SNDR - Earnings call transcript Q2 2024 | Schneider National, Inc.

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Operator

Thank you for standing by. My name is Ian, and I will be your conference operator today. At this time, I would like to welcome everyone to the Schneider Second Quarter 2024 Earnings Call. [Operator Instructions]. I will now hand the call over to Steve Bindas, Director of Finance, Investor Relations.

You may begin your conference.

Steve Bindas

good and operator, you, morning, everyone. Thank

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

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

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

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

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

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

Mark Rourke

positioning for the Thank shareholders. of commentary earnings everyone. second context financial offering then how half the and and Schneider multimodal revenue to it regarding quarter cash business the the and will the the are year of growing I free joining and on results Darrell setup allocation and turn for generation. freight share towards current call returns I for results Steve, on capital for on per the perspective over our guidance. path trends our my his by second and you the our will the strengths and platform morning. you, start hello, second we Thank with cycle in this quarter

their want sequential the the thank we control. associates, our and in Schneider Truckload, for and made improvement contributions to all of by solid professional diligently drivers we segments Logistics focused In remaining earnings primary on four most in I First, across progress margins delivered quarter. to three we the Intermodal second quarter, have especially areas our the the

based First, effortless number of resonated delivering we which recognition received. know customer awards upon an we experience, customer recently that a

dedicated and with optimizing Second, expense season across costs purpose our navigating allocation ratio intermodal drivers by to of trucks; shipper and third, the capital the XXXX freight tractor opportunities across allocation discipline; increasing stock, categories. all chiefly and containing rolling fourth,

continue us These actions to enterprise opportunities as to ahead freight market seize enhanced drive recovers. value, allowing returns will the the

combination and Our customers and best reduction commercial philosophy performance to more platform the multimodal service, agnostic that emission offer their meets transit cost our is across be of needs.

While is to our in based our considerable offerings and three purchasing enterprise services in the leverage function XX customers evident top is all compete propositions, of XX upon value which commercial are there independently segments. constructed unique

customers. with In quarter, the recognition partnership including of clear awards, the Carrier sustainability. our resonating and that received is and is we It value five Year

been our continuously what they outside seeking ensure that from their with a ahead. customers aligned and hearing to chain brokerage during they to that are are frequently our capacity diverse We balance we we understanding events customers, are more and with mix. allocation asset-based full collaborating have needs, secure across see and both We've supply

freight the allocation through We XXXX shipper approximately X season. quarters now are

contract years, achieved of our And spot with network, price time offer in the exceeded So multimodal truckload for let I price. that second modest we our quarter another first highlights gains. June me positioning starting Truckload. believe are instructive for X quarter of forward the In price platform in contractual

Importantly, contract of the for month spot as above well. remain July full

However, our the out of recovery. prior in the we therefore, shifting behind we expected timing that pricing guidance, are tempo the

up growth moderate expect Dedicated, were XXX efficiency the was truckload. of asset Dedicated further In new second we existing first actions year-over-year a total for were points segment improvement sequentially down margin offset and from deploy acquisitive margins counts and Dedicated basis the count targeted growth. Sequentially, half account churn. truck through tractors X% the truck implementations as with of Truckload we organic the year. XX% in combination as business represents and XX% Overall as well account improved of quarter,

and X% by Moving West were shrink competitive slightly to Transcon, the alternative. highly up against segment. truck in Mexico Growth counts our fully and East asset-based [ in water sequentially. up the offset ] Intermodal year-over-year the was

the experienced import year-over-year not has Intermodal domestic to West benefit port full higher transload of increased started levels, activity. see the we While have Coast

our to double-digit freight times. we at delivering CPKC the and in between Midwest Specific growth with recent Mexico truck-like transit cross-border, momentum recognized volume the Mexico

investment, growth manufacturing ongoing production shippers as chains. forward. to move supply Mexico nearshoring opportunities their We driven continue cross-border continuing to we see automotive into build and significant by

XX% We commitment than We network, reinforcing and productivity grow repositioning in decades year-over-year shipments. Mexico to fleet. reduced quarter executed from to X gains recently our a heal cost, company location on high orders worth by and XXX our dray improved results while basis points the which the drive that Overall, friction expertise first our more margins that continue moved and have ratio moved new long-standing build in intermodal City we as into with maintaining market. presence, fewer fewer drays our of trucks driver we empty enabling the more

the the back in improvement margin year. We expect in of half further performance

logistics as first X% quarter, from first brokerage order Brokerage this the stage shippers favored the the considering performance market. at we points especially Finally, freight year-over-year cycle. quarter's volumes brokers the highly of are by in basis effectively X% growing asset-based contracted competitive quarter from sequentially improved as increasingly competed while margins XXX the

