Earnings call transcript Q4 2022

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Operator

Greetings, and welcome to Schneider's Incorporated Fourth Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to turn the conference over to your host, Mr. Bindas. Steve you. Thank

begin. You may

Steve Bindas

operator, and you, morning, good Thank everyone.

Executive are me Bruffett, and President and the Logistics. Jim Executive of Group today on call Mark Filter, and Chief Officer; President Chief Rourke, President Transportation and and President Joining Vice Financial Vice Executive Officer; Steve

release schneider.com. the Earlier section Investor company This of earnings presentation investor our press an the an are at Relations today, release. website issued and available on

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

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

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

Now I'd like our Bruffett. to over Steve call turn the CFO, to

Stephen Bruffett

each to thanks morning. for joining you and of Steve, you, Thank this us

up offer for on context our and conditions. fourth call our well year some then insights as Mark our I'll and for we guidance various provide before for quarter full questions. on operations provide financial additional market open XXXX of a recap the as I'll your his will results, aspects then

is with an basis. he on indicated, Bindas joining our call, us and today on quarterly ongoing Steve calls earnings As Jim will be the Filter

the some look website Investor participation comments today. your we'll on mention slides presentation, we forward our our reference to and as available Relations refreshed we it's during his of our Also, have perspectives. and for So

fourth our to our XXXX. earnings million behind earned of was the the record profitable only the Adjusted of in the quarter in of quarterly 'XX. most fourth $X.XX we for XQ, second compared EPS results, history, quarter adjusted fourth quarter the million $X.XX Regarding high $XXX in was the $XXX

the fourth has The income year rate, been inclusion for XXXX our apportionment an state associated EPS to included mostly that our in of we've bolstered been by lower by the XX% tax three modified quarter year. and first compared for of the tax mileage. The as adjustment full slightly to the using rate, effective rate taxes quarters MLS estimate an related the $X.XX as

While year fourth earnings those adjusted million or below above full were XXXX, earnings of XX% XXXX. $XXX XX% of quarter

the as in to at, rate a is we our objectives of our addition year other favorable growing strategic of components XXXX, path advanced financial a noting. faster the than traveled portfolio. results In XXXX intermodal worth of dedicated, which and logistics the

in XX% Dedicated revenues MLS grew segment Truckload over the result within a of growth organic acquisition. XXXX, the

and Intermodal XX% revenues to together, XXXX. and in and dedicated record earnings of were about XXXX as Truckload delivered revenues XX% both of Logistics year, compared the segment in earnings. half posted segment For revenues they

most $XXX $XXX million, from million $XXX we at an million. below XXXX recent XXXX. which high cash $XXX of finished Regarding million expenditures operations, compares and cash guidance capital generated flows, all-time was Net to just of our in

during and by was million above XXXX, at reduced in million we shareholders. XXXX, stands dividends steadily XX% we Also, our debt $XX our over paid During XXXX to which currently as million. returns we increase debt $XXX $XX our total

Mark his to for And I'll now hand it over comments.

Mark Rourke

Steve. you, Thank

year in and across support driver community for and professional valued performance diversified in for contributions customer the our North our America, company and efforts community record their thank our XX,XXX to especially tireless associates want of XXXX. another I

We flow comments, earnings cash In and adjusted results and record may $XXX of excluding records additional fourth in commentary million, posted free million $XXX revenue, Year I'll of XXXX. set segment provide our achieved record here million. of surcharge the of my $XXX delivered quarter on signal fuel billion, what record by $X.X New in that adjusted EBITDA for

will of highlight brokerage, Specifically, influence I drivers our the the three Power dedicated growth strategic intermodal Only. emerging including and status of of

network peak quarter fourth in truckload our business, during the shipping is the the expected, regular As what especially holiday, intermodal. experienced both atypical and route normally portions in season, was of

volume truckload premium activity intermodal service capacity and import limited. as coverage, we to new with work our driven e-commerce in Pacific. Domestic month Western high-intensity of intermodal volume moderated conversion Notably, the successfully rail container December, in was project specific and completed channels, partner waned Union apart the from the

So our and we recognize I planning also thank as street. expectations to dray let driver terminals of happen and execution conversion. want the of through rail who teams ensuring it associates conversion the focused me and work collaboratively Union there. experienced the The and the experience on Schneider a made positive both customer the Pacific exceeded professional start at on

improving, of end, the and for move as less and good from as stacking of as dray With productivity quarter. one. networks dray two running overall completed had higher rail with did we we positioning seasonal chassis as use expected anticipated. operations as have less and the empty running resources congestion levels, conversion we repositioning portion in miles was to enjoyed the A intermodal well not In much than of the containers our less in impact the setup West cost volumes work third third-party

contraction our per revenue partner This solid resulted with a X%. with quarter. In transitioning year-over-year combined the ratio quarter, operating only Western a basis from of X% XX the basis in in and XX.X%, sequentially point execution year-over-year point rail order contraction order third improvement improved to volume intermodal XXX

