SNDR - Earnings call transcript Q1 2021 | Schneider National, Inc.

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Operator

Greetings, and welcome to Schneider's First Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Steve Bindas, Director of Investor Relations. Thank you.

begin. may You

Steve Bindas

And operator. everyone. Thank good you, morning,

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

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

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

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

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

Mark Rourke

our the on everyone, segment thank Hello, and XXXX results for Steve. with the you, Thank the context commentary today. you for Schneider quarter. for and I joining call company open expectations will trends with first and

enterprise out CapEx provide some Bruffett and additional result overall earnings expectations updated Steve Before on questions, share year will some per range we to commentary. on affirm get your close brief XXXX full insight guidance, our

demand those in bottlenecks, early flows, view, driver efficiently second year. to consumer catalysts especially the persist least the chain as stimulus, continuing. that result, XXXX modes record load the have supply capacity across we that excess half freight through accelerating at freight only the of freight evident toward catalyst were and professional all, transportation. of sales levels freight the healthy of particularly of in sourced to and market provide in market see supply We spending, freight current of constrained remainder a further and The condition expect and, cycle government market condition intensified the our market XXXX, for low involving companies consolidation internationally industry constrained and capture a full inventory aggregate optimism heavily capacity this fresh a up First multiple

being varying micro across between margin Logistics growth driver intensity capital in of Our spectrum. assets We minimal Truckload on carrier mix profiles believe varying that asset our for scaled capital and this most medium Logistics is shareholders. Schneider intensity, ends of increasingly offers professional the now, and and needs return the with Schneider the and the asset-centric, degrees execution two of demonstrate large value the segments and strategy of requiring increasing our Intermodal requirements. capability and will falling Intermodal and of driver driver aggregation asset segments trend communities. and anchored offerings mode a addressing our Each by Truckload, and and shipper

and Let's the environment how overall start The quarter. running are out first played ahead expectations. our contract spot with strategy original of the in slightly pricing

in opportunity year-over-year of driver Also satisfier pricing Intermodal retention our as grew XX% growth climb driver cover network of driver desirable momentarily. opportunities the guidance solidly specifically our support intermodal the range daily the network segments. it We the quarter desirable, possess combination driver earnings impact mid-double-digit renewed running realities end the are further Steve positions net dedicated heightened driver which and and we with renewals renewals. most impacts of less high low the company Schneider. differentiator cost share our front, book We the business both is slightly in sequentially Truckload due for and and to less the a with would quarter percentages territory, professional segment business into Intermodal. are contract here for more than first implications dray. the the our the of the and the expectations counts environment, of ahead inflationary challenging of contrast predictable in transfer reflected that dedicated condition. The configuration, schedules to irregular is The expect and to the enthusiastically Intermodal to by in in per We in and to most finished second in route the On we that percentage cost to, mix the network many, strong single-digit will Truckload Intermodal increased

our serve the of shippers needs. successful business Schneider's again, to continuing tail first segment functionality maturation year-over-year in by access to core nationwide coverage benefited offering shipper After mix, initial launch The the quarter. improvement the FreightPower in synergies book execution from of Only the XX% through results. outstanding process and it relates strong third-party in targeted Power freight the XXX% first to track gain delivered micro growth the in XXXX, Logistics launched complemented quarter to to earnings their both where trailer more revenue we quarter, was carriers launch for digitally carriers first movements. quote, long include the pools the easily to services, the our FreightPower and truckload As quarter automate for Brokerage power-only were records. in Logistics'

namely impacts be elements portfolio. spaces shippers intensity, well in flows and including weather support of this hundred enjoying non-traditional as and industry-wide through should be their to segment, our been already In that several impacted year in rail will frictionless also of coming represents the have offering of into geographies of and Texas impacted. The network February are drivers per freight however, channel other FreightPower chronicled, progresses, we in Also intermodal Truckload impact but very country. the only region and in were the both Southwest not the to and brokerage, it day of highly concentration above-normal country, We Truckload, orders introducing were highest quarter, out extraordinary, expanse service in of during our the dedicated, the the the Texas of some Mexico. and noted freight Schneider areas, for

more driver has fact, our highest activity X.X than In freight Schneider times second Texas activity state.

in strategic revenue startup quarter including growth company solutions in a and truck Our new XXX with first Intermodal drivers Dedicated dedicated first units X% contract Truckload in services our set count, quarter. in and of were quarter evident the growth early-stage average record, results.

in hundred new confidence us business specialty Our gives existing growth more full configurations. additional various dedicated strong units in pipeline year customer of growth, several

extended topic now of to market truckload the units. the year-end counts, X,XXX goal stated just On achievable truck opportunities irregular of our appear by alternative the other route for and for considering A X,XXX the units returning not challenges year-end more growth. target network capacity does appropriate fleet

delivered East. our total concentration Finally, We first records segment. mix delivered order moving to quarter per a orders in Intermodal and higher revenue to the the of change despite

time the the in eastern volumes the fourth in levels. mid-double network grew Intermodal higher five the quarters, percentage in or last For the digit of part

several in intermodal adding targeted containers XXXX. have calendar year We thousand

trade our opportunities driver award up count. step levels, as percentage in container desire growth well our conversion over-the-road additional as company business New double-digit confidence to support

