Hello, everyone. Welcome to our Chicago Industrials Summit. I'm Richa Hering of the Transportation Asset Research franchise here. Thanks to everyone who's come out to support. Special thanks to our speakers this morning. Dave Bozeman, CEO of C.H. Robinson, you have Damon Lee here, CFO, and we have Chuck Ives in the audience as well. Lots to talk about here, and we really appreciate your time. Yeah. Yeah, maybe we can go ahead and address the elephant in the room first, get that out of the way. The tragic lupus accident and the unfortunate outcome and large nuclear verdict that was made against you. How are you thinking about next steps? What do you think is most misunderstood regarding the case that's been weighing on shares for- Yeah, for sure. Richa, good to see you. Happy to be here. Thanks for having us. Let's jump into that. We obviously gave some color on our recent quarterly earnings call, but I'll just double-click, and Damon can jump in as well. First and foremost, as we stated before, we totally feel like this was a case in a local jurisdiction within Dallas that was certainly made more on emotion than fact. We strongly believe the facts in this case are one that are on our side, and obviously our insurance carriers thought the same thing as they had appellate attorneys in the proceedings. Plaintiff's bar's requests were unreasonable to settle in a case like this, particularly when the facts were so strong on our side. We just feel on appeal within Texas, and that has a history of showing this, that when the facts are presented per law, that this will eventually be ruled in our favor. I have to strongly believe that nuclear verdicts are not going to be the norm. But I would say that we are making a call on here in various vectors. From an investment perspective, I would say, this doesn't change C.H. Robinson's strategy and what we're doing. We've had a docket. We've always had a docket. We've managed that docket extremely well for over two decades, and you can go back or look at 8-Ks and things of that nature. 98% of cases never see a courtroom. They get settled out in doing that. You look at the amount of freight that we broker, 37 million shipments, as you know, per year. We have tens of cases that we deal with. Do I think that the reaction to the industry, not just C.H. Robinson, is a bit overdone? I do think that it's certainly a bit overdone on here. This case, advisory verdict will go in. Ultimately, the judge will put a final verdict in the next 30 to 90 days. When that happens, our appeal process will immediately appeal. Then the pre-file motions and things like that will happen before the judge has to make a final determination. When that determination is made and filed, we'll file an appeal, and then that process starts, and that can be a series of 18 months, two years, and then it can go to the Texas Supreme Court as well. You're talking about this could be five to five years in doing that. It doesn't stop the fact of who we are, how we've managed it, how we manage inflationary costs. We do it. We do it all the time when it comes to insurance costs. We feel really good about that. I'll make this last point that this is not about C.H. Robinson. This is a bigger issue. This is really about commerce as well. Multiple vectors happening, but you have to look at commerce. If nuclear verdicts are going to be the norm, then there are a number of the industry that will really have an issue, and we'll have an issue moving commerce within the country because 30% of commerce is moved by brokers. 500,000 truckers have one to 10 trucks and are small owner-operators. They get their movement through brokers, and that's 500,000 out of the 600,000 that are around. This is a bigger issue. We are pushing for a standard through the Department of Transportation and FMCSA. That standard of reasonable care. We're also driving the legislation. We want Congress to act when it comes to accountability and the legislation around this issue as well, or else we will have a commerce issue. That's how we look at this. A bit overdone on stock reactions within that. C.H. Robinson is solid. You see that from our last results, and hopefully, we'll get into that. We've built a moat, and we've built a system that we think wins at the low and certainly wins at the high. We don't think that a case like this, when it comes to any type of insurance, inflationary cost is an issue for us. We've proven that we absorb all of that. I'll just put a bow on what Dave said. Two things. We think the stock reaction is, one, it's hinting that nuclear verdicts will become the norm. We don't believe that's likely. Number two is, I think it's assuming that we won't prevail on appeal, which we feel highly likely we will prevail on appeal, right? We think, as Dave mentioned, stock price reaction is overdone. We've certainly been active buyers of our stock, and continue to be, and certainly believe that this has become an attractive entry point for investment. Just on that, why do you not believe nuclear verdicts will become the norm? Is it just based on this commerce connection that you made, like it could really paralyze the state of commerce in the U.S., and our legislators are probably not going to stand for that at the end of the day? Yeah, for two reasons. One, plaintiffs' attorneys, you can