Earnings call transcript Q2 2023

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Operator

Good day, and welcome to the Schneider Second Quarter 2023 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Steve Bindas, Director of Investor Relations. Please go ahead.

Steve Bindas

Thank you, operator, and good morning, everyone.

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

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

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

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

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

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

Steve Bruffett

offer then some will I'll questions. morning. and comments on perspectives opening take Good Mark quarter today. the on for provide joining guidance, Thanks and our before us your his we

of From investment, only accretion on Transport. transaction, above a represents million but this capital not our with which Xx. immediate cost We of capital. recently this multiple deployed EBITDA also begin of announced $XXX expect our EPS return M&M I'll acquisition well we an for about

our the In and to of addition, deliver employees Transport customers benefit cost both that additional will and value and shareholders. therefore, we M&M revenue synergies pursuing be

additional financial space, in earlier operational Midwest While acquisition. characteristics Mark between these Logistics and context our some dedicated there differences are similar the Systems, are two companies. the to between acquisition quite provide this quality Transport M&M will

share The is next topic repurchases.

activities, million The shareholders. repurchase first-ever second quarter contained we our to returned and $XX

reminder, and approximately $XXX that offsetting equity objectives maintain diluted are level authorization to million the part XXX share programs. our for grants our As count then impact of a by million are to that our compensation this of reduce

now refer to IR section to A review to our investor Turning of website second quarter our presentation. reminder results. the to the

likely last the freight just to The comparison is year. most of as were be challenging second second conditions quarter quarter in soften to represents year-over-year what the beginning

downcycle, Now year over of this that pressure a into nearing freight we're impact. largest pricing the is cumulative its effect

second down operations quarter from compared excluding year. was And to adjusted revenues, XX% were our down fuel, income prior XX%. the Our

how we deliver like We And our these not on cycle, of positions phase growing and prefer to of over do obviously results do across but yet perform our the resilient not do compete meaningful progress our they freight illustrate full freight all while cycle. reflect and potential, do phases journey portfolio earnings to us time. this the

have would operations. for not lower undoubtedly results segment support been dedicated from Truckload Our if the

dedicated our Our to legacy will business, prospects. still by in front opportunities We those dedicated with MLS include improve M&M of include operations and Transport. going further forward have our energized and along us we're operations,

activity, port the continued quarter of compared lower our segment, results second Intermodal to challenged volumes which XX% resulted the to in be In by sluggish XXXX.

the service value last new to fleet we opportunity two establishing a yet our by the which and partnerships grown our our demonstrate XX% since years. Intermodal have offering of having can market have container We rail in full over

our forward. largest as view we Intermodal one result, a of going upsides As

reported a Logistics highly freight challenged in quarter The the condition. segment margin for X% nearly a

that model year, this last our operations. reliant Logistics was demand is on than overflow and this considerably Truckload from own While volume the of our generates lower its shows not benefit

Moving our forward-looking comments. now to

share diluted acquisition. from guidance prior At reflects decrease the earnings updated updated XX% contribution the range year midpoint, adjusted $X.XX. guidance to Transport but includes full for EPS $X per $X.XX is $X.XX, which guidance M&M modest to the from a Our a our of immediate

expected In earnings will third all seasonal as upticks the improvement sequential be third of in sequential due XXXX during the place full quarter to in to effect decline the rate second quarter. a the show earnings quarter will Then our renewals from view, fourth likely virtually moderate quarter anticipated volume. is show contractual

first factor equipment half than gains equipment another Said half the year. EPS are this second half, within half during of contributing our way, gains the expectations for be A $X.XX from is the first of for includes the expectations second We to to and our lower EPS minimal. gains equipment EPS. recorded guidance updated timing

of we it's that anticipate from have I'd marginally will While short to insight in incremental early begin XXXX, be saying a that expectations our recovery, word and clear this condition. the will we but stop demand more are improved exit customers. capacity year, yet year will balanced freight into there next

not It better the equilibrium levers change market. in large of take derive freight a amount to does two in these

