Mike Zechmeiste: Yeah, thanks, Bruce. Let me take that one. I think your observations are accurate, generally, when you talk about the industry and price transparency, and I would even perhaps add length of load being pressures on AGP that are kind of realities in the marketplace. Now what we’re focused on are other things that help us in that regard. So, in our plans, the ability to buy better. And also, I talked a little bit about the competitiveness that we’re seeing right now, you always see competitiveness at this part of the cycle. But I think that given the strain on the balance sheets and income statements of a lot of the brokers in this fragmented universe is pretty substantial. And I think there’s a little bit of unusual aggressiveness at this point that sits in the marketplace.
I would expect that to shake out here in the near future, I think we’re already seeing it. Anecdotally, and so I think that’s the thing. And similarly, I talked a little bit about the capacity on the capacity side, I think that we will expect to see some things shake out there. We’ve got anecdotal evidence that would suggest that there’s capacity already coming out, one of the data points we look at is our new carrier, a new carriers’ signups were about 4900, here in Q3. And that’s less than half of what it was in Q3 last year. So, as these rates persist lower and long, for longer, that capacity comes out, the demand comes back. That’s when I think you get back to, close to the long-term averages on AGP per shipment. And AGP margin that you’re referencing.
So, we’ll probably come up a little short of where it’s been, on a on a 10-year average, probably closer to where it’s been on a five-year average. But that’s where I would see that shaking out. And then to the extent that the work that we’re doing puts tailwinds into that, for example, some of the automation and work we’re doing on the buy side to improve our buying. We can also help ourselves relative to the marketplace there with respect to AGP margin.
Bruce Chan: That’s great. Very helpful. Thank you.
Operator: Thank you. The next question is coming from Jordan Alliger of Goldman Sachs. Please go ahead.
Jordan Alliger: Yeah. Hi, so you talked a fair bit about things on the digital processes, optimizing processes, etcetera, which is very helpful. I’m just curious how much of the technology and automation tools etcetera, are essentially ready to roll out versus how much additional spending and or development still need to take place on the tech front or is it pretty much ready to go? Or is there still more to do? Thanks.
Mike Zechmeiste: Yeah, let me hit that a little bit, and then pass it over to Arun. We’ve got a great pipeline, we would execute on the pipeline, I think you can see it in our results. If you go back to some of the cost savings initiatives, we talked about, we started at $150 million cost savings against Q3 run rate last year, we increase that to $300. We’re now talking about $360 million. So you can see the productivity initiatives that we’ve had in our pipeline. Working their way through to our results. And so yes, it’s there. You just heard Arun talking about productivity again, in the future, similar levels. So it’s not just a one project kind of thing. It’s a many projects kind of thing. And I’ll let Arun elaborate on that a bit more.
Arun Rajan: Yeah, the way we look at it is, just continued focus on operating leverage. And we’ve got a whole bunch of new tools in our toolbox. We’ve got Gen AI, we’ve got Lean. And the point is, when we talked about this, we said this is a multi-year roadmap of opportunities. Got to 15% productivity improvements this year. And we have to Mike’s point, we have a big backlog where we believe that we can continue to unlock significant productivity improvements in subsequent years and we would target another 15%, like I said, in 2024. And so, in terms of technology spend, we don’t expect to increase our spend year-over-year but we will continue to stay at the current levels of technology spend. And then execute on the roadmap that we have.
Dave Bozeman: Yeah, Jordan, this is Dave, I’ll just add on to there, the — and I feel really good around the teams embracing the kind of new clock speed initiatives just really driving more definitive, more speed of decisions. And it really sets us up well, in driving waste out less manual touches. Everyone is really locked arms on that. And so we feel good about that. So, it’s good question.
Jordan Alliger: Thank you.
Operator: Thank you. The next question is coming from David Vernon of Bernstein. Please go ahead.
David Vernon: Hey, guys, thanks for taking the question. So, Mike, you talked a lot about trying to beat the market. And I just wonder if you could elaborate maybe as a team on what does that mean? Are we talking about volume, are we talking about value? I think the volume is a little bit better than I think the shipment index from CAS and pricing is a lot worse on a per mile basis. So, how should we be thinking about how you’re approaching that NAST market? Are you just going for volume and you’ll figure it out at the other end when the market corrects or are you also focusing on kind of value share?
Mike Zechmeiste: Yeah, Dave, thanks for the question. It’s a super important question. Let me be clear that our pursuit is both market share, gain and margin. So, it’s profitable market share. When I talk about beating the market, I’m talking about being able to maintain our margins, given the market that we’re operating in, while also gaining market share. And let’s take market share first, we don’t — coming forward with a quarter like Q3 where a truckload volume was down 6% or down 4.5% on a per day basis, because we have one less day. We don’t want our volume to be down, obviously. But when you look at the market that we’re operating in, and you look at some of the metrics that are out there, you look at CAS index was down 8.7, in the quarter think the U.S. Bank index just came out that was close to almost 10.
That makes us feel a little better about that. But we want to grow. Now, on the other side of that, we operate within this market in terms of pricing, and we are constantly evaluating opportunities and ways to improve that margin. A lot of the work that we’re doing, is to improve that margin. That is our pursuit that is our goal going forward. And in the short term here is we’ve talked about, there’s some interesting competitive dynamics that I think have a lot to do with the aggressiveness around the broker set, given that they’re really struggling. Now, the other point I would make that I think is important for Robinson, is that because we do have a strong business model, we do generate cash, even in the toughest of times, like this quarter, we’re able to invest throughout this downturn in the market.
