SNDR - Earnings call transcript Q3 2019 | Schneider National, Inc.

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Operator

Greetings, and welcome to Schneider National's third-quarter 2019 earnings call [Operator instructions].

As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Steve Bindas, Director of IR. Thank you.

begin. may You

Steve Bindas

good and Thank morning, you, everyone.

company on Rourke, Mark me President available Chief today, on today which relations press Bruffett, website. are and Chief and the Earlier Officer. of call the President Financial an Executive is Vice earnings release, Joining Executive the issued section Officer our investor Steve and

actual that contain forward-looking may we I'd results vary. Before may call begin, like this to and remind that you statements

the non-GAAP the Also, related release. special measures there to references Please of notes and to risks statements measures. included may reconciliations uncertainties and earnings to refer be non-GAAP in forward-looking this of

Now I'd Mark CEO, like our turn to over to call Rourke. the

Mark Rourke

for-sale for and Bruffett for Good it most shutdown booked for call service the Steve the as the Schneider the will I impairment to final over quarter as to summary specifics commentary. segment, morning, of thank today. core on regarding mile the the inventory will the first comments well everyone, remainder to recent you XXXX status and turn financials operations, the joining offer truckload tractor forward offering and that include more of in was I a few

tanker truckload, platforms, considerable the segments, America. highly specialized highly retail reporting delivery, logistics three services operate move me, and and range bulk at excuse delivery commodities The configurations. has Schneider customer base all merchandise retail scale multiple across that a serve and North and intermodal diversified throughout from dedicated in general value-added

of engine. participate in North wide and America's we serve economic cross-section Therefore, a

in synergies so the between reporting midst across in of oversupply season. The we segments. strongly competitive of are three leverage capacity While peak the fourth as commercial, the Condition with the and very environment the independently, segments. we even in continues segments cost persistent operational quarter, far the all quarter was operate

carrying into seasonal starting below Through of season, retail or October, promotional peak produce related are and traditional due and capacity some last but seen seasons. in summer things But beverage the August, have the has tightening they of seasonality lacked conditions year. like September XXXX volumes patterns the frothy typical to spring, to we well

As network large contract is year pricing recent for-hire our truckload ago the the in in offering. context, flat most quarter, with

year-over-year, price overall erosion projects. price down is promotional with and spot However, fewer freight

Intermodal the price more year-over-year low-single-digit delivered volume order less were difficult quarter And into in comps. range. new in a increase intermodal the renewals contract

teams, driver mechanic of On process the to for indirect operations front, and in expense want of organizational am and effectively variable safe I lowering gains maintenance operations, cost the of costs focus the recruiting I good appreciative on our recognize especially the staff, driver and recruiting management. professional driver, areas work onboarding. with wide in our including fuel and consumption, efficiency and variable

compared the to year throughout business through our continues position a We and improvement we cost XXXX. overhead significant the truckload have ratio of improved operating the the be management expenses up focus our favorably ratio second final segment, In the as points reduced quarter, in impairment, set core sequentially the and to performance impacts mile quarter. basis an to to exclusive all held-for-sale XX operating first in tractor XX.X%

control. While fuel down year-over-year, to were only contribution X% excluding revenue down variable dollars variable with solid associated were operating X% revenues the that cost due surcharges

capacity compression prices The contract spot and favorable oversupply results standard for-hire within the while is of a versus business truckload market in a along year the due segment XXXX, ago. less to with were bit margin differently achieved XXXX than experiencing renewals

the in operating pipeline our our the robust. margin We new customer The an dedicated quarter work benefited dedicated sales of remains performance portfolio excellent had to quarter. and in delivering the reshaping value business base

market quarter a was share QX segment, intermodal versus share. the of For holding growing

over year-over-year decreased volume the estimate X% that market XXXX. contracted domestic intermodal X% we in the and order same Our period

XX.X% target and range year's was QX and, consistent ratio the long-term quarter transportation mentioned, did points year quarter. quarter the primary X% volume of the from per low-single-digit was costs the between compared Revenue operating XXX the quarter ago year-over-year built strength an order order the to purchase for Each Lower throughout record improve and versus our ratio XX%. Intermodal as were from rail to performance. operating in contributors range. order-per-day annual when XX% month in positive standpoint of limited higher volume contraction a fairly the renewals remained volumes the of last contract basis

market market should be Recent competed a growing new QX largely brokerage rates. in order, a in will first year to ratio but offering And and above of growth finally, business XX% XX segment's per wins lower gross XX.X%. our volume year-over-year lower, order in the year-over-year, contributing return margin reduction we implemented that service the indicate after at of operating a points difficult by the to basis to but effectively

