SNDR - Earnings call transcript Q3 2020 | Schneider National, Inc.

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

Operator

Greetings, and welcome to Schneider National Third Quarter 2020 Earnings Conference Call. [Operator Instructions].

As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Steve Bindas. Please proceed.

Steve Bindas

good and operator, you, morning, everyone. Thank

Company on and Chief me President available Chief today, on the which Relations press Bruffett, website call President Rourke, and at the Earlier Officer. of Mark the are Financial an Executive is Vice earnings release, today Executive Joining issued section Officer; our Investor Steve and schneider.com.

provisions about forward-looking under and prospects the which constitute statements Our the plans safe federal call for applicable forecasts, harbor will securities laws. future expectations, include of for remarks purposes Schneider,

identified statements results involve including, filings, to discussed current Company statements risks this cause Forward-looking All uncertainties required earnings and except risks uncertainties most SEC any by investors in Schneider today's to are expectations. but could statements, as of date recent that to forward-looking not urges review actual Form call, and our the and from the limited risks differ duty as law. to, of disclaims release. and such made materially in The XX-K our update those

comparable pursuant G, includes referenced found measures. a measures any financial can non-GAAP call most today's during our Regulation addition, the directly to earnings release, in to reconciliations reconciliation which of In GAAP be

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

Mark Rourke

our segments. dividend liquidity to provide earnings operating call, questions, I overall offer announcement, And your for where our Thank quarter quarter and near-term freight Schneider well across ask guidance. outlined thank second some begin enterprise results it's you, our the we business then because Steve. our position will you Hello, I everyone, our we year before are as the as at today. the to call our Bruffett expectations on important segment and our context, strong on get operating full I for XXXX cycle. On view, joining in Steve with comments think -- to we I X ongoing least insight some of our on special earnings results, will

heightened First, tight continue supply condition demand an the further into market the by we challenge, freight a that supply would robust expected driver picture. to be increasingly

meaningful expected network margin performance range we our improvement. brokerage Intermodal our business, We portfolio that our to spectrum to towards both micro. growth as volumes expected invest and And of for in the in across continue to we in our shippers to we continued target enhanced expect And capabilities to XX% and a offer contribute XX%. from to to and to see long-term tools effectively large driver reach finally, balance then that Intermodal carriers to improvement significant

demand reversal So how from our say, perhaps the term. think the I'd network did we quarter out? a that X-point customers marked whole and for was quarter as start more using as does levels the And capacity what a The to calendar into far business truckload fourth XXXX? by are foretell in the yes, market us perhaps QX play turn wrestling I to. importantly, asking by that exceeded our our

fact, they've in climbed a month as entered the levels climbed we've And into Our throughout October. the daily further rejections order bit record quarter. to now of

and to consuming observation far often unloading our Our too labor many networks. COVID-related loaded, containers challenges running suppliers is equipment of disrupting behind has drop availability equipment and many in our and production as when product led with in are too delays trailers timing

take to are to that well some specialties. levels situation concern inventory low and will correct belief our and all big retailers a now Additionally, into time sizes XXXX. it's stock-outs And that, of

in Additionally, my this industry. driver difficult present availability in in I've is as the years seen environment XX-plus

to new to significantly CDL a result come the as the available new industry. of and that into documented constrained, I and the think of driver are COVID-XX well been the funnel that's number is industry graduates that it's

While in share a and I of we our some just pockets those. challenge, experienced have of couple want to retention has improved total, unique

the is our particularly supply low who nonfamily deliver of areas for inventories. configurations chains discomfort this being those COVID to time in of quarters in one reduced to strained attrition sensitive team tight increasingly rate with One our transit drivers cargo, the important are component of operating with another. due an has team

nature a in that recognize responded incentives, short have particularly which team term. the pay but for willing transit economic the been value and We and with to challenge unique that here of are shippers performance, teaming, it's

sequentially the XXX configuration. the further from in truckload as realized. in quarter into crossed they their order the we and contracted spot about being volumes those similar that primary Intermodal, year-over-year second network some combination business directly awards beginning operating in Secondly, we factors and reasons, a community the positive X authority respects, our in are acquired own to new perhaps drivers what participate October And in we XXXX, trend accelerated with owner-operator of August, saw to in seen portion the in have market. has our over