augment shippers of truckload the prefer mid- needs network growth value the flexibility back Only pools. trailer our expect And large half of continued percentage we again, of and to pool serves year. Power its sequentially double-digit Only year-over-year volume rate trailer year-over-year in both growth and shippers. the to the as Power

encouraged We through market of driven by capabilities challenging our power-only strategy by freight freight differentiated offering. continue be in our and the conditions, power performance generation brokerage these our platform, execution very and to stand-alone

quarter in the indicators, saw demand, during summary, including and seasonal event, In truckload positive Roadcheck contract pricing tightening gains supply network. spot increased price annual the modest our

not market anticipate signs move yet are we which there not of forward. will the calling as are and just While has of proven, we trends market a we these improvement, opportunities sustainability yet present inflection

quarter Darrell summary we and it questions. to ahead Darrell? turn me his to look for your let before So over get a on comments the

Darrell Campbell

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

priorities enterprise flows and refined and and Our financial and our segment net provide guidance. CapEx cash discuss context XXXX the quarter, our on review EPS capital results allocation for

website. can included You of presentation on Relations find our our on investor Investor summaries Pages to XX our section XX of

Our adjusted income operations the million year second $XXX from to for was quarter compared a $XX ago. million

earnings share was per $X.XX second year. to Adjusted compared the prior in quarter $X.XX the for diluted

represented include the EPS. on Second XXXX quarter $X.XX which higher versus gains a equipment current to headwind sales period,

adjusted actions sequential adjusted of and cost XX% operations the quarter. quarter Adjusted EBITDA in was increased to our continued As market XX%. million improvements of higher $XXX this also the income The operations first adjusted results of and productivity from improving million year, or commercial income the EBITDA conditions. from compared than $XX first reflect

pricing slightly second revenue to for network pricing recent driven quarter offset primarily lower truck up growth quarter basis, lower at week revenues quarter by from second partially by a contributions the grew network, and the Total for which to gains compared year. lower equipment. driven. a most M&M last organic business were our due per sequentially our Truckload Within as transport, X%, earnings lower Results acquisition, on and the network same sale were the truckload in volume primarily year-over-year dedicated were and of our was yield on per and volumes.

continued demonstrate contributions business under We're and growth accretive our resiliency startups, delivered existing to solid the excited dedicated pipeline. account ongoing NewCo and quarter. business of performance our new during ] [ about acquisitions Our

primarily truck which by per largely revenue week growth Dedicated saw second productivity-driven. was X% year, Intermodal revenue per quarter X% order. a for revenues last driven year-over-year in the to decreased compared lower per

volumes Intermodal and productivity growth lower revenue earnings operations order, the by by similarly to partially improved the XXXX performance. offset to contributed favorable quarter impacted compared quarter. per dray financial year sequential Volume were Second cost in ago. actions a same period network and favorable were efficiencies results

second order and revenue quarter the quarter brokerage year, income in X% for volumes. brokers from Logistics revenues to XX% quarter lower to operations volumes. Logistics XXXX, same compared driven per same per decreased primarily to and a the due net by last order the revenue decreased lower compared

strategy. allocation provide flows to sheet our Our ability us capital to with strong cash remain the balance committed and operating

us facilitated asset initiatives, improvement containment a the sectors on half free and ROIC. discipline toward Our capital investment million a enabled CapEx productivity led prudent million the These in us the increased to basis in the our was cost facing a managing yield of business be flow. in have $XXX spend, on actions net that efforts which combined our our and of to with in $XX year-over-year path highest year-to-date cash first year returns, have

in of in ongoing CapEx position the efforts guidance of our age our shape which $XXX disciplined fleet our $XXX to focus to our businesses The is of these capital year. we remain year, for on the the we for and million reflected efforts, against growth. execute full allocation While remainder objectives our million will continue for plan

to repurchase program purchases. million quarter, of the our advance continued we During opportunistic share $XX second with

last a operating of year-to-date net which at quarter. and returned to also dividends was $XX our our We million debt period have at On the end shareholders, stood X.Xx the basis, year. X% cash above flows we the same in leverage strong

the to during of as as our actions progress As second dynamics improving laid sequential restore our margins well segments. market led Mark quarter, targeted across out, to each

as the cost benefits our recovery ongoing We productivity second of modest from yield the half expect year the efforts well price to and in actions as seasonality. and

While contract of of we we price approach increases achieving have in of the expect had disciplined previously sequential earnings improvement volume earnings the level year-over-year of network both lower-than-expected year, in of growth the second half and our impacts the effects businesses timing shifted our the anticipated. and

EPS these of Based rate on of on year a to guidance for tax adjusted XXXX we effective XX%. year range refined full diluted assuming full a to considerations, $X.XX have $X.XX our

