SNDR - Earnings call transcript Q4 2019 | Schneider National, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Greetings, ladies and gentlemen and welcome to Schneider National's Fourth Quarter 2019 Earnings Call [Operator instructions]. It is now my pleasure to introduce your host, Steve Bindas. Thank you.

You may begin.

Steve Bindas

Thank you, and good morning, everyone.

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

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

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

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

Mark Rourke

Thanks, then Steve offer forward the a everyone. will to over I regarding most for you will Schneider comments summary for results for the turn specifics and it and joining financials good Bruffett on morning the few recent commentary Steve I and call more XXXX. operations, today. for quarter Thank core

and scale $X customer achievements all North in truckload has annual truckload, the that QX performance, surpassed the operate three XXXX diversified the joining revenues segments. highly in logistics of and a intermodal for considerable intermodal first at base With logistics serve strong time segments; operating billion America. Schneider prior throughout and

a in $X in our level not import export XXXX. crested operating muted large line, logistics decision environment insourcing more XXXX with a pricing customer full continued billion first primarily growth in year maintain brokerage volume Logistics in in Despite threshold revenues did that due brokerage. combined to service

in pricing as for growth spot volume this we environment However, positioned expect progresses. year and regain XXXX as are milestone we to the improve

trend, the the continuation in and brokerage. environment a market of the truckload persistent capacity oversupply of in was particularly Overall quarter

this in complex reflects see Schneider project-based promotional in work customers than larger we period less of pricing experienced activities XXXX. the solution more we the value what in and from the volume same the did was While that expect set, especially

an Mile XX.X% segment, XX.X% from than extended typically quarter, base the support QX’s surge operating less First XX effects as that seasonal core a to operations a ratio our would erosion delivered season the trucking robust of In sequential our dedicated extra required excluding experience. be customers for our we less the truckload Final point operations retail basis into even peak

hardening is focus to to while to encouraging being demand on change sizing side drug network higher Our include supply catalysts quality a correction capacity testing of our meaningful for mindful industry the the levels, on to conversion for spot requirement National auto effects XX% random the markets, now liability of EOBR environment. the full from of multiple the and top quarter extended a clearinghouse Alcohol and XX% annually, market weak the insurance Drug pricing

changes. loads mix again due revenue primarily effects dedicated truck Final lower to Mile of spot X.X% opportunities, rates, per excluding week and contracted less per year-over-year promotional to seasonal First Truck

mix we As seasonal experienced business of market the move demand availability work. solid unique of to growth most robust advantage new intermodal and network to recent order higher picture the we seasonal intermodal across the including take of intermodal, as combination above segment, result on demand, container of a a optimal awards volume used project

of solid primary our marketplace, in reliability service XX.X% versus operating rail of QX partners, of unique an opportunity, Intermodal year. ratio network improving last XX.X% a levels of the an challenging Despite areas through from of performance execution, delivered analysts pursuit QX

XXX-basis XX% has while XX% ratio premium highly order XX% comparison In in revenue operating logistics, of year-over-year by count two-year rate QX with point grown since XX%, brokerage market and operating per competitive XXXX. was increased QX. contract It's contracted orders, interesting actually to less then our revenues increase mix, our lower growing XX%. a seasonal earnings to have year-over-year. the in basis container spot X%. a compression of XXX Logistics Revenue order increase count year-over-year in in brokerage Intermodal due opportunities do the point of was driven a XX.X%

how we maturity allocate I and before portfolio Final ask enter on of the out a will on our with our technology will strategy dedicated XXXX full and to potential our to and I of company XXXX and stock, close capital, of we my rolling with as First both And unlock to guidance people, stronger taken the XXXX with services, that portfolio. Steve reshaped finish comments discuss starts Mile for and XXXX, actions our our the

revenue growth a best-in-class specialty that with while on offering asset truck and focus improving a value return a delivering company multi-year the value like for consistent customer driver execution based [Indiscernible] centered intermodal profile solutions experience earnings and create delivering company. are our capturing customers great and continuously Our for reliability squarely at dedicated

The carrier shipper, while driver facing driver of continuing technologies costs, to and our customer and lower carrier deployment improve friction that digital continuing execution experience.