always do. We cannot stop a lawsuit per se. Right? You bring a lawsuit in a particular jurisdiction, and that can happen at a local level. No one, no matter who they are, can really stop some type of lawsuits. They happen. They happen all the time in various industries in doing that. But proving that fact set all the way through the court system, I think you kind of see what happens over time. And we think in this case, that certainly will happen when the facts are presented to the appellate courts. It will clearly show some things that really show that C.H. Robinson is not at fault and certainly was not negligent in this, in the way we went about transacting this load. Those facts are clear, and so we feel really good about that. We do not think that that will be a nuclear verdict. If it is, if for some reason we see and that is the norm, then that is a bigger issue. I would go so far as to say the company that really kind of stands up and has the wherewithal to do that, you need someone with an investment-grade balance sheet, that has the scale, that has the monetary means to do that, and that company is us, to be able to stand through something like this. We are just calling on a broader look at all of transportation that this is a bigger commerce issue. We will be fine either way, but this is a commerce issue, and I do not think that there will be an appetite to have commerce slow down and have increased costs, less service, and that impact. I just do not think that we would stand for that. Yeah. I would just add, look, as Dave mentioned, the vast majority of cases that are litigated, they settle. The plaintiffs want to settle, the defendants want to settle. Very difficult to settle cases with this type of expectation, of a nuclear verdict. So we just don't believe that is the norm. And in fact, history has shown in most industries that is not the norm. We think, in fact, even in this case, if you read what the plaintiffs' attorneys have published post the verdict, they've always wanted to settle this case. They didn't want it to go to a jury verdict. So we believe history will be proven right, that this is a unique outcome, and that ultimately the history that shows the vast majority of cases become settled at reasonable amounts will be the norm. As Dave mentioned, if this becomes the norm, it is certainly not a C. H. Robinson alone issue. Logistics, the movement of goods, commerce as we know it will be severely impacted. I've said this morning, I mean, think about what we went through at COVID. I mean, I think you could see similar type events with empty shelves, service levels dropped, and substantial inflation. Because again, an industry cannot provide for its customers if the norm is nuclear verdicts. So in that scenario, certainly the government, Congress would have to do what we're asking them to do today, which is to develop a national standard and to enforce reasonable liability as it relates to that standard. I mean, that is something they could do today. Hopefully, Congress does not wait until we end up with a situation where things are much more dire to act. But again, that's not the case we're saying is base case. We believe this verdict is unusual. This case is unusual. We believe that history will be more the norm. That's our base case. One following- Sure. On this topic. You said you're very emphatic that this is emotions versus facts, and the facts are in your favor. Can we just hash out kind of the facts here? Sure. Yeah. You hired a carrier that had a satisfactory safety rating from the FMCSA. Which is not easy to get, by the way, not all carriers have that. Only 6% of carriers carry that satisfactory rating. Sure. It was pre and post-accident as the government came in and did an audit after that accident and upheld that satisfactory rating for that carrier. That carrier was less than 5% of Robinson's business that did that and was used by multiple entities, brokers and shippers alike. What about the concept of borrowed employee doctrine? What are the facts against that? I mean, the facts are this. We did not contact that driver. The fact that when you look and say, "Hey, that driver talked to their dispatch, and we actually rescheduled that load for four days later." That's just the facts. What's out there is fog. I'm giving you the facts of why this is bullish. That's just the facts of what we did. Yeah. That stands on what it is, and that's why we feel really good on appeal. We had no communication with the driver. We did not control the actions of the driver. The driver was an employee of the carrier. I mean, it's that simple. Yeah. C.H. Robinson did not act as a motor carrier in this particular case. That is a really important fact. That's why we believe on appeal, those facts will be taken into consideration, and we will prevail. The appeal has not been filed yet. The final judgment has not been made yet. Correct. Is there some discretion for the judge to maybe think about these facts and mend the actual verdict? There are. There is. That judge has a lot of way in which she can determine. We're not expecting that, but she could change everything from the liability to a number of other things within this case. We are prepared as our insurance carriers are as well to do the immediate appeal. One question, if anyone, we've got this