CH Robinson 3Q15 Earnings Call Notes

C.H. Robinson Worldwide (CHRW) John P. Wiehoff on Q3 2015 Results

A little bit softer demand

“one of the things that we wanted to highlight, though is that the trucking industry continues to be a cyclical industry…a lot of our net revenue growth this year has been enabled by responding to a market that has a little bit softer demand and taking advantage of the marketplace from the standpoint of serving our customers in a more effective way.”

Trucking industry has had some underlying cost pressures with driver shortages and increased equipment regulation

“I think very consistent with what we, and maybe many others in the industry, have been saying that there is some underlying cost pressure increases around driver shortages and increased equipment and increased regulation that’s limiting productivity. So you put that all together, and over the last five years, think the industry and we have seen some above inflation cost increases due to a lot of the factors that have been talked about in the industry.”

Everybody is expecting a softer market. Margins will depend on whether or not that materializes.

“So everybody’s expecting a softer market and everybody is moving down towards the lower end of price changes in the range, and really whether net revenue margins on that committed business expand or contract probably has more to do with how next year compares to what everybody is expecting during these bids versus the absolute tightness of the market year-over-year. ”

Volumes are still up in October but the growth rate has decreased from where it was in 3Q

“They were pretty consistent throughout the quarter. It’s what we discussed. Towards the end, there was kind of a slowing of that growth rate towards the end of the quarter. In October, what we’re seeing is volumes are still up, but, again, it’s up – that growth rate has decreased from where it was in the third quarter.”