XX-basis-point margin 'XX. expansion of quarter the and the contributed from part, cost However, in focus on sequentially a process efficiency to second automation,

automation third-party micro Our extended into platforms already the where are target meet specifically carrier and platform to connected. select investments they were carriers

carrier complement channel of my load truck of effort our serves capacity carrier applications. to Steve for his reach, commentary. lowers it and our to now direct expands cost our over I'll acquisition The as turn a

Steve Bruffett

and third-quarter of seem everyone. Mark, our results unrelated. lot activity be good might financial noisy and to in There morning, Thanks, that a was

the these the beyond. held cost tractors to numerous theme the of preparing XXXX company The common sale for to organizational first of one activities, focus overarching for group service impairment included a asset and of of reduction initiatives. shutdown which and mile is was in final theme a there offering, the However,

already seeing segment my truckload discussed Mark we're day our From that within the execution earlier. the to in day focus that benefit of perspective,

of mile in next shown XX estimate initial of our of charges we quarters. statement. restructuring million. to the our These a million million be charges truckload at which of refined few recorded XX the will final the charge the are Regarding segment, is income the to our shutdown, $XX.X charges first range on end guided consolidated This lower line over

for to the the with mile guidance first were final of line third losses million. our in $X in In operational addition, quarter

in for the that mile tractors quite to typically was channels, impairment through sale of volume also to used by $XX.X segment. the effectively it retail that first became impractical equipment equipment our now of channel. Moving recorded our sell sell the million shutdown, final truckload held compounded We year, needed solely we the was this to given which but retail to asset utilize

the fourth will quarter get parameters reached such, our block our to a a an channel by for used which As year-end. partner in help we normal third inventory of quarter sale tractors closer tractor agreement with us

expenses is income consolidated in charge impairment line supplies statement. our included This the of and operating

Mark $X.X Regarding a primary segment, quarter. third segments, our third $X.X loss reporting last year's I'll so income on compared to the segment addressed of results, other quarter in million the our million in comment which had

our So are similar all in XXXX's not accruals for given would directly our accruals provide if associates in second pay segments. for to million of further the incentive was incentive $XX be targets primary quarter, who XXX% the we context, year, compensation To for reason the operating a annually. variance hit approximately

and our XXXX's targets than over year-over-year achievement larger in XXXX there's relative a targets, achievement under However, sizable normal relative a our variance. to to financial given

with million expense of achievement XX final quarter $X.XX. were XXXX. put our Looking assuming you results, compensation shutdown than approximately for incentive was and factors our the the for Adjusted will share XXX% financial all When next more forward, together to includes charges, our have third that year impairment targets, $X.XX, earnings consolidated operational mile first $XX.X charge. core for per million EPS these and

maturing a repayment item the additional repay. the nearest upcoming of XXXX XXXX in currently Looking is $XX of we November also notes expect an have million that ahead, note, we million to $XX

the full-year midpoint $X.XX of reflects share. diluted a range a our to to decline, majority third quarter. impairment taken the charge which EPS Our updated XXXX been reflects prior guidance guidance, adjusted $X.XX Compared $X.XX the of to the of per has this in

has guidance adjusted to XXXX slightly net prior the CapEx approximately XXX Our from down XXX. guide million, for of been

disposition The change proceeds primary the increased equipment. the for of reason from is

of We focus effective our finish actions rate XXXX comments, strengths. ahead expect tax approximately organization we've to for And to We're series year as this XXXX. and wrap plan XXXX our up the core leverage positioned we to full-year taken my well be and also a out XX.X%.