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

Operator

of Instructions] from line first the Stephens Our question Inc. Imbro with [Operator Dan comes

Daniel Imbro

we you're backdrop how we've in expecting lot in for trending. you're that's any for guidance? seeing next and that of sustainable is? tightness different July? Over talk into what about market you the And pricing the how Could half market the truckload that heard back give around a color accounts And pricing like the week, -- in

Mark Rourke

house the network little try was question that Yes. bit. more unpack your I'll on specifically. think of to I truckload the a And side

seeing, we we're is mentioned Dan, we in to our contract solid expected consecutive quarter, also the had we second a the anticipated in we're again with as spot for pricing we particularly in X month June to but our think As pricing, continue in our contract tighten, than opening and of which seeing which modest time the had pricing our years market exceed as first spot July. I now initially so in improvement very performance less

to those an early too encouraging are again, So signs. but inflection, call

spot We bids. of network we work, an And that, our mindful continue our relative also and are into levers other play, mini truck of of X we'll on business, of project intermodal allocation season what's about level to have X. seeing both increased in out available that to we're X/X quarters have and we price lean left so

is a businesses there's network our that continue we embedded we mix in the improve what's adjust think into series freight which our to really of activities second So guidance. the can half, across of and

Daniel Imbro

like, Are has side tightening. expect backdrop Got mentioned, backdrop positive seen competitive flow intermodal as just on to How mentioned the the market a side, business? change it. And any forward as of do backdrop data through intermodal that the of for on and you you we've And points the lot is the seeing that volumes going to up freight pick stabilized? you freight there? seeing how you the pricing

Jim Filter

Dan, is Yes, this Jim.

I'll You of try a to this. answer questions have there. lot

was First is more We've volume, really talking market become I more the out focus we XX% we've look with that our trucks think dray is of is the at efficiency as earlier, on Mark area about efficient. improving so we've our capacity. taken focused really there. in on that to And

price up still going up segment, required critical is flex really third that opportunity to be able most That to with customers' to will parties the surge asset business premium the market. and get in that to have able to but come demand, a be be be meet from that's that that's to at to that generally something

opportunity the there. really that's I where So that pricing see move we'll see

we side. seen to July. and talked We transport Last quarter, hadn't started IPI, in continuing the more transferred demand growth increase. really That through second domestic to quarter, have started to late see about the the that's activity, we over there and change

Operator

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

Mark Rourke

either out, on you're you're Jordan, mute.

Jordan Alliger

you me? hear Can

Mark Rourke

we Now do.

If we you hear asked question, it. a didn't

Operator

on going to All Bruce with move to Stifel. right. We're Chan

Unknown Analyst

just I dedicated could here. if on touch Maybe

nice some had additions You've truck far. so

dedicated maybe If the us any updates how for implications pipeline competitive the you half market. on the in and maybe more broadly, walk then for that's the could the And up? the fleet shaping through environment outlook just back are in what capacity there there and

Jim Filter

we've in here And that portfolio really dedicated is of been And big growth a efficiency we've Jim. This we've Dedicated, just balanced our revenue. our still look gains of number in question. of our that purposeful a We Thanks for more the have going also diversity. than held that hundred of business. just X% We've to of we think been believe verticals participate well. year. Mark very working some we we are customer customer that in. that I growth our about is part of the around for talked want on years. No this remaining had trucks the a of Yes. enterprise up represents And couple to at and

get timing fourth that really but still next the pushed on the customer quarter some there year, it's new of Now of matter are might a pace. same acquisitions our startups into

strong. remains see that. I grow pipeline lot opportunities to still Our a of

Unknown Analyst

all? And or more so seeing, consistent competitiveness is at then just that is to any as far where that as it's you're less Or abate that with far? starting been

Jim Filter

about back a competitiveness, but to our some network stronger I'd solution, sort That's losses might it's opportunity. you short-term to competitor's in think a to dedicated fleet. from terms customer of going aren't What moving most provide network. say dedicated to likely Yes. solution in And not of or a of private that's if a a value something that but market. provide rather

from opportunity would to customers grow differently to we us provide network them, so dedicated And those stronger that condition. that really for with in approach an market switch a but

Mark Rourke

a I several that than it we years. proponent Yes, more as Dedicated in guess the is competitive Bruce, any maybe been wouldn't a to relates of competitive. year it's competitive context, last narrative be is the this

are or So the solutions our audience based mix that upon of we're on after that targeted specialty-type dedicated and mix we the of customers pursuing. freight

think We're still bullish unique its opportunities have growth opportunities, the I within not prospects, recent still with at legacy acquisitions, on only particularly our efficiency recent of including our one the change do step very, sectors we're level we We'll those. our competitiveness. some we deployed. in but had efficiently very business this that But and incredible that it's so into with capital grow companies acquired base. the the can the opinion to not it lean more of dedicated, continue

