Earnings call transcript Q1 2023

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Operator

Greetings, and welcome to Schneider National Inc First Quarter 2023 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.

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

Steve Bindas

good and operator, you, morning, everyone. Thank

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

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

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

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

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

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

Stephen Bruffett

each up our and of comment see your across remainder to start I'll XXXX. results, return with then begin the full of the I'll and year the questions. for XXXX of on you. insights Steve, Mark then us year we what and quarter call of will our the guidance, recap you, ahead first welcome provide we'll open and Thank to to on financial his the

the will we to many possible endeavor as you in time. usual, to as allotted As of get

guidance. full Our quarter our for specific and our our Slides can presentation on first to is your results XX website. found investor through available year and be reference XX are refreshed

in quarter purchase down million that $XXX million the year-over-year. consolidated down proportion. that $X.XX costs to first it's our billion. segment, transportation XX% cost purchase their excluding important $XXX in note Our decreased revenues, and fuel, was reason were primary Logistics or that's And our were $XXX decline million transportation the of to

Regarding had our quarterly earnings, by of absence quarter, conditions our of month-end tough surges first characterized that and we history pressures. was adjusted quarter which comparison operating were last freight profitable challenging pricing year million. with earnings in the $XXX a year-over-year year's first of obviously with as increasing volumes, most the company Contrast this soft market

our Inherent performance, first and of the of our Given the invested of over that million best solid $XXX portfolio context, have quarter in first second our strategically quarter. of some the earnings are couple in years. XXXX past we results operating pursued benefits restructuring and represented

Adjusted diluted for quarter share first quarter of $X.XX XXXX. the $X.XX earnings the was per first in compared to

included a As income noted items non-GAAP in strategic year's first note comparisons. glance, first odd looking statement, at can few release, our included year-over-year that, to line sizable equity please that related quarter gain results the at a earnings When of $X.XX our looking investments. last our items create our

expenses million flow were through operating line which item other of supplies line. other and the gain, the most and reduced million, first property the net is $XX items The settlements which $XX expenses the totaling general legal

years. equipment than being to much CapEx, year have deliveries Regarding this for on the past closer flows couple been and in of our have schedule been particular, cash they net

year. CapEx first quarter is in and expect line expectations, our net of throughout with we rest the our such, that continue the As to

established We activity to second repurchase repurchase earlier program the begin this share expect announced we have now our in year. addition, the In authorization quarter. million and $XXX

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

Mark Rourke

for Schneider you thank and call everyone, morning, today. good and joining Steve, the you, Thank Great.

of by starts specific It approach strategic with the me maintaining and a logistics. Let allocation strategic emphasis our start disciplined around organization. to framework for an as with drivers dedicated, intermodal capital a priorities growth targeted of offering our

the streams term, market believe stable invested more priorities long share strategic return enable growth, enhance and resilient and these gains, capital. we Over on earnings

prefer our efforts it involve associate our information it. investment provides in digital to people, relevant That customer and experience timely and Secondly, is carrier nature, experience. additional ways deliver trade process consume and priorities our optimal and increasingly partners the technology and to and associates need in

bring first of with And is of perhaps the our into is let's consistent assessment at expected. differently occurring close offer year. developed our a year, high-level different transpiring beliefs let it coming pace what than Now expectations quarter the what a the than in and or to me then

progressing front. First, as to the expected

growth Dedicated segment. with first count our quarter continue year-over-year in closures and units Starting Dedicated. third business The XXX of truck quarter in grew Truckload in are number the Dedicated prioritize for quarter. contract second late encouraging we very as to new implementations

at high remains pipeline business new historically Our levels.

Dedicated year fact, is of customers the In up ago. first to a XX% presented over solutions the quarter first in quarter from

position the with growth. several more year hundred in units to are We tractor close of organic

actively Additionally, opportunities organic our that growth we potential complement Dedicated strategy. enterprise overall initiatives acquisitive are growth and pursuing

for locations, rail offering experiencing and we of has unloading fluidity Next, positioning we recovery. well focusing in delays new and the the are dwell customer associated within rail are as strategic and as the the and on terminals. our friction Intermodal, volume loading time at Overall, with as container partnerships less rail improved existing broader

the to network fluidity are transition the improved With and experiencing Pacific, we reliability. service Union

grow asset productivity container As revenues recovers, current demand base. the and contribution freight earnings gain asset we and to expect additional the with quickly