So we're of deliver to well positioned regardless execute conditions. the and

Mark's So now additional provide insights. to going his

Mark Rourke

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

freight your context to to favorably are positioning the into get perform me business questions, and economic through additional we how cycles. offer let Before we

is and our and truck revenue was stable First profitably first investments our which in truck proved the Truckload grow per quarter, segment. compared highly performance. per to count evident year-over-year to resilient in week Dedicated Dedicated

do implementation quarter XXX XX business in additional of XXX new a timelines. year based trucks to upon on first levels, grew of the an the second half by While current units sequential basis, add only we expect to Dedicated from

trailers equipment high-quality the X,XXX that and verticals. and add we're we Schneider and in serving In XXX acquisition, addition we to to organic Transport selectively associates operate portfolio, retail to manufacturing carriers the primarily the specialty team. looking to Through for nearly growth, are to our pleased welcome dedicated M&M added the trucks contract configurations

is is follow to that a run dedicated name, intact. regional carrier our Southwest playbook. keep the the operating established in and very acquisition Northeast, intention will Transport and well-run Midwest model our independently, largely operates M&M country. brand their Transport regions of M&M successful It

puts founder in of a tractor growth, business. X,XXX offering $X.X with We Those is have trailer addition driver-recruiting among capital, count of And personally synergies annual with synergies identified a and enhance list combined the on I'm support that organic associate growth and that a the customer-facing the Transport staying glide deployed access include customer truck experience. technology Dedicated path M&M of resources, units. billion towards the and our identified and to revenues The others. pleased

costs of portion perhaps Now is rising network through renewal end pressure costs let's to margin segment. not our and in the It as insurance inflationary turn that rates Truckload certain contract new not the most of even equipment of under wages, durable, the this elements are into are and year. book the

are materialize. Our operational to commercial upgraded and to pivot they teams begin ready to opportunities as

Intermodal transition let's to Now the segment.

to the year-over-year. management We the the bottom. discipline this not our in have import volume through and are order chase and cycle price reflected That reduction muted volumes XX% revenue chosen retain discipline leader to

of emission offering are cost a Union We reduction combination Pacific, rail through service and customers a providers, for recovery leading recently, our the value the the CSX and most poised proposition with freight CPKC. strong

implements gives of reliability into CSX. Pacific with soon high-performing as a advantages into further we of execution Speedway out forward, proven Mexico and seamless Meridian the benefits CPKC the their and Union across Southeast the even through leadership The with Moving playbook. addition and us the connection expect

has one-rail exceptional. CPKC's early been experience solution with the Our

We now have found that with the transits beat transits other nearly solo but match truck levels not offerings reliability XXX% service on-time competing published only performance. their and

to The the with performer be Union productivity It restocking containers transition, with that have added next tailwind in to capability now CPKC on the asset with to proven CSX expect top additional for growth fleet we where a allocation paused important new what meaningful a the one proven focus in room being Intermodal the a with be measures. season record to we note we Pacific will cycle. inevitable and the volume is have

our battery important milestone of achieved of testing facilities, operation to the engineering, California second to capability intermodal with beyond we equipment teams large-scale building intermodal And quarter, battery electric I'd Southern our electric merely vehicles hub. recognize the a driver scale. nation's fleet, depots our Also like the an commercial charging to in one most advanced move sustainability for installation professional at at operating

we emission State savings by rail approaching year-end, vehicle This the for or us capability offers final-mile track dray mandates movement. middle-mile on value to the deployed intermodal first are dray of units of the zero-emission battery the rapidly have in electric with zero And of combination California. favorably in a XX positioning emission

quarter Logistics forward purchase year, this in rates where peak dray is the our in into noted we special opposite port coming time, this rising at warehousing off with a special call segment quarter transportation our was year Fast demand. whatever second a were of and moderating that is. combination costs services and Last freight

even renewals of be through Only typical. inclusive assets putting Power we is Contract Power considerable network XX% Power resilient proved volume cycle, pricing more contracted the revenues Only considering than brokerage Overall and are optimizing And competitive especially dedicated per order volumes services, pressure. more net than to under is our year-over-year, asset-based day on Only. backhaul proving

cycles. our and model The freight freight all capability keeps us of relevant Logistics through generation adaptable

conclusion both way still destocking before the While capacity from to marginal will quarter its phenomenon giving challenges we in fourth seasonality have accelerates exit third market, the the and as its believe this cycle show is reaches natural starting to moderate age inventory quarter. their the

to that, with let's the you. Thank so move operator, question-and-answer And session.