Pacific CSX East. with the at XXXX, uniquely of the dray are Union in chassis As and with driver positioned intermodal the model the and company-owned look now company our we we containers West and partnering in

advantage growth That purchase pairs for CSX the term, Asia destination up. and being intermodal first to over to well of volumes ramp conversion. expect and in the daily schedules including With in East, the frequent very import West the the are reliable in more take we highly until model pressured in execution situated more we activities road be near back quarter to said, opportunities origin

of We customer contract renewal are early monitoring in threats. the process, the several stages we XXXX and are decision

import For between instance, they Western their Eastern the strategies are shaping ports. how and location

road through considering are differential the last West, between strategies volume offers. what is as customer as well reduction For what the Eastern those ports uniquely has favorable back take the pricing and of fluidity and that the more who XX to going improved, intermodal push in the the months, advantage opportunities as emission alternatives over intermodal

throughout solutions additional offer up sizable the available. we we battery For to looking the our year for electric dray presence the latter, customers ramp for intend as California greenest in value Southern

asset container focused We we've to 'XX of intently the investments growth count and service have intermodal on and partners the are 'XX. productivity made advantage investments rail our in in in take recovery made

As do such, we container to year. our not count anticipate adding this

the to Truckload on move segment. Let's

less certain were acquisitive demand of individual as in Our was year-over-year and as a business levels. third were limited quarter start-ups contractual growth. and combination from customer was through the count customer match Dedicated applications we prominent count flexing XX% slightly tractors resources Truck new grew down organic with

annual implemented. improved revenue week truck X% pricing as per adjustments are being sequentially Dedicated per

truckload XXXX dedicated up half costs, price tractors year maintenance appreciation XX% driver inflationary of We making in expect finished fleet. wages. with the renewals positive of pressure first in parts, equipment the and the as reflect We dedicated replacement

and is strategy long-term percentage rate continue contractual with relationship to Our dedicated the the to counts truck level due grow deeper of renewals. leads customer a which the to integration of contract to the nature higher

work proximity dedicated prefer to provides. professional the of nature the importantly, the and that customer Furthermore, predictable and drivers increasingly relationship

awards units As has on dedicated dedicated the the and implementation enter new New year. throughout in later we sales our first the Year, quarter we'll ramp begin hundred closed of several and business team

being Our driven productivity of from during was the per condition lower and experienced network of remaining front that the swath we driven third spot comparison low to The essentially moderating tractors premium quarter. per Christmas. of work to up the two-thirds the leading of that nature XX% weather large fleet, year-over-year, the third truck price of finished Revenue percentages sequentially at and primarily flat double-digit week project the week with down nation was winter year demand a due seasonal lack the disruptive across rates. the truckload to

XXXX Our organic dedicated. in focused growth on plan truckload in will be

and year. positioned specialty However, actively right opportunities pursuing and are move on this well acquisitive and dedicated in screening are truck we the opportunities also to

quarter. year brokerage support dray XX from ratio operating logistics from moderated transloading third-party quarter our third Finally, promotional dipped as basis the in points work this the support in for fourth port sequentially and only

fourth to over resiliency promotional and down project seasonal proved attribute We quarter. volumes brokerage the would things. a X% few limited order the year's just volumes order resilient, in Despite opportunities, highly last in

is our demand depend it brokerage, truckload complementary function a upon capability that First, direct to in it. not but our offering is creation

digital the the our our acquisition the and brokerage equation. on for both shippers both increase in demand buy lowering market power of while Secondly, sell XX%, capacity our continues our in side freight in and carriers investments contract our to costs connections and percentage capture and is nimbleness of

service. collaboration expect our offering we carrier processes third-party truckload and technology between our network Thirdly, Only the Power improving and our year asset-based

fits our acquisition our improved have address management imperative regular to strategic broader lens, contract offer revenue We order and on their submitted our needs. the solution trailer It management, coverage a model. route customers to execution to customer

we trailer-centric service As our evolving a to a result, truck-centric versus over time, network business more offering. see

to So with Steve on provide our it back update guidance. that, to an I'll turn XXXX

Stephen Bruffett

thanks. Mark Great,

XXXX Slide our moving you forward-looking And of on XX comments, summary find our presentation. now investor of our the can to guidance

issues a and in same freight inventories the of a XXXX At rationalize broader has year further we year working to will early for and softer ago. have we experienced diligently chains customers been forces time, the off has as As started these macro already. well quarters been the it supply of address our in months several economic the environment expect than documented, that

year. progress freight As improvement we expect steady such, in through as conditions we the

to the we the several past made our years and of Importantly, expect over resiliency performance given demonstrate progress have multimodal with we composition earnings the our platform.

these time platform, - and updates. we for review have segments, our of I that any targets the year provide to target this when is targets touch margin the three ranges that given Speaking we long-term the wanted of on

the XX% XX% continues segment, For to at segment that remains and that Truckload XX%. to Intermodal for XX% the range at range

business, raise of to the it sense past rapidly parameters growing Power business. of several this makes our with coupled growing offering by the with been will our For target the the are XXX to X% long-term has segment, ranges and that X% for range This at raising points, X% to X%. basis we to brokerage margin Logistics momentum for the piece be but our years rapidly Only,

ranges IR You margin can deck. XX through find these of target the Slides on XX

now XXXX. none. for we Moving currently equipment of million currently be we while $X.XX in realized adjusted of to XXXX gains, assumes our gains our Also, $X.XX XXXX, that net in included of these EPS the vicinity equity XXXX $XX guidance to expect

we into them as year. equity or our incorporate through incur progress we'll the losses, guidance As gains we

our tax year approximately to it XXXX. we the expect Regarding be for full of rate, effective XX.X%

us to brings $X.XX of guidance our that to And XXXX range $X.XX. EPS adjusted for

couple Our in Intermodal tractor guidance for million of enhances of Only also constraints. trailed OEM our plan in a for and years $XXX growth production capital past plan million is CapEx targets fleet investments age and that in our range meaningful to The Power the $XXX has our trailing due includes to equipment our net Dedicated, of offerings. of support

