Good afternoon, ladies and gentlemen, and welcome to the C.H. Robinson Second Quarter 2011 Conference Call. [Operator Instructions] As a reminder, this conference is being recorded, Tuesday, July 26, 2011. I will now like to turn the conference over to Angie Freeman, C.H. Robinson vice President of Investor Relations. Please go ahead, Ms. Freeman.

Thank you. On our call today will be John Wiehoff, CEO; and Chad Lindbloom, CFO. John and Chad will provide some prepared comments on the highlights of our second quarter performance, and we will follow that with the question-and-answer session. Please note that there are presentation slides that accompany our call today. The slides can be accessed in the Investor Relations section of our website, which is located at chrobinson.com. John and Chad will be referring to the slides in their prepared comments. The slides do not contain any additional disclosures beyond what is in our earnings release. There are more visual representation of the information that is in the release to facilitate our discussion today. Finally, I would like to remind you that any comments made by John, Chad or others representing C.H. Robinson may contain forward-looking statements which are subject to risks and uncertainties. Our SEC filings contain additional information about factors that could cause actual results to differ from management's expectations. And with that, I'll turn it over to John

Thanks, Angie, and thanks to everybody who has taken time to listen to our call. As Angie said, the earnings release in the deck are similar, but we're going to be talking off of the deck and making references to that. We hope that this format is useful or helpful to better understanding some of the result comments that we make. Starting on Page 3 with the overall financial results, just to highlight a few of the important metrics that we have laid out there. Net revenue growth in the quarter of 14.6% and income from operations of 15.1%: those are 2 of our key financial metrics that we look at a lot and target our long term 15% growth, as well as compare the growth rate of the 2 in looking at our overall business model that Chad will comment more on later. Our earnings per share on a diluted basis were $0.67, which is 13.6% up from last year. So transitioning then to some prepared comments by our service lines starting with the consolidated or global transportation results for the quarter. If you look, we had 18.7% net revenue growth for our total transportation services. This -- these numbers would include all of the different service lines of truckload, LTL and other things that I'll make more specific comments on later, as well as our transportation results from Europe and Asia and all the different regions of the world that we do business in. As you know, most of -- a high percentage, more than half of the business is North American truckload, but there is quite a mixture of the results that roll up into this. The common theme across all of those services that will come up many times in the comments is in the note…

Thanks, John. As Page 11 shows and John mentioned earlier, our total net revenues increased 14.6% for the quarter. And our operating expenses increased 14.2%, resulting in an increase of income from operations of 15.1%. Personnel expenses did grow slightly faster than our net revenues. Our personnel expense increased to 42.8% of net revenues for the second quarter compared to 42.3% for the second quarter of 2010. This increase was primarily the result of an increase in expenses related to incentive compensation, including restricted stock, profit sharing and other bonus programs that are driven by growth in earnings. Our total stock-based compensation expense was $10.1 million for the quarter compared to $7.7 million for the second quarter of 2010. Excluding these incentive compensation expenses, our personnel as a percent of net revenue decreased slightly, primarily due to our headcount increasing at a lower rate than our net revenues. Moving on to other SG&A expenses. They decreased to 14.1% of net revenues for the quarter compared to 14.8% of net revenues last year. The primary reduction -- the primary driver of this reduction was our provision for doubtful accounts, which fell to $1.7 million from $4.4 million in the second quarter of 2010. One other comment on our income statement. Our effective tax rate was 38.5% for the second quarter of 2011 compared to 38.0% in 2010. Both of these are within our current expected range of 38% to 38.5%. The primary driver for our fluctuation and tax rate is the impact of foreign operations. Moving on to Slide 12. Our balance sheet remains strong with cash and investments of approximately $316 million. We had a good cash flow quarter in the second quarter. Cash flow from operations was $26.2 million. Our net CapEx, including software, was $10.2 million for the quarter. This includes our continued investment in IT systems to help us become more efficient and to continue to grow the business. Touching on our share repurchase activity for the quarter. During the second quarter of 2011, we repurchased 249,273 shares at an average price of $76.22. That concludes my remarks, and I will turn it back to John to summarize the call.