Operator

with Tom line Our question of comes from UBS. Wadewitz next the

Thomas Wadewitz

network thoughts intermodal if some see model revenue should or could should sequentially? in is pressure? caused rates there the impact stable from in XQ relative when XQ, XQ did lower in week to you per to you XQ revenue and how per on Wanted in we per then it's load truck trough Or we about think how that in hit some offer contract sequential

Mark Rourke

to changed I'll to the it's open rates. Mark. Tom, add. has of material of I'll intermodal, we do contract it as so. yet, seen our Jim and anything him stabilization mix. Certainly, haven't We've Yes, let changes

our profitability. that the in impact our friction We've the less healing results. been that see network, You'll cost efficient, more of

executing, nice job of team commercial and operations drivers. has Our our trade done a our particularly really teams

the where we've seen that's So lift.

us. in generally a to pricing contract is of think a I that. on bit more of front There's lag truck

we to guide specific metrics obviously So don't quarter.

a So that's the setup kind second was really or the for first quarter. of

the second year continue the encouraged half of we in little Jim, couple. for than the the experienced of we're that are different with lean last We and may to be maybe, customers planning some with a discussions

Jim Filter

our of can of Thanks, remaining to have the the opportunities allocation season. Yes. the Mark. best is where the we flex Really, season advantage contract freight capacity that outside through disciplined we

demand. well it we we're feels see so just positioned quality And like wherever pivot in

We services, flex opportunities we portfolio provide where helps really have see we solutions able to customers, a broad of to to but us which be best profitability. to have the

Darrell Campbell

X Yes. talked of Mark I that of guess in what add, we was a productivity ratios. quarter tightening about lot the driver-to-truck our other thing, I'd is second this is, improvements. Darrell, obviously, saw

expect We half. to the into that carry forward second

that it of half is in the volume lot expect we a second we the expect So the intermodal. first to relates growth improvement half as also driven and in incremental

Thomas Wadewitz

that's it just for a Yes, ago was about did And dedicated think great. that I the acquisition. year you Okay. follow-up, nice a

very think, the is which you leverage, sheet balance I mentioned Darrell, low.

gives if at if consider that you balance nice wanted sheet you you find if of acquisitions timing to on pressure night. or to that's to that Obviously, just do of want at when things to So a might been attractive for But a like sleep more buy. cycle, the it just if there's wondering seems to I'm this time opportunity deals lot to. well you find you deals decide bit could tougher it's using thoughts and the

Darrell Campbell

Just good position to Yes. is say And to be I'd this a X.Xx question, say, leverage. Tom. in, No, good net right?

puts opportunity So a we're arises. in and that conservative to the we flexible us position are be reason because conservative there's it when a

between obviously all intend or things I at Xx, investment the and and X.Xx if there's But there's see going look something us the So we to we're we'll go big comes remain time. couldn't but above grade. up way right transformative, if strategic looking it. opportunity to a Xx, at

do something perspective. every just XX to reference, think programmatic we'd a months, for more from to XX expect I So

the that been several years. past over doing So we've

you things for will dedicated and So modeling assume continue, but intermodal logistics. for looking we're portfolio strategic initiative and the that market add purposes, could of always that our to in

Operator

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

Jordan Alliger

brokerage? for a a logistics bit the better is your sort problems. Thanks the me giving more of than thought. in of phone seeing brokerage of what own market Century second where side Are Anyway, on fared spot a And price XXst point there's equation, cost you're versus a transportation? actually any reaching we chance. you experience bit developing? selling in normalization little there of actually in terms Curious

Mark Rourke

I think feel customer favor opening, mentioned asset-based offering that period, does community. in brokerage, that the is have we [indiscernible], resonating customers, we power-only it are as also talk more the in players also in to Jordan, our general, as but and asset-based but we an opportunity additional there the

spot that not loads. disciplined, where a on tools happens, lose make try we we the remain So have individual being It really it's our money to but market, we we that hobby calibrated. constantly

to say continue So I business. is in spot volume the would but accelerated, pricing you, margin. carrier on look up to quarter costing we're kind giving this at piece. side, as positive consistent and very comfortable earnings our it the And we side stable of relates play juncture. producing brokerage is into our the results tell more stabilized. quarter market it what wouldn't it's after for and brokerage I which it's positive both forward But to

Operator

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

Ravi Shanker

and guys up. peak when from 'XX, expectation like given of XQ historically, inflection year have how 'XX, this One color in sense And think you've ban of good pretty shifted moved XQ the the on what when shaping just Just timing that of now? Any just to would to confirm a of second, effect? on your some just that's happens us the is kind you season, of something you follow-ups do you cycle. the kind point couple is, Can of that's here.

