Good morning, ladies and gentlemen, and welcome to the C.H. Robinson Fourth Quarter 2018 Conference Call. At this time, all participants are in a listen-only mode. Following today's presentation, Bob Houghton will facilitate a review of previously submitted questions. [Operator Instructions] As a reminder, this conference is being recorded, Wednesday, January 30, 2019. I would now like to turn the conference over to Bob Houghton, Vice President of Investor Relations.

Thank you, Donna, and good morning, everyone. On our call today will be John Wiehoff, Chairman and Chief Executive Officer; Andy Clarke, Chief Financial Officer; and Bob Biesterfeld, Chief Operating Officer. John, Andy, and Bob will provide commentary on our 2018 fourth quarter and full-year results. Presentation slides that accompany their remarks can be found in the Investor Relations section of our website at chrobinson.com. We will follow that with responses to the pre-submitted questions we received after our earnings release yesterday. I'd like to remind you that our remarks today may contain forward-looking statements. Slide 2 in today's presentation lists factors that could cause our actual results to differ from management's expectations. And with that, I will turn the call over to John.

Thank you, Bob, and good morning everyone. Thank you for joining our fourth quarter earnings call. In my opening remarks, I want to highlight some of the headline themes that we'll be discussing with you today. Strength of our business model is the ability to rebalance our portfolio between contractual and spot market freight as market conditions change. In periods of market dislocation we experience higher levels of repricing activity across our portfolio. Then as routing guides perform more effectively and freight costs decelerate, we tend to see our volumes shift more heavily towards contractual business accompanied by net revenue growth and margin expansion. This outcome is clearly reflected in our fourth quarter results. Over an extended freight cycle, we continue to believe that honoring our commitments on contractual freight while also securing spot market capacity is the best way to serve our network of customers and carriers, grow our business, and create value for shareholders. With fluctuating levels of freight demand and carrier supply, significant weather events, and changes in tariff activity and government regulations, the last few years have marked a period of high volatility in the freight market. A critical part of our strategy is to make investments that add value for our customers and carriers, and drive growth for our business regardless of where we are in the freight cycle. We are proud of the strong financial results we delivered in the fourth quarter and full year of 2018 and believe that they are a reflection of our strategy of true cycle investments. Our North American Surface Transportation business did an excellent job of supporting our customers and carriers through a volatile freight market and delivered outstanding results for the year. Our Global Forwarding business delivered strong net revenue growth through a combination of volume increases and pricing adjustments that reflect market conditions while also making investments to drive future growth. Our Robinson Fresh business delivered significantly improved results in the second half of the year and finished the year with net revenue growth and operating margin expansion. With those introductory comments, I'll turn it over to Andy to review our financial statements.

Thank you, John and good morning everyone. I'd like to begin my comments on the financial results by highlighting the fact that Robinson achieved record results across the board. Gross revenues, net revenues, and operating income for both the quarter and the full year were at all-time highs. All three of our reportable segments contributed to the success by growing both net revenues and operating income at a double-digit rate in the fourth quarter. Each segment expanded operating margin significantly in the quarter as well. From a cash flow perspective, we knocked it out of the park generating over $700 million in free cash flow and returning nearly $600 million to our shareholders during the year. Our enterprise platform has been carefully and thoughtfully constructed over many years for both scale and leverage through all types of environments and cycles. We are appropriately proud of this performance. Now, on to Slide 4 and our financial results. Fourth quarter total revenues increased 4.5% to $4.1 billion driven by higher pricing across most transportation service lines. Volume growth in LTL, ocean, and customs and higher fuel cost. Total company net revenues increased $82 million or 13% in the quarter to $714 million. Net revenue growth was led by truckload services up $53 million and LTL services up $12 million. We delivered double-digit net revenue growth in ocean, air, and customs for a combined increase of $15 million in the quarter. Fourth quarter monthly net revenue per business day was up 10%, 11%, and 13% respectively in October, November, and December. Total operating expenses increased $37 million an 8.9% increase versus the prior year period. Personnel expenses increased 8.9% primarily as a result of increases in our performance based compensation that aligns the interest of our employees with our shareholders. Total company average…