topic, can we move on? Good. Good. All right, let's shift gears and talk about brokerage capacity. Yeah. Which you're passionate about. Before getting into the C.H. Robinson special sauce, we can talk about the market. You've ratcheted up your outlook for dry van spot rates significantly throughout the year. That was very much past year supply driven, right? How are you feeling about the prospects for a stronger demand comeback? What are you hearing out there from your customers? Yeah, good question. You're absolutely right that this has been a supply driven kind of inflection on overall cost. On demand, I would say this, it's a mixed bag. We certainly see some green shoots that are out there, but we're also cautiously optimistic because you have to break it down. Again, I will reiterate, we really look at housing, retail, and kind of this industrial manufacturing when we start looking at freight, what are really the things that drive freight. There certainly are tech industrials going on with data centers and things of that nature that is certainly active. But if I look at housing, and I look at retail on consumer spending, some of those are a bit flattish, and we certainly would like those to have an inflection to go up and to the right to really start driving this kind of demand rebound. Up to this point, we're just cautious about that. The main thing is that, as you know, we've built a system that wins at the low, and it's going to win demonstrably at the high. I think we've proven that by out-beating the Cass Freight Index 13 quarters in a row. That is our secret sauce and our system that does win. When the market does inflect, we will win on both the contractual and spot like we've been doing, but we'll do it in a more demonstrable way. That is very impressive, the 13 straight quarters of outgrowth in NAST. Maybe speak to that a little bit more. What is the value proposition that customers are particularly drawn to? I bet you'll talk a little bit about your unique tech platform here, but I'd love to hear more about what differentiates you from your competition. Yeah, I'll start, Dave, jump in. Yep. I think at the end of the day, we provide our customers a very high level of service at a very competitive market price. That is the equation. Now, what enables us to do that is what we've talked about often, which is our Lean AI approach to executing our strategy. We get the question often, how does your customer benefit from your Lean AI approach? One example we give often, which is, we have one agent that handles transactional freight quotes. Prior to the current Lean AI approach, we only touch 60%- 65% of those requests in our NAST business. Today, we touch 100%. If you're the customer, historically, if you're only getting a response in the time you need to get a response, 60%- 65% of the time, you're probably not happy all the time. Today, they get a response 100% of the time, and that agent responds seven days a week, 24 hours a day. Our number one rule as it relates to deploying our Lean AI strategy is do no harm to the customer. That is the bare minimum. If any approach we believe is going to create any deficit with the customer experience, we do not implement that technology. What we have seen over the last two and a half, three years is that the customer experience, our service levels, our service customer rating scores have gone up as we have implemented our Lean AI strategy. We always have to be market competitive. We always have to provide a differentiated service. Certainly our Lean AI approach has allowed us to do that in an exponential way with our customers. Richard, let me tie that up on what Damon said, which I think is right. As CEO, I will look at you and say, "We are not just a Global Forwarding and a freight broker." That is the price of admission at C.H. Robinson at scale. It is much more than that. When you start talking about the customers, we are a solutions provider, a technology solutions provider at scale for our customers. That separates us out from, I think, the industry and competition. We drive solutions when it comes to topology and onshoring and customs and really hard decisions that customers are making about very complex supply chains. We do that with things that we have recently launched. Our Lean AI Planner, a Lean AI Engineer, scans supply chains constantly, gives answers to those supply chains, saving our customers money on inefficiency and things of that nature. We are becoming more than a forwarder and just a broker. This is a solutions provider company. It is something we have been building along with our system as we have transformed the company in the last three years. I think it would also be helpful to hear, because a lot of your competitors talk about the importance of human touch. When the cycle heats up, like, okay, fine, you can address all these quote, unquote- Yeah. Requests that come in. But next iteration, maybe something goes wrong with the load and- Yeah. People want to talk to humans, right? Yep. Talk about how your solutions are maybe making it easier for your- Yeah. Folks to handle maybe more complex. Let's get into that and be really, really clear about what we're doing here. Because I hear that sometimes. I want to make sure people understand what's going on here. No customer, and I'll speak for