With that, questions. for the up your call we'll open

Operator

Our with Please Stanley. Morgan your question. comes state question first Shanker Instructions] from Ravi [Operator

Ravi Shanker

can XXXX, again, looks for dust guys? on trusty early crystal there more the uncertainty Mark, from explicit obviously supply specifically you perspective like, off for if next your you and we and ball year the read think very a demand try the a catalysts on side. get a do are few industry and What rates in maybe side,

Mark Rourke

the existed a XXXX, now the macroeconomic see supply certainly we ditch as Obviously, are the clearinghouse. I drug certainly side the think But ago. we in the national relative do prices. kind insurance a in significantly have But We've that I associated to and But of as with a uncertainty, into more came a we'll were, for place got year have XXXX we're little XXXX, low with not different kind we they into plays articulated of hardening on you've markets attention have more out. spot which things bit certainly, go how of the and the than mode to were lines there several yet We quarters of believe, condition. guidance.

got We ELD final conversion.

that uncertainty. of economic but as around many experienced And on so tension and and and trade am encouraged hair those. public we're bit of XXXX. position to But, all together, there the But a supply side things watching little haven't we ruling. following discord is that against a than I follicle I those a we little, expect yet more a bit a in the just we're taken We think maybe backdrop put mentioned,

Ravi Shanker

be you up rates next At feel as like this whole? point, a can year do for

Mark Rourke

maybe catalyst. first sure might it'll, constructive more again, year, in the the But certainly supply but I half will be be the not condition. think, half second the key of a I'm side,

Ravi Shanker

some very Maybe Steve. Thanks on follow-up quick for just for the of color moving the parts there. a

have least. and guys of given mile run a a can some now couple XQ little the prints final the of way, noisy of out number are of these XXXX? items issues But first and with at clean earnings like of get a wound for last You you to we of had couple in of into feel down finally the bit do quarters,

Steve Bruffett

feel tighten we regardless our a go articulate, year our needed to And strengths objective. we're to things number certainly we felt quite environment the take and as on and relative terms, company positioning forward. how There tried has being been to That's the were up go core forward. in like of that of to steps But ends I a well-positioned positioned. up, this the what capabilities we like focus of

Operator

from question Please Wetherbee with comes Citi. Our question. next Chris your state

Chris Wetherbee

some impairment maybe to through was pick that we on believe final $X.XX. point, it's from that first So the just Maybe impact sure up go the clear? I to on on items a think roughly I Steve, this of $X.XX. is just last And tractors XXXX perspective, the if could to about mile make

about that I just there's So there's on think to that to want when $X.XX make when sure into to about the number of setup I of $X.XX guidance about, right not we the understand we that year? sort next think that's impacts $X.XX, I recur likely so XXXX XXXX? am will going updated or about

Steve Bruffett

here for sale. of today, further held expect sit we we wouldn't equipment As certainly impairments

residual and However, we'll and of time. over policy course they or monitor that to try over time, how We over to equipment that really we of do turns to how net course time. the the large out our the of the market dial practically and course losses set used out not depreciation generate gains need to values continue see

disposition XXXX. may on in we used could things equipment it is be some there the market those modest through couple I As soft losses don't that go that incur yet. patch that come quarters a like of first tend to know in pockets go. of this, and But the we

final part $XX don't, mile, little a that the million-or-so that it's what difficult won't pre-tax point, first yes, at won't XXXX. repeat we say to we in of removed, incurred look like. your that will So to losses incur we've But to

yes, on spoke size the I tailwinds in those the for just can as incentive we asset situation impairment have well. earlier as my current for plan accordingly for into that There this that And I just view the clear, they same trying up comments, trying XXXX. XXXX. thing at it we so to to time, in go people to is that comp was make us

Chris Wetherbee

quarter, the or you're And just right? first to for not through to negative the expecting final a a fourth impact P&L, loss that's run mile

Steve Bruffett

done. The operating losses are

down operations. shut entity its that has So

as a estimates in out On they'll charges, to refine separate the line given those the called continue statement go on and non-GAAP status. we we'll be income through restructuring time, but a

Chris Wetherbee

segment, you sort looks aside operating profit, have thinking could impairment a relatively charge or right had question, But the And ratio adjustments. first to we're I improved the truckload environment then And put for the there make of that's have like final unique in about I minute, the it mile about just the potentially might the follow-up to think actually and if that now. know excluding improved. seeing

like about to want sense maybe we you Just anything Obviously, was first part there. about light next of in half thinking early seemed think cost there get into how some out and then relatively sort year. the in and we a that a initiatives environment right It now? of heading of performance the good XQ else making are But unit, incentive you're you've performance think it of about of the laid guys like the that issues. as comp can the we're seems of progress

