Good afternoon, ladies and gentlemen, and welcome to the C.H. Robinson Third Quarter 2021 Conference Call. [Operator Instructions] As a reminder, this conference is being recorded, Tuesday, October 26, 2021. I would now like to turn this conference over to Chuck Ives, Director of Investor Relations.

Thank you, Laura, and good afternoon, everyone. On the call with me today is Bob Biesterfeld, our President and Chief Executive Officer; and Mike Zechmeister, our Chief Financial Officer. Bob and Mike will provide a summary of our 2021 third quarter results, and then we will open up the call for live questions. Our earnings presentation slides are supplemental to our earnings release and can be found in the Investors section of our website at investor.chrobinson.com. Our prepared comments are not intended to follow the slides. If we do refer to specific information on any of the slides, we will first let you know which slide we're referencing. I'd also 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'll turn the call over to Bob.

Thank you, Chuck, and good afternoon, everyone, and thank you for joining us today. The third quarter was another quarter of progress and strong execution, resulting in record quarterly financial results. The trajectory of our business is heading in the right direction as we continue to leverage our tech plus strategy to help customers navigate through an extremely challenging and capacity-constrained environment, which we expect to continue. Demand for our global suite of services and for the benefit of our powerful technology platform continues to be strong, and the digitization efforts continue to take hold and be ingrained in an increasing percentage of our business. In our North American truckload business, we've made steady progress in a sustained tight capacity environment. Through the continued repricing of our contractual portfolio and higher volumes of spot business, our adjusted gross profit or AGP per truckload returned to our 5-year average. And our AGP per mile in Q3 exceeded both our 5-year and 10-year averages. We accomplished this while growing our truckload volume 4.5% year-over-year and 3.5% on a sequential basis. Within the quarter, we saw an acceleration of truckload volume per business day in each month of the quarter, with 7% year-over-year growth in September, and that growth trend has continued into October. For the quarter, NAST truckload grew AGP by $83 million or 36% year-over-year through a 4.5% increase in volume and a 30% increase in AGP per load. This included a 14% increase in spot market volume year-over-year due in part to an 85% increase in volume that was driven through our proprietary dynamic pricing engine, which is now on pace to generate $1 billion in spot truckload freight for the year. Nearly half of our spot or transactional business was priced via integration with our dynamic pricing engine in…

Thanks, Bob, and good afternoon, everyone. As Bob mentioned, we delivered another quarter of record financial results in Q3, driven by strong performance in a favorable market as we continue to execute on our tech plus strategy. Our total company revenue increased 48% over Q3 last year, and our adjusted gross profit, or AGP, was up 43%. Increased AGP was driven by both volume and AGP per shipment across ocean, air, truckload and LTL. Total company AGP also improved by 13% sequentially and 33% over the pre-pandemic quarter of Q3 2019. On a monthly basis compared to 2020, our total company AGP per business day improved in each sequential month of the quarter and was up 51% in July, up 39% in August and up 40% in September. For the fifth consecutive quarter, prices and costs rose across our North American truckload business with cost per mile and price per mile each reaching new highs in each month of Q3 due to the persisting supply-demand imbalance. Our NAST team navigated through this environment by continuing to grow spot volume, which was up approximately 14% year-over-year in Q3, marking the fifth quarter of double-digit spot market volume growth. Within our contractual freight business, where Q3 volume was flat, we continued to selectively reprice the portfolio to reflect the ever-increasing cost of purchased transportation in this market. As Bob mentioned, our Q3 truckload AGP per mile is now above both our 5-year and 10-year averages. AGP per mile and AGP per load are key metrics in our truckload business rather than an AGP margin percentage, which naturally rises or falls with the changing market cycle pricing. For those following AGP margin percentage, if or when the market loosens within the current cycle, with the greater than 2/3 of our truckload volume on…