Steve. turn I'll get there. stop we'll then to questions. it over to I'll So And your

Stephen Bruffett

typical on call. and sequence comments. to everyone I'm Thanks, my Mark, to our reverse and the going forward-looking begin with morning good

$X.XX EPS adjusted for to is guidance initial our and to $X.XX Our $X.XX, $X.XX. guidance was updated

in the So earnings. over Mark as to is and of The represents likely capacity, based on range what and condition this remain the has we a now throughout that of the robust combination ongoing and increased that stated, pretax place XXXX and end and demand was X%, is the in constrained million $XX the upper is guidance lower midpoint updated end, by beyond. expect

and Our of customers' value well services by broader serving portfolio providing a of is functioning our needs. shareholder portion

Logistics expect our the XX% Regarding by of we our total the the feel across to earnings we results positioned and portfolio, will deliver XX% XXXX. segments asset strong to And remainder that of year. deliver for well Intermodal

of expect a resulting $XXX range The $XXX tax updating guidance for continue full to of chain year issues. our a OEM million CapEx to range effective XX% delays delivery and potential We to supply net are some rate from allows approximately million.

intent from shift surcharge, continuing to of and a at capabilities. fleet the quarter. about first purchase enterprise tractors same recap lower average now of of first our changed has segment. up underlying our revenue and, ongoing number Logistics results XX% I'll new fuel was our to for the strength time, tech for development excluding record our funding nothing with However, the of the budgeted XXXX revenue, age on of our the quarter Beginning the

January up the and our XX% was weather-challenged adjusted income the most February. first profitable of XXXX. helped quarter from Strong and $XX of for first history compensate million to compared was a operations March quarter in Our

that material had only starting see comparison quarterly there relatively our first XQ but COVID Intermodal note impact. is not were 'XX a impact effects We on year. to income operations, financial Looking XXXX the of at last mid-March limited initially in our statement, a in to as of XQ quarter I'll 'XX clean was a

As lot growth costs the higher statement purchase other support the notable to a such, transportation than on of there in Logistics revenue are the not items segment. income the

million November to sheet. now million of $XXX months, next would we the both repay notes It's maturities Moving just in current of I intent March now point balance in that to maturity. million the XX debt out have $XX our XXXX. $XX in at and

used equipment. investing of from On and amount quarter activities, this cash used the is strong in along flows, light you'll the due with a limited sale of of proceeds in statement the CapEx see cash to

for start year to considerable our and CapEx, we a forward crisply three over the year, quarters the being look our result. year. remainder final over a value net Given off expectations delivering of we're we as anticipate positioned used to executing well Closing, and year the the plans of and cash full solid of to the shareholder obviously amounts

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

Operator

comes [Operator from Morgan you. question Stanley. Our Shanker question. the your with Thank with proceed first line of Please Instructions] Ravi

Ravi Shanker

in we do of new is it Is $X.XX, Thanks kind cycle it view your you of where your we mid-cycle you of they're feels can there's wondering lot of are number? peak, morning. - margins are kind is based for this where And But will a of Good what of and have to are that is many normalized update. if the sense about or are and $X.XX, there? What's where where now, EPS think cycle $X.XX? EPS exactly that on of cetera. the Mark, right is cycle, 'XX, now early I'm like a et we if Kind close it in fairly to given still normalized saying you. and it the be? guidance right Thank at peers where what we and the debate kind are obviously, you think the Steve or continue

Stephen Bruffett

This I its mid-cycle provides different a Logistics, in for Truckload, We've conditions, XX% X%. Ravi, and changing market subject suppose. we X% And XX% feel they're I'll we margin definition to think we've with XX%; what our that now period vary jump adaptability definition. question, time is, I target well-positioned some as market have and a we and conditions. market to do and that and - through that, that ranges that guess, is Intermodal, stated XX% to that of the stated; to is, We interpretation Steve. into There's lot to portfolio of in in the resilience go from

on trajectories because in of they segment with makes really think us those as time, basis. review so we'll for into it on. annual later little And an guided at and by And our ranges and this the remain, comfortable is So a planning growth strategic point ranges. like get where kind into do we we have I cycle, these different it we sense year

to our that. what under normalized and number we the the mid-cycle time. those I into one most over do the we think response. get I EPS be I'd would tough think think. with rather Truckload So we probably that's will not if I But my of can do think answer, because anything, that a would course And or scrutiny margins one be

Ravi Shanker

Okay. helpful say about when evaluating of kind the you it. No, margins, And Got are you them TL that's or evaluating up again, down? framework. talking a

Stephen Bruffett

I don't see them going down.