electrification And will and and new professional finally, safety us equipment an our testing support that autonomous development XXXX for be technologies with drivers. year important and

over I'll that, it With to Steve. turn

Steve Bindas

Thanks fourth the million Mark, to down robust good everyone. and I'll with compared revenue which quarter fuel fourth excluding begin was $XXX surcharge, morning XXXX. quarter of

in $XX XXXX. due difference to a sourced was that million in of year-over-year from and Final by earlier import business a to revenue export context, in For that from Mile, customer First decline was

items, down two these $XX for XXXX fourth was quarter million revenue or X.X%. adjusting So

these of million million was the reasons. same year, decrease $XXX to attributable full the For $XXX

specs. we fourth On to it's Final point we and XX with the somewhat First million than anticipated time shutdown is topic to in larger of First quarter. costs tractors valuations This related to originally the of Mile in Final for booked the Mile,

recorded XX topic In of this This of the on XX total this the range should substantially close we and in offering being anticipate do guided XXXX books our million million we to middle discussion a which was of for million. XX results. service not costs, of for shutdown XXXX,

view that fourth year, prior the of difference earnings, given we my than quarter it’s of from conditions. operated operations in quarter quarter million XXXX in to income even of down from the XX% better Moving while the adjusted XXXX, operating $XX.X fourth the fourth was

a year. second earnings income This the from XXXX. operations expectations On highest of represents of history, earnings going the basis, year full into our second in was XXX million amount well those our adjusted of to only below also

important the is will the a year. other our that Fourth to XXXX year. we Mark our our loss fact X.X quarter three million a positioning address I loss improved the last of portfolio million operating covered and so throughout our results XX.X More compared primary segments segment. included

recent year-over-year As is in for the minor only reason incentive that, were accruals primary there for we've improvement discussed of lower compensation. variances. Outside quarters, the

average the will likely there into some million to other we Looking and expect variability about currently XXXX, X losses ahead quarterly the quarters. be among for segment

now assets moving to all XX ironic Moving year-end during had the end. our one total prior that It's or the year million tenth balance only the a were XXXX, at we percent of from sheet. with different parts

that reduction to One by collection reason revenues marketable receivable, the That most Mile cash Final was trade in above which which of receivables. and normal million moved items was XXX was and XXXX. during the the of securities, First and the driven lower main accounts a increased amount is by

XXX rather, to looking a at cash, balance that we're balance conservative continue cash cash with of to are for more of in build the We will and We've due was invest million occasions We've XXXX the of also working The sheet that not we're and we position. comfortable in year-end. on to deploy acquisitive marketable XXXX so. and the securities stated company our begin expect dynamics. that stated typical in the our for organic capital lower will intention build to our long-term to productively to cash stakeholders, maintain healthy cash do expectation actively numerous ways and it's than be our and success benefit we to our looking

reach during sheet, maturities. reduction On debt XXXX anticipate the balance side year notes million with the we XX XXX liability of as of existing further the and a ended their of million

Transitioning XXXX. to we There's upcoming metrics that change now provide truckload to the our performance segment. for an

shutdown, first continue performance from two. down Given we key dedicated to to metrics in four sense XXXX with operations. these results, will it streamline Final higher Mile First and metrics for the provide quarter our categories makes our to Beginning to

and are We will specialty equipment standard the type. categories discontinue of to which related

you other that trailer truckload authority. component segment, our pairs a change a we've to under upcoming party our their involves within service incubated third a small, Schneider own growing we -- about So of In give up under heads change. with want business capacity that pending but a complimentary operating

This third brokerage party unit. our through capacity is procured

with in it this up sense align So beginning XXXX. segment running, capacity our to now as logistics it and makes is

We also EPS XXXX want for context guidance. to some provide

economic that to First, overall remain conditions the XXXX. those of guidance similar assumes

confluences. catalyst, progress as driven capacity not but XXXX, by as steady result noted of a multiple all single a anticipate earlier, in Second, we rationalization at or once Mark a

and envision balancing do capacity we market see we do while And not across demand. currently conditions tight a XXXX, of

slightly As in early across and in anticipate offerings our down the pricing later year. to service favorable year, such the building comparisons we overall to be to flat

full a year be offerings. the pricing single assumes up or flat our average service basis, On to guidance digits across low

diluted year weighted of would guidance year the second full therefore EPS suggest. to $X.XX towards for the of Our is more $X.XX incrementally seasonality than half typical

and be Regarding the similar of as million to network. well specialty dedicated toward enhance approximately capital them will expect XXX as expenditures, our density net and we directed trailers XXXX be our to to capital operations growth

year. incremental plans changes As the CapEx likely some make always, we will to our throughout

energized are opportunities we are for we and questions. the closing, In that well-positioned in by of your for up XXXX now us, and we'll believe the call open front