Thanks, Mike. I'll take a couple of minutes here and wrap up our prepared comments before we turn it back to the operator for our live Q&A. I believe that our results once again this quarter continue to demonstrate that our model is working and that our strategy is sound. There's no question that we're in a time of unprecedented supply chain disruption across the globe that reaches virtually every mode of transportation. I believe that Robinson continues to be uniquely positioned to help customers not only navigate this environment, but to succeed in this environment. None of us know exactly when this cycle is going to begin to turn or how long it will last. But with everything that we see today, we believe that this cycle will, in fact, extend due to the global constraints around adding capacity and labor while demand remains strong. I certainly don't believe that having 70 ships anchored in Los Angeles is by any stretch the new normal, but I also don't see us reverting to a market resembling 2019 anytime soon. As referenced on Slide 3 of our earnings deck, one of the pillars of our tech plus strategy is our people. Our customers continue to tell us that our team around the globe are the people that they rely on. As I said before, I believe that the people at Robinson is the most capable team of supply chain experts in the world. And I'm incredibly proud of how this team has continued to help thousands of customers navigate this environment while also delivering record financial results for our shareholders. These past couple of years have been stressful times to work in a supply chain. In many parts of the world, we continue to work in a primarily remote environment. We're…

[Operator Instructions] Your first question comes from the line of Tom Wadewitz with UBS.

Yes. Congratulations on the great results in forwarding in particular, and the -- it seems like really taking advantage of the market and doing well. I guess, I mean my question is on NAST. It's -- you gave a lot of good stats on technology and how you're getting traction on that, but it seems like it's not necessarily translating in terms of -- I don't know if it's net revenue growth or operating income, but it seems like there's a little mismatch between how well you're doing with the technology and how that's flowing through in terms of just, I guess, growth or kind of profitability in NAST as well. So I don't know if you have any thoughts on that in that relationship in NAST and maybe just relative to the strong brokerage market.

Sure. Thanks for the question, Tom. I guess I'd maybe reiterate my closing comments there, and we tend to look at the sum of the parts here, and we feel pretty good about the fact that we just delivered enterprise operating margins that are the highest that we've delivered since the third quarter of 2016. Specific to NAST, there's really 2 things at play there. The first is the increased investment in technology and the investments that goes with that, whether it's expensed or capitalized, comes prior to some of the benefits that we've gained for a couple of years into this journey of increased investments. And we haven't fully harnessed the impacts of the business from those because we're continuing to drive adoption, both internally and with our carrier partners. We talked a lot about connectivity, and connectivity is really to me, the thing that eliminates the friction from these transactions and allows us to drive greater efficiency. When I think about our transactional pricing engine being up to the level it is some 85% year-over-year, that's a great example of us taking friction out and driving better outcomes. The second area that is weighing on the operating margins today is still the higher level of negative loads in our truckload business. While we improved that on a year-over-year basis by about 390 basis points or about $12 million, it was pretty consistent from Q2 into Q3. And so not that you can just net out one variable. But if you netted out those negative loads and they looked more like historical averages, you would see operating margins that look very similar to what we've experienced in the past in NAST.

Do you think that there's an acceleration coming, like, just when you talk about the traction, the spot loads and the technology, is it reasonable to think that accelerates at some point looking forward? Or is that the wrong way to look at it?

I would believe that we're seeing some of the acceleration right now. I mean when I saw an 880 basis point spread between head count and volume growth, that's a real accelerant. We talked about a 25% increase in shipments per person per day, I think that's an important proof point of the productivity that we're gaining. The automated bookings is something that we've talked about consistently, arguably. And I would venture to guess the number of automated bookings that we have there, 340,000 in a quarter likely exceeds any of the "digital upstarts" in terms of their total load volume for a quarter. And so I do think that we are making progress here. The biggest weight and the biggest drag on operating margins relative to past quarters has been those 2 factors of the increased technology investment and the negative lows on truckload. And there are a few things that we anticipate gaining better value from that technology as time goes on as well as narrowing the scope of those negative loads as markets continue to settle. We'll reprice about half of our contractual truckload base in Q4 and Q1 of this year. And I really see the market going in a couple of different directions. Take scenario A, we maintain at this kind of current status of tight markets at elevated prices. And if that's the case, then we'll reprice accordingly, and we should eliminate some of those negative loads and settled down at a certain net revenue or AGP per shipment. The other side of that is that, potentially, the market starts to cool down and you see margin expansion in that model. I don't anticipate that we're going to continue to see year-on-year increases at the same rate that we have over the past couple of quarters in terms of cost of purchase transportation.