everyone here, no customer, no matter what your customer is, wants to pay for back-office repeatable tasks. If you think that back-office repeatable tasks are going to come back and you will add cost in to do those back-office repeatable tasks, that is inefficient. I don't think that that is supporting your overall customer. We no longer are going to do that. We have very much put our technology into our order-to-cash process to automate some of those repeatable tasks that really are set themselves up to be automated, such as tracking and quoting and a number of other things. When the market comes back, we are not adding humans back into those particular repeatable tasks. What we have done is taken our people and allowed them to do the things that I just talked about, solutions providing, customer touch. We have the best logisticians in the world. When we start talking about solution setting and touching base with the customer, that's where we're focusing our people on, small, medium business, investing in people going out and doing that work. But order tracking and quoting, that's not coming back at C.H. Robinson. That has contributed to a 60% productivity since 2022, but it's on a solid ground of what we've built. I want to be really, really clear about that. Just to add to that, every process that we've automated at C.H. Robinson has a human in the loop. If a customer or a shipper wants to talk to a human, they can. Absolutely. Our technology is enabled in such a way that they don't need to. I think if you use your own life, for example, in most cases, if you can go online and solve your problem in a satisfactory way, you probably don't want to talk to somebody. Most of our shippers are that exact same way. But if they want to talk to somebody- We'll meet them where they are. We'll meet them where they want to be. The way we think about our technology, it's not about replacing the human touch. It's about augmenting the human touch. We've taken the employees that our shippers love to deal with, and we've given that account manager to be available to that customer 24 hours a day, seven days a week. That human in the loop can intercede into that automated touch point anytime they choose to. For us, it's not about either/or. It's not about human touch or technology. It is both, and we feel like we've got the right recipe to give the shipper that optimal combination of human touch and automation. As Dave mentioned, if you were to ask a customer, "What are you willing to pay for?" Those tasks that they're not willing to pay for, we've automated those almost 100%, and the feedback from the customer has been extremely favorable on that journey that we've been on. Let's talk about first-mover advantage too. There's this theory out there that it's only a matter of time before competitors can catch up, but I feel like- We've been hearing that for two years. Yeah. Talk about what's different here. I feel like it's, two years ago, the management team, right, you guys came in and- Yeah. People were willing to break things to make things, and maybe that's it. Maybe you talk about having a different philosophy. Sure. Yeah, I think a good framing on it, the first-mover advantage, I actually disagree with that premise. The reason I do that is because we just have to go back into a little bit of history. You can go back to 2015 or so, and the digital entrants came in. Remember that? When the digital entrants came in, it was like, "Hey, Robinson is done because this is going to take away all of brokerage and automate it," and things like that. That ultimately didn't work out. The thesis was a pretty good thesis, but the issue is that now you look at a 120-year company at scale that has 100 trillion data points and proprietary data, largest data set in the industry, and now it's the disruptor. Because that thesis has some flaws in it, because moving freight is really hard, and it did not account for that variability. Well, we actually do account for that variability, and the proprietary technology that we have used, along with our operating model, it has driven us to be a disruptor in the industry. We did not create Lean, and we did not create AI. It has all been out there, and anyone can get that. How you orchestrate that and how you implement that is different. That is where we have an advantage, and therefore, it cannot be a first-mover advantage. It is just an advantage. It is not going to be one that we give up, because you assume, when that question is posed, that if someone even tries to catch up, that we would be in the same spot. We will not. By the way, the deputy is no example. Some pretty big names in tech that are coming in, so they already know. Yeah. All right. Low single-digit growth in volumes that you guys have been seeing. Of course, in a down market, nothing to scoff at, 13 quarters of outperformance versus the industry. Could we see more meaningful growth, especially as you recently hit your margin targets you promised to the street impressively before we reached mid-cycle conditions? You talked about leaning more into growth once you achieve that target. We are there now. Curious if that could look like a step function change in what we are going to- Yeah. We certainly believe having optionality is one of the tools and levers to drive performance is going