So wrapping up our prepared comments for the quarter, on Page 13 of the deck, I've mentioned several times that across all of our transportation services that our net revenue growth was primarily driven by increased pricing and margin expansion. When you look at the Sourcing activity for the quarter, it was primarily impacted by the continued loss of business with a large customer. We feel good about our third-party model, the variability of our operating expenses and some of the commentary that Chad made towards the P&L and how our -- we're managing our overall results on a variable basis and continuing to grow the earnings of the company. Lastly, I've talked about economic uncertainty and volatility or choppiness in the quarter. The economic demand, fluctuations as well as a lot of the capacity constraints in the truckload portion of it has created an environment where the demand has been a little uncertain. And maybe that word has been worn out in the first half of this year, but we do feel good that our third-party model continues to add value by helping our customers, either transactionally or for integrated services, whatever works for them and balancing that with whatever the marketplace gives us based upon the cycles of supply and demand and how our volumes and margins sort of correlate inversely during those growth periods. Overall, we feel good about how our business performed and how it is operating. And hopefully, these highlights have been helpful for you to understand our activities and results for the quarter. With that, we will open it up for further questions.

[Operator Instructions] And our first question is from the line of Bill Greene with Morgan Stanley.

John, I'm wondering if you can talk a little bit just about your 15% target growth rate. If we look at the second half, and I'm sure you heard some of the comments from UPS about a bit slower growth rates, is that sort of at risk as we think about second half given all of that uncertainty that you referenced? How should we be thinking about that?

I would say that when we look at the overall results in the longer-term growth of the business, we've said many times that margins are going to fluctuate from period-to-period. And that over decades or longer periods of time, that the market share growth and the volume is what's going to drive our long-term value add and our broader presence in the marketplace. When you think about margin fluctuation and volume and economic demand, all those things kind of mixing together, what I tried to talk through in that transportation margin scenario is that we went through a period of time where volume was low, margins were good. And then we went through 2010, where margin comparisons were a lot more difficult from a growth standpoint, but volume growth was really good. Now so far this year, we've had less than 15% volume growth in our core truckload activities, but we've had kind of more normal margins. At some point, we do need to see stronger economic demand and greater volume growth in order to sustain that 15% growth, but a lot of what we've been trying to share through the understanding of our own business is that when you mix together the capacity strength, constraints, the economic demand and all of the different variables that come through it, I almost feel like it's hard as ever to predict to that. So there are certainly scenarios where we would have a difficult time achieving that 15% growth in the second half of the year, but we don't forecast or give guidance to that just because we know that those variables can move very quickly and that there are other scenarios where we would feel good about achieving that growth rate in the second half.

Okay, yes. I know, and the slide deck was actually quite helpful. Just one question about your cash on hand. Does it make sense for us to think about the potential for acquisitions if you've got that much cash and you've got a very resilient model? Maybe that's a way to sort of sustain the growth rate? What are your thoughts on that?

We have said for many years now that the ripest area for M&A activity for us would be outside of North America to continue to expand our service offerings on the other continents that we think we have higher growth potential for. We've been a little more passive about that the last few years because of the recession and some of the uncertainties but maybe more importantly, as we get our operating system common around the world. And we do hope that as we get into next year, when we feel like we have a better platform for integrating investments into it, that M&A investments will become a greater part of our future again, not necessarily different from the way we were several years ago but that we could continue to use some of that cash on hand and capital to supplement growth by expanding our network outside of North America a little more aggressively than we have the last couple of years.

Our next question is from the line of Justin Yagerman with Deutsche Bank.

I wanted to get a sense on Sourcing margins, 8.2% is lower than you've been running at for the last few quarters. It felt like with the Walmart business kind of falling away that maybe that was giving you a bit of a higher margin on the Sourcing line, or maybe there was something else that was impacting that. I was just wondering if there was anything onetime in the quarter. I know weather has been pretty screwy, impacting Sourcing margins, maybe driving up the price of produce. Can you give us a sense of what you think normal Sourcing margin should look like on a go-forward basis and maybe what was impacting Q2?