Mark Rourke

Ravi, you had of catching maybe time one. all hard a that first

be early We're maybe to a this us you that were not for to occur. at I when of out declaration for projecting a think looking XXXX. juncture, little inflection the might probably bit declaring

there. So I'll away from stay a prediction

through to difficult this recent do It's most been cycle. incredibly

So on down that we'll one. stand

been successful in years, we're they're trying seeing towards working to to a relates for come very price we year, at more in plays their it the understand Jim, early context think think As last most that been this how need that believe They've will by customers and couple just back of customers, we this discussions I is increasingly stages but have to and I how the the volume season as out recent the of discussions. general, sales. color do volume peak, maybe with will lever, of and -- some over that and have our world,

Jim Filter

but went a market little in were a a tightness just the first you pockets those couple about quarter this little dropped of context you time then of And what the of and see necessarily each degree one the what in those think when Roadcheck pockets in through the of quarter, of is between we bit off there Yes. tightness and between same of tightness. didn't of end and holiday,

just And more are balance. more all, mini bids are the supply also Mark and into demand and indications these -- that coming mentioned

customers from start surge capability we more hearing what are bring our the we is we options can so to What do table. talking about us would that? that want to to And how to

discussions. having case the to those really fact discussions but year. having terms we so just -- last days, that and much the And how that they're those nothing going we're wasn't this ship definitive yet and of There's in year, we're

Operator

question from comes of Brian JPMorgan. with the Our Ossenbeck next line

Brian Ossenbeck

it Jim, side. you're like the you intermodal, maybe maybe sounds So the little a a more the -- elaborate bit IPI, can on into of on transloading international domestic you can seeing spillover bit little

is here I of expectations into as to not so up kind would if don't whether maybe slow steady, there line in a that's that when necessarily the from or expecting and progress know hit any that with you're or picking still is of kind [indiscernible]? So accelerates volume and that opposed network,

Jim Filter

Brian. Thanks, Yes.

just ocean in quarter anticipating see start were that we tightness didn't feeling it seen last call because through talking the quarter, we just of have We on in some and -- were not a about we this our of capacity. this that we carried until July. with to that late is we And didn't So -- start really that. drop-off the very it would

sure could make assessment more with an definitely not that how when seen we of change more or see making that -- to But vessel tightness to capacity, That's a say So we've that that will I'm of peak. see that difficult going bigger that to decision I from switch we much are they're to ocean IPI domestic. there.

Mark Rourke

Brian, the Mexico solid as some get we of seasonality, season, normal through Yes, did the to of those inflection we more we're a we as Western to see due growth in part markets, improvement. -- key And expect these Transcon, the out Unfortunately, return not region. quarter, seasonality. some more not would calling and normal some to went but capacity. busier we had But we peak, offset some truck intermodal the the

Brian Ossenbeck

Understood.

in do to Where Just in looking are to right spreads conversion And stabilized now? the like intermodal are sounds having the you anything East. terms follow where it's quarter and the relative they're on Have shipper challenging then now up so still of you truck is, notable is improving. it seen conversations in to far? where more service history the rail that market

Jim Filter

partners. a of all a Yes, great has from here, This three from service Yes. rail our barrier standpoint, not is we've really that Jim. seen been service

rates positioned So there. relative compete it It's start to really slowly as here putting road. price the of to a truckload to And intermodal we over and seeing the increase. more is matter are recently,

improvement, we'll start see bit truck I especially a to that would that's competitive expect something of in lanes. So those little an

Operator

with question Our next from comes of Chris Wells Fargo. line Wetherbee the

Christian Wetherbee

and contrast from some compare fairly out you I guys to I last wondering perspective, into was it bit the is you could the compare you you'd several that the mentioned in dig curious commentary of normally the kind would know perspective, normal way seasonality business? a what of expect morning. demand macro what this But are negative out over just sort broadly a if it above suggest? how of I'm speaking, course spot July in maybe playing data a little rates contract. seen weeks I that still from and you've the seasonality guess

Mark Rourke

is unusual good expectations quarter month either was my which is, anything overall, major direction. But I I it. normalcy, been of sign June. a with a obviously, in of coming and from there wouldn't coming a in It's bit think, Chris, off shorter Yes, holiday particularly little fairly a say end steady, in

back So I spectacular, to less mentioned, lower market. as volumes or but changes, a the not not much reversion in pricing spot

So pretty steady performance.

