J.B. Hunt Transport Services (JBHT) 15 Oct 192019 Q3 Earnings call transcript

Company Profile

Participants

Brad Delco	Vice President, Investor Relations
John Roberts	Chief Executive Officer
David Mee	Chief Financial Officer
Terry Matthews	President of Intermodal
Shelley Simpson	Chief Commercial Officer and President of Highway Services
John Kuhlow	Chief Accounting Officer
Darren Field	EVP of Intermodal
Brad Hicks	EVP of Dedicated
Eric McGee	EVP of Highway Services
Todd Fowler	KeyBanc
Dave Ross	Stifel
Tom Wadewitz	UBS
Brian Ossenbeck	JPMorgan
Jordan Alliger	Goldman Sachs
Ben Hartford	Baird
Justin Long	Stephens
Jason Seidl	Cowen
Allison Landry	Credit Suisse
Chris Weatherby	Citi
Bascome Majors	Susquehanna
Scott Group	Wolfe Bank

Call transcript

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Operator

Good afternoon. And welcome to JB Hunt's Third Quarter 2019 Earnings Conference Call. All participants are and will be in a listen only mode until the Q&A portion of the call. After today's brief presentation, there will be an opportunity to ask questions. [Operator instructions] Today's webcast is being recorded and will be available for replay after the call on the company's Web site at jbhunt.com.

to of conference Investor like Delco, to now President Vice Relations. would turn over the Brad I Mr. Delco, please go ahead with your presentation.

Brad Delco

Good Hopefully Web jbhunt.com. everyone release on review for site should be joining at an not, investor access today. thanks that to the to earlier release our afternoon, opportunity earnings section you issued If the able has and had was us. of our

to call, regarding I to Before these looking looking would Reform to Private such on I anticipates, estimates, Words identify introduce may time disclosures the Securities as XXXX. take statements meaning intends, call forward provide This or today's some looking within forward intended speakers statements. some statements. Litigation forward expressions of similar of expects, like contain Act the the are

on forward-looking These future could that Hunt's different from forth statements and and those to materially current cause risks involve expectations be statements. based set JB the are and uncertainties activities results and plans in

risk regarding Exchange Commission. to other with and Securities information Form JB the reports and more and on Report factors, XX-K For Annual filings Hunt's refer please

With Officer today's I David I'm President EVP McGee, Dedicated; of This Eric Intermodal; Intermodal; EVP Services. to Field, would by President that our joined President call. EVP Roberts; Kuhlow, CEO, Simpson, of Dedicated; Accounting Highway Nick Commercial and our of Darren Officer; John our afternoon and Brad Chief Mee; the speakers Terry Shelley Highway of Chief Services; John of of out CFO, the introduce way, Matthews, Hobbs, on of like Hicks,

for John to like our At John? call Mr. the comments. opening I'd over this time, some Roberts, to turn CEO,

John Roberts

decisions. each view more and will strategic make point to we're use longer enhance understanding Today, perspectives Brad. us shape the you're quarter. which new of to element closely better on We hope our to will calls, and your extended help information this we from introducing align the focus getting term Thanks our to a ours,

some efforts cultural are of that on oriented outline that evolving the always last our consistent we recent service transportation and there strategic blocks reflect that approach each occurred place have the the taken are events in of more That help with very will building are Let's five years that have today. steps as provider. in key the key growth