Ravi Shanker

Okay.

maybe Obviously, right are as we very you an And are to a truck us want now? market. unprecedented that customers of that. clarify tight what your with can give sense follow-up, it's well like conversations a known Just

them, find contracts rail longer-term As trucks? on a like customers what's are they with to sign to that, hey, counter of to get your their to the looking tell and side? Are not hard are visibility intermodal? actively reaction Kind you your more drivers willing you initial switch more when trucking to may

Mark Rourke

services obviously. really across whole do to to Mark. It's what that we interesting and host have a we're finding, various that our we to Good I period getting think be a morning, offering, a of we're our And Intermodal whether the they're Logistics get receptivity Ravi. It's whether certainly, is customers their that of solutions because it looking This is moving have. for or solutions trying reasons, what served. been for freight to you. good it be from customers provide hear And to - lot

So to I under open difficulty, think a creativity more our of it bit to make things obviously, a happen. customers you're -- little that are have does everybody generally play And strengths. little when - is to

other convert way service of might places, times seeing at and requirements we're intermodal And increased at conversion people the other from reliability. capacity for to then looking some see because we truck So coverage.

agnostic why make upon most so we're take customers happens. and what's We sure to the them. we're And how it's to offering kind letting want advantage to options that important our of based

Ravi Shanker

Very for color, good. Mark Thanks and Steve. the

Operator

of question. Our Bank next question of line Ken from comes with with America. proceed Hoexter Please your the

Ken Hoexter

job And environment. and on despite morning. Good great. the great results storms Hey, the tough

your clarification, And So like the to still quarter? commentary? can trucks that throw contrast want hundred and getting over-the-road just Steve, you gains then just so fleet in sounds environment. the with in driver on I Thanks. growth X,XXX this dedicated, guess, few that for in I looking to out back the quick a a you're adding then understand - sale And

Stephen Bruffett

tackle I'll believe, compared Mark on last I The of to of second a gains million, first million. in modest can the year, part. the modest gains, modest. were sale that, the then couple and couple take of of and losses quarter part equipment They're of a

a in there's $X $X space. year-over-year, difference million or So million that

Mark Rourke

ability we're there, the relative do environment network best it kind what business. segment to our of Ken, our relates in looking to really of And stabilize as the to is truck our to count truck this

We and the are and for we're tremendous progress amount us, we're driver was configuration pleased competition strategic which is of, just there. And steady, seeing news we're there's team providers with our obviously, priority folks while across don't with we that agree some retention community. recovery that fairly is good the see the in private it's we're competing seeing have where all -- don't levels when been. and we turnover board, for key a do of but the making a the today. has fleets to And difficulty slow And LTL kinds generally

not number where X,XXX numbers the be sustain business. just we that why do like were whole up because growth presently, we that's and We why modestly hard don't focus on is do it, around on too cost on and how So are to would the we want to that's centers front and from it grow dedicated the longer-term our focus commitments services and those in up took struggled those hit weather just chase Truckload and of value-add a and we a we were of then double we're obviously, a the component first the deal Texas to had start-up well. largest in our only year-over-year, of the up start-up, that to as of quarter. stay customers only bit not so well, Unfortunately, unusual be good little happened up less but sequentially, there pattern activity efficient the in of as we state because and on

and performing So there. - feel we're great we're dedicated optimistic is very about where

Ken Hoexter

like maybe needs? levels that I a is a more on little Maybe Are phenomenal your conversion rail my it still you seeing just on Great. Intermodal? Intermodal. pricing all of little follow-up, bit bit an How environment, can the accelerate? meeting growth outlook obviously, given the service And if And get sounds a backdrop.

Mark Rourke

good And back very question, are Yeah. very, as that's to Intermodal, to Certainly, the pre-pandemic, reliability it Ken. relates in East, well. performing we so

a strength a continues because I our real also of thoughts, have As to performance, our five back we've improving, opening showing in other there's activity, customer grown performing going I port that rail on a the we East, across partner be not in four dray now improvement. of in network is range well think, that's and my the but where mid-double-digit area the mentioned quarters constraints satisfied, at relative of there to equipment getting of anybody to, where would just there. But still of be turned. least delays very signs The but very, West or lot

And little more West to a so East, but the be in it's than in improving. challenging the it's proven

Ken Hoexter

Thanks. color. the Appreciate Wonderful.

Operator

Capital Our Todd with Please next Fowler of KeyBanc proceed question your comes with line from question. the Markets.

Todd Fowler

multiple about offer Obviously, sitting Can Great. Thanks at Mark, carriers service. expand able area. prepared you of towards and that some you good consolidation comments, morning. that to modes talked your you in are little seeing guys is point Or more that trend? comment? something you're bit anecdotal? there to Is are results things more supportive a that that that that on big can within are that you you that feel seeing of

Mark Rourke

small we're small opportunity the on reach service Todd, to and get that the strategically, to multimodal really capacity that's medium heart that It connection as down and - to our the and there large, carrier concerned think be strategy. providers now, consolidation the providers a both at side the and, and think, it a and a big times, dozen-or-so some as They and I value to form on going LTL could are that And side half aggregation don't be increasingly and form that for I to because that bare respond that. think a spec providers gets of own possible consolidation. easy it that think traditional customers in demand of It four less wouldn't the be carriers, a of bring exchange offer source multimodal I to airlines and under type. the an tech-savvy investments and is five about how belief a heavily increasingly at with or But are of tech like is our I assets respond we're is - do in acceptance to shipper customers, make done. - our spec great the view to their offer well. as of investing

Todd Fowler

Yeah.

maybe in that sense. you're same that the little strength growth that some the is this then some see lines. how within you've less you a when seeing once that once that to Or segment and business Logistics your look of makes service, of going goes we along follow-up, revenue revenue the substantial do forward? maybe of business? capacity going think there, bit Thanks. is more That Is consistent away? that The a Okay. provided view And sticky view more constraints, that, transactional that you out you the be

Mark Rourke

parties of to no that all to them, that I middle market benefiting it doubt allows, Well, and or role supply are the XPLs today. in portfolio of varying it increasingly, demand cost bit think, there's effective really a conditions. our as have I markets third the condition of the from all well exists But to durability perform parts of structure solutions, variable customers, a have to and can think, in for a adapt bit more the

allows doubt market, staying no about concept shipper the some we're for to who efficiencies, power that and those parties, particularly another bring have that. I element this and again, pool stickiness, trailer of to us and maturing - mid- being from but with certainly large the fact benefiting that's to that think whole the needs So able third increasingly

Todd Fowler

Thanks the for time. Understood.