Operator

you Ross proceed with comes question Instructions] Our your Please Stifel. first question Thank with [Operator David from

David Ross

performance and how talk gentlemen. strong about morning, a the into wanted about to going intermodal I you in little Good very think bit XXXX. that

go or you going through count Are more you add to to you lot move year? do a the do of try to with expect the going where containers? existing containers we container First, to the are as

there's can job partners when about improved truck it's service? the you on you then, How more a have intermodal done and of better comment getting a if product, And talked that any like there? rail it offering

Mark Rourke

offer Great. it's Mark. I'll insight. Steve David, and can start any

intermodal the to count. container relates it As

a some QX business We positioned from we XXXX. are very a container presently juncture into believe, little bit meaningful know we well end-of-life. atleast way as in or at levels boxes we in of don't needing without had additional capital, this chastity both add foresee we where disposed came grow sequentially you'll from this to at QX As down we so to are

think I our to that. the And turns that there effects take network. I and the well up really is in on was we quarter and tighten so, having focus do and tighten managing the we're them of demand. solid And needed to that's our to focused key And advantage positioned the the a well of think very was one up network where drivers very where is we're containers performance our fourth that network to

The second I… part of that question,

David Ross

levels. service improved the and partners rail the on been It’s

Mark Rourke

partners me, really performing we with reliability Excuse and certainly, the truck so see allows network cases very focused meaningful rail in to like those par is partner all again, and that, Yes, on and us David. of our performance, had are year-over-year. as and more although on across Yes. truck relative so signs both Eastern improved we improvement that alternative distinguished ultimately the But compete with all then encouraging. to all very our themselves

David Ross

talking type? And From your are through outlook. customer optimistic then about are you last lane question volumes coming that the it's and in by or just growth where on volume intermodal, customers seeing whether the most market intermodal the to

Mark Rourke

and we're We out that's there. We're so some able opportunity east, be additional also optimistic still conversion deal. is. sea had the about share. the like truck good but higher competition in We the of still bit more the to to bullish And where in the see opportunities, little growth share is of a Mexico, would coming pronounced trade

we're of markets well international a expect we of So, me be are balanced eastern in maybe part market to the we opportunity, have a fairly into position to part kind the say to international the network. would where but forced across of the

David Ross

Excellent. Thank you.

Operator

you. Thank

proceed Our next Stanley. question with with comes question. Shanker Ravi from your of Morgan line Please

Ravi Shanker

tailwinds. half the know relatively it can Thanks. something maybe flat better better, that second but walk you especially us Maybe prevents year. for Good first OR up mild environment to line conversion being should mile you or just be the you morning, of be gentlemen. you think there that going conservative, conversion seems to where Is consider bit. at to guidance are in rates maybe or your looking Steve, you're the when or conservative on we're Mark help that and kind half little y the and of a first final down

Steve Bruffett

we our And here guidance? played Yes We're Ofcourse better out. of we're the to that up I of It’s taken actions This Steve could well just service presents to said across sure. operating and whatever is leverage be about just during to assess have sometimes there's like Could January organization. and how cost and the time. things, trying we course this things the game in perform positioned sitting do take well We're direction? environment feel tightened we've the we feel XXXX we offerings than go lots itself. late Yes. other could. things

of view, vary. that a rationalization and pace so, and pace of in And really capacity can our degree it's that trajectory

Ravi Shanker

seeing you're sooner. upheld Because the and of it tightens out kind -- than you if numbers market could quicker be if capacity expect, comes

Steve Bruffett

we but operate to regardless conditions. of well the Yes, expect

So, there's too. element that

Ravi Shanker

you’re you actions of what elaborate maybe seen of up in And maybe obviously increased defend the against those you segment, it. just seeing take players pressure and price. just of of Can Got yourself competition can a segment that trends? you've kind kind and number and kind about on some of talk the there Logistics on to