Steve Bruffett

delivered do this non-GAAP that I it what we non-GAAP Sure. for the comes qualify charge whole not quarter. Truckload so that's can to the posture feel treatment, operational time, think the and be we segment the the of tend conservative at to non-GAAP that At in do confusing execution a when thing take didn't in impairment times truckload third and I unit. the we GAAP core that same representative it's

didn't that the regardless it. So all humming the machine start during track year year the entity, work additional done a that to well, think that and we do did has out back the of provide we which step lot of the get environment. take course to get visibility of the Because on to

yes, we So well-positioned. feel

enter I positioned fourth Truckload we're the the revenue about said, we're think in Mark, here day-to-day management sit in reasonably I like just the think dedicated along -- I the operational how November. on contributor, important quarter that all in as his initiatives of to cost And performing progress side well we segment the just that's mentioned earlier the like comments, an here and the and business, with execution. still and

Operator

proceed with Please with comes next Ben Our from question. Hartford question Baird. your

Ben Hartford

portfolio? at the Mark, provide? more if composition the you perhaps now any offerings you of take do services within Final portfolio on to there more Truckload a look that other shuttered, niche going hand, forward some step back Mile any feel with anticipate and of how culling the the see of opportunities you First that are expand the Do might you that you Or to that portfolio? about

Mark Rourke

of our articulate As And dedicated to lifting full the Steve work most the was of starting relative really the come was some just to do had for of portfolio. part, reshaping to first seeing that this quarter, the benefit all there, we together.

to do we can we're bring customer. We're the of on so a we after, is the vehicle. what And value believe targets our growth after that what very not we're and that focused

how And we see well new expansion the pipeline, would so business really from as positioned, resourcing a and opportunity. we're an sales we feel that standpoint and

have and look don't for of like both and the other the market to any anywhere other do we division grow would our the particularly at of good because can what in there really serve opportunities there's performing really Truckload across assets, portfolio. acquisitively, reshaping of some that there, And real believe do tanker specialized we We we're and leverage and some potentially organically into. kind

in into So see probably network. It a of growth would at I juncture, the be us, for-hire the lot specialty would areas. primary be those vehicles. more those this X putting growth wouldn't

Ben Hartford

follow-up, year relates utilizing and bit that still it as the and that to into particularly any little challenges utilizing we to trend, how it changes at you you the as just Can year the a move experience some as the given look and organization kind operating difficult you've as XXXX environment? may earlier talk related in made tool look of of Quest. a it then a through about the And

Mark Rourke

responded how pleased it came to degree as at typical world may a really some the you'll to had not or slightly as of year, And addition different the the I'm As those. is side positioned correct house to as adjust not tertiary that we cost to contract we a us, just that how also, in well may positions favorably a as for into the we're ourselves, through secondary to organization and freight be the really, recap, available on go has responding relates given cycle. and recall, you

so the would quarter that And I see. how characterize with made we've consistent and you've seen is adjustments, third the we'll those performance in

season little a And well a of land, as truncated holidays we're we'll good to do what of would that. take XXXX, of The we're really to question bit feel we peak got XXXX. in in into expect positioned with we learnings taking take we'll that the into coming how is there a to advantage be advantage here much but position shape We painful the of. where we fighting be go

Operator

Thank you.

with Jack Our comes question. next question Atkins from Please state Stephens. your

Jack Atkins

flat challenging the year Steve, that incentive perspective, for truckload I rate the to first profitability to environment guess, all a terms in earlier to will about whether modest in puts the months you need, coming guidance of demand about segment as and year. the questions not year? when be all what and at or able year, and back But sort knows. today. do a next given six of sort next and market some truckload back be and are thinking look who the perspective takes And just a thinking of in the of comp the I give But you next XXXX, could items, puts if I see to year, this obviously, for you guess, go understanding may growth from operating to takes guys from be next of position inflationary it's you're just the out the

Steve Bruffett

It's just that the comes our contractual go timing those weakness of down I supply/demand Mark themselves contract somewhat really, to it think, or we in to the then steady. and renewals. in I be price as through market will equation renewals strength boils think with volumes how available the referenced market conjunction earlier. down Because much is And the

I think to variable comes XXXX. that's the single it biggest when

Jack Atkins

drive inflation to rate that Do need year? EBIT able be you feel like next truckload growth you in to

Steve Bruffett

in it that positioned rate it I expand To pricing, a put out way. maintain with some question. environment. we're take think it's to lifting, the I'd would not flat of margins margins flat but heavy