Continuing we've time. grants is announced allocation overall equity to complementary offset Then to of flows, framework. a theme serve share purpose repurchase component effect of our the over of as million. And capital repurchase this of authorization dilutive of cash primary the will program $XXX program employees the with the a

XX.X% $X.XX a our increase recently quarter five That's And in to finally, from per $X.XX quarterly also an announced we increase from dividend an years XX% IPO our in the XXXX. increase per quarter, ago.

forefront at in So ahead. the our financial capital and capital allocation, priorities year on shareholder the of returns remain return

up for we'll your open questions. So now the call

Operator

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

Ravi Shanker

Great, you. everyone. morning Good thank

sounds targets is logistics last given couple commentary guys that It new in Power than of years? the the margin you in Only, on focusing growth that all a the like in rather and of on the network. which of going business you're tractor more a understandable are with trailer-centric So kind centric

the rest to the of compared of competitive the third, Second, pandemic not it margin questions is is a it like by And was one few So supply compared what's clear chain maybe is to the tightness? profile in for the area does growth is, industry not of business - there, and environment of logistics? downturn, rest something a what that that, that brokerage? there kind the structural driven that

Mark Rourke

This Great, a long quarter enough opening model. at been is was thank much despite understand we game my fourth seasonality different from what Only believe is in Ravi. fourth XXXX to you, being the We've of Mark. Power - the comments XXXX resilient of a of really It very standpoint. than the quarter

inclusive volumes X%. Power only brokerage contracted Our of Only,

that's model. that think good durability of business I a So that indication the

see as we it very alongside owner our of network Increasingly, our part a operator model truckload and excellent instrumental offering company-driver our group. a overall within

into to then invest perspective, is is to point integrate offer processes broader decision a a our What that. for that commitments that to of the And Only seamless customer. do use trying so from technology Power very we're in a and contractual continue range and customer we ultimately

only more network now side, benefit certainly, in conjunction now strong. for the of upmarket Only both and over and our would Power in moderating there expect be asset very, and very effective on those enthusiasm a investments. with our remains our more to market seen And commitment and time we So, the us we've offerings in

Ravi Shanker

or guide as 'XX, maybe the as business a pretty is maybe of the especially of you of feel on How of had about that's initiative a back the shifts business, now UP stable the a there's like what the in bit - shaping the intermodal margins of we And feel through do given good kind of do looks and nicely on fourth marketplace, price going Great. think guys in and be - you like well. quarter up do some kind it that kind to like business kind pretty competitive there forth little move shifts? follow-up of you the

Mark Rourke

question. good Ravi, Yes,

were of it As in or or we whether throughout another, about the that operationally. be one transition you commercially would a be XXXX whether state form think year, in

the well view who And so, to great type went throughout transition execute, get certainly, the we're year invested quite the customer that team Pacific. to from Schneider a of a and Union ability that how result. heavily our that's pleased to to on credit And and was

we And context, you range, reiterated came of kind we the year put XX% our our at so, whole which if earlier in this within morning about call to on XX% XX%.

distraction, into we're that across And XXXX. forward, want we much some so as if of head clear and in you board as pleased will, Obviously, have move all the the some we to we we're import operating air we see activity return.

are some We customers of other think very a road value pool rich of want to the the particularly see that we around to get what is over going and conversion. emissions believe the we

forward. that are XXXX, we'll those going be that on we'll positioned that well things stated we focused so, our in feel And we be margin range the within and

Ravi Shanker

Very helpful. Thank you.

Operator

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

Ken Hoexter

from Hoexter It's That's BofA. one. a Ken new

given the the transition out Just per load, conceptually maybe bit revenue up market talk following softer little Intermodal, West. on a can can about we and

that fuel maybe network. do pricing new that we and more competing moving and [Harvey as now how going you same about the off, margin well? environment on You're the UP that -- more comes ultimately, they're that's pricing Does competition Knight] guess see to given I just impact, or environment on question as talk with

Jim Filter

our We've has is providing to that to service to road Intermodal for grow the and the when the opportunity overall to over over is continue to focus this lost able that's few share now, Yes, Really, and Filter. that yes, is to competition from intermodal be think about I company over the last largest value. by able seen far by grow the right Ken, there Jim services, offering. road be the years

to on certainly partners working that an value on more months rail we've last some And improvement there the seen competitive truck that's ability so is of based network. service with that Western provide especially here over with, and the couple the we're in

be to value. great have a we So, we to think sustain that opportunity able

Ken Hoexter

Can the the maybe of that or network? with don't to helps know, I efficiency understand you box talk something turns perhaps, shift in new terms us metrics

Jim Filter

we over a of couple opportunity the improve years, just necessarily demand. overall not of matter - turns, box Yes, obviously, have this huge so There's expected performance, been of a last our to from opportunity box turns. yes, level below we've turns an on but box

to to X.X So back operating there's an we're to up opportunity the get turns X.X that at previously.

the our both that over And improved the ramps networks has ability months. in efficiently and as rail are of well with our cycle as drivers, operating last way operating XX dramatically they're over the the to

Ken Hoexter

Great, thanks Jim.

Jim Filter

Welcome.