Mark Rourke

weather Ravi highly you as environment. it's competitive Yes, a mentioned,

is category least some or in increase at to routing the finding brokerage way typically arena. to that by less I guides avenues lot distress think in its just the contract of that go mix would volume the a the driven the and related

contract so, increased our as you've the mix And seen year-over-year. points think basis spot XXX of I

channels, is other what's And going is my competitive so through. the of that's typical on less coming those lot entire just a And space. across sense

with is to a that it within to to a us, multiple want have a outstanding we with we focus an be business the platform across it Our platform cost them direct and the whether make acquisition, just where ones. with how possible, and and when certainly and platforms in of sure reach reaching lower where operating, carrier easier we're way we so trying finding and multimodal It’s do us little to shipper or reach. make direct brokerage differentiate also do but when that partnering we're expand they're others out higher of versus our do

But that talked the of would much side truck but think spot will have on expect. just we intermodal not a rationalization as the favorable play the of I not presently we will volume more typically just here, capacity as there's help the on side, it certainly or as

Ravi Shanker

market thoughts XXXX Got it. we one of the terms can sale And for missed in gain used for you on guys? if this kind in of just me, but and Steve. I one Apologies what last commentary, truck on any your in of think

Steve Bruffett

the public Sure. has not that comments a I or period before maybe of and just again think bit. balance make out of on topic we there normalize. there's starts to did any a earlier show softened so, itself two that obviously there's equipment out market stats another that time and quarter plenty quite that in used And of

were kind it’s So guidance. with going in, story talking that half, second this earnings our of first we half about

stabilizing first the in kind half. drag and of the of we equipment as little losses of a that expect disposition then half in on second year the We from get

Ravi Shanker

Thank you. Understood.

Steve Bruffett

you. Thank

Operator

you. Thank

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

Ben Hartford

morning Good guys.

Mark Rourke

Ben. Morning,

Ben Hartford

interested comment dedicated first changes the how dedicated makes portfolio. Mark, of period that guess on It about year about done presently I internally that's to constituted? vein, that. anything the else growth that over your a do mile, to profile sense how obviously five to but perspective with particular And business Mark in the do -- to you you it's reshaped of been the final regard three think reshaping that as operationally, with that speak the in in

Mark Rourke

to and all Ben. and thanks what kind really sets I'm the some largely our of the of truck with trucks, them we we large of on through more through growth replacing but specialty of and side target. that, replaced I've of generation it's prior And attrition capacity size because is be the sunset plays. site calls, before that Certainly, not just primary type pleased said this XX portfolio XXX And single reshaping we that the we're versus very XXX that our the and were the manage with mass. taking trucks XX locations, on solution of really we plus Yes, see all business quite

to integration when sales one the And that, even dedicated so to way that, and effort I the with network we're do do well which with stronger the think makes more effort our network the closely integrated there. execution

of an whole All of improvement not those, series and execution have platform. across a other opportunities continue initiatives portfolio the overall we're and to integration done across have still and that we from to to have and improve truckload our take portfolio have standpoint,

in with very dedicated a good had what much pleased So portfolio. upon the shaped really just we momentum target We there. based target and pipeline traditionally -- were our is different have a good our

more of less across But a the wider swath much lot specialty retail, economy. services a

would And what's we several expect your to growth years for question good. four And that be to then all the or like over comes So, multi-year next a vehicle. to will the five that alters current through see we'd of customer our year primary the going the your be your rate retention may growth that and some trucks and it changes then that portfolio. hundred down what's the

well of had with the seen changing that organization distribution that very but patterns, and and And really still has some is we've the effects overall well some aspects positioned some behind of count, tractor customers on the objective. lined their commercial up

Ben Hartford

up order With flat or worse Thanks. the better for how Whether out? pricing you made than comment truckload mode see And playing on that being can level of rank buckets the pricing then flat up Steve. across mean, XXXX, portfolio more you regard I to you see in you kind you XXXX? from if specificity the and helpful. of portfolio kind that any can comment get of That's being to that or I intermodal, or dedicated one

Steve Bruffett

I that's moves we Yes, of kind specificity tide layer gotten haven't obviously into, all guess of a but that together. of those the

order would our most of unit a percent in as the way context. its probably provide move has contractual and the quickest the overall pronounced market that of that spot revenue. it net different then, our there's I predominantly plays business going space so think, definition logistics within by revenue and dynamic per rest we're some And whole helps though on the a and because

Mark Rourke

space, par Yes, a nature. in and contractual higher on probably space hit in multi-year will dedicated right truck logistic for our nature side we there I think more the think the with be Steve but

centered those of businesses. comments our around most So, network

Ben Hartford

specific could truckload than the intermodal, do is XXXX Thanks. during other If bid Thanks. I from look truck one-way being you a being competitive just more get one contractual you if A answered. versus question intermodal, one versus one see domestic at as load perspective?