While on experienced XX% expense as dray, in locations our dwell import-centered fluidity XXX with basis we progress the brokerage In quarter and per from But steadily the into sequentially a the congestion, our our cross-sold transactional the the those third-party grew order throughout Intermodal our levels, market. the quarter order year-over-year anticipated. But higher in improved segment. times more effectively customer inbound but negatively at quarter, carrier overall, and and highly the inflationary volumes impacted we improved third-party fourth operating network capitalized than further performance considerable points market, value our throughout rising segment cost offerings of and on and in we dray combined of our pricing expect and initially I volatility the fully in as and second network resource brokerage revenue container quarter. company asset-light logistics revenues quarter, early the compression levels ratio improved Logistics, customers net earlier, available mentioned

points. heavy concentration our spot just ratio in limited adapt year-over-year XXX operating to of ability model's our erosion However, basis to

turn close to let few looking over Bruffett, me a I Steve and a it forward. Now with you thank before and looking thoughts forward,

third associates of drivers remain my before their across to and safety rising cost that we realization near goods double-digit appreciation XXXX to term, a volume asset-based count of addressing truckload our health we reliability our yet. country on the In in and and And of First, contract need regard. it to in spot-rated rate sense, the the percentage and light market we in is return some more premium are expect we throughout over-the-road book did And responsible quarter cycle. quarter that to those unfortunately, the quarters we predominantly offer season in dedicated And few execution achievable the Upper and we're all forward, the focus the as levels and flow the and provide solid to network business. eastern not we to through for quarter, peak see Intermodal, But growth of work contractual amid while in believe that customer configurations. that and is of be annual securing had range looking Wisconsin capture to us but convert portfolio case go rate our going We to associates, we we able our truckload normal we capacity, Midwest. commercial services, for continue particularly with We our bid I pandemic. year-over-year to we the to the across And want low in primary we remain ahead especially relates quarter support another here intermodal are increases spot, economic continue the COVID is forward. our on shippers meaningful in portion the differentiation the think in traction double-digit to have to going and continue our while ensuring environment. to contractual in increase only express value contractual improved percentage due more hard must the of increases commitments network. of our a to to we rates finished network, our opportunities my operations, balance of as focused dedication our And in the business asset

and on with of deployment. constant top business a pipeline build expect line We and solid to our performance also brokerage investment technology its bottom

going freight our And sets collaborative Schneider to week, In launch and app, a select Mastery will well demand, brokerage to with we're over advanced effort with our Mastery's multiple road not it drive access for intellectual us with to With our this collaboration in fact, targeted implementations brokers. only dedicated slate a next-generation modes, this map customers' our which tech Schneider our power This technology platforms. volume business. of as logistics Steve, from business, pool scale, XXXX is we unique power-only but traditional execution our across finally, brokerage back value carriers full capital turn leverages as I'll we're uniquely that, our give has platform you. positioned trailer and domain apart confident expertise and size, into across to

Steve Bruffett

remainder our then for to quarter year. provide on and I'll on the for the results and everyone the Great. Mark, perspectives good brief outlook call. morning of enterprise Thanks, some update on our give the an

$X.X year, enterprise then within given of excluding million. XXXX, of surcharges, earnings quarter is were the and and much between were which Revenues, adjusted similar revenues adjusted has now. and Our million ironic, within were quarter happened third earnings third last somewhat how fuel to $X

there our statement. would given well. showed down most expect be And of income the as expenses down case the prior generally that items, for from that but at Looking you line expenses was slightly were year, items revenues an that expense increase. X were This

quarter due $XX difference the benefits, salaries, was earlier of accruals. third $X this been a the million million, first and In The XXXX, that compensation incentive had is made in was we in year-over-year which year. wages and accruals up reversed to

accruals. the quarter we in year, While this make to third continued of

is supplies which adverse ruling million. second expense the in The recorded $XX amount and is operating item included our was was This tax release $X this Other million up also segment. earnings referenced line. The in in expenses,

of tax $X.X loss show the without So XXXX quarter segment a would this million third the in ruling.

a it to excise to glider relates over XXXX. XXXX dispute pertains on ruling, through the years tax kits the and tax taxes Regarding

in Final comparisons to believe statement income we One quarter continue comment that to on is concluded quarter Mile of in we We an position last operations the have are our appeal. sound First the preparing as this third last XXXX. on matter the year-over-year is in those have this which a and

flows. over the cash quarters. On the and of Moving on a next we excess to our the had objective deploy I'll I stated balance a that an comment to I referencing portion call. start X cash position meaningful to made second earnings call, quarter by sheet X at least that

$X of share a that cash-deployment special is of dividend today component announcement a Our per obviously objective.

of payment generate couple we net initiatives. that a our CapEx the of sizable net of shareholders. past cash our strong the at year-end And cash dividend, strategic upcoming over are to capacity approach, and the marketable the years, million. free anticipate flow in the of securities approximately time, to we Considering the Given to cash we're coupled we both million sheet remainder this be will our year. users expect able the we We be with fact of generation to over same for pursue and quarter, dividend $XXX anticipate special growth shareholder the near-term $XXX that longer-term fourth value. payment providing balance preserved Through our now

contractual constrained, we're and well next on highly we market. condition comments, higher need Regarding market this for rates an with provided And we're forward-looking obligations driver that truckload in into year. market the anticipate that inflationary conditions our experiencing. Mark our is continue commentary balancing The will the

leaves $X.XX of Based to primary margin our expect X year, our given We And our results quarter our last for among for the the of quarter would expectations, best which diluted fourth segments. be guidance on to year-to-date $X.XX, sequential for is that quarters. of $X.XX improvement adjusted adjusted operating fourth in also EPS these the $X.XX. all $X.XX

million. to Lastly, our guidance for $XXX adjusted slightly is net CapEx full year

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

Operator

Instructions]. [Operator

Shanker Our comes from question Morgan Ravi Stanley. first with

Ravi Shanker

your some peers seated and of of to with was the truck drivers kind a kind driver a view bank in recruiting convert financing, on had the I of harder et you head challenges all How the off little to you as of surprised operators But what restrictions cycle. I given and kind was to cetera, to of owner do of to that this some situation, many insurance into talk headwinds owner this pointed it's driver going similar operators clearly, quarter. -- peers think evolves to XXXX? your that of your drivers issues become hear little of So you we XXXX.