that do and newly were up less overlap conversion and the is to our look recently we ways also to States. that the not competitive. intermodal asset-based the Mexico the model garner We relatively by enables. this the a opportunity additional portion an freight believe corridors of CPKC leveraging competencies UP, with growth total our between This to and partnership additional for pursue previously the announced with small volume continue United agreement offers core attractive with UP, We opens where formed

for a growth. by catalyst We will believe this intermodal new agreement be itself

strength of model, ownership business in In to operating this service doing Mexico over further been offering. addition to agreement, City, our our team XX new substance asset our for years, where experienced we've the provide

to is that maintained item This offering market the and to correction. growth offering our Logistics a freight power-only a Sequentially, am order our next in and customers the during of fourth that condition. relative The the enabled power-only demand the capacity daily a maintaining incremental power-only additional ability quarter segment. from well their volumes I enable challenging the during first in of resiliency enterprise with service pleased the quarter, while performed soft will quarter XX% volume. service our is

in key equipment delivery cost front making we the on and of and office as driver Finally, areas, reduce tractor to such expense. expenses. costs schedule, cost experience inflationary Furthermore, further progress are new expect efficiencies, the and parts operating input equipment driver pressures and recruiting is planned enhance back arresting and we onboarding investments occurring these

a we let's areas levels expected. anticipated. transition our the Industry have a pace expectations than pace but to correcting, at Now that capacity or at slower different developed are than perhaps than differently

believe will a new meaningful quarters. pre-pandemic small stress couple driver are the we that running next materialize signs in of driver hiring experienced business ways the availability ahead candidates owner-operator Those the brokerage in the increase breakeven correction community our rates across operating of our levels, pipeline, include defaults on However, in as and dipped overall point. carrier the spot below of in seeing we more meaningful lease signs of

to our and percentage spot of the durable This belief been applications, our The low the our seen compared is further has but volumes, especially dynamic capacity planned, hasten near solid not of making we than across in renewal have that XXXX, lower and freight Also, in customer our the pressure all the but of asset-based incrementally for expectation. we correction. supply volumes. It creating carrier likely the evident contractual this import is remains progress, of spotty rates highly be horizon. of higher original term, credit marginally network accelerated replenishment for and which the positioning The on customers many opportunities inventory to level that renewal cycle small in is year. timing time rates in the certain correlates been have the planned base across are will delayed tightening to than of intermodal

with summary, introduced network current condition the a from volume in volumes Truckload In Intermodal Logistics. transactional particularly uncertainty recovery in the and has market higher perspective, of a along offerings, in freight degree the timing

However, we do XXXX. an in condition freight the moderating latter a capacity volumes improvement of in portion into expect

Let to into insight me our Steve to further it turn provide XXXX guidance. back

Stephen Bruffett

forward-looking Moving now our comments. to

of XXXX our guidance find presentation. can You summary on our XX investor a Slide of

adjusted X% XXXX our $X.XX. per year the now from to the update This to range updated Regarding we from for guidance. full our expectations be by range earnings share, lowers or $X.XX diluted $X initial expect

For a not additional losses. context, equity reminder I'll that we offer gains forecast or do

However, and results into recognized. we our do guidance they've once them incorporate been

income guidance So considering updated a the to our in XX% the is first operations. essentially gain quarter, from adjustment $X.XX equity our

in work trough earnings original first second to addition, were expectations. of remaining through third year, X this largely we compared the full In and projections of results impacted Therefore, quarter with being XXXX line adjustments forecast the way quarters quarters cycle. freight applicable our year are as to most the the the to our with initial our

more of resumption seasonality the higher characterized volumes typical promotional fourth the by and assumed in guidance initial opportunities. along project Our quarter with

shareholder And although and lower profitable for the level. term. has well, achieved, and especially of deliver improvement, feel backdrop. over operating portfolio updated feel positioned have is fair progress returns this while been given we a a room achieve at expectation, guidance like well long the we always retains amount to performing slightly growth our Our we Overall, there

make have in flows freight to sheet throughout equipment and continue so the investments and cycles. to do cash our technology and balance We

the $XXX remains for point, range awards. of XXXX million. this upper million Our as we dedicated And guidance new we're $XXX range net toward at of to business implement at trending that CapEx end a

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

Operator

comes first Our Instructions] Stephens. Atkins with [Operator question from Jack

Jack Atkins

and first an appreciate what's color however, the I of in think in as changing off, inflection would a just of about for you you fundamentals, outlook. recovery to fundamentals say, terms your really can like that in you kind guess peak in want or later about think a you of context this see I potential their Maybe you what in confidence freight provide about that around your phrase are or some that. on the gives quarter it fourth telling flows may customers terms it, anticipated year we in context season. plans I or

customers your lot no would year. about what a crystal has And telling but for get a to we it's of are just be one ball, could uncertainty in of -- out in half see a the curious feel there's there what think second terms plans. I you the their of obviously just