Mark Rourke

Ben. about Let's a little think that bit,

over we any from strategic back think, it’s year opportunities for I maximize certainly the so looking seen to don't customers our we've pricing. changes some road of relative to appetite particularly intermodal. conversion to see Obviously just because and this

and the bullish the So with between I really difference very on would the don't alignment a two. put think intermodal customer I so community,

Ben Hartford

Thank you.

Operator

Thank you.

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

Jack Atkins

Thanks balancing increase morning. or I allocation. much your about Mark very I just do capital Good M&A for is you relative for guys. returns. to think Hey starting Steve, taking how me off shareholder my questions. guess, guess

sheet is very strong. Your balance

to take your have to guys I to to in it feel returning free perspective, would shareholders cash going here? what market there point get flow the You're to for accelerating you a from mean, comfortable M&A maybe are cash nice continuing. and opportunities

Steve Bruffett

Yes message to benefit I'll investment I it and have comments, to And on returns sheet that. we in growth put in that mean, Jack, that can this the the we're to generate be the and/or that's shareholders. and to earlier whether haven't for cash want tackle of we revenue clear we aware just to shareholders long we return as term any and some very earnings work absolutely my that about want the I Steve. table, off options taken convey this trying that. is balance

force we it that them price. deploying all than ranking or want So, more prudent to they're considered, being want acquisition we paying this If fair isn't the price. sure we're a with on want don't an point to fair capital. that not we're plate at and We make space, acquisitive to be fine and pay

a dynamic so a that too. of bit creates And that

longer So short we course of capital be stewards of over won't time to and ourselves a measure [ph] bursts. opposed as prudent

growth. So, we long-terms do focus on earnings with

Jack Atkins

my to It think quarter "Book a for and approach. sense makes guess announced related pilot. the back during question, fourth this specifically That kind you're to fair of very the I And I that's second Now" partnership going you Truckstop.com with

Is more you to the be some may to you time seeing the with model. years business. opportunities be And potential meaningful are which in there your fairly maybe automated to over business several do as increased move guys this a gained next synergies maybe are some more technology guys

efficiencies of you're I the think look years? within you seeing next the though utilize opportunities to the forward Even already you industry. couple to more technologies of within Are as on technology that drive forefront over

Mark Rourke

do of Jacky, ample We way automated friction extending the that by our technology and to share our the just really as to power of platform believe both partners our on we speed a use maybe such with information strategy. technologies. to takes automation of mentioned some there you're at all Truckstop.com of and and it on but various increase that accuracy the is and into business where trade opportunity to the right in using time reach across people others so like direct you they out our parts

advantage that. science And platform places do of able be the to and has more to way business both that And they enables think and Quest think are and decision the more comfortable promise. the on people carrier post changing great side to various that getting I shipper take our we

that's that talk in exactly space. it's tech investments primary our about in So, we what

Jack Atkins

time. Thank again you for great. the Okay,

Operator

Thank you.

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

Chris Wetherbee

thanks, good morning guys. Hey

Mark Rourke

morning. Good

Chris Wetherbee

little fundamentals to market. near I morning But maybe the missed that kind you I of bit you're on seeing a more if, your with and a apologize truckload busy in touch multiple guess if it's term prepared I wanted been the I sort know of in calls. remarks,

kind how and it bit market. time challenging or and Kind of of year a it the like of early the error I were better is know of translated that the coming does maybe a sort kind up shaped into feel December January to up, ended activity. how expectations health like it's measure of of than

to kind that want through But about of it? are get you and read early guys how thinking

Mark Rourke

on -- as asked can year. momentum finish I Chris, to maybe you what the

we I felt throughout. December measure early disappointed most you think are again typical October about if to probably November would timeframes the and momentum with we peak season. better And the

appear of that build. But overall all how fell it see did what promotional would activity there the reasons have the we reason would did typically based quarter lots see the So, typically and and but just a we to strength perhaps we is have of season saw. didn’t holiday this upon

the saw see build month terrific like some build January we it's again throughout December. seen we have But some we on but wouldn’t we and and expectation did a in say robust to it's start

side So, of businesses, and for network higher again I'm the speaking to the mostly the side.