Mark Rourke

us, our for are of our some what in own -- least And the operating to was spot just that saw suggesting from current their from operators a clarity, some directly. seen them a in market on data of maybe after to XXXX. Ravi, get to point owner of us little who I'm we've we conversion bit authority

So a operators as it's regard. owner track to in not that of company this drivers and already necessarily has somebody converting who's bit perhaps in a experience record environment

don't So influence on to to it, it the overstate want but quarter. had some us I relative

Ravi Shanker

to of well Okay. long That strategy? Also just as this color a I does cash sense, that, kind dividend, of more what in special can mean deployment on a Mark, term, bad. the makes the you timing lot give terms that. maybe confidence earnings that's why my as on little and medium And both us misunderstood now? of more

Steve Bruffett

or Steve. take over what our Obviously, to casually. conversations how with in our on not it. continued the balance that is one. do we had had We've not special and so. build. cash internal might something do analysis This about consideration do last lots meantime, do and several position Ravi. to these And calls to a I'll to continue is We've Sure, quarters of dividend deploy cash the and

So given to cash million in $XXX a us, it sizing. was that that of crested we timing quarter question it we third of do the then for And something. became felt appropriate

to to make our big ton wanted a provide same the so a and still something near And value a upon. after return again, of we enough position looking preserve execute sheet we've do balance liquidity that in that the optionality felt keep had for strong and initiatives like but with that we while to strategic shareholders and difference a to to term, was and

now across X, the we being, more to X as organization. is intact X as in are opportunities inorganic to remains So to looking organic and that deploy which X quarters far like growth

Operator

Jack Atkins next comes Our from question with Stephens.

Jack Atkins

to takes. guess if know there kind don't are of some this leave and just I I you to obviously Steve. So as want or puts we you to -- forward XXXX, look into start and to this if kind of take want But Mark,

Or guy improvement talking strange just hearing trucking basis it rate But that. a in a about about context when got some about will same operations be You've going to helpful. comps in that's right sort which around bit offset XXXX. on of pretty potential to XXXX trucking to versus good I for Is Obviously, think be there's be would an I wages, OR driver others meaningful any little think XXXX light? think, a us your we're some Schneider expense operations, COVID. just your within year-over-year of the margins, given

Mark Rourke

economic think Thanks constructive for we're the but backdrop, both for improvement reasons, for opportunities of Jack. from host certainly, have. that setup question, we the next also the in And year a we kind a internal of in

that have still makes our value. services, term it deal within customers. between of of specialty our strategic a some got particularly leverage we've a pipeline sense of intermodal the deal we truck network anticipate also long grow feel favor makes for one over to we're much would and really And in about great the thus business there, keeping in invest, platforms the portfolio an and of as of but that's arena. as improvement continuing believe much solid opportunities our provide we presence for absolutely great and and presence We intents, and so to specialty us. well, but perhaps margin in one-way as a network It operations our not our dedicated large And the across sense excellent think very

XXXX, giving we of see bullish. expect do we'll expect but yes, not and that should we together when for We're So we're yet guidance get ourselves and improvement. next, certainly to we

Jack Atkins

can going and I quarter about prepared to much driven Okay. a with a business platform, as thinking your I'm a that kind partnership on be a more about just to impact just hear of your we had question, that from into XXXX? of X that? be we say player well. a No, about to And and my comments into guess revenue sort just How to thinking it, longer-term and sort you're that about about opportunity? about X be going starting now Logistics partnership dig makes Mark, you're that, last how glad that to should of positioning, months Mastery, being I know company platform should asked about that follow-up OR? of I think But Is within it for it have your Or is all the sense. chance it Logistics? of And you more that. sort strategically bigger more in to Is improving profitability back

Mark Rourke

question. particularly, Yes, XXXX implementation between looking trailer. record, have the year and around an [Jeff] of really, companies. blend there. feel they And lots it's and the relative and as see the where with at you collaboration and our we where And covered be where Jack, that's about the the for we're Mastery, we terrific and we we terrific the bases are obviously, and our asset non-asset good priorities space between really are us, Schneider will a starting -- where strategy space, to provide to that's in track in brokerage leverage, you largely

have thought find leverage ourselves, platform. a And done was this we to opportunity so but the with could we Mastery that great

lowers also standpoint certainly a get cost our as structure we it advances it but from speed time, capability. leverage, over our think I to that

automation, see also offerings, some particularly of you'll non-asset in particular, is opportunities but that's dedicated. comments for largely and XXXX in so my some asset-based see and simplification in we portfolio, in And our our around

of But in nothing are. the back strengths about we the we're than leverage have started we and we those where very year. where so we better now staging of mid thoughtful journey part priorities, when meaningful but feel way And relative a to this gotten are this