Thanks Andy, and good morning everyone. I'll begin my remarks this morning on our operating segment performance by highlighting the rapidly changing nature of the logistics market. On Slide 11, the light and dark blue lines represent the percent change in North America truckload rate per mile billed to our customers and cost per mile paid to our contract carriers net of fuel costs since 2008. As a reminder, North America truckload includes both NAST and Robinson Fresh truckload. The grey line represents our net revenue margin for all transportation services. The rate of growth in North America truckload price per mile and cost per mile continued to moderate this quarter including a modest decline in truckload cost per mile versus the prior year. We benefited from the shift towards contractual volume in a decelerating cost environment in the fourth quarter leading to 110 basis point sequential improvement in transportation net revenue margin from the third quarter. Our net revenue margin expands and contracts with changes in the freight cycle tending to expand when costs moderate. Despite the high level of rate and cost volatility, as well as other secular market factors, our average net revenue margin has remained relatively consistent over time. One of the metrics we use to measure market conditions is the truckload routing guide depth from our Managed Services business which represents roughly $4 billion dollars in freight under management. In the fourth quarter, the average routing guide depth of tender was 1.4 representing that on average the first or second carrier in a shipper's routing guide was executing the shipment in most cases. This representation of routing guide performance is reflective of a more balanced market. Moving to Slide 12, this graph shows North America truckload average price per mile billed to customers and cost…

Thank you, Bob. I am going to wrap up our prepared remarks with a few final comments. Let me start by sharing a few data points on what we are seeing currently in the marketplace. As stated, we do see evidence of a more balanced freight market. Routing guide depths are now more consistent with a balanced freight market and our truckload shipments have moved back to our typical more contractually weighted mix. The significant price increases of 2018 have moderated and while it is uncertain what the remainder of 2019 will bring, we are in a more balanced situation today. Tariffs and changes in global trade agreements remain a big uncertainty for many of our customers. We do believe there were modest amounts of advanced shipping and inventory buildup in 2018. The U.S. economy continues to grow and our customers are generally planning for steady to increased freight volumes. While our markets are more balanced at the moment, the potential for further changes remains high. Our core go-to-market strategy has always been to help our customers understand and adapt to the market conditions. We focus on managing through the cyclical changes in the market while investing in our capabilities for the future. 2018 was a year of excellent financial performance for Robinson. We generated record levels of revenues and operating income, earnings per share and cash from operations. But more importantly, we continue to invest in our people, processes, and technology for the future. Our team, our culture and our platform are real competitive advantages that are getting stronger every day. We feel great about our future and our continuing ability to create value for all of our stakeholders. That concludes our prepared comments and with that I'll turn it back to the operator so that we can answer the submitted questions.

Thank you. Mr. Houghton the floor is now yours for the question-and-answer session.

Thank you, Donna. First, I would like to thank the many analysts and investors for taking the time to submit questions after our earnings release yesterday. For today's Q&A session, I will frame up the question and then turn it over to John, Andy or Bob for a response. Our first question comes from several analysts. Bob, after a very strong 2018 year-over-year comparisons clearly get more challenging as we move through 2019. Can you speak to the levers that you intend to pull to help drive NAST net revenue growth in 2019 given evidence of a balanced freight market?

Yes, absolutely. So we're definitely feeling a more balanced market in 2019 when compared to the prior year. As we've stated in the past, we tend to look at net revenue dollars on a per load or per shipment basis as a more important internal metric than absolutely net revenue margin. So we know for the first half of 2018 our net revenue dollars per load were pretty close to our historical average and those really expanded throughout the second half of the year as cost started to moderate. So for our success in 2019 is going to come from continuing to take market share through increasing truckload and LTL volumes on a year-over-year basis, as well as continuing to stay focused on our initiatives around cost control and driving further efficiency into our business model. Volume growth will be key for us throughout the year, but even more so and in the second half. Fortunately for us, we've only got 3% market share today in NAST and we've got a really large and aggressive sales force that's committed to driving growth in 2019 by continuing to add value to our customers and carriers in these market conditions. Now I've said a lot of the past several years, but our focus is really not to go ditch to ditch between the focus on net revenue per load and load volume, but to continue to pursue that balanced growth strategy over the long term and throughout cycles.