Chris Wetherbee

Okay.

that's you And sort bit how about be you when for Now, commentary that in pricing can talk context. a about XXXX, fleet think thinking about of we development then should your helpful.

gone got over you've gone final of -- first quarters. through of the obviously the course to to last the mile you've couple So, calling

in fleet XXXX? we do think the about But how

Mark Rourke

You're referencing sizing? fleet

Chris Wetherbee

Correct yes, that's correct.

Mark Rourke

Yes.

is we largest we're think are And higher from a segment, a in the little standpoint and where targeting satisfied I'd specialty liquid satisfied our bulk bit in we're aspirations focusing do -- component. really where and be I and for tanker growth with are areas and the maybe which we're space would we specialty example which our I the area for our and where think dedicated. of by

I growth any think great their and in capital And without doing I do potentials in have adding mentioned to so that. model way earlier, as we meaningful

think So, is to a areas year as the our up. rebound those in the things start second logistics for focus we obviously firm specialty particularly of half is poised even growth

Chris Wetherbee

I Okay, maybe that's my last helpful. And then question. guess

out want to about there. you obviously exchanging like a going and was growth to load bit in specifically specific to thought intermodal the be it's Looks outlook business opportunities transcontinental thinking you maybe quarter. little the of need approached the get coming if back fourth of Just or sense how some a impact that growth to the

are sense Trying you you of maybe for the share to get thinking specifically in guys how opportunities about a intermodal. market

Mark Rourke

pleased I as total our ability We've as Drey with just again. really Yes. often been business that and -- our the well in it to refer advantage and we very Drey the to model to in that relates & progress execute competitive we're Company, execute in company

so, would for obviously and truck bit, And expect business growth east to hardens from in to will that we a more ways continue the particularly market look we the catalyst that a there. as that's nice opportunity

other see know of but. don’t framing I So, that on kind if any

Chris Wetherbee

thank very and appreciate I Okay. much. you

Operator

Thank you.

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

Scott Group

Hey thanks, good guys. morning

Mark Rourke

morning. Good

Scott Group

early of I intermodal, on and that, you're from truckload I'm not in what terms sure seeing bids of heard kind share you yet. Can

Mark Rourke

Yes.

activity in early yet insight we we I to Scott have have flight really don’t of lots hasn’t, share great have, a we're relative And we this at of it have to so think lot in and a through be the from that activity hard something fourth still in it's whole process. real We but sample have being to quarter any juncture. that. represented didn’t to set

Scott Group

Okay.

margins lower I intermodal direction don’t or any increases intermodal give do say the the guidance On your they can then, know And can visibility cost on in you year. in were of you have have would any 'XX the rail higher or if for than 'XX. side, you

Steve Bruffett

relates in XXXX was market moved some a in the have to in as moves costs, of As you it market of effects and XXXX. we long-term and kind know where to the rail contracts recognize that very certainly aggressively

rationalize, come as market we expect into would mechanisms those So, goes other to the kind direction. play same relative the when the of market to

kind of dynamics, based all Scott. upon those so, And it's

Scott Group

this intermodal So, margins what potentially mean year? does that for

Steve Bruffett

in Yes. stated fall the we and certainly comfortably range. XXXX in we've to our range XX% past, expect offer think for margin I that so expectations XX% would the X% in to

Scott Group

the alright. you, guys. Okay, for Thank time

Operator

Thank you.

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

Jordan Alliger

hi. Yes,

on Just in a follow-up quick capacity dedicated side. the the

term like XXXX you longer that apply per growth XXX think or you XXX to see mentioned would well? Does as to truck I year.