That's a good question. We probably should have put the 10-year margin history in here like we did for transportation. And I don't know exactly what that 10-year average would be, but we do not see any material change to the future from the past regardless of the Walmart transition. What -- you hit on the items that there were freezes in Mexico. There were a lot of rain in parts of the country that stifled some of the volumes and made product quality an issue, where margins will bounce around quarter-to-quarter more from those issues and the mix of what we're doing as opposed to any kind of a permanent change. So they will bounce around, some of the program activity. While margins could move from year-to-year, the program activity, because it would give consistent commodities, maybe would put a little bit more consistency into the margin trends. So the range of what they would be for the last 10 years is what we'd expect it to be going forward, but it may, in fact, even be a little bit more volatile going forward within that range.

That's helpful. So there was no real impact from Walmart in that change in the customer behavior in terms of...

No, I don't think so. In recent second quarters, they've ranged from roughly 8% to 8.6%. So 2009, as an example, produce margins were 8.0%. So I don't think this 8.2% is anything outside of normal.

No, I would agree with that. This is kind of a reversion back to normal. It's just that for the last kind of -- I guess since '09, we've seen margins that have kind of in at least several quarters, above 8.5% or so, which has been abnormally high for you guys.

We're constantly adding new value-added services with packaging and branding. And there's such a wide variety from some of our new acquisitions where we have different labels or different products, and we never know if some of those new things are driving longer-term improvement trends. And then usually, the weather comes around and corrects us back to where we've been.

How are you guys thinking about personnel as we head into the back half of the year. Headcount has been coming up, which you guys have talked about, especially investing in the people and making sure that you've got the assets you need for -- or at least human assets you need for taking care of any kind of recovery type of volumes that you see. Where are we in that process? And how should we expect to end the year from a headcount standpoint? And what are your thoughts there?

We continue to hire, so we do anticipate investing in the second half of the year with additional hires. We have probably a 45- to 60-day window into that where we can bring people in fairly quickly. And at all times we're interviewing. And if you look on our website, there are a fair number of job openings posted out there right now. There's other variables of turnover, and that hiring process can be accelerated or slowed down depending upon exactly what happens with demand in the second half. So I think our headcount is up about 6-point-some percent over the previous year. I think it's right around 7% of where we were from the previous year. That could go up or down in the second half of the year, again, adjusted on a rolling 45 or 60 days. I think our network and my hope would be that it goes up, that demand and volume gets a little stronger and that we could certainly handle and are prepared process-wise to hire more and get that number up higher by the end of the year.

Our next question is from the line of Jon Langenfeld with Robert W. Baird. Jon Langenfeld - Robert W. Baird & Co. Incorporated: Can you reflect on the other line logistics volume? Talk about the -- a good pipeline there. Can you just talk about the size of clients that you're seeing adopt the managed transportation services that you do provide?

Yes. So there's about 30-or-so customers in that group that would be in what we would call managed transportation, where there's fee-based income. There would be other transportation customers in the traditional transportation revenues where we might be doing some variations or some of those process management things, but it would just be included in the overhead of the transportation. In this line item, on Page 8, around the $14.8 million for the quarter of net revenue, there's about 30-some customers, and these generally err towards the larger side of our customers. Many of them are top 100 or top 200 customers in the portfolio, where we are providing technology services, route guide management, some sort of transportation management type fee-based service, where those fees would roll into the other logistic services. And in many of those cases, that route guide management or whatever else we might be doing far that customer would be routing freight to other providers as well as to our own network. And so there could be transportation revenues or there is in an almost cases with those same customers where we have traditional transportation revenues as well as the other logistic services. There could be network analysis or bid work or other things that would be more project oriented or non-recurring with those same customers or with customers that we don't have a transportation relationship with that would not be regular annuities, which is why one of the reasons why this line item can bounce around a little more. Jon Langenfeld - Robert W. Baird & Co. Incorporated: Great. And then on the depreciation and amortization side, where does that trend as this new system comes online, have we already started to see the impact of that?

We have started to see the impacts of both the international forwarding system that we've been talking about as well as T-Chek is developing a new system that they implemented part of it. There is still further spending going on, on both of those systems, and there will be additional amortization coming online as different modules go active, but we do use a relatively short life of 3 years for those systems.