Thanks Bob. The next question comes from Jack Atkins with Stephens.

Andy, looking back to the last time we were in balanced market, 2016 and early 2017, your net operating margin peaked in the second quarter of 2016 and then declined pretty significantly over the next several quarters. Would you expect net revenue to grow faster than operating expenses in 2019?

Thanks Jack for the question. The short answer is, our stated goal and objective is always to grow net revenue faster than operating expenses. That's at the enterprise level, but also at the divisional levels. When you when you reference a balanced market I know you're speaking specifically to the truckload market and let's go back and revisit that and the difference which by the way is truckload is 55% of our net revenue today and it's growing and it's great and we're very pleased with it. But in that market I would say that there were two differences primarily are different than today and the first is GDP was lower and the second is pricing and cost were lower. So today and at that point it's pure arithmetic where the cost and the price lower today GDP is higher and the pricing and the costs are higher. So if you look at those lines we produced in the published report on our earnings that they're higher, that the relative difference hasn't really materially changed. And so, we think about those levers particularly with the NAST we think that continuing to grow net revenue in excess of our expenses is clearly achievable. You then layer in some of the other services that we've added over the last five, six years, you think about LTL, you think about Global Forwarding, both of those businesses have doubled in that time. And in doing so, we've added more of a secular growth story to the Robinson enterprise and Robinson platform. And in doing that we've made investments and clearly as you saw in the fourth quarter a lot of those investments began to pay off. And so we're really pleased with those results and we do expect and it's our stated goal and it is how we're all compensated is to grow net revenues in excess of our operating expenses.

Thanks Andy. The next question is for John and is from Ben Hartford of Robert W. Baird. Jack Atkins with Stephens asked a similar question.

What are 2019 contractual pricing growth expectations, have they softened from the low single digit outlook provided on the third quarter earnings call?

So in our committed biz in the low single digit comment was relevant to truckload, so I'm assuming that's where the question is at. But with regards to our contractual bidding, whenever you go through a period of time where there is meaningful change in the spot market, you're going to start to see some of that show up in the sentiment around the contracts and the committed rates. Over the months of December and January there have been some meaningful softening and reductions in some of the spot market and that will start to show up in the attitudes and the outcomes of the bids and the committed relationships. I think low single digits is probably still a good center of gravity. Maybe a quarter ago people were saying low to mid single digits and that's more or what we were seeing, now more common low to flat, low single digits to flat, so some of the softening in the pricing is showing up in the committed activity. It's a pretty rapidly changing market. As we shared in our prepared comments there's a lot of different factors that are continuing to impact those bid arrangements and a lot of potential for change, but today probably the low single digits is still a good center of gravity in terms of expectations around committed pricing.

Thanks John. The next question is for Bob. Todd Fowler with KeyBanc asked.

With respect to the outlook commentary indicating that continued investments in technology will help achieve the 2019 objectives of top line growth and operating margin expansion, could you comment on how you see technology impacting 2019 and beyond? Are there costs associated with these investments that tail off in the future and if so how much?

Yes, thanks Todd. We expect that our CapEx run rate will increase to about $80 million to $90 million in 2019 and with that really our total expense related to IT investment for next year is planned to increase to well over $200 million. So while we're really proud of the foundation we've built within our Navisphere technology platform and our ability to provide customers and carriers with unrivaled and actionable intelligence about their businesses, the further investments that we're going to make in technology will really be focused on ensuring that we're providing best-in-class user centric technology. We're providing technology that enables even more frictionless transactions, leveraging more effectively advanced analytics and data science and that doesn't just apply to truckload, but really applies across all of our services. We want to make sure that our e-team has the appropriate resources that they need to accelerate the speed to value so that they can take the great ideas from our people and from our customers and bring those to life even faster for our clients and create value for all of our stakeholders. So in terms of the step up in CapEx, I'd expect that to be pretty consistent for the next several years.