Operator

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

Jon Chappell

environment mentioned, how was Mark well. holding Dedicated Thank the you pretty morning. pricing you, good in

you plan based kind What's year this up be season. early costs? think inflationary bid to of customers' I on fully some absorb elevated said of even you to these willingness

and in able you given service cover trying just business, are Dedicated, your cost kind hold normally? growth plus And get to pricing inflation to you that your to are inflation in of the on kind of or

Mark Rourke

Jon, have want benefits replacement, good business, to experience maintenance irregular the being in demand is less of one taking costs, network a side, predictability just not hi, said, our the have cost immune One of there. parts, place of in than we question, the it's have because and benefits of cetera. where That from a participate much their and we better in route inflationary the overall et structure, that's we standpoint equipment industry drivers pressures to - wages, in both the from more that sometimes that steady variability Dedicated

achieve renewals in our integrated. working seen We're confidence, we the there. great deeply recognize and year have new we here. to - upon based second and the we're confidence as we that half we'll we're our have enter to mechanisms with able to And customers confident inflationary the so, We and pressures, structured value, provide we how there be that have of year in in those

probably our we think a were renewals, more I half And second those of taken that's half as into renewals fairly effectively. first had account

why think, XXXX. overall, that's year still we still full in price have for appreciation So we'll Dedicated some

Jon Chappell

place, just involved And a Dedicated in I'm against so, probably see don't sequentially. long great. have moved so Okay to the some there - just to on you sequential but up seasonality count. to But side That's kind truck in numbers, run a speak. then back Again, truck network pruning is the of decrease equipment. some know if a of I too. small the guessing go follow-up way

about mean, think growth there's this? we this As fleet parts the to guess year, I I two

is One, expecting in it kind continue share bit, gain in there? primarily of eased the and fleet that as still to as kind of you you're Dedicated a segment what's the total the growth your OEMs overall 'XX? And to two,

Mark Rourke

Jon, new the is the first late the in strategically, truck we'll our earlier, the as of Dedicated. focus growth of several business And sold Yes have and in side quarter second business here to implement start quarter. hundred mentioned units that - we on through

focus. And so that be our growth will

as we we on stable that to offering value our sure network with the side. additional best to want and want can our make asset stay and provide integrating by mentioned, Only side the network we we've And is Power coverage and

Power count side the focused will network in on in And so on be report truck our the our around business. growth logistics side whilst network asset Only than more

Jon Chappell

Got it, thanks Mark.

Operator

Please with from proceed Wolfe Group question with next Research. question. Our your Scott is

Scott Group

morning good Hi guys. thanks,

Mark Rourke

Scott. Good morning,

Scott Group

margin for segments just we any on the color curious, the 'XX I any any Steve, businesses? targets. long-term 'XX? looks got differently the I'm for in margins of the know

Stephen Bruffett

one end other the given that do be having might complementary be of in within the middle part vary toward Yes, lower over we to business - any of where might provide it it services insight and ranges we term the the of can our I fall portfolio some end, have or on longer benefit upper might the ranges. it's guess we might in the how the those one be year, But view year-by-year and providing wherever attempt is up. those

all contributes of the time. it the But profitability over to course enterprise

will I basis, the the we year full we a feel not early a it's to here year. on a range and that probably in hard of on path number, with margins a down XXXX that very frequent go have but it's down as comfortable basis, specific outlined nail look So at

Scott Group

you QX, like where we just not? Any intermodal most, Any up, one of beginning the thoughts Maybe improved QX most to thinking think the color? we about the need intermodal or that's Okay. the on that's so follow [XX] in year one the for with. so one XX help should around those do maybe moving be in the margins,

Mark Rourke

Yes, sure Scott.

As a our second would execute effectively rail fourth a doing that. basis. we the at that look work year in and that third quarter and I'd that transition working by almost we XXXX, half together, and were year an and lot the you we to of full Obviously, look we had partners with maybe on at right? look be the XX%, the have that on of quarter average putting too, the

enter little different think range and to the and that feel more we obviously, positioning. I were anticipated. a that based there through as and year a stretch of for is, appropriate we XX% full volume, same efficient year relative XXXX upon XX% here But we is quarter less or full were So very when were fourth with think, in XX% And in down bit than the overall, in. preparing XXXX, staging puts transition. we that kind I to coming we assess to the look takes And

Stephen Bruffett

earnings dollars And providing a and I'd through add lens to that look growing a to steady go here. our of that organization we story with growth Scott,

is what volume going in as so, there. and and and we're by adjust between we dials, And - those there's we've offering that margin can vary by on could it got segment a a service conscious that bit of balance

of anticipate high opportunities whatever, aren't trying on range earnings type be of we in us. or ahead emphasize But the depending profitable necessarily and margin the is to to dollars I growth of so, trying that we continue. I'm see point make at some what of And end to always the

Scott Group

Okay, you thank guys.

Operator

your Please Subin from question. question next Stifel. is with with Our proceed Bert

Bert Subin

Hi, and questions. for you thank good morning, the

Mark Rourke

Bert. morning, Good

Bert Subin

you, for I guess probably is this Mark.

to able does above the XXXX. maybe guys weren't You mentioned during volume not about where clear segment XXXX, And here? you $XXX and more go which XQ, I'm in the really million stay talking that headwinds, mark but logistics from rate

by about talked XXXX. doubling intermodal You in size

you you do more that setup it the more function if the footprint a Power side? think Do on you And do, becomes an a digital see similar is the for of Logistics really or segment? increased Only in side

Mark Rourke

Yes, Bert.

As we Intermodal it relates the logistics the to strategic really as place our of Dedicated Logistics, and side business, growth drivers.