XXXX, identify From of XXXX new aspects waste remove the all input, to to company known employee using implemented we elevation. processes help from as and the

top JB management growth growing the We reporting restructured the Hunt down also as Mile to change in completely information services tools and publicly channels known XXX also our freight business. our of incremental technology committed Final to from and commercialization our

we business, XXXX, running continued and year. million In on XXX platform brokerage our and growing the digitizing that $XXX nearly Marketplace launched

also with used our logistics two is years on in to deployment compared and closed expand our we the purchase Final for supporting in expectations the company fulfillment years to XX old, We performing special the in has first decision. This made acquisition data Mile. presence acquisition, now above

carriers and the transactions on have currently through needed sign technology marketplace for with will And through a and support dollar Hunt organic expanded acquisition Mile, agent to During Hunt new have and Final closed by Mile we billion through have XX% executed over our year-to-date. The invested JB XXX the the this channel Final out and with acquisition we also more breaking expanding a And far we focused platform. rate. in Overall in run network second so trucks our programming initiatives. are JB growing a XXXX, growth, Cory. on XXXX. be We've expanded presence delivery XXX,XXX furniture XXX to than in the infrastructure on on

and the with known With has as XXXX, continued changes accommodated levels rail of move and commonly to completion service help Intermodal in far, substantive towards providers so PSR. lane is our regard to in from legacy service businesses what our

we new to container turns, fleets further in box potential orders to expect expand we're elasticity return initiating purchase prudently have historically fleets. continued to per sound to the Our and month. utilization But metrics

two growth organic and unit reaching unprecedented accelerated count through years, DCS the contracted in past expansion revenues.

As expected, expenses performance. targeted over implementation to mitigated to expect strong we growth the have in services return the private to time, core business related margin and fleet

in We private also with and expect continued channel this conversion. creation organic fleet growth

the digital hope needs model, to including contract new carriers different and carriers box to right towards this find to all opportunity. and independent customers brokerage moving with and our to contractors our ways and the Services, a expand our trailer business XXX equation with the trailer exploring capital of on fleets. and asset the truckload approach continues more Highway migrate services, We're and lighter programs, focusing to

I'm the Overall, of country. my I direction. reiterate our believe across employee with part this this on continue pleased journey team leadership and generally our and progress our in base our to in confidence

on for quarter. comments now will Mee the David Dave? ask I his

David Mee

boss. you, Thank

For played general, most the most out its in seen below levels. pace. was of it of we much evidenced volumes still as But Again, segments. thought anticipated. seasonal part, quarter pretty XXXX have remain uptick And we in are continue the each our freight and

In volumes flat Intermodal, ago were announced. as with year overall we

saw calendar-month down year-over-year we saw words, X% X%. we quarter, In and the absolute September to up down changes. July, August calendar-month; During X%, other

attention second month, freight some XXXX our for in been remain lower levels. a out and volumes the even to recognition would quarter at traditional the counts in we've pointed both particular lower assurance that paying call, looking load pattern we the daily seasonal at as each freight However,

June XX.XX. point workday per and third was XX.XX, reminder, a work per XX.XX And day September starting quarter the August loads for So was for was as XX.XX. loads reference was and a for July XXXX,

network, out primarily than our which across growing in were encouraged the local has and balance the associated as experiencing inflations, definitely rail we country past. still more While now but it are been we the is increased in inbound markets, localized by as transportation costs purchase driver rates not throughput, the cost in additional well with pressures, of

And today the business. the higher XXXX. were and truck In and as Final pipeline expect new quarters, first to the in expected we're trucks but good Dedicated, organic two acquisitions both in than XXXX. add confident And second generate they Mile acquired Mile than it in were X,XXX recent newly continue positioned actually we'll historical the to that very additions year, in see robust remains we But Final current to quarter XXX line throughput in stands have XXXX. growth with in this and us lower

that increasing quarter our sequentially expectation the of We the with platform to XX% in results scale pressure of in the this and and ICS gross to for from quarter to and/or market for to state margin current the rest Competitive will for and on likely even in share we'll technology XXXX. resulted J.B. margin operating business the little spend the we most XXXX spot environment XXX market by or believe ICS's marketplace second grow contractual share the compete no margin is pricing compounded have with on gross decline market. year-over-year, what compete the decline. retain reflect XX% Hunt over aggressive we gain mitigate through opportunity by for and

contract quarter sales store and were the rates year-over-year. same our positive Trucks, in third

and activity of than mile. which spot overall it for ago, was a loaded was half load what rate affected year less customer counts However, both

truckload commitments, to in seasonality spot not is XXXX. substantially market the and rebound contractual customers have meeting fourth we are seen customer While in quarter activity some the their of expected

that Brad, have prepared. concludes what I

Brad Delco

right. ready for questions. Michelle, All we're

So let's open up the queue.