Thanks Bob. The next question is also for Bob from Chris Wetherbee of Citi.

Fourth quarter marked the second consecutive quarter of solid operating margin expansion. Can you help provide color on the broader trends in the cost structure? Is it being driven by more automated transactions and direct load matching? And are there other initiatives and what level do you think operating margins can move to over time?

I'm really bullish on our ability to both drive net revenue growth and operating margin expansion in the coming year as much as Andy said. Automating transactions and direct load matching are certainly part of the reason why operating margin has expanded and why we believe the opportunity to continue to expand operating margin, but it's really only part of the story. And the act of matching capacity to demand is really a small part of the overall Freightquote cash cycle that our clients ask us to manage for them and we're focused on creating value and reducing cost at each step of that cycle. So we're investing in the area of direct load matching. We're also rolling out the tools that help us to accept the right freights based upon predictions of outcomes, more effectively manage exceptions, and we're leveraging tech in new ways across all of our reporting segments that remove the unnecessary steps out of our operational processes and we're investing in tech and process improvement to enhance our sales force, both the sales force effectiveness and the sales force efficiency as well as back office functions such as collections and billing, imaging and the like which has a positive impact. Digital freight matching is clearly gaining most of the headlines today. We feel like we're in a great place in that space, but our focus is going to continue to be from Freightquote to cash and in simple a sense it's about winning more freight, executing at a lower cost and maintaining or improving our industry leading operating margins.

Thanks Bob The next question for Andy comes from Todd Fowler.

What’s your view as normalized net operating margins for NAST and Global Forwarding, what factors within your control contribute to your ability to improve net operating margins over time?

Yes, several years ago I made the decision to go to reportable segments and in doing so we broke out NAST and Global Forwarding and Robinson Fresh on their individual performances. Now we have four years of data for you all to lookout. And over that period of time I would break NAST and both Global Forwarding into two components and the first vote is net revenue. And NAST net revenue will be median net revenue margin percentage of NAST has been 16.4% over those last four years with a standard deviation [ph] of a 120 basis points and that includes the cosmetic impact of fuel, but also the substitution impact of LTL which tends to have a higher net revenue margin percentage. And so, we would say that that net revenue margin has been relatively consistent and it's been in that mid double digits for a long period of time and we would expect it to continue to be in that. And so, then you go to – and to a large degree, there is a cyclical element of that as Bob mentioned earlier making a lot of investments on the IT and the business side to help us make smarter decisions, both for our customers on the pricing side, but also our carriers on the cost side. In doing so we think that we can continue to move the needle a bit on the net revenue margins. On the operating margin side, again the same figures over the last four years. NAST operating margins, the median has been about 43.5%. And if you knock out the high highs and the high lows a standard deviation [ph] of that has been 160 basis points. And we talk about making investments in a through cycle environment. And so, fortunately for…

Thanks Andy. The next question is also for Andy from Matt Young with Morningstar. Jason Seidl with Cowen and Company also asked a similar question.

A few upstart digital freight brokers appear to be gaining some traction in the truck brokerage space at least from a gross revenue standpoint. Could you talk about what you're noticing if anything in the marketplace from these providers?