Operator

comes from [Operator Morgan Ravi Stanley. Instructions] with Shanker question first Our

Ravi Shanker

season guys you You peak will. are of somewhat if whisperers,

the point their into hear you very and customers in at it's What are how now pickup next quarter. visibility in about right their need or a start about desire both two? current I to much comments you in quarter wondering restocking to telling was the fourth your inventory have as as well So some just levels your interesting that? seasonality

Mark Rourke

for thank Ravi, you question. the

and I end. to opposed long think We are decisions had back And it. a chasing reflected as enough weigh is we're they increasingly our certain on retailer bit in products. between lanes discussion in so and getting destocking fact, an starts trail with to certain on to it discussion that to the inventory a transits truck that that that customers on coming with recent intermodal destocking confident a

everybody a of over that's illustrative say done different I several quarters spectrum, work but to get is spot. wouldn't it the the have last the across that so folks And to

-- So I getting they feel within are think with that zone. the folks in most

changed the I the less the purchasing on of focus perhaps year consumer through has the and concern think to be they'll and inventory. in the what categories health remainder the of

Ravi Shanker

a a the you're going questions know follow-up, I here a as get call. bit Also it. in little to because cycle shifting gears Got of million

big It initiative. on Obviously, EV So want kind I tipping recent to did we electric of kind of was you think are of semis Or showcase with need electric long-haul what trucks like of change a point there? our did start do a charging there's building focus manner? you of of capabilities. ask just infrastructure, some of that feels deployment pretty can where what we in get a at Class significant more Kind your now. your commercial about coming availability to the we kind X to of

Steve Bruffett

deploying the the side as presently Well, but beyond California. necessary be the haul, the now moving just high-density some are infrastructure of large-scale applications on markets would short I have significant of testing is move there challenges what still in, we think operation phase, mentioned, to real Ravi, Southern that a we're which and beyond

think think answer, infrastructure part implement much in we still as us we easy of there's is have the the term of types because this have And truck. to trucks, the thinking operational be juncture an although broader an of So this the I battery short different adequate at again, answer electric not parameters I concerns. to for

James Filter

Yes.

Ravi, piece, the bring the driving into operation. electric this just is truck last be year to new is of in end a will regulation this vehicles. California time adaptation other The we'll that diesel be able of The that

-- by all California. will in beginning be year, battery as So next vehicles new electric mandated trucks

Operator

Chan Stifel. with Next from question comes Bruce

Bruce Chan

down, around terms in the guide optimism And guidance. I of the then equipment softer can just guide recovery cycle in outlook? you maybe wanted lower the square that the parts the the to the down? remainder lower big comments mentioned Is you to other when some that pricing? think with gains. just of the of there were you Any any that biggest portfolio the that due factors as driver of isolate And about of

Mark Rourke

The is word. optimism interesting an

most some that of I as is condition, prevalent think getting that have is think and well. the would the We words is the think that we cycle the aged. that been to drags is that we choose age starting inventory

getting overly I in optimistic wouldn't within end at So think happen cautious. But a be and -- starts a restocking mischaracterization. least the I sight being that to we're would probably mode lines. we're say it's the to

to year. we've As unlike got a of this on year relates more time gains, our it the ago, equipment

taken in equipment the we've place the of a so the larger of year. And of first activity year. And more took first half of disposal the our new half percentage our thus, in

that's So a contributor.

is secondly, then And the also went carrier, the has health demand, the as on. the of small which reflective waned of perhaps year

X So have half we minimal gains that things of we will the put impact year. in those the think the combination of on second

Bruce Chan

inflationary some just yield helpful. of offset costs the then very rail dray kind about Okay. Intermodal can Great. the as of lower of and and the Maybe the the cost those and and takes puts side? on you some follow-up. talk costs between just of That's ability headwinds And then to a

I'm And Do later this do what of to year. down -- OR of below that lower, stay at think can these I feel a of that you segment costs asking XX levels? you guess kind in that is get going we're to section here Intermodal kind adjust sort you as back

Mark Rourke

partners context. standpoint. I'll do let But a our our with box we and some of additional and capability from Jim offer rail great performance deal can a count we what have certainly,

recovery really and that just particularly the as and haven't through our the is drives so so business. we're so Intermodal activity volume and cost than intermodal the that in And more yet, port opportunity seen we much of biggest believe we -- price what

And would best going our towards more so volume that I comment forward as remedy.

James Filter

in us -- had. is the there's early we've we've here get performance opportunity volume, believe on stated. cycle the actions ahead certainly, Yes, Mark maintain and to I enabled freight to that what's number taken cost a this. And this of of as But margin big that's

terms adjust they're so market-driven, term, our In are do of long rail market. deals, the they those with

there'll so this through as be cycle. go some And of we adjustments this remainder

Operator

from question Brian comes Next JPMorgan. Ossenbeck with

Brian Ossenbeck

think, your Intermodal. the back, chase to really of I to comments wanting pricing just Mark, circle mentioned in Maybe on not you some

right, more still competition doing didn't within that containers? getting the pull actually some if the Truckload you the on just to you point segment. maybe but conversion? So I do same? feel hear you others your stuff are And can broadly that Do stacking expand like you Are off that you visibility highway? the spreads where have some getting can to some of Are