Operator

affiliation. and Our Todd Please company question name repeat your Fowler. comes [Operator from first Instructions]

now line Your is open.

Todd Fowler

Great, good evening. KeyBanc feel It's Todd Capital with Markets. I Fowler guilty. bit little

nice job how going Dave you on a up. term questions. shaping share peak see laying to with know But things. of some did or longer some the some fourth just You John you out can start near-term thoughts Terry, quarter I'm

You September. comping got are volumes positive that in

peak, One a of little quarter carriers based guidance know compliance. of on truckload of turning earlier fourth other your robust talked a about bid about I some bit volumes positive talking the less

So both the volume you're expecting intermodal, quarter, and on for I'd fourth side some appreciate comments for what just if you it. the can and margin share

Terry Matthews

Terry. Yes. This is

in think the positive about quarter, would the in quarter. haven't the changed second fourth we to volume to we that regards quarter in volumes with fourth and with be I for fourth the direction So we positive regards territory in talked quarter,

stronger peak from September West as concerned, far we the September was the saw is than Coast As XXXX. in

third to quarter So we starting see it's we the continue quarter. With been should we October. in regards an what from from believe that fourth to margin, into basis the improve robust, rather and margin saw in OR our

Todd Fowler

demand related your you just maybe of any of has you just pull a think Terry, a September to with potential more or in have true that's the a up, to Do of do Thanks. strength. follow of reflection tariffs, comments on And marketplace? for sense that do that forward the

Terry Matthews

I and shipping have I But our from early. product heard haven't customers. anything that haven't customers heard Shelly heard our from forward head anything they're her might pulling something. shaking see no. I it

I marketplace. more basically what's going on think the So in just it's

Operator

please Our of your next company from your next David, -- caller repeat comes Ross. our the David name, question affiliation. line

now Your line is open.

David Ross

from Thank afternoon. Stifel. you, Good Dave Ross

which be you XX% the big said network it's in question year-to-date. time? a Just quite for How two been years' seems on think Final in could do to get that Mile, growing you nicely,

John Roberts

if guidance I we're our we're we're million grow million don't today to Well, continue clip. at run and a fast about going to some to if be… $XXX targets, comfortable on very of giving or rate $XXX very know

David Mee

Two years…

John Roberts

Yes, two years…

David Mee

Well, year, year? a XX% X% a

John Roberts

plus. XX% XX%

David Ross

And similar to in fleet And BDP difference is little versus plus? then that grow on of is a last you bit conversion or that private side recently on going the years? be a to at clip the seen couple the dedicated more the any expected have

John Roberts

we that's back again will because in little market. private really of we've probably 'XX, very 'XX consistently hot you XX the XX months a it up be consistent I that is fleet and have bit in next really us other think normal than very But the a year. with will adds add when to we think year it's thing only it's sped The I the in seen see timeframe the were to have decision changed truck truck this of

as good. We're we're said, Dave conversions. in high And fleet retention XX%. pipeline, our very the -- very confident is is very, Our rate very still private

about year. good where very next feel going we that's So

Operator

please question. next name, company Caller, have your We affiliation. state

is now line open. Your Caller?