Our next question comes from the line of Jordan Alliger with Goldman Sachs.

Just curious, just taking a spin on the freight forwarding side of the equation, which obviously continues to do quite well. There's questions, of course, on sustainability. So I'm just sort of curious if you could talk to your thoughts on whether it be operating margin in that segment. The tightness in the supply chain tightness, how long that could potentially linger and drive these outsized gains? And then maybe more importantly, once the frenzy does die down, do you feel between market share and gaining new customers, are you at a new platform level so that even if things do die down, we're not dropping back to sort of earlier pre-COVID type of levels in terms of base level profitability?

Yes. I don't see us going back to the base level of profitability that we demonstrated pre-COVID pre-pandemic, call it the 2018/'19 levels. I think we've done a lot. The team in forwarding has done a lot to engineer their cost structure in such a way that we can deliver improved operating margins over time. We've cited the target of 30% operating margins in that business. We haven't updated our guidance around that point. But we've certainly shown that we've got the capability of delivering operating margins well in excess of that. I won't try to forecast how, where or when the cycle on the forwarding side ends, but there's been a lot of conversation here as of late around ports and keeping some select ports open 24/7. That is one node within the overall supply chain, but it is not -- while it's an important one, doing that alone isn't going to solve for this. And so I think we have a -- certainly domestically, but potentially globally, a real challenge with labor participation truck driver shortage, warehouse labor shortage, port labor shortage, rail yard labor shortage. I mean the labor issue permeates throughout the supply chain, and it's really driving fluidity out, which causes many of these backups. And so I don't know what the magic bullet is, so to speak, that solves for that, Jordan, but I do believe because labor sits at the center of this in virtually every single node that it's going to be slow to develop. You look at inventory to sales ratios. And clearly, there's a lot of demand pent up behind that in order to get to more normalized levels there. So again, I won't try to prognosticate when and how this ends, but I do believe that it's going to extend for quite some time.

Our next question comes from the line of Jack Atkins with Stephens.

Going back to the reference in the slides around the 340,000 fully automated bookings in the quarter. One, is there a way to kind of quantify what percentage of your truckload shipments that represents? And I guess, secondly, do you feel like that you're at a point where you can really kind of see the bottleneck around capacity procurement that really I think it's been -- it's fairly been historically fairly labor-intensive. Are you starting to see technology breakthroughs there that can allow you to accelerate those fully automated sort of communications and bookings with your carrier partners? Just curious if you could maybe talk about that because it seems like that's an opportunity to really accelerate the automation within the system.

Yes. I think how I would quantify that -- and I won't comment on the percentage of total but just note on a year-on-year basis and sequentially, it continues to grow in kind of a hockey stick up into the right. The good kind of chart, right, up into the right, unless it's expense. I think that the way that I would quantify where we sit today in this journey is I think we've captured the low-hanging fruit. I think we've captured the early adopters in the carrier community. I think we've captured those that more naturally want to interact with us in a fully automated way. And there's a lot of things coming down the pipe in terms of greater adoption of booking APIs. This isn't just all about a mobile application, right? This is looking and meeting our carriers where and how they want to interact with us and trying to drive friction out of every step of that organization -- out of that process. I would say, Jack, I would say that the next 6 to 9 months for us are really, really critical in this journey, and that I would expect for us to really deliver some strong results related to this carrier procurement automation over that time period.

Our next question comes from the line of Jason Seidl with Cowen.

I want to stick to the forwarding side of the business here. Clearly, doing a great job. You're throwing up some fantastic revenue growth. As we look to the back half of the year, what type of scenario can we see revenue growth in as opposed to it just might fall off because we have just unheard of comps right now.