to be critical for us going forward. We have said this many times before, and we always like to clarify this, which is, the freight market on Monday is completely different on Tuesday, is completely different on Wednesday. Meaning, there is going to be some days where we can take demonstrable share, and it is at the economics we want, and we do that. There are other days where the freight quality is just not there, and we would much rather the competition take that share because it does not meet our standards, right? What I would say is we now have one more tool now that we have established that baseline quality of earnings, the mid-cycle margins you referenced, 40% for NAST and 30% for Global Forwarding. Now that we've established that baseline quality of earnings, now we have one more tool to drive outgrowth. We do believe that will be a meaningful contributor to our outgrowth in future quarters. I would think of it more as situational versus linear. I don't think you can say every single quarter that optionality is going to yield, I'll make up a number, 100 basis points of outgrowth, right? As I mentioned, the freight market is quite different every quarter, every month, every day. But we do believe, on a situational basis, it will add meaningful outgrowth to our performance. Then just the supplier pressure we're seeing across our industry. Obviously, you've kept AGP below flat, very impressive in light of that. But it is creating a bit of a near-term friction, right? Because these purchase transportation costs are obviously rising. So what inning do you think this depression is in, and when does it level out? When do we start to see maybe pure goodness comes with this? Yeah. I think we're in an elevated spot rate market for longer, right? I think if you just look at the fundamentals of the market, I would say we're in the early innings, and I'll get to the next tranche of why I think we're in the early innings. One is just, a lot of capacity has left the market. The current regulatory environment is going to keep that capacity out of the market. I still think the elevated rates that we've seen, even though the rate of incline may slow down, I still think they're going to stay at an elevated level. And we believe our revenue management capabilities allow us to win incrementally in that type of scenario. You mentioned purchase transportation. We believe through that revenue management capability that I just spoke of, that we procure freight better than anyone else in the marketplace. So even though the cost is going up, our relative performance to the market on that purchase transportation, we believe is industry leading, which allows us to deliver a flat AGP per load like we did in Q2. Now, the other tranche of why I believe spot rates will stay higher for longer is what we've talked about around the legal environment, which is we mentioned post Montgomery that there would be a consolidation of small and medium-sized brokers and carriers in the industry. We think now the combination of Montgomery plus, Lipe, Lupus Superior, is going to even exacerbate that even more, right? And as the industry consolidates, certainly C.H. Robinson will be a winner in that consolidation, and certainly that consolidation will keep spot rates higher as well. We think the fundamentals, as I just laid out, are a pretty solid recipe to keep spot rates higher for longer. Well, it is a very fragmented market, so we do not get to see what is happening private side. Right As much as you do. Are you seeing that already in terms of these consolidation opportunities? We are. We are. Yep, we are. On a couple of different fronts, we see small, medium brokers. First of all, as a fact, over 20% of brokers had kind of burned down in the last couple of years just on the macros of the environment. We've talked about that. We've seen a bit more of a spike on now some of the other issues that are hitting, be it headwinds on cost that they have to deal with. We do see a bit of a spike on that. Ultimately, as Damon said, I think we'll see potentially small carriers could have some of those headwinds as well as there's some consolidation that could happen, as we all continue to navigate this current environment. Yeah, and certainly we're getting the signal from shippers, right? Shippers are certainly signaling us a signal where they would've had many brokers before. They're certainly consolidating the number of brokers that they're willing to deal with, and there's certainly a flight to quality in that- Yeah. That number of brokers that they're willing to move freight with. As we've said many times, we think shippers are certainly going to be part of this kind of reshaping of the brokerage universe because as the economics change, as the legal environment change, shippers are only going to want to do business with brokers that they feel like are going to be here to provide all those services going forward and protect them, from a legal perspective from some of these verdicts as well. That kind of goes back to that earlier question you had on customers. That's the other thing we provide, is that coverage, is that partnership, is that trust, at scale for shippers. And I think that's what Damon said, that's what we're seeing in that call to quality right now. Seeing in terms of asset base versus not. You're also hearing some of your peers are making that assets matter, and shippers want to work directly with folks they know. But there's another line of thinking that maybe shippers are more inclined to work with brokers because they get that extra layer of protection before the carrier gets into the accident. You can Yeah. That shot. Are you seeing any sort of Yeah, that question, this is how I would phrase it. I'm not in the rooms of what the other folks are saying. I think we're pretty wise at C.H. Robinson on how we look at things with data and everything. Assets do matter, and brokers matter because commerce matters. 