On the logistics is so, a our but side, collaboration more we offering, the Only strategic and to business. commercial have less the capital side bit of Power complementary our intensive approach with why getting with intensive asset capital that a

real And assets Power and think one perfect of collaborate tied a also is to and third-parties. But have business Only brokerage of your we of example is the not own ability heavily be I that's course assets between ability benefits our that they a their upon invested for freight chart assets. collaborating, in accountable not own to within only own their so and can success but Logistics, the demand dependent our generate to while

shipper the And freight end investments grow shipper that count aggregate and economically footprint that do tail, to nearly around at small allows without the people and on growing feasible carrier particularly one our for and the carrier, capacity and business same scale rate. long ways that small us demand our freight can the in in business for we've aggregate that we digital and power other, power made digital

and upon the benefit And those freight Power power efficiency so, on seeing to our invest by and shipper in factor elements, great we power execution. we're carrier for Only freight for continue coming will with

And and continue degree achieve necessary ability value, out go that. the add we to so being for invest that our to to It's to really, see we'll don't that's and growth. limited

so of bullish, perhaps slightly we I others with through that and think And brokerage we're have cycles because we over offers different more alignment advantages resilient very models. think asset-based this that

Bert Subin

Clearly, it's two there's there, it's just side had you you of revenue if just think just operating curious, about increased on just answer a - maybe the clarify expanding story. you net I the about growth or to revenue go income. And a in based there. of talked automation in think you hand-in-hand to more play? think like when combination a margin than efficiency be I'm there. more Do you think market your the which the market you if that and know more

Mark Rourke

the question. earnings we technology have digital. no more opportunity and We There's being nature Yes, margin focused with of dollar probably think on that than logistics because are here asset-light improve more to of growth efficiencies more we the the has. margin

And we're want so, to sure we growing and growing make earnings.

is that logistics of so group. the really the And focus

that the made Only. going a if bring like we've is change form bear shape recognize range the some in we're way, trailer Power And to or to to assets in in

that X We a X making return investment on from good range expansion X. have to assets X to additional on that to to get is we're the and which what's behind our

least the growth, on got really we're line seen at return - of and from impressive. there. this getting is the business our last the view, top investments and margin on really a that good in really we've leaning results we're making a yes, years improvement And over three what we've So group track

Bert Subin

for half just you numbers ultimately, into just And clearly big you an and Can just or you. improvement second do you the is, range it. look on give a reason initial follow-up quick I to there's more year detail? some you curious then provided if uncertain that And us really, it you ask that made see some sort how how the in $XXX the is million. of back at $XXX of step-up a assume to I'm Got I'm 'XX guidance through you trough quarter backdrop. the the developed curious incremental more we the were assumptions your detail able Thank first just that just guidance? million

Stephen Bruffett

three that Bert? questions, Was

Bert Subin

There's there. a clarification

Stephen Bruffett

is one. this take Steve. okay, I'll that crack Ah at And a

it - kind and here the strongly a like I way the don't of first it's narrative half in second in a soften year sitting remain this year of second that of know the half when is we ago, first year don't about half probably necessarily as then We it felt half were pretty would we and felt bit we half, sit think I first quite XXXX. if year, - at here a point played half, robust a out that in we exactly narrative. the second

articulated prepared earlier, as But a like the I I think steady we of year. comments improvement go through it's the more in

- the think do of quarter year. traction and we I be move So point we throughout steadily see first could fourth then gaining some as XXXX softest the

stronger fit know definition, will I uniquely second by quite within play a half they the but to be out that. the don't like could, that So months, than first,

think before I second some we improvement see half. the

Bert Subin

Mark. Steve, Thanks thanks

Stephen Bruffett

You bet.

Operator

question proceed Atkins next Please your with Jack Our question. with from Stephens. is

Jack Atkins

Okay for great. and taking my Good morning thanks questions.

Mark Rourke

Jack. morning, Good

Jack Atkins

announced So guess you of for at offsetting intermodal stock you. of looking larger your like the a dual capital million allocation, aggressively pretty the couple about your principally truckload My substantial sort discount more understanding of to some a turn Mark, you maybe to it's share back think dilution. $XXX buying because a challenges class but buyback, of guys structure? related discount stock question peers it's just is, some there's I I'm to mean I peers. trading at When

moving I some sense things you like And guess why feel got make considering think does the share shareholders class forward, dual doing B as about justice? is here? Class your I the So it's you Do Board guess, changes? to

Mark Rourke

or that talk Well, Jack, there liberty I'm probably lot there's about. to at not a discuss

it bring to relates to any really that. have or as predict color don't I changes to So even

comments as intensities continue multimodal business. think the Intermodal are I platform. truck, what to So based going focus to our this to opening we're we Logistics discount, on different capital on that has relates upon your it focused and on

keep opportunities but invest also allocation capital active help acquisitive we looking hitting upon, and be for growth priorities strategic ourselves and drivers keep Intermodal And strategic in from to drivers ways that that for our advance those very and Dedicated, those of Logistics. looking three prepare organically can growth

And the that we're things are focused so, on. those

with We like would buyback. our share

just grants. fixed that not to get allocation count predictable a add and as is this, know amount share a of to more capital approach You what there it with we'd it's to we our can so like incentive to shares from be

three next the allocation $XXX million think And achieve years over strategy. of capital us our will that so, to that allow we authority portion

and and from both focus advance potentially we primary Dedicated this standpoint. success the got past around with is it effectiveness real growth a that a view opportunities year MLS, can Dedicated find raging did the us our from help we acquisitive a our where investment organic But like

so, as we at to look like would those options And well.