Yes, I think it's appropriate that the first talk about and start off by answering that question and kind of really telling the story of our platform and then maybe begin to talk about what others are talking about what they're doing. And so, Robinson is a digital leader in the logistics space and it's a big, and it's a growing space, but we've been in it the longest. Bob mentioned we're spending as much if not more than anybody else. We're connecting over 200,000 companies around the globe through that Navisphere technology platform. We’re executing truckload, LTL, intermodal, ocean, air, customs, managed services, parcel and other services with over $20 billion in freight under management. 100% of our shipments are executed on the Navisphere platform. And again, why does that benefit? The benefit is obviously to our customers. They have one source of truth, but why does it benefit our carriers, it allows them to go to one place to get access to all of their information. And so, we believe in that one platform. And so we're going to continue to invest in it. And while it's a big and really we're the largest, I wouldn't say that anybody could go out there and claim to have conquered logistics despite the fact that there are many people out there with that, there are many people out there with press releases. There are many people that are out there selling a story of how much they might have raised in a particular round, it's a big space and we're going to continue to lead in that. Where we are seeing some of these competitors, digital competitors that you might have mentioned are really - we see them and select us because we have over 120,000 customers. And I say if you canvassed all of them, there's probably a 119,000 of those customers that aren't or haven't been doing business with the digital upstart. Now, there are 17,000 brokers, truckload brokers, freight brokers in North America right now, if you think about where that exists in the globe there is multiples of that as well. And so we have had and will always have competition in the marketplace and to a large degree everybody is talking about technology. Our go-to-market has been and will continue to be our people, our process, and our technology. We believe that those three tenets are core to how we're going to continue to successfully grow our business, solve the complex global logistics needs of our customers, be a strategic provider to our carriers whether they be located in North America, whether they be located in Europe, Asia, Latin America. And so, we're pretty comfortable and pretty confident in our technology story, particularly vis-à-vis the startups.

Thanks Andy. The next question for John comes from several analysts.

How much business is currently under spot versus contract and do you think there will be a shift back to the spot market in 2019?

We are today in our truckload business back to that more typical mix of having more committed or contractual activity, probably two-thirds or one-third, about 65%, 35% with more of that being committed or contracted today. With regards to where will it go in 2019 and it's just more difficult than ever to predict, but a few thoughts around that. I guess coming off of 2018, where we showed on our charts double digit price increases over a short period of time and that being higher than anything that you see historically on any of those charts, those price increases were in part driven by some regulatory changes around ELV implementations and all of the carrier network changes that accompany those implementations, we don't see anything on the horizon that is that significant. There's no pending rule changes or anything that would suggest that that type of spot market activity or price increases won't happen again in the short term. As I commented earlier, there has been some deceleration of pricing in the spot market and some opportunity where maybe the committed rates are softening a little bit and could drive some shippers to explore more spot market opportunities to take advantage of lower prices if that's where it sustains. So while we don't see anything big on the horizon that would drive it back to the spot market, kind of another factor to consider is that over the last decade as shippers have automated their supply chains and carriers have automated and tightened their network around how they run their capacity, there is less slack in the overall system which has led to more volatility and more greater price changes. So while there's nothing big on the horizon that caused the price increases in 2018, the overall environment is predisposed towards faster changes and greater impacts that could result in more freight going back to the spot market if we see a meaningful change in the overall demand.

Thanks John. The next question for Bob comes from Matt Young with Morningstar.

Could you provide some additional color on NAST efforts in terms of running more truckload transactions through a mobile platform along with a rough idea of the magnitude of adoption among C. H. Robinson shippers and carriers?

Sure. So a core cannon of our go-to-market strategy has always been to really meet our customers and carriers, how and where they want to buy. So our focus has been less on moving transactions to mobile as it has been around just really being focused on driving towards those frictionless transactions, we've based upon the preferences of our customers and our carriers. So a couple of examples, if a customer wants to integrate their ERP in our Navisphere, we just want to ensure that we're the easiest supply chain platform to connect to and extend our platform into their ERP. If a customer wants to use the Navisphere platform to place orders or track shipments or get exception notifications, we want to ensure that we can provide that information via web or mobile in a means that serves their needs in the fastest most user friendly way. Another example of a carrier prefers to work in their native CMS versus in Navisphere, again we try to connect to their native CMS, ensure that they've got visibility to our freight and make it easier for us to connect to them. Specific to mobile, in general we've seen the carrier community much more active in the mobile space than on the customer side. In terms of rough orders of magnitude today we capture about 55% of our truckload events in an automated fashion and much of that coming from mobile and we've got tens of thousands of active users every single day on the Navisphere carrier, both mobile and web platforms as well as the customer, primarily web platform. Another example, our Book It Now [ph] feature, our Navisphere carrier continues to gain broader acceptance amongst the carrier community and we see more and more carriers taking advantage of the ability to come online either via the web or app and self serve by themselves book freight. On the customer side, we see relatively low adoption of mobile as the primary means for communication and ETI [ph] really continues to be the preferred method of electronic integration with the customers.