Operator

Evercore. Our line with Chappell your question. the with proceed of next question comes Jon from Please

Jon Chappell

morning, everybody. Good you. Thank

Mark Rourke

Morning, Jon.

Jon Chappell

people so for to new very incubation It's A that we're our new with which, operating relative some the Logistics model, is drive Only, kind margin is technology. still that that my range via on and tech. And science, decision and think many segment. but to those made or has just our done. so investments kind sophisticated is have make. house we degree there, your people-intensive. long-term enhancing. great leading the that favorable and of still, generally view, the relative we last both that structurally it we've the and there is at the Jon, grinding the that with to now? is and of of business productivity to beneficial made potential that is in too certainly where Or contemporary we is business, area on and macro got the are side Is margin TL an asset-light shipper differentiation without Rourke - great carrier continues start traditionally comes market follow-up that kind I over frontrunner the higher. I -- to the all this of dynamics based are your generally business? our now them be people. the create time, in guidance changing of things a in the continued edge that scale it's again, whether market, investments right to to we many buy-sell industry about Mark there transactions Power comment, solidly there where arrangement, the in Mark, based into FreightPower think Logistics have That can your it's We've and And We of question of business it's margin at and whether side upon in think play whether are what the got something been cycles, opportunity that same technology I growing that the some investments that Intermodal to segment into It's

that seeing in of some play certainly you're And performance. margin out our so

seeing of Power created play our in the shipper large out in the for You're value being solutions some that. Only

of strategic the that's thrust multifaceted it's delivering a result. there So kind

Jon Chappell

week the time today? vis-à-vis of can you're in a period we move than contract in that the more truck side. despite per Is That year-over-year Okay. week others sense. there's just where representative in the flat noticed seeing renewals per where was spot second dedicated the of kind there revenue renewals, network a essentially significant more the the what dedicated makes contract market per see then increase per And truck KPIs in on I the revenue

Mark Rourke

contract of our side. but and is Yes. same for -- midst to stable still dedicated those on and do the series what that but customers we more like coming in also more have And we are of the having a drivers Part sure they're we about and looking work are of renewal both our contracts there dedicated discussions certainly making along the time. renewals process at rate keep competitively to paid, that that parties,

a and will good going it's there play of so our out, -- think for going the And deal effort year. expectations to on I and that certainly remaining quarters of the

are stable most through rate business, on work retention and to So that, continue the renewals levels and component we'll driver increase extremely the of predominantly high, front.

Jon Chappell

Understood. Thank Mark. you,

Operator

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

Jack Atkins

there getting guidance It back that of around seems like in this Is guidance XX% more taking is First Great. business, to weather Final more the morning the thank first you quantify for to the then, there Steve, your Truckload those environment operations? way I broadly, a first that impact year? strong the like guess questions. what's from doing Mile ex the to XX.X% freight to look end something a Truckload such And I preventing the at quarter, we to to in for midpoint. margin. upper way about range Good and -- maybe if is XXXX, kind this back longer-term that specifically think a my you operations of XX% year guess, I were to guess,

Stephen Bruffett

Steve. first that the take part for sure. Okay. is Jack, of this I'll

the that, some a to attributable guess a of quarter, negative that across say When spectrum net you weather of reports we on could Truck the did the specifically benefit that. haven't of question how impact. weather. somewhat miss effect But all -- had back you from I and the was look in another analyst no bounce and the attributable could quantify there's quantified responding is to Truckload quarter. in to do be the say March the Logistics miss constraints I'd be a and in February Intermodal, We seen in we've -- way if beat

Jack Atkins

Okay.

And Got end to hit Okay. you. ability to the year? relates this as guidance it then of the range that upper

Mark Rourke

certainly into Yeah, -- we And that, leaning adding that drivers is XXXX, the we what into much more Jack, to inflationary where costly the we capacity cycle, are more for do it's to when challenging side been as to those this think on us, back really were period look that. has we impact and into that.

get at particularly that really of network to And our want size, the we so business. heart right to where do in that's

that's And as April, we much seen so I opportunity. We've March. where dedicated, on out had quarter. think short growing have and did in first And closer to effect everyone opened in an expect see is have associated exactly should costs we we expect to end satisfied that with of obviously term, perform that, the us range Steve think whether when time. start truck. have that the not our Obviously, with the start-up are margin where should long-term biggest we presently, first why some and you're that We're I in and higher that you those arena relates improved of behind the now dedicated metrics the over relative of get the a second revenue to into But quarter. we to because us half it the start-up question the coming big we of some we're as elements performance