I think the thing that gets me really feeling good about our forwarding business is it is so grounded in really strong volume growth. And obviously, there's been improvement in adjusted gross profit per shipment. But when I look at our growth this quarter, 12% in ocean and over 50% in air, we think that there's some staying power to that. Our customer -- we have several large opportunities and a very robust customer pipeline of opportunities that we've yet to implement, customers that we've come to agreements where we're going to take over portions or all of their forwarding business, where we've yet to implement large, large chunks, for lack of a better piece or a better term, of business. And so we think the pipeline is robust. Again, the macro market conditions are going to dictate some of this. But the growth trajectory for that business, we feel really strongly about.

So to be clear, you do think there are scenarios where you can grow your revenue in the back half of the year?

No, Jason, after the second quarter of last year, we all sat here and said there's no way that we can grow air freight revenue off of 104% growth rate in Q2 of 2020, and we did. And we continue to grow really strong -- deliver strong results on top of some really difficult comps. And so based on where we sit today and looking into the quarter, we think it's realistic to expect that we can deliver growth -- we can continue to deliver growth in that business.

That's great color. Listen, nice quarter. I appreciate the time.

Appreciate it.

Our next question comes from the line of Todd Fowler with KeyBanc Capital Markets.

Bob, I wanted to ask on Slide 9. I think that Mike made the comment, and we've got this in our model. This was the first time in 9 quarters when your sell rate exceeded your cost of hire. Can you just talk a little bit -- I mean, is that the contract renewals and repricing work that you've done here this year? Is that a greater ability to pass through some of the higher spot rates that you're seeing just because we've been in this market? And as we think about this chart in this curve, what would be the reason why this isn't sustained going forward, which, as you pointed out, is typically a good environment for you on the AGP side?

Yes. It's -- if you look at the actual cost of hire within our business and you look at it sequentially week by week and the actual customer pricing, we have started to see that flatten out, right, in terms of dollars per mile that we're billing, dollars per mile that we're paying. And so we're not experiencing the week-to-week volatility of these increases and decrease. We do seem to have found things kind of flattening out at a much higher level. We've delivered the change there based on, yes, the opportunities that we've taken in the spot market and also the selective repricing activities that we've done within our contractual portfolio. We've continued to take the long game on our contractual strategic customers, right? And so there are customers I can tell you within the portfolio today that in the third quarter, we lost maybe 20% of their loads or 25% of their loads, but they're really important customers for us, that have been with us for 20 years, that we know that we have an opportunity to reprice the business with them in the fourth quarter. And so some might say we should have been really aggressive in the third quarter to go in and whack those losses in order to drive those losses out in the short term, but we believe that, that would have a very negative implication for us in the fourth quarter and moving forward for the next 4 quarters. And so we continue to take the long game with those customers. And so I do expect to see this type of trend continuing and the difference in the year-over-year change in rate and cost. And if we can get to a more stable type market, I think we have that opportunity.

Our next question comes from the line of Chris Wetherbee with Citi.

Maybe wanted to zero in a little bit on NAST operating expenses and maybe just get a sense. I'm guessing there's probably some incentive comp that's in there based on the business that you're doing in the quarter. But I want to get a sense of, I mean, how to think about that going forward. It was a nice step-up from the second quarter to the third quarter. And I guess I think adjusted gross profit per load was at a high level, I think, was above your longer-term averages. But when you look at sort of an operating income on a per load basis, how does that compare? I just want to get a sense of what you're actually getting that leverage dropping to the bottom line? Because I know heads are growing slower than volumes. So I would have expected that relationship to be a little bit more favorable. So I just want to make sure I'm not missing something there.

Yes, Chris, let me take that. So on our NAST business, we have increased heads slightly in that business. And that's really -- as we've looked at procuring capacity and making sure that we're taking bottlenecks out of the system, we've taken up heads to get ourselves aligned with where we feel like long-term growth is there. So that's a little bit of the increase. But we're also seeing increases because of personnel expense. And that is on the back of incentive for the most part. And that's where our folks are paid an incentive on enterprise results. We're seeing a pretty significant increase overall. And if you take that question to the enterprise level, we showed you the personnel expense up $97 million. Over half of that was incentive. An inside incentive is equity, it's commissions and bonus. And then probably also should note, true to NAST and to the enterprise, another 1/4 of that increase year-over-year in personnel expense is a result of short-term savings that we had a year ago. And so obviously, we didn't expect those to continue. And so getting back to a more normalized level, that's a little over 1/4 of that increase, and then head count makes up the difference there on the personnel side. So we think we're in a better position now going forward. But as we roll into next year, those outsized incentive payments will be a tailwind for us as we get back to targets.

