we go through the year and probably end the year, higher than where we're at. Fair enough. Appreciate it. You know, obviously, on that, I'm talking to what we've got on the website is our spot market. Like I said, you know, price and contract follows the spot market. As those contracts reprice, those will come along with it. Gotcha. Appreciate it, guys. Thank you. The next question is coming from David Zazula of Barclays. Please go ahead. Thanks for taking my question. Could you comment on the LTL market a little bit? Noticed, you had outperformed at least some of the indices we'd tracked on volumes. What, what you're doing to drive share in that space, and where you think the LTL market will go heading forward? Yeah. You know, on the LTL side, you know, we've, you know, we reported Q1 volumes down 5%. That was lower than our expectations going in, but that market also faces a similar softness that we're seeing across the board. What we've talked about on our LTL business has been, you know, the impact of a couple of large customers that we lost, you know, during the pandemic that, you know, we've had to lap. We feel good about the automation that we've been able to bring to that business and our effectiveness at getting out there and competing. From a margin standpoint, you know, that business kind of runs a little bit with fuel prices. That's the one part of our business where margins are improved when fuel is up and come down a little when fuel comes down. As we comp last year from a fuel perspective, I think in Q1 we were down, you know, about $3 on, you know, impact on fuel. There's a little bit of that margin going on there. Overall, you know, we feel like we've been able to compete there, despite the results coming in softer than we originally expected. Okay. real quick, you'd mentioned some automation initiatives. I guess, could you talk if, you know, to the extent you have on any feedback you've gotten from customers that are resistant and what you're doing to maybe help customers along with the initiatives you're implementing? Yeah. Good question. Most of the automation that we're doing actually should have extreme customer benefit. Much of what we're doing is automation on the, on the carrier side or internally, as it relates to appointment-related tasks. So on the customer side, where customers have systems or scheduling systems that we can, you know, integrate with to do appointments, that's great. Or they allow us to reach in to their systems, via automation and book, and schedule appointments. Ultimately, it's a cost savings for them as well, so they don't really push back at all. As it relates to in-transit tracking and track and trace, most of that, the heavy lifting is, it's not really heavy lifting. It's about, like, self-serve for carriers ultimately, right? Carriers now have the ability with better and hardened technology to self-serve as it relates to giving us visibility to their, to their locations, which then gives us greater confidence that we can relay back to customers, around service performance. Ultimately, on both sides of the marketplace, we haven't really found significant pushback, on the activities that we're currently working on. Thanks very much. I appreciate it. Thank you. The next question is coming from Chris Wetherbee of Citigroup. Please go ahead. Yeah. Hey, thanks. Good afternoon. wanted to maybe talk a little bit about some of the cost initiatives that you guys are working on. I know you've upsized your cost out goals for the year. You know, I'm wondering if maybe, particularly on the personnel side, we could maybe break that down between heads, and then maybe incentive comp, if that is part of it, or if incentive comp is excluded from the numbers. Just wondering if you want to start there. Sure, Chris. You know, we talk about the $300 million cost savings relative to the commitment that we had put out there, you know, on our last call. Just to recap that, you know, we had originally said we're gonna do $150 million in net annualized cost savings, and we use the base on that as the Q3 expenses from last year, which were about $600 million. You know, that if you annualize that $600 million, that's the $2.4 billion. Midpoint of our new guidance is $2.1 billion. That's how you get the $300 million of overall savings. You know, what you saw in the guidance that we put out there was a $100 million reduction in 2023 on the midpoint of our personnel expense. When you get into the composition of that, you know, we do have some tailwind from a normalized incentive for our folks. We also, going forward, you know, our annual salary increases go into effect in March, they didn't impact Q1 fully, just the end of it. That will be a little bit of a headwind going forward for us on the expense side. You know, the primary force behind the personnel expense guidance change was our staffing. You know, we've made really nice progress on our staffing. You know, in Q4 ending Q1, we ended, if you look at ending headcount in Q1, we're about 16,400, which is down about 1,000 from where we were at the end of Q4. If you went back to Q3, we're down about 1,500 from where we were in Q3. You know, we talked about the fact that we needed to get out there and kind of fix our cost structure from a long-term perspective. You know, I think we've done a pretty decent job of both right-sizing for some of the expense escalation that we had when the market was hot and, you know, the volumes required more service, frankly, because, you know, times were tenuous. We had to correct for that a little bit. You know, just looking at our, the long-term cost structure that we need to be competitive going forward, you know, we really felt like we needed to do some things there, and we did. You know, all along, we've had really good work on