David Bozeman
President and Chief Executive Officer at C.H. Robinson Worldwide
Thank you, Chuck. Good afternoon everyone and thank you for joining us today. Our first quarter results and adjusted EPS of $0.86 reflects a change in our execution and discipline as we began implementing a new lean-based operating model. And although we continue to battle through an elongated freight recession with an oversupply of capacity, I'm optimistic about our ability to continue improving our execution regardless of the market environment. As part of my initial diagnosis of the company, I identified an opportunity to refocus our mindset on root causing and definitively solving problems, including making decisions amid uncertainty and acting with greater clock speed.
Following my diagnosis, I brought in additional talent to assist the senior leadership team and me on improving operational execution across the business and to deploy a new operating model that is rooted in lean methodology. In Q1, we began deploying the new model at the enterprise, divisional, and shared service levels, which is evolving our execution and accountability by bringing more structure to our continuous improvement cadence and culture. This new way of operating is starting to enable greater discipline, transparency, urgency, and consistency in our decision-making based on data and input metrics that can reliably lead to better outputs.
It's also setting the tone of how we operate and hold ourselves accountable, helping us make systemic improvements, build operational muscle, and drive value at speed. We began to see the benefits of our new operating model in our Q1 execution. As a result of disciplined pricing and capacity procurement efforts, we executed better across our contractual and transactional portfolios in our NAST business in Q1 and in particular, in our truckload business. This resulted in improved optimization of volume and adjusted gross profit per truckload, which improved sequentially despite an increase in our linehaul cost per mile for the full quarter versus Q4.
Additionally, our truckload volume reflects growing market share and we outpaced the market indices for the third quarter in a row. And what continues to be a difficult environment, our resilient team of freight experts is responding to the challenge and embracing the new operating model and the innovative tools that we continue to arm them with. Our people have a powerful desire to win and I thank them for their tireless efforts. They continue to be a differentiator for us and for our customers and carriers, and I'm confident in the team's willingness and ability to drive a higher level of discipline in our operational execution. We're moving in the right direction.
And at the same time, everyone understands that we have more work to do. Now, I'll provide some details on our Q1 results in our NAST and Global Forwarding businesses. In our NAST truckload business, our Q1 volume declined approximately 0.5% year-over-year, which outpaced the market indices. Our truckload AGP per load improved as we moved through the quarter. And although spot costs within the market came down after the winter storms in January, our new operating model and improved pricing discipline led to better AGP yield within both our committed and transactional business, while our procurement teams improved our cost of higher more than the market average.
We had an approximate mix of 65% contractual volume and 35% transactional volume in our truckload business compared to the same mix in Q4 and a 70/30 mix in Q1 last year. In our LTL business, Q1 shipments were up 3% on a year-over-year basis and 1% sequentially on a per business day basis. AGP per order declined 1% on a year-over-year basis, driven primarily by lower fuel prices. Our LTL AGP per order improved within the quarter and also benefited from our pricing discipline and the new operating model that I mentioned earlier. In our Global Forwarding business, we've been highly engaged with our customers to help them navigate the ongoing conflict in the Red Sea and to ensure flexibility and resilience in their supply chain.
The transit interruptions in the Red Sea and resulting vessel re-routings have extended transit times, which has reduced global ocean capacity. While the Asia to Europe trade line has been most affected, the impact has also extended to other lanes as carriers adjust routes based on shipping demand. As a result, ocean rates increased sharply in Q1 on several trade lines, including Asia to Europe and Asia to North America. While the Red Sea disruption continues without any clear timeline of when it will be resolved, ocean rates have come down from the February peak as capacity has been repositioned and new vessel capacity enters the market, while rates remain elevated compared to 2023.
As a global logistics provider, with the scale and expertise to strategize and implement contingency plans, we have grown our ocean market share by providing differentiated solutions and customer service and by leveraging investments in technology and talent, leading to the addition of new customers and diversification of the verticals and trade lines that we serve. In Q1, our ocean forwarding AGP increased by 2.5% year-over-year, driven by a 7% increase in shipments and partially offset by a 4% decrease in AGP per shipment. Sequentially, AGP per shipment increased 13.5%.
As the Global and North American freight markets fluctuate due to seasonal, cyclical, and geopolitical factors, we remain focused on what we can control, including deploying our new operating model, providing best-in-class service to our customers and carriers, gaining profitable share in targeted market segments, reducing complexity in the organization, and optimizing our structural costs, streamlining our processes by removing waste and manual touches and delivering tools that enable our customer and carrier-facing employees to allocate their time to relationship-building, value-added solutioning, and exception management.
Our continued focus on productivity improvements is one part of our plan to address and optimize our enterprise-wide structural cost. After exceeding our productivity targets in 2023, with 17% improvement in NAST and 20% improvement in Global Forwarding, we have carried our productivity momentum into 2024. We are on track to hit our 2024 target of an additional 15% improvement in NAST shipments per person per day, an additional 10% improvement in Global Forwarding shipments per person per month, both of which will result in compounded productivity improvements of 32% or better over 2023 and 2024 combined.
Our commitment to deliver quality, value, and continuous improvements to our customers continues to be validated by high Net Promoter Scores. Over the past four quarters, these scores have been higher than any point over the past few years and higher than the last similar point in the cycle, which we believe has contributed to our market share gains and puts us in good position with customers ahead of the eventual rebound in the freight market. Our customers continue to value the quality, innovation, and reliability that we provide as they work to optimize their transportation needs. They want a partner who has financial strength and the ability to consistently invest through cycles in the customer experience.
They also want a customer-centric partner who can meet their increasingly complex logistics needs by providing expertise and our breadth of innovative solutions, enabled by technology and people that they can rely on to serve as an extension of their team. C.H. Robinson is that partner. With a combination of people, technology, and scale to deliver an exceptional customer experience and with the breadth of capabilities to meet all their logistics needs, including value-added solutions for cross-border freight, drop trailer capacity, and retail consolidation. We deliver integrated global solutions with no equal as evidenced in how we are helping our customers navigate disruptions in the Red Sea and restrictions on transit via the Panama Canal as well as supporting their growth in cross-border trade between the U.S. and Mexico.
As we continue to improve the customer experience and our cost to serve, I'm focused on ensuring that we'll be ready for the eventual freight market rebound with a disciplined operating model that decouples volume growth from head count growth and drives operating leverage. Our commitment to continuously improving the experience of our customers and carriers and eliminating inefficiencies from our processes will make us a company that is faster, more flexible, and more effective in solving problems for our customers, delivering better customer service and creating operating leverage and profitable growth.
I'll turn it over to Arun now to provide more details on our efforts to strengthen our customer and carrier experience, increase AGP yield, and improve operating leverage.