Operator

question Michael DiMattia next Wells comes from Fargo. Our with

Michael DiMattia

I that driver how explain impact drivers also to can you incentives your approach providing forward. are was you could terms if And Maybe availability retain more wondering little to to issue in please lost bit the expect stated the little just a that bit going OpEx issue XXX more in given if issue. into you that you economic could elaborate indicated the you you delve of you that the them, you terms to of drivers sequentially quarter-over-quarter. a

Mark Rourke

and have to would think the of we generally I the entrants what And driver experienced, we I with well is our social distancing students year. Yes. experiencing COVID anticipate, couple experiencing is, -- is schools and at new funnel, toggles XX% entrants particularly company XX% thousand are the a strategy typical what the between requirements industry top think, of limited industry And and availability the inexperienced. new documented hundred relative capacity this all -- into is of

us And optionality. top-of-the-funnel cut so those you of the are for when are impacts some as and they others for

So, that's one.

that the great to which unique we and configuration, we there, incentives we a in operate inside is the some a tight quarters, XX-hours nonfamily day to, what configuration. was fairly Secondly, offering. And particularly for around referred have team team in did and saw see I centered attrition a often truck

uniqueness. from have fund at willing that team recognize an what's to and We and to customers great least up necessary, help step certainly incentive us

value we doing folks You to the comfortable reflected our Company. provide we customers sure make have they to have still and to it, provide that but the to wanted

our we configuration. enhanced relative team entire equipment relates And package to from to compensation -- to so it as our

the too not costs And also ahead the recovery market. on do getting trying of so front to without is ourselves what we're get from far

from on in in certainly, third -- work as driver And a of the the of recognize the that as the cost so place that great end we and industry XXXX, our the an to quarter, take there's place the in the that's front quarter, fourth from possible we recover inflationary as across market. turn calendar as anticipate to much will took deal

Michael DiMattia

next tight -- And help rate increase would to forward months. as be still at turning ability your down look moving of mile is terms to of higher? just If it the that is What maybe the some profits issues? you issue market that have the XX you're are, there that as freight quick over keeping amount offset is need in and these the as to follow-up there tools the loads one combat are while of driver of per you some a wage to you

Mark Rourke

the of to a over-the-road in you're their of that. dray from That's with our that our make. Certainly, creating experiences emphasis configuration, We Yes. market rate great a part you're the their decisions effort for being your the Intermodal dedicated that's cognizant whether experience. reach put is time, be recovery driver that those based that perspective. what using to and driver of mindful that your very of trucking the of that's we deal business, -- them, market commitments very experience respectful we're the that is on business, freight that entire -- making against of environment our upon Part

to environment. importance And the combat making going we getting driver. commensurate initiatives our I be make we're with can combat forward. sure the share a of expect that that we just all to from material And of that return that those sure with with so would customer that We

Operator

next Stifel. Our question David comes with from Ross

David Ross

bit. dig the you to things month the can give growth into Steve, a through and intermodal of quarter wanted maybe us volume by I side October. into

positive positive. just said they're how wanted You recently. trending it turned that to see I

Steve Bruffett

I discussions. layer and guess, we haven't calls on detail that David, into investor that's a these of gotten our

here wins before so as the as seasonal November early bring expect December October, away it we'd as part the would to went we given did stay to slowdown. from trends, business quarter do seasonality, into prefer monthly continue on through to the we of in that and strengthen well And new and so continues and but

are network helps terms. locations have improvement, as we and that with as well getting some both our there asset which they still certainly and fluidity can, aren't container hotspots, utilization efficiently think but ramps -- still and seen I So back operating positioned that certain customer not is

David Ross

on ramp as the now? on up increases? side Given the to right customer lower Intermodal are to But I truckload get some how tightened, these intermodal closures, it's prices market for ability some quickly detention, issues, you account ramp pricing able the year-over-year. cost what's the of the has think

Mark Rourke

the period as in on here quarter, very David, and renewal it's anticipate experiencing we're presently following third in through the been with what line working truck and on what the side. close we've Yes, is we're

some erosion, is And I in think, intermodal the some that there upon was based the over marketplace. more of competitive last on couple years in of going dynamics

board, So the believe have in of this between we the rate Intermodal as consistent, the into year, we ability turn across end not our but and a business, and XXXX. capture calendar now we only

David Ross

And Schneider where that versus you of you third-party and just drayage in-house percentage be? then remind us what want can is to