Jack Atkins

No, really of that across my I guess if it. the a point is outstanding getting the are business. makes sense. just I job don't doing know And you lot credit is just guys stock for an

thoughts touched maybe the of on guess that question, my pools I love on your kind to for increasing second lot? it I trailer sort providing. get of are We've value would strategic So a

is at through or than this kind navigate rate bid season, year that's curious a ago, such But pools large folks as guys anticipated all? better would back just customers, to negotiations, you have so if maybe if go trailer season you are pool trailer here deploy and to bid in having through what a that you ability degree, helping XXXX, going the impacting of to how

Jim Filter

integrate here this also Jack, and our being real don't because asset just flexibility one some driver or for pool to large customers we're that have you seamless company the using other. gives opportunity base Jim. our to and us this both we're with if customers Yes third-party being where able using limited trailer is a to The is the

additional our for value value customers for that's and providing so additional enterprise. our And

Jack Atkins

thank Okay, you.

Mark Rourke

a and say so increased for as take complement obviously share. broader customer we other for share get that way where we looking easy allocation the for each And do season, to us obviously, say that's yes where those to yes to in the Jack, and and to could us easy we're a may or into add

flexibility to really integration the that collaboration networks and the effective those back with that. the on forth and in us trailing allows doing asset And share so pleased and be

Jack Atkins

Thanks again for time. the

Operator

Wetherbee is proceed Our Chris next Citi. from your question. with question Please with

Chris Wetherbee

Hi, morning guys. good thanks

Mark Rourke

morning. Good

Chris Wetherbee

forecast, again, margin you're but using? I wanted a obviously, the long-term the a major I if the Obviously, to sort the bit to differently. shift, you're that ask touch could. changing providers Maybe on there's carriers, not question intermodal of updating little

have curious, do how play that be to any there's new margins pressure arrangement you that railroad feel uptick you West the aspects out, you increased get going could or particularly of So that there's influence obviously, XXXX of like truckload out with on dynamic kind pricing the in any when might rates?

Jim Filter

market what there's, railroads Yes, believe we're how with the competitors that that in competing into truck how we look we are and deals. operating, about this is on are But with or adjustments don't with position long-term going we to details structure put we're our competitive, get all talking it and some rail. we of about us if when matter They're work in a the the at very doesn't deals that work. competitive our necessarily just those

the We the using the to we fleet own drivers company be bringing only The UP. largest using has our are own our able and of that on large that chassis. chassis one bring productive. We'll dray our be company all a chassis fleet more some are differentiation fact

the this partnership feel as we directions UP options and and tighter new that the even compete customers. our grow expand seamless just steel we all wheels the for like in as we'll as expect we this CSX So create rail to network, well - integration and on well more that be between able having more

Chris Wetherbee

something of for is kind XXXX Okay on breather some there's sense transition those When else opportunities takes could curious that's or in curious and M&A of about or a this picture maybe see your a think the bit what as be? a then, landscape this you've little there. sort to do? time? maybe a be to a want bit period opportunities that. anything of where incremental of question. maybe I going bigger we helpful. if Obviously, Just of that is think success Mark, Kind had appreciate you you you And going

Mark Rourke

feel get our want both anything, But prospectively. right think proactively to opportunities, those XXXX. at done that we're in we're to don't We I is where have Chris look it year can and be certainly course, for active we at Of announce to we continue positioned mindset and be, obviously, that's point. this one that the to calendar can

confidence So that approach we with that the right XX the on months our can that continue two to there. advance those suggesting path strategic had now initiatives most that recent its and I the in the last, us we're guess, gives success taken we've we've and

that I anything have yes, something be for and steady love just yet. that's to periodic. don't would just so I to And announce

Chris Wetherbee

a vertical portfolio in from fit you the it the where needs where anything you in portfolio? standpoint think have might Just

Mark Rourke

As it relates to something we the don't have today is or expanding question? services,

Chris Wetherbee

more the a would maybe there business that others? of is you part than focused on Yes, be

Mark Rourke

Logistics robust for making our there it, We really own something, such for we're ability. really Yes. the special Only footprint, It focus. we special. to opportunities us. a we that eliminate our think that segment have in there the Power perhaps and would think investments be digital be be organic to but have primary the I for We Well, is I wouldn't think, growth growth have offering to

and consider Intermodal poses options a a less little to bit more few there. concentration

a that. is presently So or have for large that attractive that specialty you leaves the would within one arena. at the customers, And that, times the has be truck probably truck in overlap or dedicated target then most, yourself don't most. probably can't benefit find don't the serve of attention us markets into that's And of that that's new our which you additional expanding

Intermodal target-rich logistics out rule specialty area. the remote wouldn't Dedicated and more I really in a and perhaps much put environment So on truck

Chris Wetherbee

appreciate. Okay that I Thank helpful, you. really

Operator

question Suisse. with with from proceed next Please your question. Rosa comes Our Credit Ari

Ariel Rosa

growth of get stay Thanks. intermodal on Great, double the good that to you could long-term morning some you of target? the that think Kind of details whether of it's would industry. or for overall taking what's the progression wanted the proceed that doubling I of that, into and in how terms share thanks for to to XXXX. Maybe could piece. on by the color go kind Maybe Intermodal business you to the talk target about that. particularly

Jim Filter

Yes, thank you.

factors. of based really on it's those So both

do First, opportunity than road conversion. set seen XX% clearly emissions. feeling closer fastest by intermodal converting carbon closer that over the the more the get to remove the has years. Scope are as by this to and the believe XXXX, by we their The customers last to X over pressure to way over to But XXXX. going to reduce is that country towards of we've more the that intermodal. I And there's, couple be expect And emissions road swing an largest as objective is