Jack Atkins

certain for for give the sense gains sense. We're makes seeing That your us significant year? gains And carriers. is my sale at of rest a for outlook you Okay. on the follow-up, Steve, some could what I for guess

get that of Thank partners? And the that able in would broadly, to curious half of you sort back Are OEM equipment the you you. then you expect need if the year? more how from ramp Just is to availability? your equipment

Stephen Bruffett

Yes.

underlying different try bit little a gains of has interplay the cycles. company thus, each So fairway middle play the through there. philosophy in between and equipment used different you go losses depreciation as your policies around and to the We

have the the gains first of I to up we we in would extent get least year-over-year at try began bit go of a would losses and get when in year XXXX. things a remainder this we to or the compared year comp market even heated it through expect Obviously, can, but more, half So losses but the depreciation modest as to where like think last I this minimize have be year. second to the improve the into we us the gains across of this generally, conditions some just its you got year, modest job. don't half of favorable big as be remainder noise items, to there'll do

Mark Rourke

a six think ourselves get middle we to midyear, versus second the be us now here Jack, of that's about visible through been visibility of little less the are about do will see front, schedule front, tractor as weeks delayed, on wanted equipment the And options. I we OEM by area the that that's as We empty have of to in another new to we half. coming point. to the that in start capacity but in delay little would in, the a Intermodal delivery weeks. some we to a loaded which container side, constraints pace this at behind assess a expected is at mentioned of six quarter, build We to bit On come because delivery bit of right vessel return less increased the available to the second we our Probably here. and

solutions so working And to that. through some we're

better several even we a So little -- perhaps ago. bit than weeks about the tractor front, we're but were feeling

Operator

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

Jordan Alliger

morning. Hi, Yeah.

still contracts, are are and when from some finding dedicated solid, that of pipeline? just they think, accelerating here? the than of curious, generally of sort about I'm involved about terms terms big you Is amount Obviously, sort on size? you types the can of are alluded side. color talk things were same they requests the to you of you the pretty And of more of it getting in Or trucks dedicated pre-pandemic? larger the are sort in the curious Just

Mark Rourke

one-way tight opportunity step it gather we're capacity network strategic solutions, dedicated as are those to our just relates of maybe to we back really to Jordan, looking kind not are commercial that durable and So pursuing and and mindful markets. very just looking focuses in and dedicated, where for that

It's solution And as lack look so certainly of of to are cycles. emphasis there place don't we that that because a durability place from standpoint. through a a the who people just customer would

replacement what on the leads in to that have ironically, dedicated the fleet 'XXs larger And smaller XXXXs. may private generally and XX dedicated more maybe type the been truck opportunities, to they so are generally the size, back XX network-based in is nondurable of prevalent specialty-type the then that kind versus and more range

with the with and that, customer, but of the a in the targeting. durability what we're of pipeline is And generally, that little some and very processes win smaller that, so so is value-added because of and because average for stickiness consistent doing size generally comes actions support looking that we're our of that's our the or that's

Jordan Alliger

much. Thanks Great. so

Operator

Landry from comes question question. the next proceed of Our with Please line Allison Credit your with Suisse.

Allison Landry

Thanks, good morning.

the of of QX and weather rail So even quite the better Intermodal bit just a wanted spite to than OR. would sequential some challenges. in about ask normal trends service apply was

think it the point? And run baseline sort of math, the trends? improvement about full So we year. than for sort the more XX.X% balance from I sort the or is apply progression OR we right that there, starting of XXX If of of bps the basically of year, the implies for can as sequential of the normal just

a to on it. So just fair wanted way think to about if get that's your thoughts

Stephen Bruffett

portfolio, which COVID to here. Steve Obviously, Allison, Yeah, Intermodal compared so... the bore least, of the at impacts in brunt XXXX, our

Mark Rourke

especially. quarter, Second

Stephen Bruffett

Yes.

but in if post comparison. to feel the basis off we that solid ample margin and continued your and we executing what expect other get should as we further expect few expansion that would top once at into smoother efficiency there the season's will margins, year year then just but And for able turn time a fourth available opportunity well same of bit, premium ramp of contribute line in in we opportunities So and years type definitely are fluidity a would market over we and very where peak enhancements go and opportunities time. both containers and moving like evolving sequentially, part our improvement the -- and improve, season But growth for of be peak in determine will ultimately to of through. question, of ability in what year-over-year later are quarter we types of margin later be spreading year, to the all the it out efficiency last the have street to in what

Allison Landry

Perfect.

on the and So both look, performance year-over-year. in obviously, Logistics side, very revenue contribution income strong I mean, the in of quarter operating terms

guidance the other maybe range So the full improvement you segments? is talk in much here just could versus the year of embedded how about

Stephen Bruffett

come Intermodal we to getting suggested enterprise Without call that earlier my in XX% of XX% our to earnings comments Logistics. from and specific, the expect

So is by the of segments from an both been those contribution that historically. than in inherent increasing where to we've overall