Mark Rourke

Thanks on the against most for that would pace so question, in are the I I say, some feeling that general, they're inventories, overhang progress the they Jack. had expected. of Great. think customers our of probably within and they are doing that certainly making

an proof and uncertainty, having cautious that more general, versus say verticals comments serve. things see we in there's I pick uncertainties cycle across I and multiple think but certainly, I though, would those would And to cautious increased optimism, segments reflect just guess I some they're think, optimism. amount start looking of to we're points say I that when of the and on up. replenishment

the second appear So forward, in as comments. we in original the start and if our to look expectations we things first of part bit and caution quarter of here certainly be as outlined a opening our delayed our quarter in the --

Jack Atkins

appreciate last Dedicated. No, would season the get shippers follow-up Okay. that. that as here to a bid for of in as thoughts contractual in increasingly feels just season like bid it's guess, renewals, on I are sense. curious the season update And few getting or aggressive gone bid Mark. or It terms expecting increasingly like that question, makes on, be of on a competitive whether realization you've for-hire as perspective has months, but rather your -- you're has what And from sort any gone rate over through I in market

Mark Rourke

Yes.

big quarter relative us a The is second quarter to renewals. for

in And so to a market. it's to certainly, do a we've that. full work highly view have got competitive some of But

but we've not Dedicated we're implementing we'll encouraged really really remains and this what business, through in what year, upon the calendar be strong. of Our by context . pipeline yet closed our only

laid all execution out And Our intent, really playing. strong. we consistent is durable a more as strategic and -- from it's earnings those revenue Jack, our and our stream. in things, are perspective much And

challenged. more network businesses, us that a are So think to which the leaves I really bit

our activity, we the As hanging looked challenge you is per is point exists. Intermodal driven need for imports, on as And import our replenishment cycle. our at discussed land revenue right where that's to is some condition which to and pretty business But by around there to the we business. see well. competitive going handle that's now us highly correlated in order, we're real And the on getting the where network ultimately our price increased truck most

Operator

Our Stanley. with Ravi Shanker Morgan next from question is

Ravi Shanker

can defensive being out -- that starting visibility take with supply you to that? Dedicated how a stability the maybe in are at upcycle Is of us your customers And in we a their that Maybe -- prepared that ahead? more in your what that Mark, they're potential that historic and come are from of that Is about chain? highs. the more is sign want cycle? kind said away they your does business sign where What remarks we tell thinking

Mark Rourke

Yes. Ravi, this is behind Dedicated expect interest of question you're might what the you your part maybe at there. might at in perhaps driving less be cycle,

Ravi Shanker

Correct.

Mark Rourke

Yes, of couple I a things. think

Dedicated DCC, the just providing solutions, generation volume us, increasingly retail, extremely "more" that increasing market. more or capacity operations in service that and at something for which more isn't aligned something the that either even we're commodity that the generic description. to high-intense in play, we're on demands specialized the of store portion First, is just focused in less nature Or fit more around

in our to the is that effort, our approach resources that our and shared. I reflective think I numbers so And sales

it's not that of it's we largely, specialty more dedicated reliability, type operations are course. in a think We've Dedicated the perhaps correlation network of in need area. equipment, So condition of direct to between and and that. that It's separated invest of condition. XX maybe ago, completely years sheet a separated, a high particularly I balance But -- strong customers pursuing, kind the from not need

that for the this so multiyear we're operationally to markets traction that us is targeting. effort we're kind And both now a get commercially, of the to at and

would So for separate a bit a I those little historical things maybe context. just

Ravi Shanker

the question we have sit And deliver X-year the think play Railway can kind with I Do out. X looking we a And see of was and you have UP how What's kind the is color third Grupo X- the space? I'm other? be have exactly CPKC West longer-term rail of on years? to follow-up, How as Coast to closed, truck maybe taking finally of and of intra that new Obviously, it's several Intermodal outlook going out? does not helpful. in the you a going maybe Mexico. That's and now wanting the conversion for. to to to other many service Do CN, Intermodal kind sure back each do competitor been you an last the side. wait the players of the that that these over play more share from think

Mark Rourke

comment general a the in Intermodal? question more that And a CPKC or Ravi, to just was or