And them good going darn certainly, be to based. that. intermodal position we then whether competitors, about capacity to non-asset other or with feel relative to help our And asset-based do we're our the really available they're

slip of So, back the competitors. feel being we that we converting one-by-one that that over don't it's from road a see our would

Ariel Rosa

particularly just my for to truckload on Got about it for the I ask side. then question, gains, second And efficiency okay helpful. the very wanted potential

extent in appreciated? that, got some for think you you of deadhead not for you miles, into would that really tight, in process inefficiencies saw do many on I Maybe touch extent guys, be higher chains the can what been we whether kind reverse think during what COVID, supply tractor it when or already to obviously, it that just but XXXX carriers, creep to has of could reversing? kind higher was just counts, unseated of

Mark Rourke

to people how factor turning. normal." productivity seeing the more "return something and and supply need intermodal, that. pre-pandemic the productivity back We're we less our are friction We yet Jim in take asset think we we to But efficiency seeing quickly Yes, and where chain, of are improvement is boxes not and item we are to and earlier. largest self-help as levels mentioned improvement advantage

some constraints our expect OEM providers. While with we still allocation

improving some associated slightly, a we tractor, light it's maintenance believe container, we are - want equipment, of our we excuse a higher lower age whether have me, cost Those mile, it's But whether get to some at getting catch-up and it's in whether efficient per some our more to the with relative trailer, the our progress fleet. and reversal experienced start would expect all the investments. chain the here end of tunnel making crews include see to rail to and erosion of nice of we the of partners to the because that we've the we've friction had some that are issues is supply

our more in win advancements job that more all a technology can made ourselves, some and in dray we has efficient us rail terrific we make efficient make the done UP of The terminals. that to fleet on environment. And of with and if out make they've them

aligned. very are closely alignments our So

has with and impressed commitment benefits and the here. our that early pleased seeing very, the really the very we're really, am that I in And of made, UP relationship

the of some as productivity inflationary focusing address and organization our this remedy. we're entire how that's So best we do impact asset on

Ariel Rosa

that terms quantify looked what two magnitude us you in extent to Is improve if have what of they can some might of like point give there the in those or a efficiency or data benefit maybe metrics any way 'XX? to of and could like

Mark Rourke

- We certainly brokerage we there miles for assets we We and there's look build per revenue at differences in at per and look day. host Yes, of believe contribution business. our look day. a tractor net those those for - order across per

those driver of series base a benefits our the community impact include can professional have focus metrics that associate really and our enterprise themselves. metrics include we to who that So, how entire to

to are those, have our everything in And so, business. the embedded and great distributed operational that do those to we and we visibility approach in

Ariel Rosa

Got for it, time. thanks wonderful, okay the

Operator

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

Tom Wadewitz

Yes good morning.

weak in just like you the the term, seem down. being Intermodal. given ask in thoughts had know competitive your near Mark broadly line or on does - a Jim, So about of the backdrop those to that It dynamic imports few you've wanted lines. kind along I along the I questions is

I grow. the other players grow, want big think competitors you to to want that

So will - think do - how that of play it? the you kind big will intermodals names

for volumes I preserving weaker focus accept partners does of period I - price. of of the players to down? all everybody risk ability a with you push a there'll flexibility the a is on behavior you on price and there maybe it's and Or that of think be kind competitive mean matter? do you just think and have guess big more couple you rail volume, focuses Do kind

Jim Filter

the West here with Yes, the the dynamic quarter into of imports in extreme decline terms competitive already Well, demand Coast. we and Tom. fourth in felt certainly

sequentially order, the type weakening X.X% I up situation. And we're of up already demand. you at that despite per look year-over-year, you've our when So that believe revenue experiencing seen

- we're moving. a driver over So where I move different little you that where the need to have than and seeing you single everybody get, don't to is driver going road a believe a that container, bit situation needing every

just industry, marketplace appears that the You take out the it capacity some have the of ability and of there's been and by to that. across stacking containers,

Mark Rourke

don't as building you the really our focused this with approach count. the conjunction on done anticipate Tom, good 'XX our a So in productivity alternative at here, look juncture I rail of 'XX job being over in on asset XXXX of we we're our adding and container looking the partners We've and throughput at focus road. yields and and a as to to think, containers, good really

matters serve improve all it well fluidity. why that's allows have that and a and so truck-like And that that it's connection the of particularly experience, the factor, all they because efficiency we very the us and that important put the the between UP CSX made to to investments

so And that's focused what count we're on, we adding this container year. and won't be

Tom Wadewitz

that's okay helpful. So

intermodal being the think think contracts, discipline. you rates that pretty than not a the you're you at Do truck? But contract have less to go look - that in season as season, because bid up even contracts that, that of right? good coming don't XQ in show you through lot rate you think even pressure expect wouldn't in, contract if I the and have you'll maybe down you amount a results So you new

headwind or of you. more should deal? guess off? along. that that, - that then element storage we and that Is the What it's that is in really rolling Thank real about be it big one not And revenues how - just I to a a mindful something I'll Intermodal pass assessorial revenues