Our next question is from the line of Ed Wolfe with Wolfe Trahan & Co. Edward Wolfe - Wolfe Trahan & Co.: Can you just take us through the quarter a little bit with some of the pricing and volume trends that both, year-over-year, came down a little bit on the truck side? Can you talk a little bit about, through the quarter, how that progressed?

There really wasn't any trends within the quarter that were meaningful. It really is more about comparisons over the previous year. I think the big picture on it, Ed, is that last year, the demand was quite a bit higher than most people predicted going into it. So there was a lot of price pressure and a lot of network pressure, a lot of concerns about significant capacity constraints. So coming into this year, bid packages and prices were generally higher. And I would say, in general, across all the different transportation services, that demand probably hasn't been quite the fear factor that everybody expected. In some parts of the regions, for some periods of time, it has been. But like I tried to lay out earlier, things bounced around a little bit during the quarter in terms of very tight markets and different price comparisons and margin comparisons but no real directional trends on either of those that I could speak to. Edward Wolfe - Wolfe Trahan & Co.: Okay. And in terms of regions of the country, did you see any strengthening or weakening throughout the quarter? Did the West get any better, for instance, by June and July? Or is it as bad as it was at the beginning of year? And did the Southeast or Midwest weaken it all?

It stayed fairly constant with the comments that I made earlier. There was some pretty meaningful movement in our refrigerated capacity near the end of the quarter where things got a lot tighter. Produce season can have a lot to do with the variability around that. So within the sub-modes of truckload, whether it's flatbed or temperature controlled or hazmat, there can be some more spikes within there. Typically, temperature controlled stuff off the West Coast would be the most volatile, and there was some movement. That, again, is a small enough portion of the total truck that it doesn't change the overall trends. But if you're working in our produce division, you would definitely experience that. Edward Wolfe - Wolfe Trahan & Co.: Okay. And the D&A is up $1.1 million quarter-over-quarter and year-over-year. What's driving the D&A? And how should we look at that going forward?

A big portion -- the bulk of the increase is technology related, both rolling on those systems as well as buying hardware that supports those systems to run on a worldwide basis. Edward Wolfe - Wolfe Trahan & Co.: So is $8.2 million a good quarterly run rate here?

Yes. For the time being, yes, that is a good run rate. Edward Wolfe - Wolfe Trahan & Co.: Okay. And in terms of headcount up 6.6% when you have truckload volume up 3.5%, and I guess, combined with LTL, more like up 6%, is that where you plan to keep it headed up? Or are we kind of going grow into that for a while? How do you think about headcount?

Well, that's a global headcount number. So you've got Asia and South America and other places in there that are impacting that, where the headcount and the personnel dollars aren't going to necessarily correlate. But as an overall assumption, what we have said and we'll hold through is that coming into this year, we were at the high end of the range of almost all of the productivity metrics. And while we think we can stay there and hopefully continue to establish new ranges, that we're probably going to need headcount additions to support our growth going forward so that as a general rule of thumb, volume is probably the best driver or best metric of what those headcount increases would need to look like. So headcount and volume probably growing more closely together going forward. Edward Wolfe - Wolfe Trahan & Co.: And then just last one on Sourcing. When we think about when and how the loss of Walmart is going to grandfather, you did $35 million in the quarter and second quarter. I'm not so sure of the seasonality historically, but should you be in that range of kind of $33 million, $35 million of net revenue for Sourcing going forward? Or is there more that's coming out of this number?

Well, we did have some of the Walmart business during the second quarter that we have lost. We lost some of it during the quarter. So I would say for the next 4 quarters, we're going to have some comparison issues, so the second half of this year as well as the first half of next year. It's hard to say whether that's really a good run rate without knowing how successful we will be in other programs as well as the seasonality, like you mentioned.

Yes. I think going forward, the seasonality is going to be the big issue. That -- we think we're at a seasonal adjusted run rate, but there's a lot of variance by the growing seasons and the weather patterns. And so we'll have the Walmart comparison issue as well as whatever sort of typical seasonality that we have to plan for. Edward Wolfe - Wolfe Trahan & Co.: Is there any way to give a number of how much, you now believe, net revenue you lost to the Walmart business on an annual run rate?

