SNDR - Earnings call 4 2023 | Schneider National, Inc.

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Operator

Good morning. My name is Krista, and I'll be your conference operator today.

At this time, I would like to welcome everyone to the Schneider Fourth Quarter Earnings Conference Call. [Operator Instructions] Thank you.

I will now turn the conference over to Steve Bindas, director of Investor Relations.

conference. your begin may You

Steve Bindas

Thank you, morning, and good everyone. operator,

Filter, at today Rourke, Campbell, presentation of the President website President me and Vice on an Chief of investor Mark press call the Jim Officer; the Financial Relations Darrell Investor our Joining Transportation and Logistics. Earlier and company an are Executive on release. and section This Chief are Vice schneider.com. and today, available Executive President President issued Group Executive earnings Officer; release

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

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

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

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

Mark Rourke

joining thank and for everyone, the call Hello, you Steve. you, this Schneider Thank morning.

long-term perspective that in context recent Let and quarter most on current placing strategic by by for me the priorities. start offering our freight our our cycle results

through back highly discussions we half diversified from of emerged customer had have theme the with consistent XXXX. our the base A

cycle find question state change? no durable. a heading consistent in it's The is themselves XXXX, capacity new is, current the of While it when virtually uncertainty demand or normal, that heightened and still even customers one believes into a does

index quite market Truckload sometimes X Invariably, demand have of below of down, historically, XXX the X and crested a adapts neutral, January, lasted steady being are Schneider's prior of with while and a and Freight that end [ abruptly pace average at theme, up environment alignment ]. the XXX an In to Internal and days X days. slow due sometimes we into and Therefore, more macroeconomics at this capacity the capitalist long balanced cycle. cycles,

are In and intently Intermodal and margin initiatives the focused return company-specific long-term their we Logistics to respect market, our operating on of targets. segments of to scaled diversified Truckload,

those in me important the regarding recently quarter Let recap developments completed initiatives. the most

overall truck through in Included is organic units segment, a in is build-in due with the combination growth support less over count Dedicated those quarter versus dozens from particularly third average ago. demand and units numbers of retail in a to improvement. up in ago, this attrition Encouragingly, First, quarter the Truckload acquisitive and channel of applications XXX even our serves this XXX year fourth year truck operations, quarter count a across demand sequentially up as a modest growth.

as improvements Dedicated week due productivity truck adjustments. per those count improved and sequentially, both and to result a truck primarily per year-over-year asset of Revenue operation-specific

priorities top strong revenue of units Dedicated's alongside Dedicated a additional XXXX. pipeline, places with the organic into in operating Our Schneider's proposition of gives of several earnings strategic us value Intermodal. new performance, consistent visibility hundred robust at it profile growth business combined and growth

were the to Dedicated Dedicated generating muted Truckload's Over the offering. Truckload challenges within offering. impact associated network due in in the returns quarter is XXX% earnings of the with performance Presently, and growth of of the

the improving quarter. per aided third modestly compared per by Revenue week productivity, truck network in asset sequentially volumes driven to improved by

provided. reason is network are until for in freight rate the there this not service at a compensable allocate levels capital time, to compelling However, additional

over-the-road accelerating Our CPKC. objective opportunities. behind the the second strategic and That through our Pacific new conversion earnings, primarily with partnership was imperative Union rail is to alignments driving grow force a Intermodal

with the off X gauging conversion operations. not are UP the We network success first quarters of

We outcomes urgently West the are reliability, not UP and game service the commercially. team only but has Achieving flexibility playing in the which here. requires our successfully long also desired the addressed, solution in

year-over-year collaborative Western was distributed XXXX confident are a working and the That a order, we're reflected in step price. back with took that the pleased we am and year a corresponding to XX% evenly order is I in successful. I allocation be to in highly am in change mix going a manner UP mix between the in in said, volumes. we trend The Intermodal change per XXXX change that lower a revenue reverse season,

thefts the We keeping freight in disruptions. considerable ] motion, the with leading Schneider's of handoffs is intermodal CPKC's [indiscernible] best-in-class its strength the eliminating are value CPKC. leveraging also service quarter other avoid is in and to [ capability committed The best improved and Mexico by way in the solution to which

Mexico. that of playing long-held reliability full we're requires we exit time be the game unlock and by beliefs However, well we long the way potential Intermodal expect market on out and Intermodal the our potential. the into will experiences solutions of Again, the and opportunity to changing conversion on to XXXX, of realizing we here,

creates for number to improve. our connections. we the digitally significant a that of growth resilient over own Schneider nimbly I the hyper softness, and the freight and our by leveraging the Thirdly, when Power digital how navigated market increased leverage I advancement begins ago. profitable. Only capability approximately Schneider to market are competitive, and appreciate XX% its the logistics am has of team Despite the acquired stay Power of the with generation orders pleased Freight model brokerage market year and environment This

trend for third into guidance I baseline. a XX% hand results, of performance safety by auto his incidents line to line safety operations, of coming basis, XXXX commentary, additional our over cutting Darrell From me including offer it earnings as costs. Before first insight and the out quarter call. the defense against as the liability let quarter compared exposure professional context our is to some fourth important the frequency reduced to pre-COVID have rising settlement an driver is teams of That