Jack Atkins

perhaps And then sector. just given your and on carriers truckload could comments haven't second lead that this a just I'm the the little toward follow-up, that in just there seeing facing I last Can attrition the thus talk attrition year? perspective as we bit surprised the of year headwinds here all the end markets leading within maybe capacity sort the about this about half we more of far. seen a out question, of potential edge the of for you mean a insurance broader that Mark, that are you're work just to from small what

Mark Rourke

and signs nature business the both carrier But It's a of that the to community, we condition or about that we tension be clear more renewals, view their broader an my But kind because rate I condition on carrier. those the the kind again, the condition in elusive, just insight of Jack, coming of have quarter underappreciated to catalyst in of cost impact, as seen. process or with view we're insurance love Relative every exists, by the opening. just the their are of the industry. particularly in understood better under, And the the are providing of the macro the does out, on kind smaller to and is a there. But cumulative it credit date. coming starting services in fragmented effect out there and is that partners, of obviously, think talked put that that as addition will to it's would have I to even one my particularly what's to an extending perhaps, view, been the in of area, in goes little elements channel check of health some our that of I think that

Operator

from question. comes question next Please Majors your Our Bascome Susquehanna. with state

Bascome Majors

fall you like to in looks on a It little wanted XXXX. It that's in sitting of dividend, thoughts table cash more be years as $XX a half to cash on paying a talk net X% the How anything by public with that belt? helpful? an your kind and be that the more of peers on rising versus this sounds today. opportunity company probably than standard is evolving XQ buyback to in two likely dividend gets on a truckload yourself deployment. yield, And capital under that Board's would the million-or-so I balance differentiate like else there special above you're rise might

Steve Bruffett

of This an by team. uses directors think ourselves the on ourselves board about saying would we It's with about in start among we is robust center front I going management how and the have and of forward. ongoing cash Steve. and discussion

checklist mentioned, of classic items that what do. through the those we of All could we go you

priority then tech We and and foremost, go put, from there. investments first and organic on

as several share venture do XXXX. our here a we to gone would repurchase, times we've public since it evaluated we've Specifically through

of leaned time. So public the on our side through far, float as gone gradually we've we've increase letting

periodically. a as to The the level not least consider something dividend it's continue have of stock. limited we annually liquidity to to And too itself our So dividend be. revisit we'll that that in conversation we It's evaluate quarterly that. is should the at what

So screen the it's well. on radar as

pending. But periodically well not we things on dividend those wouldn't form checklist acquisitive I for it's in out special the some in that play as at so potential review, activity. our point time, are as all some And of rule is certainly of things

well positioned. feel we So

rush sheet. course have the We because don't into that balance have a a strong something strong deploy and we sheet. balance of we over to just time, want to We've looked

Bascome Majors

hear a more kind is that? on I this we we Or should is of a months? in on and tuned? sense the urgency Or could that stay update there weeks something of coming more tangible mean, of just

Steve Bruffett

At this going we're quarter about I of time, uses ask cash that know point discussion. don't I'd big in you to point stay announcement up we'll show our have to toward, tuned. want oh, to and next would I a

it's a plays think story I time. that course a over out of longer

Operator

Our next question with comes UBS. from Wadewitz Tom

Tom Wadewitz

second Or prior-year point, relative of some quarter? is have the costs when the might most you could, Wanted couple the to kind come you If supply see be guess, on that? if freight a bit about you've do could of carriers? then that to really does question bottoming? market a without And that. I one recently. Is know offer talk impact? really some on view. of quarter? out then, seasonality guess thoughts little like just insurance. the, bill so you've of on couple in seen wanted that had demand a some you see pay I guess, that a freight view within of questions something on pinch the first affect capacity feel the And a to freight if I where already I more Is But a insurance due to Mark, that just this coming improvement capacity Or market's have in you conviction thoughts you

Mark Rourke

and both typical project relative although not time seasonality. and seeing just through to because a We typical choose of use really and of ago. But that the so try expect we have normally things to conditions would we're our year, import that the nearly we're kind we throughout seasonality noteworthy the just moderate. work degree the prior activity, exist of carefully, certainly, to That's meant haven't But year some the existed. this words word and been around seeing some secured, the you what

would at that I overstating would get, want I or things don't want at our the, into the has play some that to in that drove as typical it's the side, think, the the of way, And as what's Steve's encouraging view, effect a intermodal don't with why supply a the don't driven seasonality. truck fairly been imbalance because some but that. than to this But in again, expect is, I earlier fact we least And comments more we're is it on of be demand-driven seeing XXXX. insurance we we that this you… the shape view juncture, side, unique see. I concur overstate piece, the to here fact But in interpreted decent relates Steve, form, So to