Tom Wadewitz

think to like like wanted about Hi. It Intermodal in a on some seeing It It's how seems get growth might pushing the transcontinental -- margin? we question, growth. seems ask lever volume volumes UBS. that you're extent side. you've you're and from in to is the I transition Tom the price executing certainly Wadewitz a to that

kind think of to improve volume margins that about price? if different but that if next into you Is XXXX? moving how think So for volume perhaps the reasonable less ways that might margin couple look about do and would have margin? you quarters growth the or we price leverage what we intermodal How in it think mean

John Roberts

third we But the it earlier, versus should compare I to quarter, the thought the believe antes, going to costs quarter. the of in it which to as imbalances it in In network antes quarter third the quarter. be improve because more exceeded And that improve we anticipated the are some quarter. we have, of we as we margin reposition what there would the was mentioned and fourth had we third second

the a we're foresee if As that watch to should macro and and can We our we process. we costs improve. change should on not profile margin grow, far next from to still that margins year, to in our standpoint anything budget as would continue anticipate continue have the our economy, anything don't

Tom Wadewitz

more more results? in through put when being better? on as Or additional in means? I volume or through going that volume But the question I How numbers performance? one acceleration of you acceleration in impacts utilizing through you're XXX performance think we is about and we do going a of think Or what coming there the obviously, does about should margin guess where ICS more one follow-up. the just what point be terms that providing mean it you're guess means system mean, the more I do that it through system. goes in

Shelley Simpson

Yes.

the in of and that's we're this to able a the building be But volume, utilized it platform we after network is allowing this to what fully platform. a business, that. the move So inside end idea, execute us We creating transportation XX% platform. really revenue is in believe us scaling really for bigger if the shipments were more on about And should about America. Dave I by unit should able about talked inside efficient be our of get piece through North year year our to which and being really is a focused key scaling the think we

time and our it's increasing carriers, So them overall. about costs them better reducing saving experience and a giving money for for shippers

a to We was a a a move believe there freight better alike. to to goods Intermodal actually in move like from truckload. is we and better is carriers goods, So customers way just platform transact better using way way digital believe for

Tom Wadewitz

you a that, when Do of we the have lag would sense identify? that or tough time of is to see

Shelley Simpson

We internally. definitely are about here talking that

earlier, that transactions The the to that more in the spoke did system. investment waste more see platform, the into platform. Dave we see As in the accelerate further the are the opportunity we occurring the we further eliminate our

side the I into XXXX think data data we'll so And can the we particularly in the what with going work, that see on science with be do more with platform. we

of focusing in level data so X points. about seen XXX% really we're billion on, sets the platform, in the we increase One we've other of interacting data that things see a that

stage really learning been one to different the different whether we've the that really how collecting building different carrier categories machine to that work into network. I as create will a we're That beginning. different ability data to efficient just the really a and discern more way trying we or been our a at we've ways we goods a now would is are say, more transportation of information. AI move with in that's apply We It's mode. create infancy platform,

that through goods we million we million we've that move more move data the there should the long into big have on we how know a we highways one for over how platform, idea we time more and a the to about nation's the So XX the That's somewhere believe are between more are longer talked Intermodal. period. X information shipments see have,

Operator

from company your question of name the next Ossenbeck. and line Brian Brian, Our comes affiliation. repeat

Your now line open. is

Brian Ossenbeck

highway from bigger you’re you question. time. to picture get Brian the And do business truck think you. intermodal the over if of a side off growth we've as Thanks think really has shipments offload on more before rail gets Shelley well. to do up the, sort maybe And Ossenbeck seen that, term just to longer the continue the service last more the containers, if look just decades? can and rail John could When over Maybe to and my go then research you the contribution couple on size and for converting maybe taking last material JPMorgan. the conversion about start Thank What still that secondary anything as really when trailers think of at opportunities secular becomes that for then to you material on opportunity? ways we thought back the transport there? Intermodal you