However, in the on [ without adjustment. year. a earlier primarily ] claim snapped in claims consecutive from adverse a development, XX significant incidents we quarter, period Those X X quarter the experienced accident

played contemplated what gains. out cost from side On we the of in for drag guidance. performance the in earnings lower tax adverse the posted per as equipment and safety share of nearly Otherwise, freight disposal lower represented and quarter terms a net positive of the ledger, The prior expected on we lack of tax year. our a X% rate developments we the yields,

volumes December. network than and were truck overall expected, but December volumes both weeks in the in the Encouragingly, for around Intermodal, in were quarter and especially up holiday November year-over-year more tepid

turn XXXX over and on his Let quarter guidance. it insights me our most to for recent our the and update Darrell now allocation expectations capital on

Darrell Campbell

thanks our Thank provide some us results our of for you guidance. XXXX and morning. you, joining full financial to and a perspective year of recap Mark, this each and on I'll fourth quarter

You to our XX on Pages XX can find summaries of Investor Presentation.

for fourth equipment $XXX XXXX. $X.XX on per Adjusted loss Our a the earnings quarter year. in a was the revenue or quarter compared from quarter sale for the XX% gain year. the prior to in million earnings adjusted The share prior of were XXXX versus $X.XX fourth of $XX down included fourth million

per to compared Mark our by fourth quarter most related impacted unexpected negatively $X.XX share items. earnings recent guidance, X was to indicated, As

Firstly, primarily Mark accident adverse development, X related that mentioned. claims to

impacted. While in all higher were Truckload, predominantly claim costs were segments

for research Secondly, and investments the favorability development Asia and in in trucks addition changes associated increases losses related sale in our business. rate, from credits the to new which in to of electric valuation our income with allowance tax in our tax our activities

excluding than fuel offset organic pricing the were XXXX growth by of was Dedicated our Transport. more acquisition revenues, above surcharge quarter XXXX of revenues fourth from Truckload as shortfall in and for the M&M recent network slightly solid

were primarily to costs. also margins earnings discussed network on adverse earlier, inflationary price, on for and loss lower fourth the equipment year-over-year a Truckload sales development basis, due and claims the a quarter

believe Network and the rates In particularly have XXXX was largely second and our challenging, half business, Truckload reset. we that

was as As have high are uncharacteristically spot contracts that quarter, sought rates we to we last at noncompensible. entering avoid communicated exposure into our

rebalance We seasonality a the and During in seen indication our quarter and the bottoming stabilization volume the an spot freight saw sequentially quarter, fourth to pricing. pricing are marginal we continued the of to cycle. of fourth current in believe contract mix the

this and improve build momentum during contract to on expect to rates XXXX. We

we business the already businesses. very growth quarter business As seeing the Mark Dedicated recently organic of we of mentioned, XXXX. first our from solid remain fourth new in start-up We're encouraged the in see stellar our by performance and performance acquired and awarded to strong continue quarter activity as

which acquisitions, year and prior quarter Dedicated should X% sequentially. our truck We support remain week the to the revenue on per earnings fourth disciplined customer increased per and X% continue expectations. growth for from

Dedicated XX% a this organically Truckload truck of progress end to count year, strategically over year This and to trend commitment segment the of reflects our As stated opportunistic ago. grow through XX% represented of business compared acquisitions. total on the as the

Intermodal. Turning to

key We opportunity. Intermodal a business continue representing structural growth our to see

chassis grow capital. our well are existing business trailing container to injection without to XX% our We positioned with and XX% the of

declined For compared Intermodal to excluding by fuel the XX% surcharge, revenues, XXXX. fourth quarter,

network, Truckload results. significant pricing heavily the in weighed pressures As on

X% For to the volumes compared XXXX. decreased quarter,

and orders year-over-year marked empty of to December year-over-year, claim due February. primarily lower price growth Intermodal in to month impacted increased However, were costs. the since repositioning earnings first addition and

declined by per XXXX, Logistics volumes. XX% for revenue fourth decreased as revenues XXXX primarily versus as order quarter of to well lower brokerage the due

mentioned volume and earnings also impacted claims adverse fourth to quarter earlier. logistics by In pricing and the addition were margins the declines, for

these challenging Our in orders the return Logistics due our our for revenue of saw continued optimism freight also The sequential both growth nature seasonality. long-term net businesses and to profitably continues day on We and during order per in to part capital. asset-light businesses support through cycle. per operate continue to improvements quarter

of Turning most $XXX ended the with below of guidance million. capital top XXXX recent CapEx net for just the We end million, year. to $XXX our allocation of

our increased acquisition we year, M&M related of partially August. debt in the During to Transport balance, our