No, we're not disclosing that.

Our next question is from the line of Chris Ceraso with Credit Suisse. Christopher Ceraso - Crédit Suisse AG: A couple of items. First, there's been an increase in M&A recently in the 3PL business. Are you starting to come up against new, larger, better competitors? Is that having an impact on your business?

From an M&A standpoint or from a competitive standpoint? Christopher Ceraso - Crédit Suisse AG: From a competitive standpoint created by M&A.

No. What we said -- when we look at our business long term, we feel like the competitiveness would largely show up in margins and margin activity if the competitive landscape moves significantly in kind of that 10-year graph that we looked through. We think the core metric that would indicate that doesn't really show anything. Now at the same time, our industry always has been and remains today highly competitive. And one of the things that we have said is that we believe since the 3PL sector is taking share and that a larger portion of transportation and logistics is running through some form of a 3PL or third-party going forward that it's quite possible that there are very capable new competitors who are doing just fine, and yet, our industry sector, as a whole, may or may not be more competitive per se. So there's a lot of competitors. Everything is priced competitively. It's a very fragmented industry with literally thousands of providers, but we don't see any sort of overarching change in the competitive landscape that has impacted our business model or the key metrics that we would look at to try to gauge that. Christopher Ceraso - Crédit Suisse AG: Okay. And I guess in a similar vein, we heard that one of your competitors was cutting price in the quarter to try to gain market share. Do you feel that or notice it? Or is the market too big and too fragmented?

Too big and too fragmented. We could certainly notice that in a lane or with a specific customer. But there's always somebody who's more aggressively going after market share, and it's a question of how long do you do that for. Last year, we helped out a lot of customer relationships where we lost money on transactions or tried to expand relationships by being -- taking on more volume or doing things where we lost money at it. And this year, we've been able to correct some of that, and that's why we have less volume and better margins on a lot of the activity. So at any point in time, there will always be examples of somebody slashing prices and going after market share and/or making a relationship investment to try to gain volume or credibility with the shipper. So I'm sure that's happened, and I'm sure there's examples of it across our network of where it's gone on but again, to no greater probability, percentage or impact that we could measure or understand that's impacting our business. Christopher Ceraso - Crédit Suisse AG: And then just last, Chad. Can you review -- I didn't catch all the numbers on the doubtful accounts. And maybe let us know why it was down so much and where you expect that to run.

Sure. Last year, for the quarter, our provision for doubtful accounts was $4.4 million. This year, for the quarter, the provision was $1.7 million. It's very difficult to project where it's going to run in the future, but what drives it is how many write-offs did we have during the quarter and what is the quality of the AR portfolio by looking at the aging by category and the risk categories of the customer. Even though our AR portfolio's as large as it's been, the statistics about the quality of the portfolio are very high. So the way you set your bad debt provision is do a calculation based on the statistics of your receivable portfolio, and that comes up with what the reserve that's on the balance sheet should be. The expense, basically, becomes a plug of the change in the reserve plus any write-offs you had during the quarter. So again, it's difficult to predict what it's going to be going forward, but I guess the key message is we feel as good about our receivable portfolio as we've felt in quite a while. That feeling is based on statistics.

Our next question is from the line of Nate Brochmann with William Blair & Company. Nathan Brochmann - William Blair & Company L.L.C.: I wanted to talk a little bit -- last time, we talked a little bit about margin trends. And thank you for that slide, very helpful. I was wondering if you could talk a little bit more specifically about gross profit per load and how you're kind of seeing that trend in terms of getting a little more granular and talking about the ability then as carriers or kind of modestly raising rates, kind of what you're seeing out there.