James Filter

try have of sure all Yes, together make you a lot of questions put I'll to hit all these. there. those I and in

right So we less than of it's stacked. do point, have our boxes. XX% boxes this It's now at

adding fleet. Mark As that not shared, we're to

opportunity grow. So we of a lot us that leaves for think continue to to

accretive or are are and some with be market at see of levels. terms might going short that in would the in pricing sustainable competitors of those competitors, that low our be extremely contribution In really we not But contribution, some term. which no

have implement. cycles, these that through last gone reaction we've adjustments visceral And were of when out make bids many from our we've those for really to that to past, after seen customers very years. and able relationships we've strong born soon a the our of those to in build top types been of go And often leads different large on and of interactions those. And customer carriers

see we to a that truck, XX%. conversions, that. to over terms about bit the edge of road we're ranging little do to the intermodal range low We're we're In the to when a on competition relative XX% within of able of discount

up. But down cost. $X fuel is Fuel gallon last weeks, there of been year-over-year. over it the impact picking a couple other is has The

expect to gain another Intermodal will share. opportunity for we'd be So that

Brian Ossenbeck

we if more of that future? terms of IPI bit for might in transloading a or might -- thoughts international of a your the and of some the trickle little of be that's factor a rails, Just to sign that's Schneider follow-up some the recovery little resurgence, But maybe and have more maybe base. wanted for the first of a the low seen in off bit into pickup a down of get quick of that

James Filter

up. that that's hit through about low trickle they've some And these to that. that are absolutely to that's there traffic what very comps was restocking in more Yes. to some some potentially in we international often, to that have similar gone customers There quarter. to starting international, normal talking get improvement of fourth starting year-over-year is into the especially now with start a see could more seasonality as Mark level pick And that

Operator

Our Wadewitz next Tom question with from UBS. comes

Thomas Wadewitz

Yes.

see, Let's a noncycle to ask I'll wanted see -- you question.

then similar. nice announced, multiyear think it's and know dedicated you're if Midwest, just the very -- characterizing had of on which one with like do about you acquisitions. a seems dedicated You that I medium-term you've you kind frame this maybe got acquisition kind How of don't as

something similar there's this can pool you'd maybe you for is that you year these a out a hundred we'll do of like as regular of deals that Is of a a that year? couple enough a one strategically say, that well, of big hey, to growth of there companies kind And that part of our while? say, we kind something dollars on acquisitions strategy? keep That a doing million spend

Mark Rourke

think for Tom. we about question, -- As the you thank

still most capital businesses on about allocation attractive focused we that. As our and that in are most believe of approach, still our growth of we think play our intently is organic

XX us. well-run And do of with our would and the two hallmark very as In believe plan we've been sense carriers, long-term a may is future buying years, cadre that for you last companies a dedicated succession that and makes relationships well-run of contract the current the that not of its individuals. And the in suitor necessary the those to be I who have form. two dedicated -- that into solid have who continue we to attractive we're for space, around XX a least I continue have truck to these business deep at acquired think just believe particularly type we think that do which have customers,

process, the that who And we've put passion with. makes that's believe, what and I it very acquirer developed a to the consistent viable way into their wants in an and life founded approach doing someone aligned with right a and be company us

this me do yet wouldn't at surprise pace. I it us on to expect that So continue again we this anything all wouldn't year.

But -- in strategy. felt out interest programmatic the our was our acquisition in we is transformative continuing. something the that could and wouldn't and best advance also of Dedicated I more we that, if rule shareholders But that at something we're that interested certainly,

Thomas Wadewitz

freight Yes. the Great. on Okay. then And cycle... one

Mark Rourke

for the Thanks question, way. non-cycle the by

Thomas Wadewitz

volume intermodal well, a like, was seasonality I Yes, the than get on I Hub intermodal We then your It's I know. well, on heard X little JBL -- were, Mark. one to I you June. big need I sequentially, the do June And think year-over-year. on versus it, normal was have two just think, cycle, from I was competitors better sorry. better of saying, think about July insight points

little price, the So their you of optimism that's they what about on some environment at due approach competitive of perspective, expressed bit right? Maybe some I you I price. that know take think on -- talked there a improvement. the an was least from intermodal to

the Or are -- But that maybe from seeing reason some you not there those intermodal comment that two? improvement? seeing a as -- same the sequential is in in optimism you is are for it little quite or truck it

Mark Rourke

Well, I question is I July think more second -- quarter. versus would your character

We have seen...