X.Xx of operations. at net in and the generated the $XXX year, end we Our leverage debt million cash from was

us the balance and gives sheet strength remain to value including committed current Despite our operating to returning capital conditions, to our our confident strategy, conviction a allocation shareholders. of

XX% we strategically As year. total such, XXXX, continue shares above XXXX, the which and $XX for million to in during was activity $XX of we paid repurchase million with dividends

in a dividend quarter, our increase we increase quarterly an addition, to recently X% per $X.XXX from announced XXXX. In

our consumer a of while consumer have moderating that been end factor interest interest Moving has XXXX been be higher forward-looking inflation From Reserve's indication Federal the recent pressured has optimism and comments. and in inflation lower macro confidence. perspective, could key rates the and a now by demand, to rates

believe confidence persists. consumer we if in inventories, of will normalization the shippers XXXX to restocking Given pivot

across our the we taking segments inflationary continue In addition maintain and in in we're costs an to business volume, actions recover pricing managing to discipline environment. to

As we to throughout identify incremental all conditions, during market opportunities we continue do XXXX.

costs safety and expect XXXX, inflated premiums. and than of We in our immune transport. on elevated M&M because full focus increased not settlements to to primarily of in be we're Despite and safety, investments ongoing year increases also insurance higher impact litigation, the premiums

to equipment million gains XXXX, realized given and We equipment $XX of used be expected current state expect market. approximately than the the lower in

of included adjusted XXXX while guidance investments, strategic EPS our not. Also, from our of $X.XX assumes gains $X.XX XXXX net equity

usual is As losses, record the into or will as them equity our throughout incorporate we we year. our practice, guidance gains

account, is tax $X.XX. assumes for Taking share XXXX rate guidance guided our per for all considerations effective XX.X%. earnings This into these XXXX normalized to of a $X.XX adjusted

we timing expected bottom ] expect results of The impact in half and second of remain Logistics our the net our revenue the the progresses While cycle, are XXXX, of the pricing a the as and sequential Intermodal at the lower pace to in of contract year and of as [ we effects we XXXX uncertain. Truckload recovery weighting businesses in both with XXXX. freight network and compression recovery we're heavier continuing market toward during believe enter

provide year some plan guidance I'll full Finally, our net for CapEx on XXXX.

progress notable production as have constraints. made Asia their OEMs our tractor ] fleet we XXXX, towards from [ targets recovered During and trailer

XXXX. any to containers without confident We add level chassis investments remain need in volume in XXXX. the We, of our expect or same therefore, Intermodal the do not ability in also grow CapEx to

In invest we'll addition to in continued Intermodal technology capital in growth Dedicated investments, and tractors.

equipment sales XXXX. from anticipate also proceeds moderating to compared as We

$XXX of As of be considerations, for we range net to XXXX. million million have the these full a the to CapEx year in $XXX result

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

Operator

Instructions] [Operator

Your from [ comes question the ] Chan of line Bruce first Stifel. from

Unknown Analyst

to great in always it's and call, the to welcome [indiscernible] Darrell, the another have mix.

now? capacity of trend here do a environment bit as we on But have to that if kind And maybe from in price unleashed quite others just expect as the or recovery? that given Intermodal, you and peers maybe and competitive right you how what be that's there, far environment question of your a seeing lack as thereof see discipline a waiting competitive to are you

Jim Filter

Yes.

when competitive place, the is think competitor the about So interval, the over-the-road. first we landscape for largest

is we're And the looking, #X the is. place that where -- largest so the that opportunity

a stacks. of Across lot that up containers landscape, there's competitive the on are

isn't to there necessarily to service continue to strong those back be able to all so And of need put a into operate.

I needed to We're of So terms not stack. the take not take for what's off in there's that's going stack discipline off think to compensable. pricing containers containers the

Unknown Analyst

of so follow-up discussions in year? helpful. turning think that. customers business your they this network going? been about the and really have with That's well, just in signs I Okay. And the to renewals, Contract trending When Any a positive maybe quick maybe how are far those point? as Intermodal discussions

Jim Filter

the Yes. really early Well, in There's out wide very spectrum a season. it's there.

have very this at So point. out that there's not closed many

a Darrell approach that But one same effort staying -- and their don't no There's say themes at through here bid disciplined. these work bids Number into customers' and step hold also room that, a mentioned, time, now. there's entire the a that together lot just expect Campbell of to there's that the our there's are cycle. right couple back I'd of customers further. to putting we're take as bids

Operator

the Your Stanley. next from of question Shanker comes from Morgan line Ravi

Ravi Shanker

current stay know Are on underpinned of year-over-year is the stable what year? of gains through I of guys EPS that the et of rest -- there's of timing loss cetera. but seems headwinds tremendous Or the equity even So uncertainty mentioned, you that those assuming conservative, conditions on kind guidance cost you down inflection, this sale, the some with very and exactly kind the guidance?