Jim Filter

think make assets on, than to additional that equipment. revenue there stack have don't store rather to in you'd your cost rather storage big something you a or the generating out is money that that's earnings of not deal that I pulled on Yes, because

doesn't have on it's there whether earnings. impact or So not necessarily an

Mark Rourke

as fluidity some are and of looking So forward. opening for they the locations this and that's they my that thinking import in through about returned, I here, to the allocation the how and East improved between the about thinking as they Tom, make as season How are West, going that get about and threads. as we're there and concerns decisions has we now East mentioned comments, customer been several the been year there's shift this

and piece between emission favor road see that impacts obviously, the trend proposition different at the then different powerful that between to dynamic important. of differential to the value where then a very and there's, intermodal intermodal along have is the locations pricing Obviously, of spectrum between and we customers fuel those the decisions. over reduction the in that's And include how

We that are combinations. where we that certainly that don't road of value or tried kind those intermodal. we is - show a really derived beauty if it's lot the through the care into have over that customer. can we there's to be So And goes

on options both that. have We of

best trying that what So the we're accomplish. front meets they're customer to agnostic. We're really put the to trying to of solution

Tom Wadewitz

Okay great, thank you.

Operator

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

Brian Ossenbeck

morning, and thanks good time. the Hi, for

Mark Rourke

Good morning, Brian.

Brian Ossenbeck

obviously about you've coming So to focal the you on savings are taking it the share spread back down. Mark, point have spreads maybe that's last from highway several - visibility industry, a part, what's big times today. But probably the the of and talked

the some to mentioned in are factors going of weaker the that near affect probably demands You term? that, but

headway transition as it you too to have make So that if level in, you the and a visibility connection plan can you season? sort is coming back? do early bid think how is improves you year What's I for of the back this much coming in, guess, with confidence that little And service of to have done?

Mark Rourke

to are just all for intermodal et that in little about way. aggressive bit well, they I would an a talked but our it is option the cost about And commissions, allocation you, getting into their more reasons a put enthused mix early, Brian, can tell back we customers cetera.

to working all on that do a I well. focused a confidence know our they are And as so, that more intently can partners that And with rail we've end. way product been service in in the good them give

all sit are days have the and that But around constant how as really but dialogue we year couple fit. So guess, in early always we're we've services accomplish optimistic we're of And we dialogue first to - last here February. throughout the the really I it's and trying customers in, what process. of that in had

time a we get April, So that through we'll feel the - out May so but better as for frame. maybe... have Jim,

Jim Filter

Yes But these this the does market that around at and rates point, signs it appear there. levels. spot and really leaving there's we found is some capacity movement have see do at a floor, that

demand if a quarter is, in would at question that's a and the recess the that of shop year, be larger it the of back end would returns so And that quarter second probably less fourth the occurs a in the - be if shock.

And they're so to dynamic talking about as to, point we're does customers, the at that's that demand what start thinking is return?

some dramatic through years. of gone shifts the They've have? that does impact last What couple over

And today their opportunity versus risk costs year. organization the reduce so in while the to to exposing later balancing

the that playing. so And dynamic that's they're

Brian Ossenbeck

All you. right thank

a leaving really seeing we of sign the in on that market, some the to coming the tight, call with of like just I saw of So things operators first it there? first I go guess, their was - I'm some follow-up know you getting owner people I or are leaving own when assuming back what front leaving maybe back. still specifically in the operators back sorry, coming they're them 'XX, that are capacity

excess are it of you So points of that cycle? is or you are just have continued kind might over monitoring it out the viewing looking that some last of else purge grind been of And built that What at the in of the up capacity? data one is is terms that? a

Jim Filter

different a get what's indicate on understand that a of we're our exiting would of is going across Maybe a of marketplace. out to little Grind data I factors Grind, that there to organization using bit But a variety more there's points the with capacity. more

Mark Rourke

defaults coming also like on our quite number that's back that the units pre-pandemic looks pandemic Yes, versus the being checks prior. through we're monitoring muted levels, to units things which leasing renewals was era, insurance of of channel that of through renewed and

And of these public, think, lagged. number government So the a signals. there's employment I be the may again, are dip stats a

that Brian, some more so And I front on suggest accelerated think, that on And would signals. channel what's we're indices. for time carrier of get to of looking those other some those an seeing we're small checks, those and real trying

Brian Ossenbeck

Mark you Okay, Jim appreciate very it. much, thank and

Jim Filter

Welcome.

Operator

session. to for reached the I We comments. call the Rourke closing question-and-answer would have of back end the to like Mark turn

Mark Rourke

and Great, preach day. attention time I and everyone's

investor Let you an to of to you Page close XX opportunity have updated me referring presentation. just by go if our

deployment we of our And shareholder to drivers key in and enhance disciplined this be have achieve to is returns and that, growth strategy to of outlined strategic enterprise. Dedicated, Our our Intermodal grow capital - Logistics.

to had obviously, today. about we And chance that a talk

growth first, environment that advance enterprise While our are operational priorities, cost-saving we opportunities evaluate pursuing continuing to expand on this organic for priority is our and opportunities our our and efficiencies right the those margins. we're whole maximize in to actively acquisitive

to and visibility we're continued that committed of industry, to all in logistics. share and we transportation and implementation digital this and And chain accuracy the we that our we the our want dramatically our in furthermore, design value with across and of stakeholders speed improve both the transformation the have information

offer and to intend goals and footprint, lean provide our reduce we finally, value customers environmental options, we and a they services social and key trusted their that. be as partner tools and in can in carbon to doing and And sustainability our advance

to we'll you next everybody you, talk So and again, quarter. thank today,

Operator

conference. This concludes today's

You and for at may your time, your disconnect you this lines participation. we thank

Schneider National (SNDR) 2 Feb 232022 Q4 Earnings call transcript