Thomas Wadewitz

of July, months, in improvement either or yes. June those

Mark Rourke

intermodal the in atypical rate there our little fulfillment stronger be trend and I'll -- say bit would use higher in word I customer coming an was the on July a and from volumes community Yes. allocation. both truck in a the the bit a to

maybe But so in also and the moderate But a it's not July June it's atypical, bases it's from some off and it's pronounced. coming atypical And smaller there, so trend but a of, what larger generally sign -- but as of level. as talking have building about, is something well we've to restocking.

Operator

Steves. from Our Atkins comes next Jack with question

Jack Atkins

Great. Okay.

a out? could moment. color guess there grow going to I decision buy of that it there's I I why maybe versus fleet decide us maybe as it, large your to over for Dedicated XXX market towards back allocate a fleet you about buy maybe like by would would M&A would it think the little could building buying Because the a a maybe cheaper building slowly give you such on to fleet time, more mean, mean, sort addressable than you So you to trucks it organically capital discussion it. organically the be versus seem

So grow about maybe deal opportunity post talk faster than otherwise. maybe would have to the you

Steve Bruffett

and and. I And that just Yes, an with Jack, units our here our balance thanks certainly, or. that be financially, in second that focus. hundred of we as expect don't the sheet health see mentioned, continue at an for of our couple We And the either we And a least to see will question. as that organically. as implementation half

so And growing don't we do lieu acquisitions that organically. have of feel constrained in to we

market healthy have a different because access to regional nature when the with of a or that it's different do get that opportunity a had deep to particularly, a both. relationships customers segment some it's vertical in. you new don't perhaps you the just or either not have large think you its because of I And approach presence

to that's real very dedicated companies. commitment attractiveness in two that the supply and a that's businesses, these deep chain. we real the exchanged And find customer are intertwined between like so And deeply there's us. our are long-term relationships value And a just the within

with customers. And our to how so consistent with -- on strategy ourselves and we position like that's

I organically But acquisitions. it our to great so, adds in wouldn't we or I for business with that first have Jack, a [excuse shareholders reasons organic be a always way me] liquid you to value as the augment -- think the can priority And our described. will and

Jack Atkins

Okay. complete makes No, sense. that

and color. interested Jim, in if a additional appreciate I'd in that the you addressing on to -- you're it. chime for love get Just then moment, this And within operations to Intermodal

I we begin think see on years. at the just pressure least see last last to box know to asset like about point has at half turns feel we bottom feel when reached the this for the what thinking quarters? couple few about continue we improved I do be there, in efficiency? can you a cycle, of guess But of back in the been friend, of to we've that do this year? like And here should your but point, not you kind the some how

James Filter

Yes. Thanks, Jack.

So you're right.

the that have be because were demand Customers we are performance, We everything to of velocity with levels box unloading to that improve exception pre-pandemic. need our rail to levels. the performance customer all-time able we high similar have the train at at is

that And as experienced structural prevent their we they've some to spend time changes operations, type backlogs them, made to previously. with the of changes warehouse we

have chassis as as dray company well. well normalized dray place -- have in the and dray providers We as

as So next back believe go to that a here be need and normal a over-the-road to we the matter season we'll as next we get levels. moderate we to start go conversions least we It's year, everything we later occur, XXXX peak of that have that begin and have through really at the to restockings experience bid will see cycle. through to there in do year we opportunity when

Jack Atkins

makes sense. That Okay.

Mark Rourke

is believe focused we're a we both And to Yes, efficient don't really what fleet. our productivity certainly, there's intermodal container another here on more and business any getting way, across box truck impediments structural Jack, turn. to asset our that's

Jack Atkins

be that, way would incremental I meaningful. overall about it? on improves as pretty and would because think to Is up just turn that margins box imagine productivity just the the that to right that follow And

Mark Rourke

flywheel. powerful a It's Absolutely.

Operator

ISI. Our next question comes Jon with Chappell Evercore from

Jonathan Chappell

understand speak, your held a bit decline Jim, harping most basis, [I to] better, on actually But year-over-year basis the peers. think, I little the a I of XX% want strategy of in per your year-over-year but hate sequential to was orders revenue order so Intermodal, keep quite on like kind on high. in to backward-looking, just than a

when cyclical of price you some disciplined being base keep pushing that and even the because very the want recovery to macro does Are away start? higher challenges of given business you kind

James Filter

Yes.

driving pushing the of these us put willing unsustainable volume of So very term disciplined away, is but primarily to through remaining would that, say us And import I that also in what to way. events. I'd better to grow an pressured market characterize we're opportunities in we we're wouldn't the we're our bottom decline to West level. that a majority go that volume also go as sustainable as not due long gives being Coast but volume the bid