Shelley Simpson

access things to a can second access, shipments to think to capacity. So just is over access I for relates I shift it of and as Intermodal, one the platform platform because to allows the

about $XX Really us we midsized happening every that's and at small we've it say really for I large continue see year we've to you to billion mid customers, as billion market, of freight moved as If market to illustrated. not into much grow what's the overall. look would in $XX

in So would currently this those the are just in is that another of I a customers even truckload are that. shipping names. do so that to macro currently more And way shipped say view. don't truckload, know Customers midsize

assurance want, move of predictive at so how they they've done. and their predictive service they And what believe historically using price have a can they that by the shipments

what market what midsize If can can a basis the it more shippers the movements open like. look dynamic, transact time up real can way to to a changes small can move you really and shipper give on really making access

that talk market So just I from would a perspective. about

Terry Matthews

Terry. Yes, this is

keep from before key rail being truck? to So terms is service, perspective, I've and truck of the North at So see looking freight And fit is to that fuel the on are I put network X what able five intermodal in to loads general growth a bucket highway What what of to rail? identified things. in which XX rate? America, or converted. price have but the is real is yet that a we together, macro the of million things when is think of What we convert four truck the million not those then of five relative a freight key you economics? What capacity? Price the fuel

So as positive and positive, factors factors acceleration of the you'll turn more those see intermodal. those of that turn

intermodal be five XX% these railroads to to try able Coast. would like how stated to in XXXX will the that be to I thing factors the second grow the The to Eastern that two goal. key want we'll And go East mention roads is said in accomplish they publicly as they'd

you So some and able then market the also you have and railroads we freight. conditions, see have willing but

all timing how mentioned, that the you'll things as melds big of an positive And you'll really question. the together acceleration. intermodal, see, So is I turn think I see for those five as

John Roberts

bit or to I'll those a some markets refrigerated. want transloading attention little of just to the we're pay All there're we top studying, on question numbers to. in that channels add big that

think that do do us I to key at [interested]. the their bit incremental a volumes organically continue and need cleansing convert into railroads And activity. a talking clip done is hear point with definitely to what is them being little to to about networks. able be PSR of we we the are sustainably

XXXX able future to positive. regards being refrigerated of that to And with grow the another, plan containers they're their that And the and be we in containers. are potential adding double-digit. as conversations lastly we're conversion highway continue look refrigerated, and to X,XXX transload the -- looking certainly think I intermodal on business to at And up refrigerate to oriented. growth

Operator

your your name, the question Jordan and repeat Our Alliger. Jordan question. affiliation from company of ask comes please line next

open. is now Your line

Jordan Alliger

Hi, as I at Alliger a next like the know of is into Thanks. business talk is year. Yes. going And of bit to spend way ICS impact go the IT spending a some question the about of magnitude. we impact peak impact, fundamentals on But the you're the little to this you order One sort is Goldman that? as keep Jordan frame on the or there IT quarter of of can Sachs. versus sort

Shelley Simpson

is just spending is we to actually to has carriers on and shippers creating platform. critical that's So investing side side, believe in we're on the we the ratings the aren't well technology most really both people from the as experience, an marketplace which money the build component

in So interacting in have carriers having to or insert don't the in areas are identity, where the an platform process. shippers our we're people

have perspective quite a focused carriers people on a customers. sales also more are and space actually on that from few experience inside the the is. what It's that We bit both

So guidance as like. don't quite there, we've think bit given to that a what I looks

I think will on continue to investments leaning into year, technology. next make we

what data side, up at not around and earlier, with that. the firm if spoke more further the I spending and expect But budgets to to do would on can what level at people. as I continuing least we we same people have working, are our possibly still We like the look grow

even to which earlier do that talk One is transactions. of fuel it customers about really do what from highway that. to growth speed, perspective, an reasons our we ways at think We the But create earlier technology will the to for get move or an a goods. [indiscernible] opportunity and from question can will move speed discussion, we

our creating a pressure to really focus us marketplace, continuing networks, on our have So that year say to really star. longer three north operating is vision and very next income efficient but I our large would create our more results on five year for term

Jordan Alliger

stay there a some way go are a will know to the follow -- in at point, or XXXX. sense there'll you sort I a black the the on in profits way? of fundamentals know get just and Is to in be back and negative even so guess then I do some separate, expect as of the range sort on up, in pressure it I And just