Ravi Shanker

a or Intermodal a competitive after the industry. you to the Again, within as as -- the a general form in is just whole of alter environment chose whole. already CPKC from That

James Filter

Yes.

this So start I'll broadly, into then I'll Jim. -- and me is jump Mexico. and more let specifically

You're held There's has been something back -- Intermodal. Surface absolutely has that right.

to improvement. from experience to Rails standpoint. Coast levels. from see We've be the as there we Coast know couple have Intermodal a and a in as of last which little improvement of that the having a already pricing loss to well competitive competitive has being pricing, expect And years, ports ports, switch to share -- from impact. a from I over there's bit road been West Over over-the-road, seen an is East some service

opportunities there. And to so there's convert

in our to opportunity was [Indiscernible]. the experience one the is those faith and Specifically, from moving what Mexico, interchanges dramatic the of X we the at the previously, here of with in level because there if going it's the this the service U.S., directly freight Number Mexico, potential single from really a were of into with you well each would change issues that CPKC, a improve number in CPKC is X. look Mexico fault Midwest, pretty X, as interchanges surface And delivery up opportunity KCS. rail with service. struggled an that area ramps a the failure. from a former to This Mexico was And have as lot created has the to of you

KCS dramatic of there. expect in we'd improvement see to pretty line form a So the

that of on a would focused expect we're intermodal. to why reason network. length much you similar that's part the you When at higher of look is haul, And conversion the

opportunity we for see an so that growth. as And

Operator

next with Our question Bert Subin from is Stifel.

Bert Subin

hear Can Sorry. me? you

Mark Rourke

Yes. Bert. We can,

can. we Now

Stephen Bruffett

Yes.

Bert Subin

question Maybe Intermodal the near-term on side. a

had talked turns, range to by last seeing Something thinking I you've of point how flipping X.X-ish you your about side? below quarter we're normalized Has moved container talked out? historically. they've that been you on running just driven been year. to sort the a and what levels? about been the are back about really well has How at as getting those where that some have And back that within import think

James Filter

Yes, this is Jim. Absolutely.

-- us us this to right back an about thing holding of there's stacked be that's containers now. So at demand. creates point we grow. are have The opportunity our able is for only to XX% It

imports, as So what a well economic activity. seeing West we're it's of combination as from Coast overall

Mark Rourke

volumes But earnings opportunity our I the to adding point containers. and without think additional have grow the -- our we

improved, has ago. to We We And customer, think, dramatically years improved. get quite can peaked the dray resources. company has we if going about, X.X back dwell that we're but Again, better don't so our original rail question. time with know to I time several get the your to

exercising have. very forward we to much that the we're looking So assets

Bert Subin

it. Got

Okay.

but little actually Sales a that model? sort -- on is logistics that's peers Or run be there you overflow follow-up side. your of last function power-only year-over-year, are within business, than just what the seeing. better just to say driven materially seemed a a brokerage how Would you the your declined minute mainly by Just pretty offering? growing of

Mark Rourke

question, Bert. Good Yes.

the the somewhere guess, collaborate the that point, would exist count, an you comparison opportunities an our contracted as I certainly that look between mentioned what to all characterize volume in We X% we that's And As exactly I offerings. of ability of consistent there is and simply the to volumes believe, the when leverage our we way. parcel -- fairly model. don't on for market part as and I capability range, overflow that, brokerage which a investments us, more bit and last within couple and success that turn, But our executing the to allows to we years great and had do does generate strategy. our resilient, offering I to think, our be order demand

Operator

is next UBS. Tom question Wadewitz Our from with

Tom Wadewitz

wanted a Yes. kind little I more. I I a ask behavior bit know comments down rates. little on to you've to had wanted some drill in Intermodal. competitive on of

of a added there's think I been of capacity terms in lot boxes.

as some of You the discipline market. improving up Intermodal that than thinking or Do you know, supports are mentioned in the you got less kind rates. rates contract How rail pressure there'll be well. on I don't -- Truckload capacity stacked about and efficiency, pressure you think

Or further that biggest heard Intermodal -- of the put pressure on the think, there capacity that think that. by some kind maybe constructive the we've concerned would players be, might sitting market. margin. desire I I excess of And that are grow to you on

Intermodal. competitive So I in dynamic guess, just thoughts around really some some --