Mark Rourke

what to communicated label beyond I'm Yes. Ravi, we've guidance there. on a kind it's of put the Mark. hesitant

think we at fairly As price anticipate. can a towards productivity, is the the at view balanced we and where -- we we've look as initiatives, currently our market and from we and on look expectations company-specific our as range given understand

well do We upon and deployed the supremely particularly business on do the assets our pivot our positioned be model quickly. and brokerage as believe, as are will pivot we depending and upside conditions what our can quickly with go, where to we

avoid And can anything conservative -- So at again, whether [indiscernible], in clearly, anticipate that. like think taking what putting I of we've this that's would balance, or or but I we into just account, point. probably aggressive a label

Ravi Shanker

allocation Okay. little exactly Intermodal Got cetera? take elaborate the XX et resolve? to it maybe of follow-up. And months a quick is the going it. Kind you and happened of Can surprise, issue a the what UP. What the bit to are more there? kind with why on

Jim Filter

Yes. Yes.

there So first out opportunity. market, of in seeing we're the all, broader there's

the that's As I opportunity. mentioned, the market, Truckload largest

was we taking year UP our that additional there this market-based opportunity an commend is relates I both have first is think West, it -- are have I But for provider learning in but rail second year the they're for But term, really volume, the long that the this on And it UP. competitive. think our imports. as out to normal opportunity with the sides. they're And improving for I and deals service, we based cycles. a on

a So of little seek And of with seeking our forward. work that learning, those, move abnormal there's flexibility. looking using alignment little we that with both little bit times to a and bit forward sides, rails to this go during we cycles. to through when bit of year differently for leveraging a And we're

Operator

from comes the Sachs. of Goldman from Your Alliger Jordan next line question

Jordan Alliger

the again, thinking Just the guidance a once about year. for question, sir,

a there I seeing is it profitability? second the difference business pretty little first half, being how a now, the of think or about X first there segments shape going to the a better your sharply half? way you're SKU terms than terms about versus in to as progressing half year bit be second of You in between And [ the is you is mean, about think ]? half but talked it

Ken Hoexter

go wouldn't we Dedicated to we quarter-to-quarter. as considerably that will as the consistent Jordan, a continue shaping at specific segments, think our guess, it various I do year. improve we any beyond you give what is X. through that be, bit -- more more applies you to comments believe I look Certainly, all

And of believe, businesses, out XXXX so come in the we as XXXX truck I opportunity our come have network and into the season, Intermodal. both biggest and allocation

with as volume So year increasing be, upside and segments, I to all X would to fairly characterize consistent pricing the the progresses. opportunity relative in

Operator

Your comes the JPMorgan. next question of Brian from from line Ossenbeck

Brian Ossenbeck

bids, mean I I hold to first, their about just to cycle. into question mean want that not back, your take the go you're in that. read see know the to some you give through expecting around expecting maybe an they're of Jim, us Maybe and how one trying Does to year? the that. customers to don't inflection? more context Does the happens apple that the what half back of to bite can some

Jim Filter

the Thanks Yes. question. for

to expect was there's point going as did. as that and So hold. dig they year overreached to be inflection point, the an trying that these that have at to and the it customers during may going at far And former that aren't some some they

Mark Rourke

the broader long towards Yes, much being, that I the in we more fact would folks broader balanced our spectrum conversations are view, as into say across this are cycle.

we'll on are will account more those aggressive, there look, that of to referencing, take on communicate and of approach. type customers into what all upon their we approach, is not make as and them, Jim we of think what or will we behalf think folks, that I that based be with commitments

for one of believes when. no think just balanced I in into we juncture -- long going XXXX. we're opening forward than I as in those increasingly, would more as but seeing And conversations, have coming thinking think said matter described It's you're we were condition this term. in this comments, the my So a I

Brian Ossenbeck

positioning talk truck some market, And fourth in quarter. like then, as business the a capacity the mentioned hanging that All came given loss-making -- about you're performance just of you network seems into Mark, the for the on it this cost, more how right. You was to with cycle? but keeping spot, can bid obviously the

you that's rate just right permanent So drag? still into you're to there needs equipment kind quarter market? that capacity back first get your time Is biding feel Or still come out? do some this like until of the and you the waiting to move in

Mark Rourke

think we to is presently, is there this I looking Brian, communicate try capital to add what not Yes, that place we're a to.