We -- gross profit per whatever, per shipment, per TEU, per ton, there's a lot of metrics that are relevant to our network that we look at. We have chosen to not disclose a lot of those for competitive reasons, and so it gets kind of hard to talk about how they're trending or give a lot of added clarity on it. But needless to say, when you look at our volume increases and our net revenue margin increases, you can make some assumptions about how those per-transactional trends are moving. Whenever we have margin improvement, we would typically have margin-per-transaction improvement going on as well. It's just a combination of pricing and productivity. So I think the overall trends for the quarter around pricing and margins would indicate that our profit per whatever is moving in the same direction, whether it's a TEU or a per-ton weight in airfreight. We're trying to get better at understanding and analyzing a lot of those volume metrics and may or may not choose to disclose them in the future. But for now, we hope that this deck and this information gives you all the sort of trend thinking that would be helpful. Nathan Brochmann - William Blair & Company L.L.C.: Fair enough. And also, could you talk a little bit about -- when we talked about some of this uncertainty going into the second half of the year, and obviously, your business continues to perform well. But was wondering how you -- in terms of your client discussions, when you're talking about kind of contracts and locking-up rates and things like that and kind of what their outlook is on whether they're more spot or more predisposed to contractual pricing right now. If you could kind of talk about those trends a little bit.

I think that probably, the biggest trend that I personally have been aware of in the business reviews that I've been a part of is since so many companies are really trying to run on lean inventories and tight supply chains, that these economic fluctuations have made it much more difficult, especially on a lot of the consumer products companies, where you're trying to keep inventories tight and manage your supply chain aggressively and when we you have consumer demand spiking and the markets jumping up and down and commodity prices moving around, it gets very difficult to manage a lot of this stuff. And you see different customers reacting in different ways. Some customers want to pay the premium to make certain that there's dedicated capacity in a more committed way, which obviously, we're doing a lot of that, because we're growing with our larger customers. And we feel good about our service levels and our commitments, and our pricing is up to reflect that. So there's a lot of our customers who feel that way, and there are others who are more disposed or exposed to the market volatility or whatever pricing that may come with that. So it really kind of depends upon the business model and the shipper-specific expectations of how they want to manage their supply chain.

The other comment that I would add on to that, Nate, is that the most people -- the most of the demand indexes probably haven't been quite as high as everybody was expecting. And yet, with some of the areas of pretty significant tightness in the truckload portion of North America, some of the things that were talked about quite a bit last year around capacity shortage and rule changes, if we do have very high demand and high growth, there could be some pretty meaningful shortages or capacity constraints in the second half of the year.

Our next question is from the line of Thom Wadewitz with JPMorgan. Thomas Wadewitz - JP Morgan Chase & Co: Yes. Wanted to ask you a bit about how you view the tightness in the market in second quarter and how you think that kind of affected your volume performance. I look at the 3.5% volume growth -- I don't know if you think that's taking share from the market or not. But typically, I think of your volumes, in a more normal environment, being stronger than that. So how do you think you did versus the market? And as has your sense of the -- with the market actually reasonably tightened second quarter or not in truckload?

It's hard this quickly after the quarter to really gauge precisely how we did compared to the market. But there's no question that if we did take share, it wasn't nearly as successfully as it's been in a lot of other periods, particularly last year, where we were taking share pretty aggressively and focusing in on trying to get through those tougher market conditions that were less anticipated. I would say, during the current year, it's been more about correcting pricing to a sustainable execution where we're getting rid of freight that we lost money at and participating in bids with a little bit more balanced perspective. So we maybe didn't take a lot of market share on the truckload service line this quarter, but we do hope that it's a fairly natural and warranted correction of the new capacity constraints and kind of what the appropriate market conditions are for today's pricing. Thomas Wadewitz - JP Morgan Chase & Co: So how would you envision a -- I guess a typical scenario of things playing out that would drive increase your market share gain or an increase in your volumes? I know you don't know what the economy is going to do. It's obviously tough to figure that out. But what's the scenario where your market share gains accelerate again to a kind of a more normal level? Is that at the market tightening a lot? Is that -- what is it that kind of potentially catalyzes that?

It's a function of relationship building and contractual expansion within the dedicated customer relationships like we have had success on in the last couple of quarters along with new customer and transactional growth that's available in the marketplace, which we have been less successful on the last couple of quarters. I think that less successful growth in the new customer transactional stuff is a combination of demand being tight but not so tight that route guides are completely failing or that there's significant amounts of freight everywhere that there's incremental volume opportunities along with some pretty significant capacity constraints and adjustments in the marketplace that make sourcing that additional capacity at a profit pretty challenging for a short period of time. So it's a combination of supply and demand fluctuations and having enough demand in the marketplace that we can take up -- take advantage of that, help our customers and make some money doing it. Thomas Wadewitz - JP Morgan Chase & Co: And do you think it's more the market? Or is it -- is there maybe a lag benefit from the headcount you added?