Mark Rourke

for that ample that speak -- we talked we about. It's conversion. other went way thoughts thanks believe question. Tom, series of for the we've reasons to as last will our [Indiscernible] us I'll years others. the But of speak that opportunity I to to couple is unusual the there in opposed for relative

a opportunity before between dynamic itself just for or get so be great moving And on to today. the into competitors, of the industry what back should rail to the growth we there's getting

we're economically so Mexico a about we winner we well in would from announced more virtually in and is think to will as that ways But great that a really going play the arrangement opportunity in the in, just freight for be excited we road. as because West characterize in originate And over market moving East, that again, there. series why just the Intermodal that get what's has regional the we're a of where to whole we can every converted

So I if looked that's the you we're we frame per at kind And how contracted order, our on, X% of I opportunity. would revenue think what year-over-year. focused

standpoint, right that a the about that and think I would movement bit resilient pricing from more on So the suggest it's value a the is over-the-road. market versus train freight now and getting

James Filter

last was while a was price That QX strong year. over still decrease very --

that's relatively decline a So small year-over-year.

containers, the your a thing once isn't that cost of there. I other really you have consider think there stack to great deal is you

to it's just volume pushing nothing there's -- So business. us on huge our a saying this be to have you cost not get to able

Stephen Bruffett

emphasize. just was much I to rates. doesn't just we stack it at make container that is capital point on like retain the noncompensatory sense, make. This a is rather Steve, Yes, we'd keep discipline, It focused move and going we're the than return rather

so side. And through we the see as period time. you'll this goes disciplined of think I that into do go equation behavior

Tom Wadewitz

sounds you in Or trying from forward? effects much as XQ? let's flows financials an haven't Okay. margin through. say, have about great. I Yes, or lower of recognizing was think a of margins in the Did lower in is on you some and discipline. about much yet, that's how follow-up lower Just as be truck? an impact there's contract rates, of look that really Truckload the to the greater and seen cyclical impact for -- on timing think the we impact question rates how Steve, much The the pressures will contract see just, you like it It that

Stephen Bruffett

try reflected we And maturity way of that the a time. in prepared our through bid cycle go and realization craft we comments as year's Sure. to did this

cycle quarter reflected be quarter like this definitely don't signaled could If pressure quarter yet. And we some balance had that's renewals feel the first it. lift book challenged, see completed, we in why downward that. get and of particular The second of after year it's contractual the third in to force the later we bit or and business forward some then we as more a but a get we start full little as

Operator

next Our Seidl TD from is with Cowen. question Jason

Jason Seidl

me a to how think as unit Intermodal Let because wanted I of about to there's here. sort should to CPKC a bit that Is ask longer question on begins develop. that going of to per business we to a here, haul your length stay be revenue expand attached it? going

James Filter

If percentage have our that of network. larger Yes. conversion rest became But saying, total, it the opportunities just could impact. was of the at of lot an we a there's same time, a Mark as that our on expect

point. believe So across change expecting I between that our the a I'm split of this terms not overall network major at -- in

Jason Seidl

Okay, fair enough.

back coming to sequentially about XQ Let to you on now talked expect and hundred and how Mark, XQ? me in I we comments, dedicated believe, between couple the there's the side. switch little flow end that year. between the bit your additions should more How a a of

Mark Rourke

out late in we quarter opening laid into comments, on quarter. the we for as and closed Yes, second implementations the have third

of activity. to because those year, is start-up So full some level half for of most the the of second impact which that a in the impacts be of good will of overcome we -- have

more longer start-up we those can the through calendar phase. can the into we so initial And get year, the that get

the to it equipment get more it's the position, first here about it to what's get closed get -- thinking just from of started. takes in because half quarter, second year, you're and some time a a if a to So

for talking the largest share quarter of we late are second that. so And

Jason Seidl

record And then waiting said of I book on. for you had bids believe sort you of some you to win potentially business

and So I there more after XQ. between that imagine be could [Indiscernible] now this

Mark Rourke

of we've had we pipeline an and year about level its units say high I'd ago, XXX organic of our years. growth. historical Yes, that acquisition of about the A units last experienced couple maintaining is XXX

we but are. yet we're we strategic suggest plays that got one where of about good on predicting areas, that all well positioned those how really key to a would So just repeat, be it growth see of we're so capitalizing out. keep feel And and our pipeline to to not

Operator

Our next Scott Wolfe Research. from question Group is with

Scott Group

just Intermodal you And guys gains Just your Mexico volume wanted share is were? you on of what what like first, I Did Steve, clarify. can to then sale percentage share cross-border?