Okay. So operating profit per load can probably start to ramp up in that scenario?

Yes, it really depends on what happens on AGP, but all things being equal, yes.

Our next question comes from the line of Scott Group with Wolfe Research.

So I just want to follow up there so I make sure I'm understanding. So in the third quarter NAST net revenues up sequentially, but the NAST earnings were down sequentially. It sounds like you think that that's more of a one-off and going forward, if NAST net revenues growing, earnings should be growing? Is that the -- do you think we start to see that normal relationship?

Yes, over time we would expect the growth of operating income for NAST to grow at a rate ahead of net revenue or AGP growth.

Okay. And then if I can just ask a strategic one, like, I'm just not sure you guys are getting much credit for your forwarding business. And I guess, I'm wondering, we've been talking about it more what you do about it, we've also got a really active M&A market. How do you think about either being an acquirer, maybe selling businesses. I don't know if any thoughts you may have there?

Yes, I appreciate that question. I mean, clearly, we're continuing to look at companies in the marketplace from an acquisition perspective. As I've alluded to in the past, they've got to meet some certain criteria, right? We want them to fit into our culture. We really like the business that we've built in forwarding through organic and inorganic growth. And so if we've got the opportunity to continue to expand our geographic presence in that business to add additional capabilities, add density to specific trade lanes, any way that we can build scale, we're committed to looking at those opportunities. In terms of some of the other strategic alternatives that you mentioned, I'm not in a position today to comment on some of those. But really, our goal today has been about growing that business versus any of the other alternatives that you brought up.

Our next question comes from the line of Bascome Majors with Susquehanna.

Just a follow-up on Scott's questioning there. As an acquirer, could you discuss whether or not buying a U.S.-centric truck brokerage makes more sense today for some reason compared to in prior years? And I know you can't comment on specific M&A speculation, but if you could give us some thoughts on how the Board perceives any approach that you guys receive, what you have to go through and what your obligations are as a target, that would be helpful.

Yes, Bascome, I'll touch on -- I'll do my best to try to answer your question, but I won't go real deep into it, and I'll address the first part of it in terms of would we consider the acquisition of a domestic brokerage. The term domestic brokerage, I think, has evolved a lot over the course of the last decade or so, certainly since 2014, '15 and so I don't know, there isn't really a one size fits all. I'd go back to kind of the same, I guess, guidelines that I shared with the previous question, which is, one, it's got to be a strategic fit culturally and fit nicely within Robinson. There are opportunities to potentially enhance technology or drive growth or think differently about how we transform ourselves through acquisition. So the great thing about being C.H. Robinson is we do get a look at virtually everything that's in the market, at least at a cursory level, and we can determine what level of interest that we want to display in those assets. But I think strategically, our acquisition strategy is not going to be driven by what's readily available in the market. It will be driven by the strategic needs of our business, and we will go out and seek those opportunities inorganically if we choose for that to be the right path, and we'll control that process.

And the question around the Board's obligations and process if you're approached?

Yes. I mean I would just briefly answer that to say assuming that we have the appropriate governance mechanisms in place that if we were approached that there would be a process in which we would work through in order to maximize the value for our shareholders.

Our next question comes from the line of David Zazula with Barclays.

I guess, Bob, you have a number of competitors that have touted success in the power-only brokerage line. Do you feel this offering is impacting your business in any way? And if so, how are you adjusting the business accordingly?