Thanks Bob. The next question is also for Bob from Ben Hartford of Robert W. Baird. Todd flower of Key Banc and Jason Seidl of Cowen and Company also asked similar questions.

What are NAST and overall headcount growth plans for 2019?

In the simplest sense over the long term, we expect volume to grow at a rate ahead of our headcount growth. I made this commitment at our 2017 Investor Day relative to NAST and I believed that that formula still has application across our business in total. Over the past couple of years the mix of our job families has continued to evolve and as we continue to grow - really grow through some of the roles that are more task oriented, it allows us to improve productivity there and keep headcount relatively flat in some of those areas, and we'll continue to add more specialized skills and more customer facing people to drive growth and innovation in our workforce. Our headcount growth moderated in the fourth quarter and our focus in 2019 and beyond is to continue to layer in that technology and process automation, so that our people can be even more effective which should further moderate headcount growth moving forward.

Thanks Bob. Ravi Shanker of Morgan Stanley asked about personal expenses. Tom Wadewitz with UBS also asked a similar question.

Andy, what’s your personal expense growth to be below net revenue growth?

Well, again we talk about the operating leverage of our model and we've been pretty clear about how it does work and in fact 2018 is a great example of [indiscernible] in the fourth quarter, which I'll address shortly, but also for the full year if you think about it we added pretty significant net revenue during the entire year. But relative to last year headcount was relatively flat and in fact in certain cases with Global Forwarding and Robinson Fresh it was down. If you think about how they were able to grow their business, those two particular divisions with less headcount, we're pretty pleased with as Bob was talking about just before, the leverage that is inherent in our company and our platform. As it relates to the fourth quarter, again just think about how much net revenue we additionally we drove during the quarter over $84 million. The bulk of the increase in the fourth quarter personnel expenses are related to performance based pay, both in terms of cash compensation as well as equity. So if you think about the headcount, again relatively flat on a Q4 versus Q4 basis, but because we performed so much more, a lot of that variable expense went up which obviously I think alliances we talk about the interests of our employees with the interests of our shareholders very well, and that's the beauty and that's how our models always work throughout different cycles.

Thanks Andy. The next question for John on tariffs came from several analysts.

Have you seen any impact in your forwarding business from the tariffs from both the U.S. and China or the political economic unrest in Europe? We have heard other large international logistics and retail companies mention both of these as headwinds in 2019, curious if you are seeing an impact and what your outlook is for forwarding in 2019 given these overhangs?

Yes, we've been growing our Global Forwarding business the last five years by taking market share in the number of corridors around the world and we do continue to believe that we're going to be successful doing that in 2019 as well. The primary impact to date or and in the year 2018 was the processes around implementing and collecting the increased tariffs, as well as some modest increase and shipment activities probably nearer or at the end of the year to try to accelerate some of the activities to get in before year end or get in before tariffs. There's still so much remaining uncertainty around where those trade negotiations in Asia and Europe will both land. So beyond the minor impacts that we had to our business in 2018 all of the discussion around supply chain strategy, where will your suppliers be, will shippers have to move out of China into other places in Asia, those communications are going on and the planning is accelerating as we speak. So there is high potential for greater changes in routing, greater changes in sourcing areas for a lot of our customers, but we haven't seen a lot of that activity to date. We've mentioned in the past and continue to invest in expanding and scaling our Global Forwarding network precisely for reasons like this, that if customers do end up making decisions that these tariffs and supply chain changes are going to be permanent and move their sourcing locations, we're confident that we'll be able to move with them and that we have capabilities in other parts of the world that will be able to continue to go after that market share and grow our business regardless of where the trade negotiations land.

Thanks John. The next question is for Andy from several analysts.

Why did the annual increase in cash from operations up $409 million significantly exceed growth in annual net income up $160 million, what were the drivers?