Stephen Bruffett

in tackle This a million it in releases part I'll value of we per the we gains a it this broader significant Steve. earnings were consistent first full first is the where didn't I guidance, we're $XX quarter. wasn't But share year along have context of earnings particular initially our We in the line. But 'XX. with our that. believe of guided. did as quarter still of in comments experience our

So the we to XXXX, -- were be in was or close boundaries this level we're the year. year they bandwidth XXXX to the full gains in equipment expect $XX for that which still that's around million that

Mark Rourke

part of out we we we Cross-border, Truckload today. segment. an geographically really in Second what It's around exists Mexico. question our was all do, our of front of growth in but us across do important of don't break the services currently think across is Logistics, and more by portfolio We than Intermodal.

Scott Group

margin. you then break guys out And don't Dedicated I know Okay. versus over-the-road

what just versus directionally, I how thought maybe versus bigger is a in Dedicated? much One of or would give the year-over-year are terms some some just Dedicated margins color now to earnings of maybe your does. can of peers like Truckload context it or be margins helpful business. over-the-road as be Dedicated over-the-road of helpful percentage percentage in how you it'd give I thought the

Mark Rourke

Yes.

the par upon we difference of it any given term, we expectation-wise, on together. both cycle, one any close nuances. deal in think performance. are started a years think of to drag based something think could different operated think perform as be par don't that. part -- a we've to have couple up more based that those curve, in I upon takes short-term normally on where just in can the last it at given long individual of the Obviously, of I you what of that at see get margin positioning a what has bit quarter, services But and part there, those the historically be Scott, But great to we growth shared your expect

Operator

question next with Jon Chappell ISI. from Our Evercore is

Jon Chappell

I'm in X to Starting with put question. you, together going one Mark. my

you inorganic looking about there. logistics some talked so You get you attractive to network willing given buyback a secondarily But bit, out or Do from target that how or deemphasizing Truckload. you your you've opportunities core opportunities to program, in you there then pain that about perspective Dedicated, bit there? to in you're the really look Steve, little started the a the points actually at where capital a relation M&A think been the some do opportunities little want growth? competencies things traditional outside maybe brokerage are as get segments, may new of certain inorganic deploy on bottom-of-the-cycle of ones to what vis-a-vis And other this

Mark Rourke

not a concert only, first though, sit think the we with things of traditionally just and of customers curiosity that, but strategic traditional growth that X dose maintain this maybe growth or around may outlined as healthy And support we brokerage can So the correct that our of specialty of about all. directly intellectual a part I juncture, the priorities. our At believe that's third-party is we but power on found outside we have anything of get you at location. for side, truck just honed a valuable and see part more basis, have that the would regular I your growth things third-party off logistics shareholders really that. be explore opportunities on more not on our in question we things a inorganic truck deemphasizing talking haven't in, we knock to and particularly to called would we most where We're our us service current newer path, deemphasized what

open. at But the where short pursued think are XXXX through is And this specialty we I the term, have be So consistent juncture, or in truck. that with think yes, that remain should I expectation. certainly it's we what we

Stephen Bruffett

sheet and a Yes. repurchases position was to high-level capacity. a Steve. your in tackle guess capability opportunities. would the I'll is and be think we which do share I of balance come be there, about to second between this it's of M&A how allocation position And great capital at a from comment part this And strength, question

have So a we bit do flexibility quite of there.

move at repurchase some on activity to program or be approach that will as and be a potentially space part on the depending of down envisions see. steady number the opportunities we in of the point, amount activity -- could and activity acquisitive opportunistic dialed that, that then general Our this dialed buyback repurchase up top time opportunistic of of through we

So there is interplay. an

generation, comfortably question, manage as of cash But our the of we'll scheme in structure, we sheet So capacity, capabilities. and million that, your $XXX overall capital of program I inside the fits all through our go understand repurchase flow balance time.

look So we overall carrying with years. forward about of the and couple over good positioning feel to allocation, capital out I our that next

Operator

Jordan with next Our comes Goldman question Sachs. from Alliger

Jordan Alliger

or expectation part peak uniform loads the head about season you When you look feel -- look Or an Network, your Logistics, one mentioned other better excluding closer would you you XXXX. terms of latter that that? curious, there in think of a about Sort may towards is volumes as segments, Dedicated; thinking is at better would is better versus Intermodal X about it there of confidence? the that and

Mark Rourke

customers replenishment also the to quarter the our our to aligned catalyst. come or with, inventory and But that correction talk the serves customers does point level to of occur bit of the second that here a is our different how at an some down to customers obviously buying a for there's will to and which the cycle more. needs back we correction, largely as carrier is behind interplay to early kind in which this our lenses, confident several at think and and looked be view, of get third assess, capacity think believe I we're of some condition and do capacity what occurring we we've As most in through it

And so yet, to have are that's increasingly we that those think the direction. both combination. We a have not increasingly think recovery. full both of moving that I conditions here And direction, are that concert but moving current think a They instructive.