Yes. It's a great part of our business. We launched our Robinson POWER + program, I think, probably 5 years ago, and it's been a really fast-growing part of our business. We've taken a very customer-centric approach to it, where we're -- about 10% of the business that Robinson manages in NAST today, a little bit north of 10% is drop trailer, where we're doing drop trailer loading. We've kind of taken 2 approaches to that, one being kind of the rainbow fleet where we aggregate trailer pools on behalf of a bunch of smaller carriers and established interchange agreements between them. And the second, probably more fast-growing is that Power + piece, where we've got trailers, either that we're leasing directly or that carrier -- we have leasing agreements with carriers, and we're moving those trailer pools around specific corridors between specific customers. And so it allows us just another opportunity to look and feel like an asset for some of our customers who have very specific needs around trailer pools, and it's a fast-growing piece of our overall business.

Our next question comes from the line of Ken Hoexter with Bank of America.

Bob, a solid job on the quarter, but I guess maybe just 2 small questions. One is the CapEx that you're spending, I just want to understand, is that targeted to scaling the take rate on the digital brokerage? In other words, is that looking to regain market rates in terms of share gains? And then on the ocean side, a smaller one, just given rates have scaled so much on the ocean side, it's actually collapsed. It looks like the differentials between ocean and air from maybe 10x to 15x to 5x, is that -- are you starting to see scaling on the air side? Or is that gap maybe bringing more of that swapping into the equation that you talked about?

I'll take the airfreight question, and I'll throw it to Mike to talk about CapEx. We have seen tremendous growth in our charter business, Ken, and I think it's -- to your point, when you've got container rates that go as high as they have, all of a sudden, charter starts to look a little bit more feasible. And so I do think some of that spillover from ocean and air is what's driving some of the growth, certainly, that we're seeing on the airfreight side. Now, I'll let Mike talk about the CapEx.

Yes, Ken, on CapEx, we took our guidance for '21 up to $70 million to $80 million, and we were at $55 million to $65 million prior to that. Our CapEx spend is almost entirely a tech spend. And we've got money to deploy there when risk-adjusted returns are high. And so we like when we're seeing a better flow of great projects. And we certainly prioritize those amongst our capital allocation plans when we see them. So in my book, a higher CapEx spend is encouraging because it means that the pipeline that we have of projects with nice returns out into the future is stronger.

Yes. And I'd maybe just add on maybe more directly to your question. Yes, a lot of that is directed towards scaling the digital platform for truckload and the truckload freight exchange but there are a lot of other high-returning projects that we've got in flight there, whether that be in our LTL business to enhance and manage yield and better connect with some of the capabilities of our carriers, to continue to strengthen the global platform and global forwarding to drive operational processes. So there are a number of things in flight there that bring benefits to different parts of the business.

Our next question comes from the line of Charlie Yukevich with Evercore ISI.

Congratulations on the great results. I wanted to talk about the collaboration with SPS Commerce. How should we be thinking about this partnership with regards to automation and incremental volumes within LTL. And then from a broader perspective, any commentary you could give on how you're positioning for the holiday season in such a tight freight environment would be appreciated.

Yes. Thanks, Charlie, and welcome to the call. So we're early innings, obviously, with the launch of the SPS Commerce partnership. I think we just launched that early last week, I'm kind of looking at Chuck here, 7 to 10 days ago. And so I wish I had a whole bunch of revenue results that I can share with you, but since it's within the quarter, I wouldn't share even if I could. But I think the really neat thing about this partnership is SPS Commerce is a leader in their space. I mean they've got over 95,000 customers that are on their platform, that they're connecting directly into the retail ecosystem and managing the flow of information. It's such a natural marriage or a natural partnership given our strength in retail and food and beverage and having such deep knowledge of that space. So our ability to be the LTL provider and help the customers, the shipper customers of SPS Commerce access that LTL marketplace in a fully automated way, I think, is a real win for the customers of SPS, it's an incremental opportunity for us and it helps them to strengthen their product portfolio and allows us to tap into an entire group of customers in a new and exciting way. And we continue to look at alliances and partnerships across the supply chain landscape for opportunities such as those, which is just another example of us extending the ecosystem and pursuing some of these digital initiatives to drive growth. In terms of positioning for the peak season, it feels as though we've been in the peak season here for a number of months, maybe quarters, quite frankly. And so our job is to be really agile, to work with our customers, to help them navigate the unknowns, to be mode agnostic, to help them move, whether it be moving ports, moving modes, collaborating with other shipper customers to drive greater utilization. We just -- we work really, really closely with our shipper customers to help them be successful in this environment in a number of different ways. But as I said, it's 24/7/365 and our team around the globe is doing their best to help navigate this.