We that also historical to know up both network change. the from truck practice quickest business, down our cycle reacts and the

focus the And to so does we network. customers our to an it's improving Dedicated about in that's support role play in the of our adding really well revenue important advance capital quality before start-ups. and on focus, think the It

but There's equation. additional don't that Power we that put bring a things capital equipment lot own our into that to to other of capability on with with Only there, third-party party, margin trucks, restoration, increasingly and we it need that the focuses and they augmenting capital leveraging add into network

Operator

Your comes from next Hoexter question America. the line Bank of Ken from of

Ken Hoexter

I $X.XX kind -- outlook. or of -- you gains ] that's of kind on the you the $X.XX, if Mark revisit year, of just and the gets talking why you flattish it's with Ravi, the Darrell could about that eliminate [ were if guess this we I guess, outlook $X.XX

pricing? about you've like and CapEx. mix But maybe, growth got can based that, puts It and fleet within on on takes volumes the sounds talk you your

get within is puts trying So growth? the offset more and growth inflation fleet flattish to that outlook. takes now the yield are and to your that I'm is just it going

Mark Rourke

all, $XXX because the $XXX we're fleet. considerably -- the the over and looking guidance of here But of Yes, range I'll on catch-up from CapEx of OEMs turn mic to ago to of momentarily. our is with a fairly start, million million Darrell first and down at growth what I'll age year the

up positioned new equipment. the in just cost feel that because the of So years inflationary we with associated depreciation but well is last really of couple there,

good we've From standpoint, be and would through we and second sustained to give have really a really success into a both organically, start-ups that had of focused first that growth and visibility X Dedicated will of we're on XXXX. continue the quarter where Ken, us momentum areas, number have we confidence that

we Intermodal put And success leverage growing ratios be, grow won't without need we while we but fleet, chassis to to additional trailing terrific business, to them and we dray look then on container the with because adding we have of there have company look our and would fleet. our growth self-help the where add capacity,

we tractor growth there. have in So some

don't of the Dedicated. We outside need truck Intermodal in the trailing on either equipment, really see or

And all as in guidance so forward that's relates it CapEx. reflected our to

Darrell Campbell

increases equipment equity my in of comments. I've Yes. is is, increase, there's And obviously, safety thing not gains normalize. other sales we're add also mentioned expected The due expecting only to which talked lower you costs, then in $XX primarily XXXX insurance mentioned, market, that at rate, I to the that in we're addition gain I XX% the to would assuming the million, model, in premium which on in our about tax to premiums. which And is

all headwinds slightly some what in are Mark talked things So those of growth. about impact terms of that

Ken Hoexter

Darrell, follow-ups. couple of maybe just a numbers

the boxes get say it. number are you what still ask then more, that's gave You Intermodal, quarter, you rates, did X but And about percent then was me I'll mentioned number, if there in loss a of contract let stacked? with I don't that? a think asset And you

Mark Rourke

going probably move on We're after to the X.

chance to up. Okay, catch

Unknown Executive

want to in on jump the on you number Jim, if loss. that? no But Yes,

Jim Filter

Yes.

there's that [ So stack the are XX% about containers ]. of on

Operator

comes next Chappell from ISI. from question of Evercore John Your the line

Jonathan Chappell

visibility until Yes. to it's of I like hate a is see call whites eye. but to get this so be seems you be closer the it to years to those going the focused, one tougher make of with where short-term

kind as off it of sequentially? there segments in relates we basically Or should look maybe of at different seasonally the coming XQ, typically as why a season, XQ better are of seasonally it So does idiosyncratic peak muted reasons some XQ? similar to all but be look XQ weaker, to a

Mark Rourke

the quarter, in couple little we've early impacts, been to initially, comparison dealing, obviously, first years. of weather had we and some the through it's least particularly, couple weeks, last Well, at adverse of in a the

our, keep relates a We half, will said really, the do to more is what in bit year this yet but second shaping more not the specific the throughout thoughts to we'll here to improve be offer of as the year think So robust the in it quarter. first it we and guidance point. any continue

Jonathan Chappell

can turns, do drive you really are things margin structure, improvement? -- even other cost Okay. sorry, there will volume this obviously pretty optimism Understood. have Jim, back Or volume you get Intermodal before lot provide so some some volume as back I'm improvement last there's margin getting true improvement to volume networks. to step a better months. relates obviously, can more about that margin, function Is the the a over leverage, inflection? the it different on a of the of will has But drive XX strictly the internally taken will operating margin productivity, actually a significant drive the you

Jim Filter

Yes.

the there put were during obviously, stack. on were that some So quarter, additional containers

So some that just additional there was efficient running network. opportunity more was also There's a absorbed. costs

getting So as well it's empty productivity. as volume repositioning reduces our driver not the just getting right costs volume, but our that

So to all be margin. areas to improve focus are those the able

Operator

the Your next Jack from question Stephens. Atkins comes line from of

Jack Atkins

Great. Okay.