Operator

is Brian JPMorgan. question next Our with from Ossenbeck

Brian Ossenbeck

Do couple more for a Can just ago? give like maybe freight comments the there's real were of baked the excess any of conversations Jim. maybe certainly you into converting some having ask you some of into that than bids? capacity. off I quarters maybe that visibility It you you or confidence about wanted to seems highway. Are see your Truckload

are spreads out, the constricting. pointed As still you

magnitude. So I of about sort on what and And of have see we just in terms that how to that visibility wanted timing should front? think you

James Filter

Yes. Thanks.

to that they of customers one started from somewhat factor decision-making we're things the Intermodal, frequently that more impacts of So to as their starting hearing the into environmental talk well. about that's and actually in

than of I are transportation. the really growth the enabling is the in to expect see we'll Intermodal. transitions particularly East, growth strong In with intermodal So over of CSX the some short to much demonstrate from able that of over-the-road overall there term, we the is performance faster -- term, the long

win to are this But year. conversion. to opportunities conversion. in of still have That significant able is been some us already have front We over-the-road freight

would as I as we'll see expect up that the tighten of more that starts So to market well.

Brian Ossenbeck

strong Or that's do of really the How follow-up, expect that? into a expected? good capacity a more things better we're But from Mark, you point. some you seen you a at lack of a are haven't most maybe of this to like as as in color for expect think we the little to sort a April you you little for seemed you really Do about a slow of to more to durable, word? accelerated I would back accelerate decline. terms And departures be see Okay. -- thinking going this anything on Are do gave as have at bounce seasonally you bit us point, have And market? guess, of think I that. tipping feel and have front, thought it's been

Mark Rourke

think And certainly, great a other and reasonably in of taking to to should -- But parts it one difficulty your driver direct what experienced that hiring yes, I have. the would number to Certainly, is than the is which indicators. that join some are pipeline, leading our for Brian, looking agree we there we experienced can driver we're assessment to organization, looking correlation the candidates we've that visibility that with of get longer are carrier date. the it's are community.

We have baselines.

we're -- think that. hearing today, and talk payments We I and we hearing about more we inflection sign. competitor is signals the supply and and of mid-first have some we're at, experiencing and when seeing on looking getting a restricting sign, perspectives. be we base I And more dramatic because had recent That's more the quarter a of is we is that that like of see historical then of should think a time, credit not more that think sign. -- things we're inflections a And bit a and inflections

And an to the that, corrective think action And of sign stress. comments, in opening going so which I those are that's a point with delayed. the be I think, correction combination to hasten my deal that suppliers of to direct could have to inflection has take been

Brian Ossenbeck

Okay.

it based here from you factors? accelerate So think on could those

Mark Rourke

I'm optimistic.

Operator

Wetherbee Our next with from is question Citi. Chris

Chris Wetherbee

Maybe you the on us touch maybe help could the wanted if about cadence a the bit guidance year. you for to just sort and little think of

feel if the quarter still of year. the guess gain. I more challenging and So XQ the you I and gain, look that I you look equity noted quarters the through the might at be first know normal that XQ, maybe Do just has potential like going in sequential there is to respect think to be and possible? seasonally that normal historically XQ seasonality? versus normally which would is what the offset be I is incremental Or weakness improvement, XQ

Stephen Bruffett

see we from get the we're comes bit earlier perspective things there is a on the There things unfolding. Steve. effect space, were earnings to renewal cycle, insight noted on. we new in which so some the away give effect this to rates stay quarterly want bid that. some from we Yes, we annual particular, to additional how to that little stay and like trying on those into we trying call, deeper and in Well, is And steer take guidance, and as on dampening

might so type sequential sequentially, in may be you that third not trajectory. and some flattish you And second of more lift may the see seasonal quarter. ordinarily expect of It

with expectation it we're up, picking things that Before this we'll plays out. some color, see if today. seeing helps to additional time. at that would our that's how point how have But be But in

Chris Wetherbee

the trough then And the through we're over of -- you steadily That's like of you as a a on about maybe just be you that we Should think went quarters, that? Okay. Or we about go give for helpful. through -- last appreciate down the you expect that You've do you of cycle? next of year how what sense that. maybe size just maybe us managing broadly, sense of of for year, the you just a more drifted couple you very context hopefully how bit just in. can the you go fleet I do think guess this, how cadence the about fleet think challenging sort makes quarters is count quarters? which as next do through couple to as given of sort couple the I a