streamlining our processes and putting automation in to really allow our people to do more value-added tasks, things that they wanna do more, getting rid of some of the work that is less desirable, and building that toolbox for them so that they can focus on growing our business profitably with a great toolbox to support them. Hey, Chris, this is Scott. I'll just add on to that, you know, 'cause one of the things we've really worked with the senior leadership team on the last 90 days is taking complexity out of the organization and simplifying things. You know, as we all know, an important part of strategy is also deciding what you say no to and concentrating resources in areas of the highest impact. You know, simply put, we're really focused on reducing spend by focusing on the things that matter most. Part of this is the right thing to do for the business for the decade ahead, but also, as I talked about before, to really give the new CEO a platform to move quickly. I'm, you know, really proud of the work the senior team has done. They're, you know, they're tough decisions, but I think we're gonna see a benefit for all of our stakeholders going forward. Okay. That's extremely helpful color, I appreciate you guys running me through that. Maybe a quick follow-up, just sort of transitioning a bit to the global forwarding business. You know, there has been some signs of life off of a very low bottom in terms of spot rates on the ocean side over the course of the last couple of weeks. I think some other players have had maybe better success with contracting relative to the beginnings of the contracting season for this year relative to what the spot market might suggest. I don't know if that's sort of how you guys are thinking about that market as you move into the spring season, as we're going through that annual shipping contracting season. Is that something that you've seen, or is it, you know, continuing to sort of follow the path of the spot market? Yeah. You know, we're getting to the end of that process to reestablish contracts for the year, I think the team feels pretty good about it for a variety of reasons. You know, the upgrade in technology that we've had in global forwarding has really helped our connection with customers and helped us in terms of success. We rolled out Navisphere 2.0 in that space. That rollout was completed in January, you know, the customers are reacting positively to that. You know, we're exceeding our expectations on monthly average users, track and trace usage, data quality, feature usage by customers. What they're getting is getting more customized reporting and capabilities, you know, data insights, analytics to support decisions. I think those are the kind of things that have helped us get closer to customers and get the attention of some new customers. That's, you know, despite the soft market, you know, and like you say, there, you know, there is some reason here in the last few weeks to think maybe there's some positive news there. Like I said, not, you know, not enough to call it a trend. I think our team's more excited about the engagement they have with the customers and the attention that they're getting in some of the new verticals and geographies as well to feel good about their continuation of the share gains that they've seen over the past few years. Okay, great. Thanks very much for the color. I appreciate it. Thank you. The next question is coming from Bruce Chan of Stifel. Please go ahead. Yeah. Thanks everyone, good afternoon. Maybe if I could just follow up here on the commentary around Navisphere 2.0. I mean, I know it's still very early in the deployment, but, you know, when you think about it, is this a tool that we need to start seeing EBIT conversion or, you know, profit per head start to close the gap with, you know, some of your best in class peers? What's sort of the timeline for that process, if you don't mind sharing some color there? Yeah. Let me, let me take a cut at that and Arun might have a couple of comments as well. You know, Navisphere 2.0, you know, while it helps with efficiency, it's really more to help us engage with the customers in a more constructive way to help solve some of the problems that they have, make sure they're getting data the way they want it. You know, we've had some other technology enhancements on the GF side around being able to quote more efficiently, which is important in the bidding process. You know, while that, some of that tech is rolling out, you know, the game plan on the global forwarding side is not unlike the game plan on the NAST side. It's just a little further behind, I would say, in global forwarding with a lot more upside due to the complexities associated with that market when you think about languages, currencies, customs, and, you know, rules and laws as you get goods transported around the world. I think really good upside there, but that technology investment has been going on and will continue to go on in the feature enhancements and benefits that we're talking about with Navisphere 2.0 are really growth more than efficiency, but we do have efficiency investments around as well. Yeah. To kind of elaborate, when we reference Navisphere 2.0 or Online 2.0, that's really more about customer self-service capabilities, it's more about customer engagement, customer retention, and growth, to Mike's point. As it relates to productivity, there are a whole set of activities similar to how we're doing in-transit tracking, automation, and self-serve, and we're doing appointment-related task automation in NAST to drive up productivity. Global forwarding has similar activities as it relates to how a given file, we call it, you know, the metric we track internally is something along the lines of shipments per person per day. It's files per