Steve Bruffett

by renewals, I macro view terms of to renewals have example. when don't tractors the And and things aggregate how space number the happen of in a insurance across see represented those for any But just for renewal all at throughout or could that a dates maturity it all point the insurance various so transportation different have had happen companies I've their year. worked for programs,

So that I don't know there's any particular concentration.

Tom Wadewitz

time that would that of happen. So a the of kind clear that's year not

turn doesn't Would as I quite for how growth? the some you at, operating you, XXXX. set income. like the that of incentive in XX comp on in be target appreciate the and out on factor. up pricing Or to that? where know earnings end million level a still think are Steve. one idea if I results know comp, down guess, to incentive about But are that expect up showed is the increase I function Just that meaningfully more the insight favorably other financial that a quick I So that's incentive what you one programs right? predicated you

Steve Bruffett

type set annual payout meaningful of our for any hurdles our achievement when I'd in we aggressive say we're financial programs. bonus of fairly

full in million up XXXX. be, million, would accruing that XX to would or would need that there there end XX I So growth expect to an us be for earnings incremental

Operator

Thank you.

JPMorgan. question. with Ossenbeck Brian from comes question next Our proceed your Please with

Brian Ossenbeck

challenge fleet So volume the then at size container quarter a and up the on you you least, range, end rail had through then to Intermodal quarter line How the just utilization, is service some of kick do another quarter, could year. costs margins, that rail with the of we early you for with tailwind? you what next saw Do you in the here the also, downtick and in fourth think 'XX? container the inflation talk in lower be think in that sight of into in think into going And any general? about does

Mark Rourke

Brian, there's a lot to unpack there.

of we it are fleet, size First we to be. we to all, as container need container or think where maybe relates

upon equipment, we In go we XXXX. could based as some be of down through end-of-life fact, slightly

drive quite we really we growth that the that see relative room So CapEx to room don't into we fleet. and of equation. large to side to, our have have certainly, grow productivity a there And need initiatives

the some As inflationary to over talk recognize the about both maybe do sensitive are of participants. not market, down we're that transportation it terms. communicated, position areas, it's really time, rail a both costs reflect, about contractual up as do to a relates and we talk our for since But in to we've purchase

end, start whole on but see relief how based of the as So and on that higher end end rationalized presently, market we're we rates of we the all that are income That presently. we we upon couple perhaps to the over last would high at that market have the would quarters a some expect the out plays side the goes, statement. that bit see at peak that of would of

Brian Ossenbeck

in looks quick one like the It incentive and that comp good just of related imagine I a reversal. was savings. or follow-up wages cost chunk were Maybe amount good benefits down the on a salaries, to maybe quarter. the some

just in of some if few like could of a could So quite because you sound are or started some getting identify that right the that? it there's starting here. now other have traction clarify to buckets maybe play either savings, does And you if

Steve Bruffett

-- particular, cover to Mile We've the And areas. benefits cost wages positioned is you gained thorough $XX they on referred of initiatives and for is those is salaries, and the partial are costs then million through you're to company But general, quite basis Certainly, compensation those A those one the we've buckets, how third sustainable correct. First their organization. second in we've areas in in bucket if And the to And bucket and scrub efficiencies all quarter within Just regard. and look comp trying buckets. feel removed decrease There's in the that business, been to. everything. about in a so in incentive a a amount want year-over-year indirect third we that we've to quarter. think Final X to of we shutdown about there. support the good the fair being roughly of

Mark Rourke

Yes.

the customer As logistics with first the associated or place in overhead in that we other our think about the big final costs, -- quarter took are in-sourcing to activity the first excess in well mile well anything in they're of business. improvements

I cost the And organization good. it but sustainable tech-driven, in half the so, year. And the done our never in and view, my we're well, position But very feel has we're process-driven, the there. in here some are these responded and really of seeing improvements, some leadership extremely second

Operator

with comes Suisse. Allison question question. Credit next your Landry from Please Our state