We've had some discussions about that, and it's always hard to gauge whether or not our staffing is a variable in that. We know that we got pretty lean during 2010 and that we're adding resources to help us grow. And as I said earlier, we'll continue to add people with that. I think whenever you put more resources towards it, you'll have some sort of incremental gains in volume or activity. Whether or not it's the optimum productivity and profitability, it's something that we sort of perpetually debate around here. Our core conclusion around that is kind of what I've said a couple of times, that we know we need to add people to continue to facilitate that growth, and it's in process.

Our next question is from the line of John Larkin with Stifel, Nicolaus. John Larkin - Stifel, Nicolaus & Co., Inc.: Yes. John, you had indicated that of the total transportation business, the truckload was more than 50%. Refresh my memory. Have you broken out the size of the rapidly growing LTL business and/or the size of the non-U.S. business as a percentage of the total?

We have not. We have, in the past, estimated that the LTL net revenue is somewhere in the low to mid-teens, around 13%, 14% of the truckload -- total truckload category. We've had some definitional challenges in the past around whether LTL was defined as to how the shipper tendered her to you or what type of a carrier we tendered it to, what consolidation programs and some other things. We hope that at some point in the future, we'll have a cleaner breakout of that and report LTL as a separate line item. But for now, it's right around 13%, 14% depending upon how you choose your definitions of the total truck net revenue category.

And European truck is the only significant foreign trucking we have. Or non-North American trucking is a more accurate way to say it, and that's about 4% of truck. John Larkin - Stifel, Nicolaus & Co., Inc.: The question I have revolving the LTL then would be given that the brokerage community has penetrated LTL a little bit later than perhaps it penetrated the truckload market, how many more years of what I would call outsized growth rate do you see on the LTL side of things? Is it another 5 years before you get to roughly the point where it's a mature market? Is it going to take longer than that, shorter than that? Any guidance you could provide to us would be helpful?

That's a good question and hard to answer. I -- it probably depends upon a lot of things. We think there's a lot of run room there. Our relationships with the top 200 LTL providers are -- many of them are still fresher in the last 5 years. And while it's become a very meaningful business to us, we're not that large of a customer with any of them, and we feel like we have pretty good room to grow with them. So I don't -- and our long-range planning goes out 3 to 5 years. And we think during that period of time, we can continue to be pretty successful at growing that. As far as 10 years and beyond it, it would get really hard to predict, but scale also is a big advantage in that. So one of the things that we would hope is as we continue to build relationships and improve the economic outcomes of both the shippers and carriers that we deal with in the LTL side of it that as we get larger and larger, hopefully, that scale would translate into a size advantage as well as a first-mover advantage. John Larkin - Stifel, Nicolaus & Co., Inc.: That's a very good answer. And then shifting over to Europe, that's a very helpful statistic that Chad provided. 4% of total truck is occurring in Europe. I think you had mentioned a couple of times in the last 12 months that it is your core belief that Europe could be potentially as large as domestic U.S. at some point in the future. Tying that into an earlier comment related to M&A potential, mostly in the foreign markets, can we assume that the European growth is going to be more or less stagnant until it's time to start ramping in some of the acquisitions? Or is there also an organic growth program at work in Europe as well?

We have organic growth initiatives that we feel pretty good about and are pretty confident that we will have organic growth in Europe, the challenge being that with starting from a 4% base, even 20% or 25% organic growth, it takes many, many years to meaningfully move the needle in the mix side of it. We would love to invest some of that capital in the European truck service line that we have. We're not aware of a lot of significant providers over there. So we'll continue to look for smaller pieces that might bolt on well to our network from a truck standpoint and push the organic growth as aggressively as we can. And we do very much believe that the long-term potential for the European truck service line is equal to the North American truckload opportunity, but it is realistically going to be a very long time, like decades, before those 2 lines probably cross based upon how fast the mix can change from organic growth and the types of investment opportunities that exist that we're aware of. John Larkin - Stifel, Nicolaus & Co., Inc.: Got it. That's very helpful. And then just maybe one last question on your intermodal initiative to add an extra 500 boxes into your previous order. And I can't remember how large that was. I want to say something like 1500 boxes. Do I have the magnitude correct?