30% of commerce is moved by brokers. Assets cannot move this alone on doing things. Shippers go to brokers for a reason. We have, in our case, 75,000 customers or shippers that we deal with. We connect them with this 350,000- 400,000 carriers that we have access to. That allows a lot of price as well as topology and reach when you do that. If you're an asset, you have advantages and you have disadvantages. For a broker, our reach is pretty extensive in doing that, and that's why both work in concert really to move commerce. I think both are needed. Yeah. It's not just one. Modern logistics does not work without brokerage. If you think about the flexibility, the economies of scale, the economics that brokerage brings to the logistics marketplace, that was demanded by commerce. If you think about it, you had a world of assets. Shippers and assets. Shippers' requirements and the requirements that assets couldn't meet created brokerage. At the beginning, brokerage was 5%, 6% of the for-hire market. Today, it's 30% of the for-hire market. If you look at the curve, we've been gaining share almost every single year for the last 20 years, and we believe that trend will continue. Just to reiterate what I said at the beginning, we don't believe modern commerce can operate without brokerage. We don't see a model where that assets absorb that capacity. We just don't believe that model works for modern logistics. Can you say why you think that that should continue to exist, and what do you think? Do you think there's a natural, like it should be 50/50 or? I think it is the superior model to move goods. You're thinking you have the most access to capacity of any model out there, and you have the most access to freight of any model out there. Your ability to move goods at the most efficient price exists. In early days, brokerage had challenges with service levels. Today we don't. C.H. Robinson can provide service levels that equal the assets. If you're a shipper and you can get the flexibility and the economics and the service level, and you have all of the flexibility and optionality that brokerage brings you, why wouldn't you use that mode to move goods? That's what the curve tells you. Yeah. That is why brokerage continues to take market share in the for-hire market. I think when you say, "Hey, should it be 50/50 or where will it go?" I think the market will bear that. It will. It comes down to assets on how much will they invest. A number of assets have stood up brokerages. It is a reason that they stand up those brokerages, because it is a model that works. The market will bear what that percentage will be. Again, it has just been going on this up and to the right burn from 2006 to now. We just think that trend will not bend and go down and to the right for all the things that we have been talking about. Yeah. To Dave's comment, I think the best compliment that the assets can provide to brokerage is the fact that all your main assets have brokerages. Yeah. I think it's a great point because I often hear like, "Oh, brokerage, the main benefit they bring is access to low-cost capacity. If that capacity cost is rising, why do you need a broker?" But you said, the service, the flexibility, there's a lot more brokerage. For us, we're a safe network. We're at scale. We have access to a lot of carriers, a lot of capacity. I don't know if I'm buying into just this low cost thing. The data just doesn't prove out on that. Right. Make no mistake, small carrier does not equal unsafe. No. Carrier. That's not correlated right there. The vast majority of small carriers are very safe carriers. Okay. Let's go back a little bit. You talked about some of the cost increases that your smaller carriers are facing. Insurance is one of them, very topical. I know you talked about your insurance renegotiation being later this year. Yeah. You seem pretty relaxed around the prospect of that, and I think it's because of some of the results. You faced a lot of cost headwinds, yet you've done really good in terms of just operating profits and all that. But yeah, maybe discuss that a little bit more. Are some of these narratives we're hearing around the multiples of insurance costs increasing true for some of your peers, and why do you feel like yours are not going to go up as much as the industry? Yeah. I would say the extreme bear cases you're hearing around the high multiples of insurance going up, that is certainly not the discussions we're having preliminarily with our carriers. Do we think inflation is going to impact insurance going forward? Yes. But fun fact, it's been impacting insurance for the last seven years. Insurance has been inflating at pretty high clips for