person per day, and we have various activities or underlying initiatives similar to NAST to unlock productivity there. I'd say that's a little bit, decoupled from the reference to, Navisphere 2.0. Okay. No, that's fair commentary. If I could just push a little bit more on that. You know, when I think back to, you know, call it 2016, 2017 after, you know, APC and a spate of other, you know, acquisitions that you did in global forwarding, I think the commentary there was that, you know, still a new and growing organization. There were still, you know, a lot of efficiency and, you know, productivity that was left to extract. You know, here we are in 2023, and we're kind of back to the same sort of, you know, EBIT conversion ratios. You know, what makes you confident that, you know, this time around you've got the right game. Yeah. Let me start. Again, I'll let Arun make some comments as well. You know, the team has been growing share. We've been happy with the progress that they've been making. You know, talked about new geographies. You know, they're currently the top three ocean forwarder from China to the U.S., from India to the U.S., from U.S. to Oceania. They've made progress in the Europe to U.S. trade lanes. They, you know, achieved a number four ranking there in Q1. You know, just expanded geographically into the Middle East, opened an office there in Dubai in mid-February, and picked up customers really all around the world. You know, not just Transpacific, but Europe, Southeast Asia, Oceania, Latin America, India, et c. You know, the team has been doing a pretty good job. The journey to, you know, optimization there there's a lot of runway there. It's a complex marketplace, and there's a lot of ability to streamline processes and automate and, you know, get ourselves to an efficiency level that we want to. I think the performance has been good. I think the runway is pretty solid there too. Yeah. To add to what Mike said, I think there are probably couple other factors that are relevant. You know, there was probably a lot of work around foundational technology investments that had to happen over time, onboarding some of the acquisitions onto our platform. I will say that over the recent past, call it the past 12, 24 months, there's been a heightened scrutiny around connecting technology investments to actual unlock of either productivity, or, you know, revenue leakage or whatever else. I'd say the discipline, or the data-driven discipline around investment priorities and linking it back to outcomes, has probably gained heightened focus over the last a year or two. Very good. Thank you. Thank you. The next question is coming from Jordan Alliger of Goldman Sachs. Please go ahead. Yeah. Hi. You referenced, I think, the bottom of the cycle a few different ways. One of the things I think you talked about was as spot prices approach operating break-even costs You know, it'll start taking out capacity. I'm just curious your thoughts on how quick a process this could be, especially given demand. maybe what's been your experience from your carrier partners? Have you seen anything in that regard? Thanks. Yeah. Thanks, Jordan. A couple comments, there. You know, we do think that the pricing is getting to the point where capacity, you would think would start coming out of the market. When we look at new carrier sign-ups, they're down pretty significantly, down about 50%, year-over-year in the quarter and sequentially down by a third as well. You know, that's usually an indication of things slowing down. You know, the cost for carriers with, you know, labor rates, insurance rates, and fuel has become, you know, more expensive. If they purchased a truck here in the last few years, that was probably more expensive too. You know, I think it's probably fair to say that, you know, we're on the verge of some capacity coming out in truckload, for sure. You know, I'll give you some interesting maybe information around the cycle too. You know, there are no guarantees in terms of forecasting when the cycle's up, you know, when they will come and go from peak to trough. If you look at the last three cycles in the U.S., and you're looking at AGP per shipment, you know, we've seen some similarity in the duration of those cycles. If you looked at the time between the last three peak quarters, it was three to three and a half years. If you looked at the time between the troughs, it was also three to three and a half years. You're talking about six to seven quarters between the peak and trough, or vice versa. No way to know if this freight cycle is gonna follow suit. Our last peak in truckload AGP per shipment was, you know, seven quarters from Q4 of 2018 to Q3 of 2020. Again, history repeated itself six to seven quarters from our last peak, which was Q2 of 2022. We'd be talking about Q4 this year or Q1 of next year as the trough on an AGP per shipment kind of basis. Thank you. Thank you. The next question is coming from David Vernon of Bernstein. Please go ahead. Hey, good afternoon, guys. Thanks for fitting me in here. The rate year month per mile on your truckload slide six there, you know, being down 28%, that's kind of well ahead of some of the benchmark indices that we follow from Cass and some of the other third-party stuff. Can you give us a sense for how much of the book is getting repriced at this level right now? What does that mean kind of from a go-forward perspective? Are we gonna be stabilizing at these levels, or is there still some more, maybe pain to take as this truck cycle, you know, reaches its trough? You know, we reprice our contracts all throughout the year. Tend to be a little bit heavier in Q4 and Q1. You know, call it 60% gets repriced, you know, in Q4 and Q1 and the other 40% in Q3, in Q2 and Q3. You kind of think about it that