00:00There was a lot of hate made about, you know, the former maker of karaoke equipment coming out
00:04with this idea here that they had basically found a way to disrupt the trucking and logistics
00:08industry. And industry, let's just be fair, Dave, has been relatively fragmented and certain pockets
00:13of it certainly are stuck in the past. But there is a case, at least that you and your folks
00:18are
00:18making with regards to C.H. Robinson, the AI is not only there, but it's been there for a while.
00:23Explain that to me. Yeah, Romain. Hey, first of all, glad to be here. Thanks for having me on.
00:29You're right. There is a case, and C.H. Robinson is making that case. If you look at where we
00:36are
00:36as a company, we've been on a transformation that includes three key things. It's our logisticians,
00:42our technology, and our operating model. We call that lean AI. And it's been a disruptor. Matter of
00:49fact, we say that we are the disruptor and not the disrupted. And that's why there's a big difference
00:55between perception and reality on what took place in the industry. Now, what's going on with us is
01:01you're right. The data that we have is the largest data set in the industry. And we now have made
01:06that
01:07data intelligent. And we've used AI as a game changer for us. It's driven 40% productivity since
01:142023. We've outperformed the freight market eight quarters in a row. And we're just getting started
01:22at Robinson and feel really good. The last two years have been super exciting. The next two years
01:28are going to be even more exciting. And no one's going anywhere here at Robinson. We're here to stay.
01:34I am curious, though, too, with regards to some of the improvements that this AI, the lean AI,
01:39as you guys kind of brand it, and the way that it sort of factors into the ordering, pricing,
01:44matching people up here. Obviously, at the end of the day, you are still doing business with folks
01:49that aren't C.H. Robinson. So if they aren't tapped into that system, does that sort of negate
01:53some of the productivity gains that you have internally? No, it won't. It won't negate the
01:59productivity gains that we have. We've really looked at it and said there's a quote-to-cash process
02:05that has a lot of friction in it. It was a perfect opportunity for us to use our technology
02:13and really go after those manual, mundane processes and reduced a lot of that, which we did,
02:21and that contributed to our productivity. But again, our data set is one that allows us
02:29to do business and do business, move our people to the right, working with people in more strategic
02:36fashions, taking away all the things in the back office, and we've done a really good job
02:41at doing that. And now we're moving forward to solve complex problems, and that's what we do,
02:49as well as freight forwarding. But we're really a logistics solution set, and that's what we do at
02:56Robinson. Well, it's interesting. I was reading a column from one of our Bloomberg Opinion columnists,
03:00Thomas Black. He points out that, you know, you're one of the large freight brokers who has really
03:04adopted AI already. He has a great stat in here that when it comes basically to the time that you
03:11need to find an offer on a load, it's been cut down to about 30 seconds from 17 minutes,
03:16which is pretty interesting here. But I'm wondering, I mean, how you continue to stay ahead
03:21of the curve when it comes to AI, which is continuing to develop and disrupt industries as we continue
03:28to see. So how do you stay ahead of the curve? Does that come in the form of, you know,
03:32increased R&D
03:33spend? Or how do you actually build that into your processes?
03:37Well, thanks, Katie. One of the things that the team does really well, and we think is a competitive
03:43advantage, is we have internal engineers. We're a builder, not a buyer. And we take our internal
03:49engineers and we actually build our technology. Now, our hyperscaler is Microsoft with the Azure
03:56platform. But after that, we build all of our inflow AI work. And that allows us to do what you
04:05called
04:05out, which is build 30 plus agents that are mature. And the one we talk about is our quoting agent.
04:12And there are several more as well. But it's super important that yesterday we were doing quotes.
04:19It took us 17 to 30 minutes to respond back to a quote. And we would only get to about
04:2460% of those
04:25quotes. Our engineers have built an agent that now can respond 100%, 24-7, and in 32 seconds.
04:34And this happens along the quote to cash process. And it's a competitive advantage because of speed.
04:41And we're able to ideate, experiment. And we do that because we have internal capabilities.
04:48And that makes a difference in this industry.
04:50Well, as that time compresses, what does that mean for your workforce? Has that enabled you to
04:56reduce your workforce? Or could you see that becoming a possibility in the future?
05:01Well, productivity. We're an asset-like company. A lot of our costs is in variable costs. And certainly
05:08some of our entry-level, again, mundane processes that have been eliminated. Certainly, we've had
05:17productivity when it comes to those jobs are obviously engineered differently. But it has allowed
05:24us to shift our focus to the right, move our people up the value chain with our customers to
05:31really solve more complicated problems and drive more growth. And that's how we've looked at it here
05:37at Robinson, shifting the work, augmenting our people, supercharging them with that technology
05:43and allowing them to solve more problems.
05:46Dave, one quick question before we let you go. I do just want to get your thoughts more broadly here
05:50on what you are seeing in the trucking and logistics space. Obviously, given your role as an
05:56intermediary between the shipment of these goods, have you seen a material increase or decrease in
06:02activity?
06:03Yeah, Romain, it's a good question. What we've seen, first of all, we deal with 75,000 customers
06:09and we do 37 million shipments annually. So a strong scale at Robinson. So we have a good take
06:17globally around the world. And what we're seeing is the key things that I watch are really manufacturing,
06:25retail, and housing on the demand side. That's what really generates freight and helps to drive
06:31the economy. And I think on those three, we haven't seen exactly the green shoots that I'd like to
06:37do. From a housing perspective, obviously, with reduced rates, we think that that can be some
06:43help. But we have to watch the affordability issue on housing, on retail, that that's been
06:51dislocated. And that needs to be get back in place. And because we have things coming in all over the
06:56world. And obviously, on the manufacturing side, we'll see that start to get we want that to go up
07:03and to the right. Those three things will drive, I think, a rebound that you'll see. And we'll be ready
07:08for it here at Robinson.
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