a very long time now. We don't believe the bear case on insurance inflation is going to affect C.H. Robinson. Now, look, our confidence on how will we manage higher operating costs going forward- It rests in our operating model, right? We are tasked with solving problems and offsetting headwinds every day of every week. That's just what we do. Right? If you think about 2025, we offset a $100 million headwind at the operating income level that the market generated, and we still exceeded consensus EPS that year. So absorbed a $100 million headwind, still exceeded expectations. That is our mindset every single year, and we view inflation on insurance as no different. As we have said before, insurance on a gross revenue basis is a very immaterial number for us. We do not believe this inflation is going to drive it to a material number for us going forward. Whatever that inflation is, we will offset that and continue to deliver the results that we have been delivering. The other comment I would make is I believe that burden will only reside with brokers, specifically C.H. Robinson, for a brief period of time. Ultimately, that cost will become part of the freight rate environment. It will become part of every load we quote, and it will become part of the shipper's cost, and it will be passed on to consumers. We do not see a scenario where higher insurance cost is just a burden that ourselves will absorb 100%. Ultimately, like every other inflation, the consumer will ultimately pay the cost. Just to engage a little bit, moving on to Q2, some progress with contract versus spot and managed to do well despite your contract exposure increasing. Maybe talk about that and what you make of the spot market trends and the fact that more is kind of settling in contract. Is it going to be less telling, basically, what is happening in the spot market? Yeah. You want to start? Yeah, I'll start. This question is really important because there's a lot out there on doing that. I'll just tell you where we stand on here. Again, we like to take a wise approach on this, and contract feeds transportation. 75%-80% of contract is going to feed the loads that happen in there. Spot is necessary as costs go up, as we know that. We are winning at both. We have historical spot rates that we are winning, and we will continue to do that. But we also have, as we go into this repricing mode with our contractual book, we have a 93% acceptance rate within our contractual book. That means 93% of our customers that we work very closely with are accepting some price changes. Some go out to spot, and again, we compete there as well. This is super important to understand because as spot rates begin to, say, level off or grow at a smaller slope, that contractual book is super important that you have to have, because that's what's going to drive that, and then you'll see kind of that impact on if you're just counting on spot rates. We have a balanced approach in doing that, and it sets us up well for the future as well as today. We don't look at things in just a short-term valuation perspective. You have to look at this from a cycle perspective, and I think we're set up very well in winning in both contract and spot. Yeah. I would just add that it's like a balloon. If you squeeze it, air's going to go to one end. It's the same way with a spot and contract. If you're winning substantially in spot, you're losing contractual loads. More times than not, it's the same customer, right? There's rarely a relationship where you can forsake a customer on the contractual win in the spot and then come back to that customer and say, "Hey, I'd like your contractual business." So when we hear, "Hey, we're killing it in spot," we hear, "You're losing contractual business." If you want to know why we're outgrowing the market the way we're outgrowing the market, I think it's comments like that that fuel our outgrowth. One last question. Let's talk about your LTL exposure and other differentiating factors. Just talk about your exposure to the market as changes begin to happen and markets begin to recover. Do you have more outside exposure to regional versus large LTL providers? Is it hard to secure LTL capacity as more market picks up? Just risks of that. Yeah. LTL business, it doesn't get the same attention that our truckload business does, but we think it should. It is a well over $3 billion business and continues to perform extremely well. In fact, we've said if it was a standalone LTL business, it'd be hard to say it's not maybe the top performer in the LTL space right now. It has performed that well. I think LTL has some favorable macro characteristics right now that are also beneficiary. Certainly, pricing is more elastic in LTL than it is in truckload, and certainly that allows us to capture more price and more margin as we win share in the marketplace. I'd say our book of business is very diverse. It's enterprise customers, it's medium-sized customers. I think we have a very diversified and healthy book of business. The other thing I would say is the fact that we have truckload and LTL allows us to optimize freight for whichever drives the best efficiency for our shippers and the best performance for C.H. Robinson. We believe having LTL under the Robinson roof makes our truckload business better. Sure. We believe