Christian Wetherbee

Okay. That's of maybe next into expect the helpful. earnings in improvement the just mentioned then sequential guys all in of that context I you in And couple you year-over-year the think the that guidance, putting have of quarters. Any question other can you around sort will fourth of be some more what your around direct guess quarter shape maybe is, significant that seasonality? the can put that? the I expectations

an updated of earnings pace to So just of your towards perspective. guidance. rest how year from sort going out the trying the get a sense to of maybe

Mark Rourke

kind we hit Chris, are half when We did And we're I of we it. used of phraseology thinking think talking you've there. kind sequential about on half, first how the second -- quarter, seasonality, normal -- and in defined quarter expect normal that's would as. seasonality we the third again, favorable fourth more generally more the is be of would where to that indicate

Operator

line Jon Chappell question of from ISI. next Our with comes Evercore the

Jonathan Chappell

in Spend think, effectively line through sorry, flat to of revenue cost read a the segment talked lot see on I'm I revenue lines sequentially intermodal in of -- time, then interesting -- think line. every of doubling side, initiatives, really a some in of most detail. It's EBIT I and every the the the on you've

the backdrop? so much the a you've even that to any TL expand side, cost logistics maybe So too, on in implemented enable initiatives there more the and is give margin around the detail can you flat to revenue

Mark Rourke

this entire and costs ability organization's of expense dig look cases, Yes, in be discussed baseline some our turn in to XXXX, those now across inflation, calls, of several to last ourselves if I'm question. in typically which where fourth proud And is spoken we've to good the topic, as pools back really to quarter of to opportunity the multiple able for just inflation many and we've we and arrest

Jonathan.

They've from was So is be uptime. the to count recruiting getting equipment to on job done to us organization really our that uptime head our cost the standard low and back things board of a getting teams, efficient. be really ability our actions spec, all on more high driver maintenance to good it would parts our and the what our across consider inhibiting we

capital able about efficiency increase ratios. to We've talked by being

those, of one double over not bounce the you're All hitting fence.

those upon of signals we're build change have across to how And lots categories momentum. market. of based hitting about are lots You're talking structural to Those don't improvements.

And across so a why prevalent across operating in expense it segments. that's the isn't the board. is of has third-party targeted really our of in-house leaned really business really a you dollars three across part single all to the It and board or the see from into, team

Jim Filter

Yes, plays of we've able like reduce value mix places across us of helps the mix and through said get in. cost that that Mark the of mentioned freight, better freight just all allocation to really some friction taken enterprise, season been remaining out, the is better costs that and disciplined is the we've also but of a

is it really an So enterprise action. .

Jonathan Chappell

get see or does business you [indiscernible] Are walking which that's return of right was train. the effectively kind at trajectory would become the saying the greater my maybe the leads you margin Jim, can requires away resources this And mix to tailwinds? when follow-up, to that and lower you of that from change you're that point? that on

Jim Filter

align to again would those ourselves can freight growth. I positioning are for return a organizations that and generates are expect opportunities cycle, that for we reinvest we different with become available in opportunities that that a create market that the Absolutely

Mark Rourke

flexibility we decision project relative what how after Yes. what There more it's all freight, are our their ourselves Jonathan. multiple that's commitments discipline behind we and that to the go freight use the the there, in making the giving through accept work, how season, event spot we allocation mean we're by levers to premium

our have the and just is doing, healing on and of today I we the used position, getting reinforce the good want example team accessorial intermodal And the do commercial to network, network in less here work cost. better we've the sales a by

that more efficient, which doing be enabled take business us and driver save has corresponding of cost, We of and then to the allowed have expense the our that. to repositioning less capital we the by out it's fleet

So additional half to yield benefits healing in the in the the addition we event year. cost of season allocation this the relative the giving in us have to the to second flexibility commercial opportunity has that

Operator

Our question comes Cowen. Seidl from Jason line of the TD with next

Jason Seidl

Jim, I sort about bit wanted to of focus on the you're a hearing year, the peak little what back season. of half

What are You lot we telling to expecting kept the Are that capacity sort flexible. you? of of of in lot the a be business shippers mentioned pop-up half back a year? more more you

Mark Rourke

we may not done to our and discussions we've like. that I'm customers lot that we've the to some who can given capacity. Well, what degree definition a extra type of And ourselves we in kept help of need discussions to understand in have sure What that been may the the we're flexibility support. look trying

that, the we're Jason. to sure really is can that resources do And have aptitude do so appropriately make to and what and trying the we pivot

with point on a So the conjunction that. the that us early and customers. in be little definitive in for our internally but we process planning that's are also of to

Jason Seidl

seems some on enough. numbers? XQ some the side? marketplace trucks the in operations And pricing more as dedicated on of It side, the have we Fair have of contract like at out your taken competitors you Okay. seen look their guys the of some dedicated terms of aggressive