Our next question comes from the line of Jeff Kauffman with Vertical Research Partners.

Congratulations on a very strong quarter. I wanted to focus a little bit on the forwarding. This morning, UPS reported, and they had discussed about how procedures related to Delta variant out of Asia impacted shipments coming out of that region. I was just wondering, did this impact your forwarding business? And was the net of that impact a positive? Or was the net of that impact a negative?

So the net to service, just overall, I would say on the water has been a negative. I mean if you think about the current environment in ocean freight right now, there's only about 2.5% of the active fleet that -- or of the ocean freight fleet that isn't active right now, right? And so it is literally at full capacity. Service reliability on the water has never been lower than it is today, and that's to no fault of the steamship lines. It's clearly just an amalgamation of all these supply chain issues. As we saw issues in Asia related to COVID, what you started to see was their plants shutting down, ports shutting down, ports being not called on for a period of time because the ships would go to another port. And so it just further exacerbated the delays that were occurring in the global freight cycle. So I can't put -- I can't quantify a number in terms of impact to earnings or impact to volume. Both of them clearly were very strong for us sequentially and year-over-year. But clearly, it caused additional disruptions and delays in the supply chain.

Okay. And you would benefit from that, I guess, in some ways where customers would need solutions. And on the other hand, you're probably moving a little less volume across the ocean than would otherwise be. But no view of whether that was net positive or net negative to the company?

Not in a meaningful way in a sum of all the results.

Your last question comes from the line of Brian Ossenbeck with JPMorgan.

So Bob, I just wanted to come back to maybe get your closing thoughts on balancing volume market share and margin, however you want to measure that, in AGP per load, I assume. Looks -- I would have thought we would have seen the negative files maybe at least improve sequentially or maybe not at all together just gone at this point, given just how strong the market is. So I appreciate the comments that these are good customers, but won't they share in some of the disruption in the cost that you're seeing here? So maybe you can just address that one more time for me. And then if you want to weave in some comments on how you think this is going to -- I think the cycle is going to change these relationships going forward, maybe more shorter contracts, more visibility on pricing and indices, and you kind of mentioned already but it sounds like despite all this, you're still looking at 2/3 of your booked annual. So I appreciate any thoughts there.

Yes. So let's talk about the -- we'll start with the negative files. And here's how I think about this. I think our Managed Services business makes -- is a great proxy for just kind of what happens in the contractual marketplace. Whether we've got $6 billion or $7 billion in freight under management today in that Managed Services business is just a great proxy for the contractual marketplace. If I go back to fourth quarter of last year and call it, October, September of last year, all the way through today, we've been in this extended tight trucking environment. And presumably, there's been all sorts of bids, mini bids, repricing, reshuffling of routing guides, and not just with Robinson or other brokers, but all the asset guys and everybody that's involved in the domestic surface transportation trucking business, has had some sort of movement in their pricing and in their commitments and all of those things in contracts. There has been virtually no improvement in routing guide depth of tender over that 15 months. It's been 1.7, 1.6, 1.7. So I think our kind of consistent negative files is somewhat analogous to that in the fact that the market just continues to reset. We seem to be -- we've been on -- it is flattening out. But we've been on this consistent year-over-year increase in cost. And we -- part of our model, good or bad, is that we -- typically, we sell long and we buy short. And so when we consistently see that upward pressure on cost of buyer, we're going to have a higher occurrence of negative file. Now clearly, this is the highest it's been and we expect that we'll draw it down. But I think that's a bit of where we are. I would…

And you think that would hold pretty much to next year as well based on where your conversations are right now looking into '22?

I don't know that I've got a clear view -- I mean looking into Q4, I can tell you that, that appears to be the case. But looking out beyond that would be speculation I wouldn't be comfortable making at this point.

That concludes today's earnings call. Thank you, everyone, for joining us today, and we look forward to talking to you again. Have a good evening.