Jonathan Chappell

sense. That a Power the cycle. has that been resilient Mark, to makes Okay. quick And then again, follow-up. Only you mentioned

cycled? You've what the has of through offering any fully as the seen there an trough. logistics quantify Power from entire margin margin the versus or of traditional to your cycle Only build-out to from Power been peak Is way difference Only maybe has stability the the brokerage now

Mark Rourke

in this in over Yes. asset believe Look, the It's asset, your on the case, I brokerage, return on that I Power Only we will. a third-party if normally we're complete providing think understand Jonathan. question, trailer you would top in certainly extract -- we what we're getting move a

is the durable. we so profile, return believe, And

on occur of. that of the any in advantage the take same other the have still any same that We pressures created to on get of business opportunities business or part the other pricing parts

we ability And our supplemental type also consider with effectively, both a our the we would how so network efficiently to go capacity carrier now and acceptance, integrate dedicated the and market acceptance, within configuration and to offering customer within more our as customers.

and continue at just better to better we that. get And

Even it's within to a offering long-term operations. sits our party our to we And it so market. how in this we think we're trucking and though network a third much Logistics in go contributor business, and solution long-term our is integrated more

Operator

Jason comes Cowen. with from question next Our Seidl TD

Jason Seidl

the side. Wanted to Intermodal bit focus a little on

things how could good lot Wanted sort total times going and transit of think to border. about should a think those your how a coming see cross-border moves, said percent new of yields forward? you much of that about and those dive across into of You we some those become the business, that on

James Filter

Yes.

transit going we're So to four running is with the the business. time transit actually I half actually that stated performance of the Monterey Chicago, day faster. running from happy a mentioned about They're I'm very days. --

us truck on So right with it [par] our business. puts

X% business our and segment that just in began And that of seen we've of Intermodal May, business. growth out

So we're at. where we're thrilled with

I go there's through expand. opportunities grow longer well. as there and opportunities near see that And bid to also, and the And well, shoring, overall, continue North-South more business. a business performs full Mexico we expect as we think to term, cycle grow very to that

Jason Seidl

going question we should forward other of the my in about Intermodal that and impacting of yields And the part terms think yield how the as grows?

James Filter

a of It's length [pulse]. long

our end higher the of average. on it's So

Jason Seidl

appreciate enough. Fair color. I that Okay.

other to little clarity here. get The guidance thing, trying on a just the

You said M&M business? we moderately can sort the core down is $X.XX of on what a just accretive. like to bringing of get sense I be Should about that so range, think you're going

Steve Bruffett

This course, Steve. full guidance. did into take that our I'll We that incorporate as is acquisition. mentioned, year M&M a we of And Yes. one. Transport's programmatic-type

of five a you XX take if legacy needle obviously mover. it's So huge versus that of months not months business, our

that helps Said acquisition a same guidance bit have just Transport range. occurring. another our range move way, even the I M&M think same range upward us the been without within would exact M&M

Operator

Next Sachs. from comes question Goldman Jordan Alliger with

Jordan Alliger

see Truckload knock-on truckload any the curious, benefit And Yellow, with less of happen? sort And over there is the on sector? you anticipation could all than stuff to that would with in of going Just it?

Mark Rourke

to the don't segment. a comes deal of great anticipate We that benefit side of Truckload the

plenty providers there. within think -- capability LTL guess, of assessment, our I the I there's there's

or of expect the don't be -- And catalyst that to felt on and so house. haven't side a our we it don't

James Filter

are the of of But well truckload that's the that's do we're marketplace. of carriers type that carrier terms in indicative capitalized seeing market believe of pressure -- some in in the what exits and less we the on

Operator

Research. Group Scott comes next from Wolfe Our with question

Scott Group

into implemented So And rev pieces about point? the look QX, Truckload this And at I I'm truck of price color color versus on would then on at QX? bids the margin you wondering and how the much improved lot are I how QX Any guess for from think from basically better way QX to in truck, flat Any revenue to utilization QX? margins look going one heading I when to per say when think most. -- I sequentially. way that's a actually bit than be a at one which

Mark Rourke

But occurred exactly know allocation implementations certainly, what can up the Scott. all feel will the asked the brunt you third tell what in we that and to second if you don't And full maybe would the quarter through I answer are quarter. finish the I season. of there, I

and would look as So has per truck contract single-digit range. pricing at the of -- overall we Clearly, a there's revenue upper in consider And the in hang we come couple to our down. influences. ability there,

some network higher also rate We're than that our optimization volume. to spot or some part volume of typical Power in include on of the utilizing our Only spot

it And so a are the per implications revenue getting those higher little of the reduction on truck.