Mark Rourke

and there hauling in distribution any of as a Well, of you're type segments. that market, Customer even in freight are Dedicated

in dry are more and geographies. is organically growth type what our position customer. certain acquisitively, providing our our more both been increasingly, focus involved locations supply We Jason, But for the the been, certain trying generic we're van their in where has chain in dedicated driver certainly in is the durable we're ourselves or process equipment service to that that additional in the those a dedicated specialty in has

you I do so your much plus sit as every today, retention And that, there's there's through levels there, XX% to your customer competition, still but say year. And if demonstrating plenty here competition your remain wouldn't and retention actions we as stickier, day. of harder replace. well there's this to really it's And high, you're our such, we're less a -- value

behavior of our that smaller a some not but the much place, So portfolio. immune much, take not of portion that to we're it's may

Jason Seidl

consider durable? what your That of more percent Dedicated you makes sense accounts would would in you and --

Mark Rourke

Well, put XX% vast probably in that the majority, ]. I'd the [

Operator

Majors from Susquehanna. with next of the Bascome line Our comes question

Bascome Majors

on up Jason's follow first question. To

fourth season. it that price to you profit You a pop-up into have little know ultimately, would the and know noted for calendar early far it's perspective really what demand you really with a quarter? how what for Typically, be before from the you're dealing

Jim Filter

come in starting until to It's idea, put This together start sharing that not typically, they're we're processes They a Jim. information. the us. that August general to And plans. customers we have later those is really

some those getting those But some of vast already that moved completed. in the actually into and actually those of August worked are There are even here September. majority, later are

Bascome Majors

that peak the beyond range, the as a think looking segment in call from it, this margins about of Can really is bridge without there XX% back we it season get XX% today you the just That to the cyclical from, -- your helpful. long-term hard year, be it? years we of would to on operating necessarily a back inflation mid-single-digit couple trying And there. us Truckload gets price us above kind timeline through walk to of how put

Mark Rourke

Yes. recovery. price Certainly, important very is

confident efficiency, there, the that We're contributor things in see doing in industry at And us of just a are there. But that later take wages, the we've becomes price performance, is to us network to industry, future, equipment we it pricing time. have productivity, as to correction but include important but will today through an in plays out the invest recovery value of more of we juncture other through, position more that we'll of in also guidance some the prominent. put acceptance about period what we're is truckload actions part and bridge, of to side be we're particularly businesses compensable specific inflation role, the give getting whack. the those a to a rates As all to business, is start cost, quickly today. some not all this just around an around expected business part to and the been yield in what's we'll as the that went is the that of network that cover from benefits for particularly And those XXXX, to year

Operator

from line comes Hicks the question of James. next with Our Raymond David

David Hicks

of on that across improvement the expected you seen versus side for that quarter. across We've but year, we're outperformance the back room come of balance seasonality of expect kind sequential that of in to seeing? the segments, things? still Congrats of sequential is trends, know kind as that here the margin there's typical seasonal Is attack the outperforms see improvement just kind of seasonality XQ. we kind outperformance I kind board, of and cost on

Mark Rourke

We still is what actions the we've still this that durable the be -- Mark. part remaining been the we all yield Yes, cost that of the through believe is have year. -- of will certainly

a our ability word keep And and from so kind the in we've of normalcy there's freight to seasonality. standpoint of standpoint, of those some feather -- or we outlook. also, And to to a constant part part return of using our certainly commercial

in seen experience we've after of in quarter we going to but seasonality end would we've of some March, the We're date conditions out. of quarter peak to and peaks have the have discussion a had the activity in not play that suggest outlined second saying the that we're our the normal to

opening trends the the we in comes have those we our some year front confidence noted the the points, of some and third gives seasonality industry, late see which it generally is our these but We of be which comments, data at us, based level of that quarter. to us upon durable, have least fourth part through in best in into

David Hicks

to curious other of line. the operating income the then in weakness I lastly, helpful. And That's all on Okay. the segment was just as kind

we've seen quite Is a kind of regular kind while, from XQ. get improved that expected back of? time Or in a of revenues cadence to of that headwind this kind continue? while negative First we sequentially should to

Darrell Campbell

Darrell. is This

I'll take So that.

in of other as a just reminder, the result So our leasing business. was primarily is

we carriers. owner tractors So operators to small and leased

that's We some mostly the we leasing year-over-year decline, that's that there as our in To corporate unallocated your captive bucket, and the on have also specific question insurance have business in business. well. expenses

that if So seeing and through we're the small the are results. come think you in those about carriers under, the market conditions stress that

So surprising. not really

Operator

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

Scott Group

you lot seasonality. talked Can -- about normal know I a guys we

various for remind just us, what's segments? QX normal Just seasonality the to QX

Mark Rourke

of Normal seasonality. we would seasonality suggest return a of season, Yes. peak sort level a to