Allison Landry

Thank right. you, guys. Okay. All

Operator

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

Chris Wetherbee

enhanced thanks. of Hey, that maybe a you really it market since you onset, both has increasingly sort add. post of the become like be getting initial kind fleet the that more because I the wages Maybe these becomes and unemployment will works perspective for year maybe wanted drivers, just COVID to a going come dynamic that later unemployment more practically can of to tractor to in stabilizing, up, and off benefits post-COVID, if that maybe how you about to bit to of When get how I'm think a the of before seems the wanted folks? of see sort trying just use? you morning. for-hire sense back is to Good you timing to need primary a practically those the extended from up of it think what maybe little easy challenged, of drivers to second sort wait or get sort I some more half tightened And challenging tool sense the of of guess. get roll the

I So practically addressing to get thinking how a guys you about want are just that. of sense

Mark Rourke

as it's, a been mentioned, it's Christian, challenge. Yeah, you

couple COVID the network I was is some us improvement get we're which teams non-family that the comfortable being fleet because through lost to to productivity improve phases in for focused team policies the us, into comfort what of and get that as was some a a folks professional together, for well. we -- recovery along get as drivers. freight here to on that driver to that for-hire us configurations For Again, who to see have of component of we've approaches been value team premium mentioned our a the back specifically, team of the which farther our we starting stabilizing of as which proposition vaccination driver into elements team, to we've made some been to those adoptions type

the to visibility that's very for positive development. so looking second owner-operators moving had drivers we community the opportunities. area was spot that And extended shrink relative and those And was owner-operator some this and towards, market

we're helping So where it's their a we now part we're driver others, and have how gives us several sites that effect side. own are. folks and we solo we've And in the schools momentum on increase do in and focusing kind done and some we have in some is of that that, past, we some that so like that Then instituted the largely CDLs. through produce stabilization get that, then think going company of of get we

we that XXXX, a necessary of that's so you way kind of do to about things a some in very a gives large kind And haven't it since played environment this actions so sense in of place differently.

are get and helping network in places And certainly business industry our country their new so the certain CDL. Intermodal around people brand markets we have several to that creating, in we the

Chris Wetherbee

Okay.

that I probably we to rate the color. out side, quite it. has step-up Obviously, first degree. thinking quarter, presumably, helpful about guess That's that on the And I the been of potential weather good. just disrupt did appreciate utilization then coming for-hire and see Okay. might the some that side of

utilization, about you of of how year? the as curious of sort might kind of tractor truck and miles you rest through the go that Just think sort per as the progress

Mark Rourke

around is you mentioned, was because side solid, business our very, has been network of the particularly tight. very in Christian, fleet particularly Yes, of we fairly as in had the took centering where that, side February. we've hit productivity issue The price the the

and that in the get traction, truck about expect the through elements - here, are And think see would seated do see we remainder we pretty Our you'll to to shape. the of improved utility unseated talked start year. trucks I good I as that

price will of it be a So and utility. combination both

Chris Wetherbee

step Okay. And XQ, up? to starts I assume, in would that some

Mark Rourke

Correct.

Chris Wetherbee

it. Got Appreciate it. you for very Thank much the time.

Operator

question. Please from comes of Cowen the Our & next line Seidl Jason question with Company. with your proceed

Jason Seidl

driving market do I'm coming to I I Congratulations little XQ. Gentlemen, you seated morning. restrictions up count? back how Hey, view come you. just of you COVID alluded talk many to that thank sort and on your opening capacity anchorman remainder you continue are maybe some no sort strong and new view potentially to maybe terms tractor there, side? of versus of wanted overall bit then the And as carriers, a think the restrictions How both the it OEM sort you on have and can still they private guys. the of marketplace? about and good sort back of throughout you pun Hey, I guess playing capacity? of what today. from So attended, to ones and year. schools in supply the see We've heard demand. drivers public How market here the the of sort expect do

Mark Rourke

for We of don't great see a the remainder the the of relief Yes. deal on year. front capacity

commented at you the someone hear schools, our September. be the depending through and driving the think sidelines incentives on a is that's from truck the government certainly hear going a stimulus I I is, least we We recruiters, people for to with that reside earlier, that in from stay believe, standpoint us, from to state that barrier. upon

in going for see folks not of being short back we're perhaps the so And any term sort to any seat. relief the that catalyst of to in get

mentioned, fleets the just little to are seeing, or that schools more private at there own. seeing what doing whether are constraints still availability is LTLs which are and relative I think that constrained what you're their build a it's highly people bit new whether you I it's happening

cycle long to a the So a various get that them get I it but to pursuing them get some to think, production It's trend, into it's trained and folks. long is that impact, long the have that. cycle those will a fleets feeling are cycle

and trucks the inspection I looking, off the and robust And to have month we getting is month summer of the generally drive which and we're will we'll get of we're together in response. we'll now food. it's that's with overall think, periods again, things look folks take have barbecues as very into consumer the less picture demand seasonally get just products So the not year seasonal the and the week of to at that back short-term which particularly into second the a untypical get and out sitting May, and road the and April our do then and and

just So we season. carry expect really to us through that would combination peak into the

we shape don't any so form or being year. for -- And see or me, this solved remainder demand way, excuse the of capacity

Jason Seidl

be my question. Well, that follow-up to going actually was

season now and So tighter economy the with the potentially and the market with coming capacity really as that that of of it lot with along term in-person a lot kids from with getting a demand strong a is, here? get most back backdrop can we're seeing humming back-to-school back learning not the in near backdrop the and really