full of for adjust the back second headwind go taxes guess, are and going to the folks you for kind a confused guidance think because what I I $X.XX, in to about like is is the I'm insurance of when So $X.XX, to your fourth that something I kind $X.XX. fourth you're the of to exit exit annualized mean rate year about $X.XX quarter, guiding for in the and a quarter, kind

specifically trying my we're I'm So of a it the business guidance assuming like guess half really bottom substantial in of around range? to the turn second improvement of a you trying get this get seem is cycle pretty arms what would kind to in just there. there's for to end underlying trends what the I Because -- are year

but to something that to help we hope happen, it all going So kind you're through think of it because us like seems happen. is expecting

Mark Rourke

Well. fronts. Jack, to that address and a I'd in of couple like

company-specific First, we work closures annualization prospects focused objectives to visibility which our organically. we from in been both the we And Dedicated, all in good of that the contract doing and we've many on the start-ups. have and anticipate, of acquisitively and

focuses leaning in truck dramatically are about I to strategic on continue Dedicated good into where we So that. key our to overall feel improve results our there. that really we're initiatives us And and positioned allow business business

believe based do to that and how relative look alignment Intermodal fits to that strategies their growth customers, we our Secondly, we our upon are, with what accomplish are the into they what well of business are in change XXXX emerging some Mexico. trajectory opportunities we're experienced that leaning to in and hard that in positioned, include we've in unique really to the that

So that's two.

would middle cost been you since into we've expect, efficient. the as how leaning, of really, Third, more XXXX a structure and we become can

without material third quarter, in that fourth the very way. demand asset improving sequentially, results improved a or productivity our in saw the You

into improve are So our think to that we expect asset again, we across everything results. to turns those portfolio initiatives and that is across leaning that things improve we do,

very also long But clearly, we believe the we're into cycle.

cycle. to certain company-specific over a factors elements have comments, time, end also, that and look metrics we I of this very in where outside is long correlated -- of that my historically of which data at, month, we'll the surpass cycles, mentioned opening is the XXX at in internal which Our correlation days, combination we as

that, been that. whether steady macroeconomic, a marketplace. capacity that's slow, turn slow occurred some accelerate catalyst consumer over have to we'll condition, and level confidence, get an that in And include time, stubbornly of a continues rate do There's to restocking and some into back things believe exit inflation, the pace will it's extent, doesn't and we that can

taking exit, slow to and highest We're that's a that those steady year, that continue, we what things. we and we that context. throughout company-specific put probability into the believe taking we're that a So restocking a put and range. capacity has the again, restocking That's will slow improve into what steady guidance

Jack Atkins

Okay.

had And during so guess sort accrual, some on almost kind season think calls. that's a mean, insurance. It's been for then all either I I it's key has really my on Mark. far this everyone follow-up, true-up Okay, of insurance, topic [ reported maybe of these ]. I earnings

As in you premium percentage could any number? you're forward It sort expect of hard as of just some. just on moving would just to forward, expecting that your the sort structurally, are of talk insurance market inflation just costs thinking about feels you is you moving XXXX? this a a revenue But higher about be like, -- or in

Mark Rourke

Yes.

certainly, we under expect and I or of you're whether is feel portion talking trucking that. the and other any think pressure economy, markets, the we insurance from really standpoint, premium a

we what's I not have had we streak at really quarter consecutive of adjustments. did XX important look these type where think we specifically, when a Schneider

take safety technology, that of of it and reduction from couple core the and our it's the in with of I you, last we results, company years. in training see the from do value first you seriously, and every reflected -- So a incident shared over XX% the all, day we very what exposure

with have So it incredibly correctly risk you doesn't and important you about in exposure all is be it a escalate. when of incredibly a that it's it that you evaluated realistic important, to deal and that have also way

this us with X incidents. Unfortunately, quarter snapped year on that X XX consecutive around primarily streak

them issue, accept the continuous to but happen, don't a And so, do it's this for fact time and was I our they happen. that

Jack, really [ factor hard others, leaning yes, it hurting and it's of are part every or ourselves that deal insurance as -- ] will with I worth so do organization. me, we're everybody is external of but have our to nothing an is because side going in we to for premium So think we the that

Operator

Wadewitz comes next the from Tom Your question line from of UBS.

Thomas Wadewitz

a ask bit So about to margin. I the Intermodal wanted little

seems is in elusive? it sequential lagged XQ, the purchase be like that Is kind supported that this transportation, on it on that in anticipated think you will I Or that something purchase you it's reasonable by help Intermodal kind think it been reduction in yet you think just at margin look if terms to XQ margin would helping that of see whether side. there's visible that of or continue of hasn't to been improvement transportation?