Scott. for little again, there, We're bit not nuanced inflection. So a calling an

with saw to in and the that. we incredibly July. want about to what fourth certainly the But The again, some the so quarter history clear sequential, third. be bigger in far the performance to go if to seasonal improvement I you quarter. is We think third is improved second So there second

we've the have seasonality those again, be is play that business out normal see but We trends to and sustainable, more fourth. see, third the to trends seen in our

Scott Group

second focused quarter on just a side, gains for you it's in equipment And prebuy, next in that? on you I the CapEx about CapEx anything games? the And then thoughts on it. like year? think expectations a any on the Any you've Are talk side, quarter, the lowered can row

Mark Rourke

take We're think moderate significant but us, what, our with third our for equipment. to need new efficiency the big for honestly, versus able off difference the backing for we it Scott. there last Thanks fourth the factor That to it age some stages really efficiency to actions relates We're that prepare is We're at Yes. quarter equipment to and anything planning of guidance the moving question, been and as sense modeling who've the Really, this team be out the gain we and sell We've fleet. of were our proceeds the in equipment, gains. mean, kudos moving makes material we're little down in we in second able not standpoint. don't a our our quarter. fairly lessen and It available. very for said, we're additional actually then get to had came to next expect not And not equipment. I all quarter. year, an what a quite early to the OEMs and will significant at positive gains. for

comment of that. large prebuy, we're to on make but be not a for going us to there's convinced So of capability a little pool early any it's

Operator

Our of with last Hoexter of Bank Ken the question comes line from America.

Ken Hoexter

Thanks me getting here. for in

just discussion on whatever the but McDonald's, peak through through above interesting Mark. kind is P&G, morning discussion consumer many, -- and now really the sorry, spot we So given saying the Starbucks, weakness, Interesting so hear of you're morning contracts. just

seems So all see When to Mark, in like the I to happen, an occur right? backdrop do when now without where the need have call does does it else inflection? that that? you that What carriers guess, major is the the about finally right, was just needed don't long of inflection? point? which that is beginning XX% fleet, decided that I to get And the of to this cleanup that out take the final know, to

Mark Rourke

certainly us everybody, for the speaking in make business not return but been for and where it network growth -- to the Well, difficult in was to upon based -- us, it's for been a invest profile, case Ken. where is it's it hard

prevalent industry, the surprised that's certainly of theme more that a be So we it's not across would prevalent here. but

pricing really spot so couple function things. is a And of a of

we're the First XX% spot rate. We're disciplined. in of not playing XX%, at all,

particularly if our it it flexibility, to -- to year. actions component an yield to be half for continues the it an continues gives important in as adder of the us and So second improve, to it's us

comfortable to have phase But So now trends, okay, We'd see sign. before sign think to themselves we'd we're encouraging the generally -- a into a enough it's but market. be of I different these things sustain do -- that say, these is an nonetheless.

Jim Filter

just asset-based thing talking is primarily same comes where is of is we're terms when the And the just we're on pricing, as load I'll business. construction aligning in about that well on, of our it in part portfolio with. the add this spot boards. our Ken, on this It's broker our Jim, very volume directly that necessarily customers of And being from customers working you're purposeful is really with seeing not spot

Ken Hoexter

definitely. No, Yes.

up, not of guess, we're hearing you of going switching interesting certainly I you could revenue for the season. Really length of from and gain part Or Mexico? through I more really prospects to see think in as long-haul I the overall follow-up. intermodal second, is change of in just it and change? realistic load bid boards, over to haul you maybe doesn't of what's as wrap you per being went in share a a more order from Mexico, your -- longer small impact terms we a see on, business really growth terms as the get contract can still step guess in or just that my that

Jim Filter

there. STB Yes. a forward thing looking that of for to absolutely to that's forward creates new opportunity weeks approval to Mexico and provide and times that few has looking intermodal in really And we're little new there. transit that There's about the with lift an last we're of is Mexico seeing largest corridor and their opportunity as right that out early and we one an Southwest on lane Southeast per L.A. change bit our as between time a rate lane, talked as to next the UP order the Chicago, does

We've improvement times. seen in transit that

I think be to grow. opportunity able that's an to

as well. because of starts is to of per little us believe to that's intermodal opportunity So change, grow little a of East where a see lift we're but that the some for creates that opportunity we to bit slow see the a growth down as to in expect bit great not going also and that rate order, market to our assets would

entire portfolio. is our mix, So it's specifically part really the difficult lift a to on order say because of per East with large rate that

Operator

everyone. Thank today's This conference call. concludes you,

may your day. You a rest Have disconnect. now good of

Schneider National (SNDR) 1 Aug 242024 Q2 Earnings call transcript