Mark Rourke

target typically or and assets. bit from range, own in our Yes. orange side on the We perform that of typically give XX% take, a either just

the it a periods seasonality dips we're now, In a little that's the that targeting. range, bit year, part in XX% like of generally but what we're in lower. sometimes raises the first that And above

Operator

Jordan with Goldman comes Sachs. question next Our from Alliger

Jordan Alliger

to you terms concerns if situation, I the you But little you on for quarters. orders one-way then What X know on some over And of dedicated briefly, been if the that thoughts orders. own And what do wondering issues? that. of outlook or fleet, strong How late, on truckload wondering touch perspective. could of know Class the driver was from you course, pricing your -- they? give fleet about about spoke kind a I a in obviously whether your balance you a color more how there's is are plans very I growth, the be the of sort your of just capacity it coming are little think with bit could

Mark Rourke

back we've I kind get front see to starting orders. question, relative is year. of it we've we're think, OEM quarter fourth to numbers been our just now, relative the deliveries, And you fluidity the net around in what centered throughout Class in experienced, and X CapEx to finally, first on So the delayed and here

mode come out in always of we're as of we that fourth the into catch-up just the we've the what's I a because part as first well in -- we're So think and figure year. trying up experienced what's replacement catch to delays the for quarter

we're not capacity coming like the back great So seeing any XXXX of evidence condition.

intent in get to we experienced to bit side is of on back attrition little relates earlier but it looking described as focus grow but as If fleet the and a an quarters. in then the growth you organic bit made overly bit better, our have what were, painful. businesses, see lots just potentially COVID, around recall, same demand anywhere industry, occurring in I more a we coming our only that of business, capacity a through in from We at certainly, not acquisitive a time, in had today, market of beyond us, And picture, to And issue, of we for for more robust dampener centers then the in Intermodal. that the the that would truck liquid network fashion for I that XXXX little don't little would And adjustment just which not be XXXX. space but a like we our specialty little whether anticipate think, further we environment an growth the did And meaningful in any dedicated. catch-up getting Used of funnel capacity attrition. robust. not top this certainly, the bit or several Logistics the focus is that driver bulk and industry-wide at

to network business we keep want our fairly that consistent. So

Operator

question from Landry Our Suisse. Crédit with next comes Allison

Allison Landry

improvement you QX. In terms of the are earlier intermodal expecting market, I comments in think your you mentioned prepared that in

you So see just think Or comment? do wanted can sequential I that year-over-year a QX? just improvement to possibly was in clarify, you

Mark Rourke

to on Allison, target improvement to intention XX%. our comment, as is way range back My of our that we XX% -- march was sequential Yes. long-term

in meaningful targets. to some -- progress quarter. expected in and we make third we'll further our think towards view, We we did, progress those We the QX in make other and

Allison Landry

margin it the just QX? network is the quantify is to of about that it? And it there does of way think of -- Maybe that's to early terms sort much to going impact? inefficiencies Is more Okay. And like that's the way in magnitude be in sound I mean, right maybe 'XX. any the

Mark Rourke

the Yes. a time third-party turn what relative per just though month at gave quarter didn't capability constraints could for some orders delivered we that consistent. get have delivered we our We several most of of couldn't the extra dray had look were our the have know business dwell we We time up on basis is we the we year-over-year could our system that assets. through efficiently. more opportunity into we have fairly Even within to those and loaded thousand if that

so is that And improving.

expect We on of focus improve, customers our particularly time. a to that with dwell lot the

If want that DCs up going unloading aren't putting us that. business or our we coverage, empty find that up cost backing into can't outside you keep to end go another into of additional

response. the with see is are fourth X to and pleased dealing we quarter. been but improving, I've improvement the further to that walls, would labor issues expect we're their So relative are inside it Customers time to here seeing many with we the -- same of the availability turn address in

Allison Landry

there, catching evaluating. I investments bit -- sense new a guys sort of you're thinking of in us you just technology that any the major you fleet were projects if All helpful. more give and XXXX up could then sort initially growth for know just little there's how but if right. you that or CapEx about and maybe Okay. That's replenishing broadly, mentioned And a

Steve Bruffett

is Sure, one. This I'll tackle Steve. that Allison.

in budgeting which CapEx obviously And the but season be as now XXXX numbers would we're normal. guided we those is $XXX We expect quite we're right yet indicate higher haven't a this for bit here. million our year, refining to than below that

In anticipate particular. in growth configuration, that we mentioned, addition for some capital catch-up replacement dedicated Mark our probably to capital would

there's And fleet so there's age of those experience, contemplating. mentioned elements, we're but the dynamics to an us. also that Mark is a driver priority which And

road objectives involve be And experience the fleet as of positioning CapEx potential so could technologies looking quickly to context is of new as the well. that as at towards well and age of reasonable able to as some that driver part as both our down in adapt ourselves