house. materialize. consider the And still then for more quickly the opportunities percent question we when we don't and a view, is, in there that how start on item the hanging our well. is effective be most that's to sustainable productivity the we of book better can pivot that it's even can part, in We think Utility, an there into pretty the of lean side to

Scott Group

holding Okay. I look versus worse. seeing on then differently? Intermodal than a perform bit Truckload just actually today better maybe bit little why little Any just two 'XX, And when we're versus businesses today up margins those at thoughts Truckload Intermodal is 'XX, now and a 'XX secondly,

have some this comes? then demand of just and that, about And Intermodal whenever you upside worried inflection Or pricing of parked. think the you you are tons that these not that? others boxes Do limits

Mark Rourke

There are several questions there.

Steve Bruffett

there. I part truck around was within the time first single 'XX, the contributor reference is think truck. this margins of that biggest better composition a Within just to on of segment, compared which start to downcycle I'll our prior the

we to larger representation as X dedicated within years grow X we've and ago that. than even much Truckload our had have what continued from develop segment or operations our We

those of several years. we've The part stability that are been growth margins of why in past the Dedicated over pursuing strategically

so some of purposeful And fruits the of steering. that we're seeing

about that. Jim, the So Intermodal question

James Filter

able Yes. to and more do part between first have all, grow. that's and Stack of now to be the difference containers available XXXX. of capacity We

of believe in weight same on we might Truckload. put I type that have the of don't that terms the equation it's In pricing,

experienced The that the trailer standby having impact that a driver, a you of of same a stack. truck, cost a of is type the container with having cost Intermodal at not

disciplined we'll market starts So I to as the be correct. still that believe

Mark Rourke

our think look XXXX, maybe all with chessboard at another our new a of we those were to So exercise versus just favorably. offering the We we Intermodal as just haven't positioned from we view, to relationships what yet. are very in we our color and forward positioned going chance opportunities extent

And even to slight so recovery. forward look we much very a

us. we that's nice have -- in we'll a for flywheel that consider think front effect business, of all the and I

Scott Group

contracts the You're just rail have talking you about different now?

Mark Rourke

execute. network to our providers' And and ability

Operator

Susquehanna. from Our Bascome comes next with question Majors

Bascome Majors

this on can With buyback, the been class a out dual where limited bit your you see strategy? to the a and active more that's second And the active program, first buyback how as share being you having little float? the worked well structure your capital do reduction expectations? talk through you with Is interplaying about it term, of style path with quarter part you've a get share longer allocation as

Steve Bruffett

that take I'll one. Steve. it's Yes,

second solid we the program identify did off quarter. start. the As some during far to good quarter, a get We as to did buying the want opportunities

So X.X moderate year. already repurchases pace million but the a the we'll repurchased, with likely assume of shares of across nearly remainder steady

aren't launched public when are way. we float looking Like articulated we we of our meaningful any authorization, aware to million that disrupts anything $XXX that and do in this

discipline so And some there. with we're behaving

the offset forward, are where within constraints work we there we ultimately, would And we to we can go, of parameters to our equity some program grants dilutive a of impact share it desired today. going we more once given like understand but far maintenance to stabilize that anticipate we get just count, be how as said, that the

point the visibility change future? but this don't any that in at Possibly, of have time. to in we that Could

this as forward is the to we our of So this remainder plan behave year. across look

Operator

Hoexter with Bank next question Ken from comes The of America.

Kenneth Hoexter

Congrats on acquisition, getting closer. another and it's

So imports, talk of a lot here exports. on

-- quarter, $X.XX just just I target the it to your to if $X.XX $X.XX Mark, want $X.XX half the you in first second now just half, pricing? in guess down really from I to divide per at the Looking clarify, is that

It sounded saying okay. you utilization were like is

dedicated fleet? -- on end gets to right? don't your lows, highs, no that right margin about chime mean in I what in added expectations. contribution talk just fleet, you Maybe but a range to at Steve Does now, know if bottom the the on kind higher of that least wants of top, You've added

Mark Rourke

Yes, the first in Ken, of couple influences for of of of the than a are the thanks year. There's there. the question. year second the Certainly, going different the to as half gains mentioned, be we impacts half

that take would account element. that into So

some to restocking feel in particular, fourth we believe occur. to address constructive to quarter customers will the we the that and way as if position trends the more phenomenon have start believe that themselves Secondly, do pressure we a pricing as quarter, will third able that be to begin the in the would early