Mark Rourke

excellent capability, bullish through is that's I we're now opportunity But remainder I we so which condition. increase our how any portfolio in some we don't respects and think to the I an get the the offers increasingly in with to from the fairly to versus our at that the truck that have our we accept. question. of we're looking anchored of it portfolio we market gets - based daily think everything upon then can that's as logistics offer But know that - why leveraging train why have think tighter play the to what Great in year I on really we're guidance. that

Jason Seidl

time ability the everyone and stay chain safe. your I the supply with to across the Clearly, capacity customers now. right Listen, appreciate provide all king is

Mark Rourke

and for we're why looking options, giving. that's of are in the Customers business

Operator

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

Scott Group

Hey, Morning, thanks. guys.

to Truckload margins. So to back wanted I go

and same And and weather where and specific looked close mid-XXs and that are at low pleased I driver ORs referenced with are. try not what at with you're to changes the they're guys Werner You to guess, dealing you Knight they gap? I making issues.

Stephen Bruffett

is this Scott, Yeah. Steve.

we time, margin. of gradually earlier, opportunities trying Over are the as we and the in network our volume said we it's to the of And And would way this fixed it. where feel not Having that identifying and obviously, if a of some be space, can implement there the We we're like that that like series increase. Mark contributive course we though be our more can we like that to work portions will to revenue of nature, reach don't like a across higher business. would then configuration focus and in out network And we point are variety of parts because and impacts for well. part thing. It's a any that opportunity potential the there's a it like on footprint revenue type on. a what have so levels so those as country and network That's volume simple moving business and we ample answer you we over it's to, of we'll is we're some and not that need need lot another. one to on there's across time. the evaluating, But adjust enhancements, that course of we of also lever a push structure cost fixed productivity reach

we that set to have side network have we that. be But function to of in a to over we the opportunity up the of that, performance do time. So our belief business, take of have all course sensitive especially margin here step a on our an

that's goal. So determined achieve very we're -- to that

Scott Group

Intermodal then the on you just you spread back? Can What's right year. Intermodal pricing more is Is pricing? Just that are the it Truckload close? mentioned any perspective than any expect Do wider and you Similar Truckload do to start where rates now than - normal? up have holding And to thoughts with Okay. between normal? Intermodal rates you gap there.

Mark Rourke

expect the would obviously we gap X. - be still to a There's Yeah. between there

truck. in in we the single-digits we year-over-year I I quarter quarter out low as in that we'll increase of truck, pretty first will in we of double-digits be the And book that renewed quarter will see coming renewals the renewals the the high and think I the were close had as between us that is second same those have what we mentioned, Intermodal and was, scheduled in that on that are think, had project much front we par. second

- so there lift And up will would Intermodal second the expect means basis finish as in quarter. year-to-date be some increases some that lift we a we on the

change more really timing this is a there it long a is in there a - - being isn't the renewed Scott, between So what issue than spread. obviously, is is of and term

Scott Group

Okay. Thank guys. you,

Operator

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

Tom Wadewitz

Yeah, morning. good Hi.

can margin or strong of for network a Or toughest and you're more If let kind you still you little the and business? So to that you're or don't more that at of time trucks business can dedicated. smaller X,XXX trucks my below kind stronger longer-term this know, of your look network level. know put at running the critical profitability first those level had network that want in if you of for some that a quarter if there back the be about, frame first you I at just dedicated something But quarter and terms of look because I it think the in X,XXX drivers be get business. over the X,XXX business business? and that strategic is do the in 'XX, XX% emphasis in is year, network X,XXX strategic call I trucks? first is about it question on I is how Is it's mass kind you about where a on

Mark Rourke

we like our though, the business, I repeat customers. remain Tom, primary strategic we value - Logistics growth, great We areas network Intermodal what as dedicated, certainly certainly, strategic of we - Yes, is that covering there about we our and add maybe think think to segment. to we can we growth kind as were

doing running as units. the when X,XXX, with our we to year, I And And are X,XXX a stability didn't much need network facilities there all dedicated to there, like not our so want same the the focused same of challenges the because largely and network, to below would dedicated The contracts. in at Steve so look support you're specialty a running and you're come network those some of got because nature get market you now what we overall and associated mentioned, more that route get clearly. this into us locations, condition has and infrastructure the -- you're all of using at

kind over the mix you So investments looking network what and bit that you a as that's most long-term time we're to shape that's of of look and have now, carries and make those in. right what challenge business costs, we're our your makes some of And at see and at. organization, sense you

Tom Wadewitz

I question business how bit of information also guess, Power the volume you don't more in growth? to relate My growth a headcount to Logistics trying just, are the Okay. loads compare want offer the give performing Can volume growth that you what does what's don't is growth? your I But is very, second little is. us to Logistics. sense I And does in volume get mentioned you on the Obviously, perhaps number. think well. how of the a happening much very know sense a to Only? number how growth then if of headcount a

Mark Rourke

that it's much a brokerage productive rate into on but more what still time, a But equation Yes, from a transactions our making. measure in Power or simply percentage model, helps, overall more technology the we're business. transactional through growing basis. orders, than daily in our which, buy/sell also lot, we we're sides a productivity is productive, investments so additional people we is on Only, on of volume smaller in on results over a both the Logistics growth. brokerage think, both of is we're the piece a basis, But drive getting which it not seeing is that traditional what

growing are volume on growing top a digits double rate addition basis. to per in We line order the

rate volume Logistics. of to growth elements in both the are contributing and So

Tom Wadewitz

Do telling up? how was volume you us mind much

Mark Rourke

disclose that, we'd think Tom. yes. I Competitively, don't

Tom Wadewitz

for Okay. the right. time, Thanks All Mark.