Operator

Susquehanna. with Majors Our next question comes from Bascome

Bascome Majors

and go you Clearly, you you're And the pricing going end XX% a to in a peak. year, XX% to at back up, for what keep I'm look short? probably Intermodal. far on there as to that XXXX feels earnings-wise, Intermodal back seeing you And curious, business toward and goes. if sensitive to the below are the seem X the profitability we're wanted today. Is this very conditions profitability variables I as business appropriate, you get there optimistic pricing, XXXX? path could X that given or

Steve Bruffett

the them our XX% that Yes. XX% use could ship achieving were Coast. not onboarding Steve went that favor, at put the for This and well. time network that early that that's In market intermodal fuel particular a the really calls we point this and during being talking Intermodal in the even in range land margin working was them we works pricing cycles. XX% a several longer-term that right. and business these one example, We the about the -- space right possibly mechanisms year containers and are And or could efficiently margins thousand on started the go XXXX XXXX, where expected recall, for and We into were getting our I reasonable abnormal XXXX were other unique across as and when everything it's indicated we were and XX% case, commenting coming in California we norm. so immediately fair of there that place West into in to where out our get is dynamics off coming of again. and everything new into on,

consistent I today. remains so with here think And view sitting our that

Operator

Our comes with Citi. Wetherbee Chris next question from

Chris Wetherbee

have week. that that see question per in you I about But know specific just wanted is -- you a third we as I the a Just of about the bit? truck per the on think into forward down bit revenue X% the I to can apart for-hire little a could guys kind and market had cadence talked can in quarter. sort I that And of circumstances sort little the rate move break of talk little quarter. bit number realized a the we curious improve how that to of fourth relative productivity? about maybe

Mark Rourke

particularly you metric not just I'm Yes, to. pointed performances, in the with pleased that that Chris.

But teams, network. utility rate at high on dampened combination this in coming really of truck Some a a high quarter off the of truck count on and the unseated our that truckload on fleet that high skinny being the Ironically, a our of units combination is is that which per count. solo mile exact the seated the we're metric. X-year the on unseated there quadrant, productivity

upturn really which per nice in in to obviously, and truck way So we in per or had revenue price -- -- September. attributes, a meaningful mile started a

and we're, to we're team see work And be this unseated several side, on to to X the through we're that metric. have so metric that then, a fill we combination trucks Probably to positive momentum then there. have price after a for the That contribution things, quarters think, that looking couple dynamic the will to that of obviously, will drive think address that quarters. those of going next are we the starting we

Chris Wetherbee

move a a team still lag But as the trying forward bit to of we Okay. you're as through work situation? little

Mark Rourke

Yes.

Chris Wetherbee

I can a relative maybe capacity Got don't about be. about could just improvement you if lot rate rates the sort it. positive, offer talked but think That's offered for we you've I going the we've if sense helpful. know is on I the specific magnitude as what of XXXX And a on environment, market you the It you a seems think look of contracted like like. think a fairly what might a setup tight view know to but to Okay. side, know don't the get outlook

Mark Rourke

and we a we're now signals -- is that the environment. it's to Well, doing all the that work constructive going have

we how customer, our the customer low to that to you that's as in But to we to what give a their certainly, fit, and business. what to get are contribution the continue here digits be be insight more so this within of spectrum, the that on end mid-single we time. by to Chris, to we'll they going expect through are network refine next And double position think, digits, quarter, and as we're we together get

Operator

with Our from comes Scott Research. next question Group Wolfe

Scott Group

this such and guess, you were guys teens a large anything, think closing you if I to high margins, at they to were do there? think all doing I the in TLs start quarter, there's So structural gap? why if anything What, at XX%. all look that you guys there's I think Do mid- gap? are you

Mark Rourke

mentioned certainly our we was opening contractual and the of And in we the into amount quarter, digits to to business. the of look balance we're Yes. relative the the as business -- in our orientated. at move going think more quicker spot that the mid-single I opportunities we to continue relative to market. versus to take the that, a a marketplace. of more opportunity, the we're to community opportunity proven are with we the bit get the to pricing started generally of from comments, that the Scott, the advantage starting that it and we side balancing low to of long-term really, positioning the I customer we contractual digits And But business the double exist market, commitments put -- as think pricing out yields this in my spot particularly much network -- have I

and how of do network contractual, play approach do can well we will as as it's spot So better, combination we the a we And better. market.

Scott Group

negative understood per the per going about the truck. mile I rate Okay. the wasn't question back And answer. that last quarter? I rev then to just sure positive in Was or if

Mark Rourke

Yes.

network, truckload it was throughout our the quarter in but not positive the improved it quarter. for -- So

So we as closed, the were were positive throughout full slightly to improved quarter. we -- and for July, we the September get the negative in quarter

Scott Group

Okay.

a So utilization is now. down lot right

Okay.

to Intermodal XX% Do think margin you're just And thing. next you last Okay. maybe back year? XX% in the

Mark Rourke

would our That be Yes. expectation.

yet, the path we the provided in on -- laid trajectory of obviously but think our discussion. we've last guidance in haven't as we're We out

Operator

question from next UBS. Your Tom Wadewitz comes with

Tom Wadewitz

a ask growth about how next year think wanted little I and to we you it. about bit should

couldn't it warehouse. at the not more at gate you if I think shipper you loads look had third seems you in quarter, when have in the of even turned the had couldn't the might Intermodal get containers that we because them or more get like containers,

look tractor grow you're meaningful the So at I you dealing unseated fleet growth fleet? then how sounds mean, Intermodal? guess, And in lever like XXXX? Is meaningful container low the it support on with issue. do side, a you truck to going the a in to I that Are pretty

do keep market driver just overall tight in the would well how to given expect the kind So will of you you fleet tractor it grow to XXXX? Or flat, is?