having our truckload business under the same roof makes the LTL business better. We can make trade-offs between those two modes of transportation that very few can. Just to summarize that, we feel really good about the performance of our LTL business. We think it is really punching above its weight versus the standalone LTL carriers out there, and that business continues to take share and continues to drive really substantial margin performance as well. Compared to some of the LTL providers, like this TL freight that's moving back into LTL, maybe 3PLs were more involved when that was going the other way, right? Like more consolidation of LTL shipments into TL. Is the way it's swinging now going to be beneficial to you? Is it going to be more harmful to you? Like how does. Well, the thing is, for Robinson, it is always beneficial, right? Because for us, we are looking for what drives, as I mentioned before, the best value for the shipper, and then what drives the optimal performance for C.H. Robinson. For us, if that means sacrificing a truckload for LTL or vice versa, as long as the performance is optimized for C.H. Robinson and the shipper gets what they need, we are happy, right? Again, we can make those trade-offs where the pure plays cannot, and we believe that is a tremendous competitive advantage for Robinson. Any questions on that? Okay. Actually, I had a question. What support do you think you have in the business there, retail, how does it come back? Substantial. If you look at our operating leverage flow through in Q2. So 96% of our AGP dollars flow through to operating income in a quarter that I think we would most say was pretty muted from a market perspective. We believe our operating leverage will be substantial when volume returns to this marketplace. In fact, we have said publicly many times, we think our operating leverage will rival the assets when the market returns to growth. Okay. That was my second. That was my last. Yeah. Thank you. Yeah. Reaching those mid-cycle margins is a big deal for what the team had to go through, with this set of conditions right here. That only gets demonstrably better, and it's not a linear curve, it's an exponential curve. Yeah. If you had took a survey, would anyone believe three years ago that Robinson would have generated almost 41% operating margin in a quarter with a negative market and spot rates up over 30%? I think the survey would've been, nobody would've said that would've been the outcome. We're really proud of what the team's been able to do. We think these results are unmatched. Thank you. In the marketplace, and we're just getting started. More importantly, I think it proves the strategy that we've built, that we've been on this journey with, that you've seen since we started, is one that works. We've always said it would work in the low, but it'll definitely work in the high. That's right. Richa, I know we're up on time, but just maybe bring it all together. Talk about your strategy being early inning, Lean AI strategy. We saw maybe more of a slow business on the GF side this past quarter. Just maybe what you're most excited about there when you think about M&A. Yeah. You're not slowing down. You're still kicking the tires on M&A. Yep. Could be big scale, just all about it. What's next in the evolution of C.H. Robinson? For us, it's important that the community understand that we say what we're going to do, our say-do ratio in doing that. All along, we said we were going to build a system that would perform the way that it's performing. In Global Forwarding, we said that, "Hey, we're going to drive back half of the year. You're going to start seeing an uplift in Global Forwarding as we start purposely taking what we did at NAST and applying it to Global Forwarding." That is indeed what you start to see within that business. We will continue to make that business more healthy, and it will punch above its weight. We feel really good about Global Forwarding and setting the tone there in that industry. That will happen. You're right, we're going to continue to kick tires, but we're also going to be disciplined and measured. You can't have valuations that don't make sense. That's not who we are. We make sense in what we're doing. ROI is important to us in what we're doing. So we'll continue to do that. But we will also continue to invent, create, right, and innovate. So we're going to be the disruptors in this industry, and that you can count on. Six months from now, Richa, it'll be something else that we create and deliver. So Robinson is the play for you, and we're actually super excited about where we are right now. Yep. We hope that you guys are too. Yep. Because we can always point to the results, no asterisks. This is it. We've always said that, and we're going to continue to do that. Yep, and capital allocation strategy has not changed post the Lipe verdict. So we're still going to continue to evaluate opportunistic buybacks of our stock. We're going to continue to be inquisitive, right. Certainly we closed on the DeSpir Logistics in the quarter that we think is going to be a really nice acquisition. As you mentioned, we're certainly not limiting our inquisitiveness to just small tuck-ins. We'll certainly look at scaled options as well. Okay. Thank you. All right. Thank you. Thank you. Nice job.