No. We had 350 and now 500 more, which will -- and depending upon exactly the timing of the delivery and those other leases, this would put us somewhere between 600 and 800 boxes, depending upon exactly when the deliveries come and when the leases run up. John Larkin - Stifel, Nicolaus & Co., Inc.: Are these dry boxes? Are they 53s or reefer boxes?

Sorry. I was just going to say yes.

Yes, all dry, 53-foot boxes.

Our next question is from the line of Matt Troy with Susquehanna Financial Group.

Yes. I wanted to ask a question about Europe, specifically on the regulatory front. The EU Parliament, I think, just levied or authorized the member states to levy an additional charge on trucking companies to penalize them or recover the cost of both environmental and noise pollution. I think it's something -- a couple of cents per mile. But also, it actually allowed them to institute differential pricing with higher rates during peak periods or days or hours. Was wondering if that makes your business there more complex. Do you see that as an opportunity, because it's getting more complex or a challenge for your model to take share? And then secondly, the other regulatory thrust of the EU has been potentially the requirement of ships to cut the emissions. And folks are talking that, that can drive about 30% of short-seat freight to trucking-based carriage. So if you can maybe put some context around that, that would be helpful.

Yes. So for starters, in the 20 years or so that we've been building our truckload business in Europe, it's been consistent during that whole time that fuel prices have been significantly higher. The cost of new equipment has been higher in Europe. And that when we look at kind of transportation logistics optimization, that truckload transportation in particular has been much more expensive relative to North America. And that with congestion and difficulty from our vantage point, European supply chains have always had a greater cost penalty for longer length of haul and greater cost around those. So increased cost through regulation or surtaxes or charges would just continue to accentuate that, that the cost of a longer, more complicated supply chain in Europe is the detriment to your business. The trade-off of that, of course, is that there's all kinds of cheaper more cost-effective labor that's been brought into the union over the last 10 years. So despite those incremental cost, there are many companies who are consolidating production in Eastern Europe and choosing those longer lengths of haul as a trade-off from all the other scale and labor savings that they can get in Eastern Europe. So to us, the types of regulatory things or any kind of cost drivers that you've described would just be one of the many variables in any network analysis around where does it make sense to produce and what are the costs of distribution and what is the least landed cost that's going to make you most competitive.

Got it. Second question -- I will certainly keep to the 2 question request. If we're talking about acquisitions, I've never -- I can't identify a shortlist of landed European truckload brokerage operations that would be a fit or that even exist. So I would want to ask a question, does it make more sense or should we be thinking about an acquisition being more centered in the air and ocean forwarding, where integration risk might be higher, but there's a much broader pool of potential candidates?

Yes. That -- our market intelligence would suggest that -- especially in Europe but in Asia too, that there's a much more established and mature air and ocean industry that we would have much more likely targets for acquisition in those spaces. There are some small truck brokerage businesses, but it's -- they seem to be much more fragmented and much less desirable acquisition targets, because the transaction and integration cost generally exceed a lot of the benefit that we can get from them. So we would much more likely be using air- and ocean-based businesses to establish relationships and a local presence and an understanding of the market and then try to move from there more into organic growth in truck services in other parts of the world.

So unfortunately, we're out of time. So that will have to be have been our last question. We apologize we couldn't get to everybody today. Thank you for participating in our Second Quarter 2011 Conference Call. I want to remind you that this call will be available for replay in the Investor Relations section of the C.H. Robinson website at chrobinson.com. It will also be available by dialing (800) 406-7325 and entering the pass code 4452992#. The replay will be available at approximately 7 p.m. Eastern Time today. Presentation slides will stay posted. If you have any additional questions, please call me, Angie Freeman, at (952) 937-7847. Thank you.

Ladies and gentlemen, this concludes our conference for today. Thank you for your participation. You may now disconnect.