Mark Rourke

Thanks. Yes.

I will our would would and would start not we growth Intermodal board back our would dedicated We the communicated, appropriate achieve of fleet expect we of network fully and I me the you the some the get the side make to team opportunities deal business haven't will Let investments anticipate center do our the have count. where there. those. dedicated the around believe across would we our in fleet solo we we ended growing expect location. any that And meaningful growth in with network anticipate, but issues that business, here will specialty with we're we unseated that referencing We and fleet, be truck that both with but and and

Tom Wadewitz

Okay.

grow growth to So the containers in you support would plan to 'XX? the

Mark Rourke

the growing and yes. be Intermodal, will support container to growth both comfortable dray in fleet We the

Tom Wadewitz

Okay. Great. special did dividend. the And then you

some Are meaningful You spending priority not that add on still much well. Is that? growing good are maybe have still time a of amount focused as high ability a a that How still is something on to cash you? leverage Or available, just that's you for you inorganically? component?

Steve Bruffett

about of we probably environment that say, where we all as objectives. take a backseat are, our nothing strategic I rapidly did and longer-term nothing's changed we XXXX. are as one. Steve with on. we've a prioritization, would take the bit were here. about dealing changed really And our that I'll But so gone It changing now through has Yes.

we remain want don't And so that same us complete the time, opportunities. doesn't something do capacity to interested we in we so. sense the just to have At do for looking because for make

it's the us is important more than right So to finding opportunity most so speed.

Tom Wadewitz

you'll in likely it's do a deal think you 'XX? Do

Steve Bruffett

We objective. not It's it an is a hard would to, to to do always transaction happen but like just going handicap not. force going to or to it. It's we're whether

Operator

America. Our [Sanjay Ramsalini] of with comes next question from Bank

Unidentified Analyst

looking to in growth towards have their competitors the obviously, focus begun perhaps dedicated, at Just mean, I of shift dedicated. fleet

keeping objective noted of You of guys mix relatively have high. strategic one-way your obviously the

maybe the ideal there into versus be And just helpful. perhaps then So would of on ideal just contract some is. spot sort going your color what split

Mark Rourke

part a but horizon, that think, of So to be will enterprise. configuration this dedicated would several and first in I as getting Ideally, reasonable to us mix was be, a an a mix year ideal over there XX-XX one-way. for between objective

I having sized dedicated synergies strong very well, meaningful value network there's a as configuration. by a having and think one-way

would spot XX-XX the of also type the of the that that think might value the been I from type versus Did think network positions it second recognizes driver be on community that gets I those catch And one those have so And question ideal. And then I on correctly? contract? experiences. and

Unidentified Analyst

Yes. Yes, that's right. Yes.

Mark Rourke

issues in spot, in a to repositioning. Traditionally, network shop mostly of more the mid-single Yes. just with contract been digits in and we've playing out-of-balance deal the

and value than that tools higher Our from we that. would bit and that suggest technology a be can we should derive that

think makes certainly digits. on the And sense. targeting low your now, the it are, have we opportunities that. range depends low right is something market the perhaps capability obviously, but And to targeting So double-digit toggle double what and I we're that

Unidentified Analyst

just a up price and noted that -- the kind mid-single-digit year-over-year. yielding guys of network think in the saw you following And great. improvement That's that, release, September obviously, on Perfect. I

just short in you've of expecting seen XQ price? what the 'XX, are noted in in where so far contracts see more of so in more maybe before in Obviously, the So what comments term XQ, going on but and kind October? you your you kind on

Mark Rourke

what question, pricing and in part near we're network the talking we seeing? are first term of that about The

Unidentified Analyst

Yes. Yes.