Mark Rourke

question have any condition I cycle or -- down believe based that drive plans your we're to is specific we trying Chris, the the network-based, upon Yes, don't I believe.

and the in certainly world additional rate owner-operator of we because costs. combination pressure structures inflationary the So seen have of some

that's mix the we within see of would our entire in So various what probably [Indiscernible]. -- only capacity

It's area stress. that's well. the under we've competitor our seen the of I obviously. small comparison a reports some that's to likely think carrier, probably most But as most

So than network offering we but reported and in feel but we Power as Logistics. that see have like in bring, Only the reinforce offering serve, well differently our would customers gets we don't -- network specific again, -- that's we largely plans do And would not be that in trucks where only our any I to to that that any stabilized. also our Logistics that

offering part Only increasingly, So from our lens. the network is of customer Power

third-party that make we're within the sure using operate we're power, so we various reporting that want Obviously, segments to appropriately in. we

network stable So growing perspective, slightly seeing they're presence from very a us. a to customer from

Operator

Suisse. with Rosa final Credit Our is from question Ari

Ari Rosa

Great.

go So I -- to question back Brian's ask to wanted bit. a

could around slower Has correcting talked expected. about carriers might Maybe structurally than capacity in getting at pace market your you otherwise? they longer perspective? industry what accounts that a that the talk You about for maybe the something changed is in to than stick

Mark Rourke

certainly, cash than have se, different business services way time doing this you as structural have And of revenue what stream of I the think carrier type the a activities per with a it I maybe really clearly that a carrier the base. challenged flow, this still anything characterize it of carriers], well-capitalized the in understand than is But I undercapitalized to we're adequate and larger [health happened still have asset space. perhaps information, small, and some structurally as has is both of discovery changed to the environment, the is more from you in Only before. don't and the that is a across discovery in question. Perhaps price, and perspective. Power over customer in Yes.

if time. there massive know that Obviously, So I restructuring. don't there's influences But... some are there's different over

Stephen Bruffett

of anything think it also may independent... prior strength I don't you're prove to that I or this or you But not given the years, if the to have couple of a true. may be small with. carrier

Mark Rourke

more power. little [Indiscernible] a And

Stephen Bruffett

will, how that time that some years last strong from last You past you may excess have be cycles, given in environment built different a today. some if period, cash of in that reserves the we're in bit were. couple to up might longer And you just like earnings, allowed an

Ari Rosa

with That's going make helpful. sure making We've is then my the And of very a that's to business. actually question, what deal railroad want just I partnering switching understand it for you Intermodal to on. side. seen on just last Intermodal a lot of it. I headlines, the Got is big

I your actually network? obviously, So network Western you're sure UP and is talking year, over any business that moving growth just business moving the me on that pie to larger of business moved about Is Let kind that. where you seeing? there UP CPKC? you're it expecting. CPKC you're previously of make the just their this Or over into to they're that a CPKC the migrating from now that was understand is that Or part

Mark Rourke

Good you. Thank question.

James Filter

Sure. Yes.

today the of were going we're the a UP to that are or we to that additional over don't Those overlap but with that amount implementing. uncompetitive business are was the migrating the So lanes small we're have be we're don't that that there running there lanes some CPKC, on UP either also today.

of there's little our bit network. an service extension of So a

Mark Rourke

right? there And with were business was directly the we doing KCS,

James Filter

Yes.

Mark Rourke

right great let XX, does our we've close and about job optionality to Well, And priorities a It but capital. pristine you about Page the on actively us referring outlines our acquisitive those go Logistics. after in, believe sheet, the opportunities the seek interested did really growth also our we're updated strategic strategic give same deployment today Steve talking be disciplined not in Great. this me our that balance Intermodal to that just strategy talked only which right. call presentation. around we by of organic advance All Dedicated, priorities. drivers investor to those

In addition, buyback to we share authorization. are going against executing our start

to predictable Our environment invest count freight of those, have portfolio, share economic again, goal continue sense in demand heightened while we're a and we we're is today. highlight a in a done. which of to to going our several and stable we diversified our of are the operating this considerable in highly and shares neighborhood when million strengths uncertainty, And with so with XXX perhaps you chance across or

So and time attention. Thank in your appreciate I closing, you. your

Operator

This concludes conference. today's

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

Schneider National (SNDR) 27 Apr 232023 Q1 Earnings call transcript