Mark Rourke

it on Yes. side lower on very that with the comfortable But of of business we're to go certainly that dynamics number. customers. the chain new down really on and the some supply comes of acquisition front, changing that we're probably those Jordan other

kind afoot. to of current comes maybe It down your network and what is where changes

Jordan Alliger

a follow-up. just And quick

mean mentioned With dedicated you're specialty maybe have terms think in. and more we I what the conversions bit dedicated little a the done on of so this the traditionally you've some type in about before is fleet bringing move process more private of to talking does this longer you've and imply I than that

a that. I'm just the trying around feel to get strategy for

Mark Rourke

Yes.

been a anti I what focus intend on much of with think line very we were what and we in. those items have any experienced that but our to retail last big that we're over not months on of we in that's over box or history more markets our was XX underrepresented change. mix early the regard and in that's and heavy our the specialty to too focus probably in XX some other

is we've added from more have what different cycle comes a think penetration market sales is we that are predictable addressing. also comes that commercial you with which And that been to But that value very comes and stickier. standpoint well with with a have a solutions little that driver type very

return also for customer more to the only not a experience and drive the the great organization. a steady And provide but

Jordan Alliger

you. thank Great,

Operator

Thank you.

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

Bascome Majors

clarify the incentive I taking going guys Apologies call also X% could and for the if to that's questions this up in comp just Thanks earlier, having you other here. I did X% my calls range. the Yes. but it quantify with flat expected guidance hit was you headwinds missed

budget have Is comp at or a below, or incentive target this thanks? you initial above

Steve Bruffett

Sure. final haven’t about And are first and we of have This we won't I talk it in is that operating in mile of Steve. call be course to we about $XX that to comparing that talked on have worth were losses where calls on XXXX. if about XXXX, XXXX headwinds prior this XXXX the but million tailwinds tailwinds

headwind of up year-over-year roughly also and of comp in that a at the XXXX long-term that and piece the that on incentive stated pay assumes that is And million the number bonus components there you're about. enquiring So, target number. that it annual for $XX some we've incentive a

Bascome Majors

on you Yes. follow-up just there. question the clarifying closer in remarks capital mean your something airing Steve. prepared allocation. that, Thanks I sounds it perhaps like for and decision announcing And a and on to are really Jack's guys

that more. kind announced short share curious morphing noticed this XQ and report. your the a could to is want typically Thanks. we the and from something before that two you I mean, I'm we of into just day or about cadence dividend in order, hear hear something And

Steve Bruffett

trying We're capital on not and convey big or all this return we at take active. to so dismissive want don’t that the message. its very are on anything there, is cusp And seriously, we am or of What not capital allocation to I responses that convey I very passive seriously. take

a the and We're company looking, we're a ways benefit shareholder. trying to capital productive deploy in as long-term for

convey. to we and trying we're message do specifics the yet. is don’t when How I that we deploy So, about it, have that

just that taking seriously. everyone working know on I very it are we wanted and hard to

Bascome Majors

on for thanks. Thank responses both, colorful you the

Steve Bruffett

Yes.

Operator

Thank you.

question comes Please question. proceed next with from your Wadewitz Our line Tom the of UBS. with

Tom Wadewitz

good consolidation in Wanted two morning. competitors guess to and have It's I you seen to bought Yes, if call want it various we've businesses. that businesses Tom. like

obviously for last night and how and ago services. then it the prime about So, news distribution while see CaseStack a

to range Is M&A? that big broad kind consider want the something something future capability, or customers, capability that the in that might it's that have with that you that's something kind of to of consolidation is might outside capabilities useful retail in have you of is

Mark Rourke

Hi there. items then have would potentially certainly think some of wide would and range Tom, No, we we leverage I is a this consider Mark.

consolidation consolidation consolidating centered our import-export chain. the into have and a which business the really which We is around the is supply boxes and ports largely domestic taking international with business placing

an it's not so, but an in And of just some one. consolidation model LTL respects international more

But there. So, but there some things some it other narrowing that are we're some to we could either. it's it not technologies and eliminated are haven’t leverage scope there that offer

Tom Wadewitz

that view and that's -- close it or close distant helpful is I kind intermodal is necessary? is a not it mean, trucker just particularly will reasonably be a that proximity of that pretty and business to

Steve Bruffett

set absolute ruled I has this it's said think the across set don’t really that there for ways think solution us, point. to is earlier, accomplish as out different service nothing at Mark But Yes. I customers this an space.