way. You know, I think what was interesting when we're looking at price per mile and cost per mile, this quarter in comparison to last year was just how much the decline was on a percentage basis. We were, you know, as we kind of pointed out there, we're down 27.5% on a rate, you know, per mile and 28.5% on a cost per mile. You know, when you look at year-over-year, those are the largest that we've seen in over a decade. Sequentially, you know, it was the fifth straight quarter that price per mile came down and also the fifth straight quarter that cost per mile came down. You know, that's after the run-up that we saw for, you know, seven, eight quarters prior to that. You know, that's the way we're seeing it play out. Okay. Maybe just as a quick follow-up, you know, you don't give us some of the same detail in terms of the buy and the sell rates for the forwarding business. I understand different modes, more complicated. I guess, you know, as you think about the, the rate at which, you know, your customer rates are coming down and correcting with the publicly available indices we might be looking at, is that, is that spread also widening a little bit, or are we getting to the point where, you know, your forwarding business has caught up to where sort of market rates are today? Yeah. You know, like we kind of said, that business gets, you know, rebid, repriced here and we've been going through that and, you know, hard to say where you've hit bottom. You know, that, you know, especially on the ocean side, you have a capacity issue there that's got to play out in terms of, you know, there's certainly capacity coming into the market there. You know, there's a little bit coming out, but not as much as coming in. You know, so how that plays out is yet to be seen, particularly considering the macro environment and what's there in demand. You know, the market's looking at the possibility of a recession here for the remainder of the year. Obviously, that impacts demand. That, you know, supply-demand kind of play in the ocean business is a little bit harder to call at this point in how pricing will get reflected there. On the air side? Yeah, similar dynamics on the air side. I wouldn't say much different, there, except for the, you know, the capacity situation's obviously a little bit different. It'll, it'll key off the macro demand environment and that, I think, is yet to be seen. All right. Thanks for the time, guys. Thank you. Thank you. We're showing time for one last question today. The final question is coming from Ken Hoexter of Bank of America. Please go ahead. Great. Thanks for squeezing me in. Scott, let me just how do you think about the core brokerage? I know you had some questions in the, in the prepared remarks on the timing of the CEO. Should C.H. be moving to more automation and less people intensive? I guess I wanna understand your thoughts on the design for the company and where you think it's headed. Yeah, Ken, great question. I think it's a combination of both. I think the technology amplifies the expertise of our people and our ability for our people to drive continued growth, and drive operating leverage for the business, and grow without adding headcount is one of the key things to what we're doing. You know, to me, we're on a path to have multiple wins. Win for our customers, win for our carriers, and a win for our people, when we do this the right way. I guess to take it a step further, do we see a reshaping of it where we're seeing big layoffs to shift the dynamic of that balance in the near term? No. I think, you know, one of the things that Robinson is so strong at is our commercial engine. I think one of the things we have to do is leverage the technology. We've seen that in terms of how we compete against our technology competitors. You know, this is an additive game, a one plus one equals four or five. One of the things Arun is doing, and part of our cost reduction strategy here, is also to drive costs out of areas and take complexity out of the organization, to drive it towards the right things that grow the business and grow margin. That's helpful to understand. Just a follow-up on the capacity exits. I guess there are a lot of peers that are focused on, you mentioned the digital peers, focused on positive and profitable volume growth in taking share. Maybe can you just spend a minute talking about the competitive dynamic in the market right now? I'll make a couple comments there, Ken. You know, I mentioned that, you know, the competitiveness seems to have heated up for, you know, particularly on the brokerage side here. You know, we could certainly go out and get more volume, but we're committed to getting profitable volume. You know, we are, and you know, not interested in getting into, you know, any kind of competitive situation that would lead us to issues with negative loads or, you know, chasing that kind of volume. We've been pretty disciplined there. We've got, you know, really good pricing engines. We feel like we've got great understanding of the market, and so we feel like we can compete pretty effectively there with our data advantage and our people and connectivity to the customers in a way that, you know, will continue to be able to make strides both on a market share gain standpoint and against our margin targets. Great. Scott, Mike, thanks for the time. Appreciate it. Thank you. Thank you. At this time, I'd like to turn the floor back over to Mr. Ives for closing comments. Yeah. Thank you everyone for joining us today. That concludes today's earnings call, and we look forward to talking to you again. Have a great evening. Ladies and gentlemen, thank you for your participation. This concludes today's event. You may disconnect your lines or log off the webcast at this time, and enjoy the rest of your day.