Yes, 2018 was a fantastic year for us from a cash flow from operations and obviously you got net income up 160, but Bob mentioned earlier the investments that we're making on the Freightquote cash, but there's also the ordinary cash and once it becomes an order across the organization from the business to support from financial operations, driving down that order to cash cycle. And so, if you think about the decrease on a year-over-year basis and the need for spending that on working capital, the largest contributor of that came from the effort there and that's why we're making a lot of investments on digitalization, that's why we're making a lot of investments in standardization, streamlining that part of the organization, so that we would expect to continue to see improvements in that area.

Thanks. The next question is also for Andy from Chris Wetherbee of Citi. Ken Hoexter with Bank of America Merrill Lynch asked a similar question.

With the truckload spot market rolling over on a year-over-year basis, how would you expect net revenue margins to trend as 2019 progresses?

I think years back to kind of what we talked about earlier on the net revenue margins, dollar percentages is largely a function of arithmetic. And so, if you look at one of the slides that we have in the earnings deck and that’s the relative change we talk about how those cycles tend to go in three to four to five quarter periods where cost is always the leader. When costs rise or fall pricing tends to follow that. We solved that through a balanced period and we talked about that earlier and when it begins to tip over and costs go down, price tends to lag there, which does have a positive impact on the margins, but on a relative basis you see that the pricing cost numbers on a sanitized, the numbers are reported are at an elevated level. And so, there is a balancing impact of fuel, balancing impact of the numerator or denominator simply being higher, but overall when costs begin to decrease it does tend to have a positive impact on our truckload margins. We've made a lot of investments, Bob mentioned earlier on the LTL side to be smarter on the pricing and the cost side, and so we would continue to expect to drive secular margin expansion in other parts of our business as well.

Thanks Andy. The next question is for Bob from [indiscernible] from Bloomberg. Brian [indiscernible] with J.P. Morgan asked a similar question. If the implementation of precision schedule routing in the east, drive the 13% decline in Intermodal volume, if not what was the driver?

So we don't believe that PSR has had a broad impact on our Intermodal volumes for the quarter, nor we expected to. We have seen examples where lane cancellations have either eliminated Intermodal options altogether or new routings have created drainage [ph] inefficiencies which has made the routing more cost effective using truckload which could potentially benefit us. In terms of our volume decline for the quarter was really driven by less spot market opportunity and truckload intermodal conversion as well as lower than expected West Coast volumes when compared to the peak season of last year.

Thanks Bob. Andy, Todd Fowler of KeyBanc and Tom Wadewitz with UBS asked about M&A.

Please provide an update on potential acquisition opportunities, both service line and geographies and if you feel anything is imminent in 2019.

Well, I'm going to talk about the first one in terms of that the potential acquisition opportunities we have and will continue to be an active participant in the M&A environment. We look at transactions every day that are complimentary to both our service line, whether that be NAST, whether that be our Global Forwarding or Robinson Fresh, but we also look at it in terms of geographical expansion and go back and talk about how it made investments over the last several years in Global Forwarding, we continue to make investments in NAST as we did with the acquisition of Freightquote and those are pretty much part of our standard routine as it relates to assisting and enabling our rather strong organic strategy, growth strategy that we have in place. And so I wouldn’t say that there is anything materially different as to how we're looking about it. I would say that it continues to be a robust environment for well run organizations. We are very selective in the acquisitions that not only we look at but also execute upon, and so they have to meet a rather stringent criteria, both in terms of strategy, culture and business model. And then of course financial returns are very important to how we view and evaluate those opportunities. And so, I wouldn't say that there's anything materially different in 2019 of our strategy versus, what it's been over the last several years.

Thanks Andy. That concludes the Q&A portion of today's earnings call. A replay of today's call will be available in the Investor Relations section of our website at chrobinson.com at approximately 11:30 a.m. Eastern Time today. If you have additional questions, I can be reached via phone or email. Thank you again for participating in our fourth quarter 2018 conference call. Have a good day.

Ladies and gentlemen, thank you for your participation. This concludes today's conference. You may disconnect your lines at this time and have a wonderful day.