Mark Rourke

XX% clearly. renewals And substantially, business, all hear That's indicated your of it predominantly like so. we've Obviously, a already. rate continuation. the call, -- It's on didn't just a times contractual I or other occurred those we're question. have several we're

market of our in the and a the edges So subset the around base. spot opportunities with proactive premium conversations and some customer opportunity is with

weeks so. typical the and are next in X as type the quarter we so the fourth seasonality especially now play or And over of

as to to And renewal in so cycle. well we time, types same work a typical rate and lot a the At of will is things. underway we actually be enter be begin doing are those prepared XXXX of

Operator

question comes Brian Ossenbeck JPMorgan. from next Our with

Brian Ossenbeck

Mark, freight season like general, just than to little up that carriers to as so in little a do being any contracts Are maybe the subside on seen, enter doesn't But change more bids you And one, quarter? then, here. many thought that a you're times just that while how just indicated here. that market as it's we've pulled now volatility few XXXX? RFP here? I following towards know you of against more see anything just for balance you a which the spot usual, the and going in we're between the shippers seeing bit more think of are last meaningful and the fourth going again to look all forward and leaning materially Maybe you on on could than reprice on heels

Mark Rourke

a of Fourth is period. couple generally quarter contractual Brian, Yes. not thoughts. large a renewal

is and some focused is where customer we're a it our community. of increases to subset presently out-of-cycle Although relative key on

and favorably. prosecuted being being are things those So prosecuted

some than different more I that going portion see that as X be customer for improvement these in just -- more of pickup X or processes shipper approaches on different XX-car annual opposed around the and as really events both community see durable bid we'll kind on it things relates of to out-of-cycle question happen price an your that in-cycle. to streams the cycle. carrier So can going the the the in the

have shippers of to interested, lot sophisticated cycles puts that be more as seem both of and the and needs of less approaches appear doesn't the of shipper. kind more on rapid, length to that -- a more carrier a and particularly the number just You guides routing constraints modern-day and and meet

coming get opposite through of the those some "at under transportation of discussions. very does are into of purchasing vastly setup, global And a more see, can transportation to of and are puts both more as what's kind value the selection pricing be the things And of complex have to to trends kind opposed and market." which puts frequently not into making less the and durability sides a approaches, trend organization, that too around the against professional you other is decisions X upward live and spend different the right be you more changes both holistically. the and seeing department which those pool, the bid So so that discussions cycle constructive lot is purview and

prepared for both and both in of So to I unique parties, think challenges effectively to be we both. offer operate have those

Brian Ossenbeck

anything of it's it, relative towards bifurcated? more said, partnership? XXXX, some in just last still did -- the really up And but changed maybe Or still we're cycle, has you to kind -- that direction, like moved have is

Mark Rourke

Yes. process, at It's direction. the seemed pace, it see anything that for something a more inputs We hasn't year, to go a those of inputs shipper so that other in transportation. pricing, have type adjusts, in some radical. can a seen that process taken we've yet Brian, of and just moves glacier we've foot on Ironically, that more which into the many type of a a but manufacturing initiatives, which short-term seen pricing step that very common is index time it's over this durable some maybe

and think we'll a cycle from, I Something this the breakthrough. would industry we're maybe in, benefit interested see

Brian Ossenbeck

it. Got power. follow-up freight on One quick

in digital come be of And different years? also other little a the the there? offerings What us it some how That'd of of to give than carrier on last flexibility they What on over market marketplace. of a just could that the gives we've you that is bit it side, If shippers? preview helpful. couple type seen have

Mark Rourke

Great, Brian. Yes.

couple of yes. a thoughts, Just

behind a -- or question however "marketplaces" think type want or apps space you at those as to your it. is to of it look I you're crowded relates

Our on the side we're equation. focus what is now and doing of primary the carrier

that as offer access select central trailer coming relates can, it our differentiator, versus particularly technology be the down parties on trying other pike more being where a type the to and We create, third have of the freight really getting power some will we're to pool will But differentiation shipper to just be things freight. that we and the around that to Schneider can freight it we side.

have we're and things a different network. X stickier to their think to freight. And as trucks, And put may so be the see in think traditional thinks that in run some run a depending from we what can us, can bit are select Those is allocating to they allow that's carrier I X they resources, XX a emerge. we starting have of maybe upon how there, with a And particularly a they that bit have differentiator trailer access broker. mechanisms configuration. them pool about a a we And they

Operator

question Todd Fowler KeyBanc. next from Our with comes

Zachary Haggerty

Zach is Todd. for This on

just in go terms Just double what And double of feel to to contract, and conversation on maybe to were just spot wanted back mid-single-digit up the timing the is maybe the timing But low to, to kind to back that targeting how of trend? network that you're versus you flexing rightsize digits. if spot digits? of turn, do low it say,

Mark Rourke

long in think Yes, you're is in we are depending that's maybe mid-single-digit too we feel Todd, direction, to market. what the what low far range, end think the at that for us, the we upper why of there getting either is yourself getting best at of I where whack is which upon double-digit over out is not term

part And cognizant basis, that being out that Schneider. get of our our of how to means on freight so a they and year, the by the our to drivers experience very commitments what XX we're regular shippers months home we of reliable feel

of is configuration. and the vast the that so majority the think And what will we vast, network in remain most sense makes

the or don't reasonable want can so So level, flex we if back lower it get beyond that's more that we why to necessary. that much to

are we much that. and where that's so we And to get now, don't expect beyond

Operator

time. further no in are this There questions at queue

question-and-answer and a great We disconnect your have day. reached participation, for And this the you you at session lines the and your end time. thank of have may

Schneider National (SNDR) 31 Oct 202020 Q3 Earnings call transcript