Tom Wadewitz

Right, okay.

I outlook loads look on are on from When hearing in or second second maybe and you expecting at kind the you some your by actual improvement. look outlook. anticipate optimism some level you of when capacity activity you the of pickup some you've think pricing commented driven some to half? the in customers half and Is rationalization that primarily

Steve Bruffett

because think of might tried We've knows Yes. election not year, in broader on economic who part it what space. far that the go to over it's

the So, quo we've assumed economic just from setting. of status broader kind

and are move the supply year. the of more that works about the that within we and kind built assumptions through capacity see environment specifically we changing and as equation freight Our around the dynamic

Tom Wadewitz

great. Okay, you the for Thank time.

Steve Bruffett

Thanks, Tom.

Operator

Thank you.

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

Brian Ossenbeck

of question. Steve thanks just and more the Hey context around you good savings for can some initiatives. I if morning, see taking the wanted cost offer to

I think management cost last releases. press the couple effort in effective to of there at least

If put perhaps specific, finer that. anything you've a point you can on a

maybe then what of market attention insurance the been the as recently. compared address level has there players perhaps you're curious experiencing. other of are lot some And feeling to just pressure to And smaller what of getting also

Steve Bruffett

have seen significantly that Yes, definitely insurance sure. The I'll part read markets take our about the hardened probably renewal. first. latter The last and of since says

end on on yet up quarter, pending is do later anticipate premiums but fairly don’t have we that how so we the increase first Ours structuring our program. in a our depending in specifics hefty

will how stack so, is lack exactly --. those and up but specifics And it

Mark Rourke

rationalization. the a add in catalyst capacity you'd for Certainly, point

Steve Bruffett

Yes. is capacity. extension That's those on one that pressure of of thought puts the things it's marginal that

Brian Ossenbeck

Okay.

and specifically? And baked just to then you on from in guidance the point maybe cost so, savings right have this the at of if what type insurance could elaborate sides you increase

Steve Bruffett

Yes.

expect we moving as of haven’t are parts there We a increase lot I the the be markets. or we say to guess would what communicated begin the with conversations

we'll on a So, on first call. that give our better need probably to update quarter

whether topic kind direct organization or and surgically of the it's think We've or you about operational office with. like on through gone those or indirect however back cost costs And the that the started savings costs, you of things. broader to

that And made we've have the organization. identified numerous change in pockets of

that that to including we've one of benefits found some the continue to, pipeline we'll making part that magic So, spaces just lot that have that we just large it's from XXXX things continue tech expect of not a a and and in solution it's we're to area And aggregate. pursuing we're investments of work across make.

But improvement just other we do process efficiencies identify we things from why is we things. and and questioning how do

Brian Ossenbeck

opening talked for side. quick just of intermodal Then we truckload Obviously even Okay. the and a were last Mark, maybe conversion some over the enclosed under lanes had couple that some talking about on more that about one have rationalization years. up programs

What's is you the develops. XXXX share or something your and even a wait perspective and here to reopen sort just to on stress steps. how are it more how lanes if expecting some up event of of gaining and next TSR it the watch take highway couple to start that you have see as Is to

Mark Rourke

addressing ultimately the attractiveness was share and made interests, the dialogue want announced to share that but opportunities. having and Well, think we be last them. incumbent make for to its least think to the to partner or seat new did They'll those even of best that's to some some and as where couple railroads. lanes develop in advantages a and could I capability we're continuing service that sure a times have a good can have year just a upon able as commercial want speak at decision I decision that to perspective commercial we either we we bring be we Obviously, there that continue make because demonstrate to to us has the up. can't show to their sure those and make we And can that surface we of

sometimes And work, those things think, are they and so well sometimes and received, they don't. I

Brian Ossenbeck

Mark, Okay. it. appreciate Thanks

Operator

to and for there Ladies floor you. I gentlemen, would closing Thank no this like are further at turn comments. to questions. management time back the

Mark Rourke

know the Great. Well we thanks there, but it's you with busy gave appreciate I out day us. time everyone. lots alternatives of a

Operator

Thank you. and Ladies this concludes gentlemen, teleconference. today's

this may your Thank You time. participation. at for disconnect you lines your

Schneider National (SNDR) 29 Jan 202019 Q4 Earnings call transcript