Jim Filter

Yes, Tom.

target that for get quarter margins still but we do of you and we that margin long-term be are back we'll of back spot. all that, to those get So yes, targets to will couldn't that long-term have give we anticipate our there to right a targets. timing that get X which those still segments, we believe point I our there, we a out margin the and believe

Mark Rourke

to Yes, think approach, effective on I and well cycles. positioned and business Tom. our competitive Intermodal, is particularly And be through normal highly freight

we've significant a through upside. been I obviously, think,

those Now, we that, market our become customers, our with easy backside to commercially with abnormality, we've working to our particularly we're deal more for how to providers, period. seen rail ones, newest and say, with the partner me nimble of

then leaned to to degree would I forward And base. capabilities really through how and overall, continue And that positioned confidence have we hear the we're unique best to absolute we'll customer in our got looking exercising season. allocation service the But provider to of that And great as And We this there pursue. think solution think out and expect partners have continue really next real our a I'm into to I pleased have with we I that well. Mexico. operationally think we've to can do improvement there improves. we give some

would feeling -- in position I I would it that read good a improve. we're So should continue optimistic to and and that as I guess,

Thomas Wadewitz

Right.

too. results, Okay. well-run pressure of losing capacity point, on do the you cycle downturn cycle recall how maybe Mark, I result -- adjustment? -- to think at and does some Heartland's ask out where I'm wanted seem Because other on to to money, seen market, right? a look some a big it truckload like don't network this? alluded results you than pronounced it's you you of I such been trying bigger just in, losing And the these just at you think pressure cycles. what's kind downturn money. as a a question, carriers. Do that I like there's truckload prior carriers, figure in big we've I tougher

Mark Rourke

Yes.

about exit I stubborn think capacity. we've all the been of talking

expected have exit we I bigger a faster think, occurring, a at rate. maybe it's would certainly,

-- there. us market different have play. and history the But I forces dynamic in at many got think industry upon all based of there's would

a equipment get the are what some your at I play particularly as to we the Tom, pandemic-driven the through space. the the factors results, those in the there, wages short think a particularly that of had inflationary back space, in difficult, you're through we term, pushing also went side bit at, And on driver upside, compression, is, more perhaps least correction.

and factor other is the that's pronounced so bit And and a that a periods downturn. perhaps have more some happened XXXX -- in more may than pronounced some like of prior

handle those costs. a I think got So on we've

certainly, to an the compensable we service the we cost to I approach think rates But provider, don't are that. think for the serve. got

correction needs insurance side that that the that. and market be, had to throw be to reflect will you there the confident there question a just we're here Now we prior on pricing

Thomas Wadewitz

that with we'll is see but result do a downturn agree is, I I premise tougher what guess seen? this mean, the we've than the maybe you

Mark Rourke

what I my it my on as has of Memory least backside both the extremely would been, I on be sit the that -- gets say, top the year was to challenging -- not experience, a as harder the in bit X. put would got at if sides, robust most and this those of implications And from correction, what here we it's now industry, XXth as in were. the this in --

Operator

from Susquehanna Your next of from International Group. the Bascome line comes question Majors

Bascome Majors

are environment what looked is following between earning Following up in today. how at can where other that's us a versus at is on margin, is on the and understand network gap you context historical give And different what cycle Just network Tom's about troughs? you how with without charges on any Dedicated quarter? network would now Tom this to the operated in the loss claims question dealt -- you the have that up

inflation in And above to half that, necessary pricing way, get just your one Intermodal, objectives? to to and extend second how is

Mark Rourke

safety to certainly and Bascome, implication reflective that. results that. the the much network certainly our truck let in me in would so Yes, quarter the have in and without try unpack was been pronounced black more pronounced -- in

clear pricing standpoint. is from indicator. This So a a

things very, recruiting is But our out acquisitions, we the of and have even naturally into you're the with startups well. with when pricing associated some in volatility and leaning Dedicated, mechanism, that, addition to is feel our very the material and all, gap positioned Obviously, of friction that First portion all the in come you in costs a the of that business. that because around additional network spurt, plays business. with growth

a do book after simply we margin our need So rate recovery. to of do improve it's And going be to why X, lean that's restoration. capital. in business. And and cost That's to of productivity, not We priority get we're the adding to combination that's price. need

Operator

Your next the TD of question line comes [indiscernible] Cowen. from from

Unknown Analyst

appreciated. out? pricing helpful if the the This be color predictable creeping dynamics the is distinct [indiscernible] that in Intermodal a it if cross-border? tariffs into on it is Maybe us be could I this mix this there a at on one, for sort Anything have you would one how just adapted term those in the Any Did fairly business how tariffs evaluate Jason China longer of the but to do you with implications? imposition of stage, would volume Intermodal. back Seidl. appreciate Intermodal longer any Maybe on conversation, and remind possibility XXXX? play