Allison Landry

of sort seen Just rates next contract wanted to this expect ask in divergence another and you've rates year, see TL Would the rates, one about but pricing you above XXXX to specifically truckload pricing. intermodal between similar contract come to year? what intermodal

Mark Rourke

everything, rates had intermodal can to end year, as into help we've go believe condition we're of also alternatives on the folks the truck truck as the haven't how that and this we customers other fuel rationalize, which through volume truck moderating I and will erosion think And We think kind think a most I projected plays that Again, about that progress starts in yet front for Alison, certainly business. of as alchemy have to well relative that that. the versus capacity intermodal seen XXXX. associated we as certainly some with obviously, XXXX.

that to some bit truck in XXXX. optimistic some pricing And has to I'm we see little lost return been conversion that that. to here contributing may some factor can obviously, intermodal have a So start

Allison Landry

your in then of have brokerage, of terms aggressive pricing And some peers talked about behavior.

So environment. what you've seen if to could thoughts think in had just gains just strategically, share marketplace. wanted if of how this any see maybe thoughts then in you the share And in on versus some you market about pricing you terms

Mark Rourke

question total there? are those logistics in And

Allison Landry

Yes. brokerage, specifically. The

Mark Rourke

think, I yes.

how decision we to carrier per net pressure think under the manage to our squeeze to can order able can customer fourth Specifically, it we've try we've we we from had it's continue the to been be as as able piece. to costs quarter. we've We've between order that means from the clearly. I'm competitive. meant on that been maintain year, through expect at and revenue growth do competed. would rate double-digit about more use as get that had to It's everything and support But become that's the to pleased science maintain a how been interesting through our volumes, an the much we'll well we we

we've seeing we've it'll that partners sharpen folks. with how unique with the completely the taking items our but bring are But difficult leverage world, well is that announcements And and a they type we we're promise there. to out the with of recent responded to continue automation that. logistics, to solutions on element to is key some great invest parts opportunities, are those it's in opportunity the of year. But and had touchless whether brokerage the other do strength not things really going business. a other other that we has collaborate And be of of the organization of or portfolio only across that of future, saw as have well, what believe be team a but had been some and And done to and to not some some against there commercial a entire process that's services the of on we cost our

Operator

question. Ross David Our from next state question with Please Stifel. comes your

David Ross

level in timing. intermodal, the maybe in the partners on put the to terms rail does you rail question. commentary timing guess, pricing expect Have I the rate I Do increases know to not look but increases? place your of the recently? increases, us into XQ, give XQ? been Follow-up on rail raise And How the you're going of

Mark Rourke

can't are that and I are, because mechanisms where that works. approaches how David, is, is there of the going market specific recognize or of but timings various different get there market overly where there,

order as XX% where last And to a third of was single I'm, no there's coming a our think our that. quarter or I quarter, up answer is we're What per out revenue So so. X%. per I revenue here think we order were sitting

the structures of the gets And doing is So we're market but what adjusted. that. just rest those of into of kind based how of things, those all not plays upon only that

I can't unfortunately, more just and share specifically So, that. than anything

David Ross

sounds like it are rate indifferent. the So increases market-related and market not

price So raising year, that market the correctly? rails next rates that, if am say, be wasn't I hearing Is X% there. wouldn't the

Mark Rourke

was term, first I I think, how describe, be would your yes. guess, They're market-sensitive, would I

David Ross

on business. color the dedicated just then more And some reshaping

talked what business reshaping guess done how helped you earlier? operating is You it operating about How the it that now differently ratio. was I have than dedicated? in better

Mark Rourke

to what had focused that intently we're we of and returning we're large that one operations and needed a that. or to anywhere close ones on And fairly unfortunately, they series not be

to the And we so customer. had and go in with work

and we fixed, somebody sometimes we those take can else get opportunity. had the let And sometimes to

proposition. And so different it's sides aligned replacing it David. of better performing different improvement business We've targets both had of attrition some the and the on value and via equation, underperforming with to

do double kind lift have effect so you when both And this of those. you of

more and opposed at as talking, one trucks, attrition it's metrics services tractor ones we've count replace a five had to mean, customers. the And be or favorable so XX little might because generally, the as smaller our it And been value-added in bit to to XXX one masked go those trucks. in because or through large we've at

of opportunity. has special we smaller the general, ones, very positive, to general in heart with and to, growth customer. But exactly which that's and replaced at the solutions, commercial strategy. we've more It's number traction start-ups the of been very new strong. operations our has is specific much our so large been very, And in see more some the It's intimate where