And primary. second -- two or to And the the so moderate the would those be improvement the to the the seasonality quarter other. excuse fourth me, being the third from from

finish the all dictate of those, will range. So of in view, our ultimately degree that where we in

Kenneth Hoexter

Great. And search? this the thoughts? then timing external, update focused CFO Is any on any internal,

Mark Rourke

this at you for time. updates No

Steve Bruffett

minute, what CFO? Wait a

Kenneth Hoexter

right. brought that one All it up. the you're Steve,

Mark Rourke

do we process have we is something plan. progressing our Yes, And for will so. share, our when to

Operator

question Chris Our from Wetherbee comes with next Citigroup.

Christian Wetherbee

and little the so a to about specific question. maybe of I bit ask sort fleet, detailed a I wanted guess

to course ahead the previous side, just between post confirm side years beyond And Truckload environment trucks a levels couple Do I of side, Dedicated? about stretching the that. next kind and were you of how the to before think cycles of expect way the freight about on I we Dedicated back is to of the potentially? this presumably, have for-hire think us. think of next sense then to couple you of relative you but this bigger about think grow to as or better the right picture get the to quarters, proportionately it's maybe to wanted maybe X,XXX and you acquisition, want relative Dedicated evolves over the network

Mark Rourke

in you, as will space. the within I our we've laid driver Thank I understand out Chris. strategic and Yes. remain Truckload question. is dedicated believe Certainly, growth the

a period we're way And are earnings of focused with Dedicated. looking the for over so those focus less quality time between two, percentages to an our is opportunities but sustainable what in extended grow

X,XXX lens. is a meaningful a masked one-way our presence. still we have do meaningful business we the said, from presence. trucks, trucks gets X,XXX is being of increasing the but influence if stay customer network little bit Only Power What That in there a nothing

go integrate our because published how from market, we a so customer driver viewpoint, to things. than feels larger owner-operator one-way company our And network we and business how those fleet of

customer at going value maximize various across earnings Truckload And how potential so capacity our network as the that to look to those we're to and types.

types we'll that random that the in random, those are more capacity And configuration. operate network

combination be So the those things. two it will of

we're remain very pro not we're so business, great deal. we our in a And focus our it Dedicated. network anti-company driver, like will in growth But

Christian Wetherbee

Okay.

So maybe that low in like somewhere X,XXX-plus is sounds the watermark. range truck the

you'll don't that You thinking? is think below drop necessarily what you're

Mark Rourke

not be our all. would not It intention, at

Christian Wetherbee

just Okay. acquisition. And one follow-up the quick on then

are could end that per just week revenue sort variances numbers? I that's contribution, the whether does the other per week, small to either dynamics relative broader exposure revenue coming per trucks X,XXX in in that up be -- sort of stack know it As of different of piece think how market truck drive there it's per we about But on. context meaningful a or truck relatively

Steve Bruffett

what is this here. healthy that contribute is Chris, to -- very approach buying do our trying No, -- a this can to in consistent we're to we companies way

So the that some very on be to experience much slightly ahead, they perhaps will upon our current par based to participate that in. geographies of

So a contributor. be it will positive

Operator

This remarks. concludes our like Mark I closing turn back Rourke session. over question-and-answer would conference to any for the to

Mark Rourke

had logistics. talk to shareholder close investor everyone, and our truck, we those And to our capital, just outlined to today. our returns. you strategic chance focused we to pleased growth Well, by presentation. disciplined a be Great. do And referring drivers And intermodal today. I'll how of that, on of strategy and dedicated updated us is Page we XX that And deploy have in joining for about XX our thanks, we're things

as to we what our synergies leverage to our but implemented. truck In the quarter, And growth them our get strong us, we did sheet drive balance opportunity only to with Transport. efforts we not they to dedicated bring look organic M&M complement forward

right nice steady drumbeat repurchase opportunities strategic chance quarter. of our advance the almost share We'll that about is the to a for but million got remainder not We've shares today, extent, pursue in X.X to program same that which steady acquisitive talk We'll a to continue perhaps those priorities. a drumbeat. nice keep year, the our

going in call the we're our strengths a had continue again, And we across today. highlight which on to the several those invest and to portfolio, to chance of highly diversified

Thank you. I So next look forward and our discussion to attention your time. time appreciate and

Operator

now Thank presentation. has you today's The conference concluded. for attending

You may now disconnect.

Schneider National (SNDR) 3 Aug 232023 Q2 Earnings call transcript