Mark Rourke

you. Thank

Operator

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

Bascome Majors

my that have an into the at two taking that isn't early of you idea favorable for one unpack giving curious industry quarters items least can that conviction or Thanks are this to Mark, doesn't four Schneider. continue if three trucking environment visibility. questions. that be you unique biggest 'XX typically could I'd in But or the

Mark Rourke

Yes.

than has more coming. last talk which few the customers our to the be where are very availability be We condition. really expect the would over need of had months, marketplace. just the being seen we is The inventory was some that back don't and supply-demand their don't what that. It definitely, economy some want consumer I recovery kind still on what see money it to doesn't where legs. which at they And not are correction quarters mean, into economy. our the to very different -- several happen many, of at. or that and back. this of are juncture. there's obviously, but several they they this the pretty but We're capacity where in of industrial so it point, in is in basically to levels healthy and some coming there's look kind is to system, made is at to we see there serves presently. was there, they side to correction what we of I come going the the a they're plenty business think volumes improvement, -- which exclusively mean or that's won't almost have injected think about there XXXX this many market of And precursor finished more some contributor much of overall, We midst think a We capacity that folks seeing some have help to And bulk and it our assessment be of goods of is the we solve and it. in There robust while in industrial

moderation up of sets do that before a We'll condition who moderating there's it may So all busy a lot some the It just we're if not now. on knows. to per-load to it, moderate, for basis. see but we have there's

Bascome Majors

you than helpful. XXXX, you does corollary for you to at analogs how that different remind this of you internally think allude be any guys out mapping mean how of did trying of be other think response the market? you capacity on that side. further, Thank would I been and out. to least And zoom could if historical or Just this any

Mark Rourke

my not side is tunnel kind generally which and this, This year Yes. recall I we XXrd seen. of doing don't at the the a have end having of capacity the light

so biggest to point. country period in in just is to the any And and condition what's reasonable the the going and -- difference level overall me, labor correct the that's itself any reasonable to

kind me, have going to correction economic the change So be we are. an drive is to in of it's to going what's where to

Bascome Majors

Thank you.

Operator

All right.

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

Brian Ossenbeck

the for Thanks Good guys. question. morning. Hey, taking

Just - I'm more sorry? to get a little specific

Mark Rourke

sorry. wire. Go under just the We're ahead,

Brian Ossenbeck

you. Thank Okay.

on improvements sort going of it we're any drill to like down help, the Intermodal expecting the improving into does seeing a I when which to points? capacity when course. one. the and in realizing you fluidity street side. on turns When to try know shipper level you tie keep locations, are a of would still you fluidity But guess, be quick. back at And think at you look second detail, the part weather, that of and then, it will rail I to I'll I'll lot certain there's of keep So rail side, better it

serve more the teams TOFC capacity some taking network or taking some on maybe constraints rail priority you as the any that the parcel? fast, for and are LTL freight moving priority and premium seeing of up With

Mark Rourke

there. unpack to Lot

again, first of part that, the Brian, So was?

Brian Ossenbeck

supply fluidity, anything your addition The warehouse to improvement expect what seeing there and chain you're on street in in you the turns rails.

Mark Rourke

that are Great. a fluidity would are we we and of metrics Thank where customer is we however, challenge, we're every now still is be are not than to an day to box can our what influence able when that saying and box on to has more we turned. driving get that of expect acceptance that -- expect more you. What yes would standpoint. It a bit a need of our we do, get or be able from them when that to to to back

we're getting those consumer customers So type -- on acceptance are network it to front, kind so do our our there. effectively And we location favor who and the that the favor [ph] of that by acceptance most based get decisions. driving bend to bend upon ship of data have and great

in folks on doubt slowing and some And turned. rails, driving having to more so impact And parcel some -- LTL of of no demand West. are the push than that down the that's the and challenges we're the kind push getting equipment that perhaps and labor of so then relative of the challenges some particularly there's the certainly, the e-commerce is the fluidity push so

And through that, we certainly influence can went see last And would typically it getting quarter fluid, we see. we so that. had more more and the certainly, we know fourth it's as than year, but it's better getting

Brian Ossenbeck

it. Got Appreciate Mark. a lot, it. Thanks

Operator

hand the management There are no remarks. for to like I'd to back questions. call further closing

Mark Rourke

Thank follow up got Since thanks any we've with tuning passed, for questions, already the other in. please everybody you. team. And

Operator

gentlemen, does teleconference. for Ladies participation. this Thank conclude today's you and your

have at wonderful your may lines And time. day. this a You disconnect

Schneider National (SNDR) 1 May 212021 Q1 Earnings call transcript