Operator

state Wolfe question. question Research. next Our comes with from your Please Scott Group

Scott Group

wanted I show up? in cost question. impairment the the does Where a just on ask quarter Steve, to cost line? Which So

Steve Bruffett

The impairment operating expenses. supplies is in cost and

Scott Group

the a reduction general help Can about expenses had pretty other in think the then you that? just And nice quarter. us

Steve Bruffett

the with there. that obviously, of There's, items there's cost through flow label, a lot

Our about that showing cost initiatives in down the quarter. we are talked up costs indirect coming in certainly as line,

the And being to biggest so contributor that that's line decreased.

Scott Group

earlier an was truckload, said it I question. you a I if truckload think then And question, to think

truckload keep we year. margins You of sort then to next and you said overall can margins if of get thought think earnings you company truckload sort flat is we intermodal we next flatter, flat year that keep and pricing pricing can margins that if apply flat, Would earnings, intermodal overall same flat?

Steve Bruffett

out that cost have objectives is, improvement the than and timing to is maintain even I we cost biggest we dynamic independent price, then can believe, single things. statement, that relation and general an can But perform pricing XXXX after did objective We price for given The to of to in flat, a going that that speak that's we the environment in that Mark's all identified in variable better those to have, us of our process I we're think if help areas how XXXX tried that there. margin. and as XXXX that efficiency in we go will plays the rail that is

Operator

Merrill with from Our comes state next Lynch. Hoexter Ken question Please your question.

Ken Hoexter

Just quickly on the, impairment charge. the on

excluded charges? in I difference that because the exclude business, to Is view you of understand, it final is it want you handling to the it didn't mile. or the just that, You you just your while excluded why or first core to as

Steve Bruffett

do to not. speak when as as can. to be treatment little I'll but try comes tried posture to earlier, a I qualify to I it I it or items conservative And what non-GAAP said take we for a clear that

a offering, view, And something being for part non-GAAP qualified of of in treatment. clearly a service shutdown our

that of to Something excess was inventory border more amounted of the equipment sale line.

necessarily was just we that core the there, and truckload for it's in that the So operating reasons. and think representative performance of provided people segment important to isn't approach because chose we path that item, took the conservative those we visibility it of to that for know a bifurcated

Ken Hoexter

necessarily capacity whatever not clarify, to of left final excess first selling core trucks from was trucks? from mile your service they're Steve, just it's to not, So just just the

Steve Bruffett

first combination. It's trucks the that pool. coming was by the situation compounded mile to into This final

Mark Rourke

been retail that, of very we and approach. effective or have really space over and very supply our certainly and our been combination eight years, to we years, sales place The last our Ken, outstripped and successful. secondary reasonable has arm probably frame of have on way, a of and very what there. preferred equipment method you and equipment, retail an the a for to the felt, our that's will, factors seven to and our the or that a if Mile adequate that's in line Final And in of number First capability had effective the time took top any there, disposes go

Ken Hoexter

I guess now And for the post Final now that tractors, First in of XXXX taken the out rate you've higher run rate -- Mile -- full then the to the fleet? specialty, that run is

Steve Bruffett

metrics performance you we provide segment a In by key see quarterly average. indicators that that our Yes.

that, equipment looking the yet time we run is... not So you but the probably full out quite of would to the see that that at by fourth get quarter,

Mark Rourke

They ramped Yes. third down but there the quarter. in some quickly, movement still was

Ken Hoexter

So little Can of you period that maybe of period. segment? for of a tell where is end because more, the that end us

Steve Bruffett

it's... but I you. to of We don't in have that can get me, that front

Ken Hoexter

-- to Is Just And movement demand? then the just, the where market is at follow-up point? that. this of general, on market terms I there in guess, given just quadrants in trending mix fleet within

Steve Bruffett

it's tractors route in of the Mark's versus deployed is basis. spoken the single active ongoing think network to, dedicated configurations refinement biggest on that our that manage that interplay the I irregular we an

Operator

Have National's Earnings this at parties thank time. questions further concludes Quarter Call. may This today's no concludes both All are Third may there parties disconnect. -- -- gentlemen, you. and Schneider today's a day. This Ladies XXXX good

Schneider National (SNDR) 2 Nov 192019 Q3 Earnings call transcript