Mark Rourke

the is Coast not And share place our leans in imports of certainly, that typically of a West maintained towards have we effect Intermodal And would is our all we imports heavily one most business. and the expected. have service the of Yes. that that offerings,

network. western component, And particularly import so recovery side of is our the in an important

those on place in the We the here. investment some which biggest Mexico near-shoring winner have is that's activity also geopolitical, is of the I positives think, going that, taking real response some on, the to

Some take to and take of to those hold. investments time mature

there's moves there on there's want length opportunity to of of parts the hauls out over well that over other biggest the to some economically, clearly, and winners that part But how make long much and road we're also of pressure, emission-wise, in time, the of. while take sense the advantage another is we sure freight most Mexico, geopolitical might be some, make network, positioned so

in we Mexico. Southern And from Eastern obviously ports activity to shifting have ports seen port and to some addition

more are opposed generally truck which Intermodal attractive So to over as time. to

maybe just Jim, XXXX? other comments, But

Jim Filter

their surge when in cause sources bit really a as if of little Yes, came of back But of they a go a finding other XXXX, created blip, it back, I some did to demand. our products. are customers short-term it

we So sides of saw both those.

you impact had so away. And type that right of

are and our we have for help customers at their their a Mexico of option, low-cost lessons countries, looking been -- using and that's of have great They've because to as Most customers they more so other learned. Asian the countries, us why derisking is other really strategic other supply service chain took them. been more Mexico low-cost our

Operator

of line the Wetherbee from from Citigroup. comes question next Your Chris

Chris Wetherbee

side. wanted Dedicated I the on to ask

a overall little competitive as I dynamics guess, where picking side heard we've up. I here. the of we So cycle expect of, kind think, are Dedicated bit on the you'd in

base I about fits per metrics that a context. where it the addition and of a in Is trucks you'd do sort Is that think outlook what sense is per that of I to reasonably So in? guidance looks, it health as doing the point stabilized? kind expect think sense, at you of truck revenue you, and Obviously, or just to XXXX wanted want to you good But week it'd get for cycle? the touch market how the what of be this post the whether in looks market? of get that that the guys,

Mark Rourke

Chris. Yes,

As it has it a generally relates Dedicated, little cycle. longer to sales

And the so lot work the under you've work in prior, year belt. a of got that you do your

months your And of we a into at your you our to so here. of X have generally been leaning the business, better have you visibility where but current reach extension retention both little levels also expect least out, as

successfully our visible that Not is going what very that pipeline recent we based calendar experience out upon not our the success decision-making be new see but the have that's visibility that, our both as so in story yet in year and second confidence and and the gives for scheduled third fourth for but still that's quarter, starts quarter. into XXXX. us the first good us through into fourth to another really and and in are say very, process, have would and robust. business guidance. pipeline of We've you We only parcel we the part market And to quarter,

Chris Wetherbee

Okay.

maybe just quick one then Intermodal. one And helpful. That's on Okay.

big little have the you I the Just of know picture. doubling bit there. thinking goals business a XXXX more

sort of need break about where of turn utilization asset how from profitability to investment maybe guess, think business? again? we about I what in that a points Just on constructive to terms in of you be sort get the hurdle of on perspective you to thinking the what start are should kind growth or see you it's curious more

Jim Filter

back levels we're getting need we when be of margin We and Yes. to as we turning demand, get increasing see and those that's that to that we'll to be capital. see targets. the to back on back able level And long-term the quality

Mark Rourke

in just to even of such [indiscernible] to opportunities pretty relates high us, box front to having [ get as back it turns. productivity not have we Yes, ]

take to normalized very news think investments good sure make the more focus I in of part, back the some customers. And to We're seeing most that container. that. our is we're this be we our with past with turn front a could the efficient base, the customer chassis year, did for we getting advantage

need where So our there, ratios are to be they Chris.

to And get in volumes. like that things after margins additional capital to bring come to with cost and so improved we not having invest incremental the growth on

it's -- we have want now, to that and it's so the we're not -- we So think invest, yield time we to benefit invested of so investments. don't those

Operator

I time. have further will over the Mark closing this no at We to Rourke for queue remarks. questions our in conference turn

Mark Rourke

I and appreciate operator, morning. really this everybody's you, Thank attention

had about the Dedicated demand our our and power commitment our strategic platform Intermodal growth talk of to freight through capacity of advance drivers and We and our truck, to opportunity aggregation around logistics. an confidence our conversion

improving in the about second year we're more progresses. half. bit talked see, So least bit the capacity XXXX we throughout year, heavily and here we of a And get as as a that weighted in we've with a at as call, to to balancing do early, this transition

get forward So season. thank conference you for and as we into we engaging your attention, look here to

Operator

now call. participation, your for conference you This Thank concludes and you today's may disconnect.

Schneider National (SNDR) 1 Feb 242023 Q4 Earnings call transcript