Shelley Simpson

on our on working to going I budget next line still I we're for we're have say, performance. But pressure our think bottom would year. So

startups, the in material that perspective metrics have inefficiency. We continue will onboard in well. know we be accelerate also that's lanes key itself growth, probably will now. that be can there platform which from customers time. both from we're our inefficiency margins biggest our overall. the continue new driver all going And purchasing more as new we theme the we're pressure and freight the But right on watching our for to as and work impactful for platform get to the platform that that's key out onboarding is us, and put we to carriers for into as that's carriers, We through over will new Today be happening

John Roberts

exercise a be the view. no, expect we taking And into Yes. loss to get leader answer Jordan, little The market. to bit just longer a is this don't

expect using in business this the people to XXXX. technology take turn unit We into technology, likely the investments occurring XXXX that and business a and are most it this profitable the all here and throughout

is Five Does some be mean chalkboard strategic don't platform. spending We a was seen a perspective transform know. ago, would money digital profit loss on meantime. yes. to was market's the center easy say leader. a we've I pretty XXXX years turns a put yet? we a to more it as to absolutely, not the But that our changed black actually that to in before this is numbers This yes, from designed into say as the and in it But it be standpoint, and that from started just

Jordan Alliger

know and just you a And front, season talked give this season thoughts on of do bid You're you've Intermodal surcharge to able the timing? low of late. single digit X% your quarter. perhaps. question what, bid ex-fuel X% I sort one quick other for Can all-in on sense

curious thoughts that I'm on just follow any So up front?

John Roberts

really any starting is Well, we results bid haven't back. and got just season

pressures rail, orderly the out year knowing two anticipate regards in I very marketplace. years, that other with been it's providers next So And would have a PTE the last to market, to be that's market. orderly an

our price would cover to is if positive that So expectation up, those costs costs. have are we our

Operator

Benjamin Benjamin, Our from the comes of line affiliation. question state your name, company next please Hartford.

open. line is now Your

Ben Hartford

customer bucket interact lines? quarter how Maybe, the million about more Ben ICS build success a customers not to as Hartford do looking singularly this of with $XXX But changed with Shelly, if how change you of a could you you with will back Baird. talk marketplace that little profile million at this this of that profile and I It's across $XXX the ICS measure this if revenue that engage you typically quarter it define in guess different up through question. the XX time? it you platform in kind you year-over-year, profile could and Thanks. with success? from it Has small marketplace Maybe that how business executed here. or customer I'm it's customers up through bit year-over-year. curious bit When changed, medium over and of to a million the able meaningfully the is of yet engage I'm you? effectively and leading you're has sized

Shelley Simpson

Sure.

So largely spent us we well. us have very time customers that know know and with

scaling That's insider participate have And in something that the organization business platform. that go our that's in into and out do see our of so market. the We will buy interactions small there an relationships our coming with XXXX nine up and of don't really currently plan as in much. services that definitely be really midsize part our to plan we customers We that across that the marketplace, we segments. our you and deep offer

Ben Hartford

of looking And the gross this understanding at then competitive dynamics. margins the some quarter, just

over average you kind gross something it some going the if we this How As and kind at as of or is that about development do matures we baseline? trending of anticipate the trend? project continues. margin offset as competitive growth do we supplement natural Or medium the you smooth gross look And with on should the think as else if sized margin quarter that a pressures? as small percentage time the customers from there of mix this benefit by

Shelley Simpson

XXX stay we've in percentage talked that margin could I plus XXX X% range back gross in earnings to the can see get really that the total. what results you think performance bottom to the similar points total. But or or in our I think line minus inside X% about into QX, basis

at happening our in across everywhere If of revenue inside as we're percent a the of part investing. you just expense ICS we're that base look business, up what's as really

we our that So expense expense, that. our our to system significant and all E&T direct expect leverage all in certainly in where get new expense have our of employee inside sitting

that do of our But start of metrics people. to will into can lean to to expect back so that improvement started We that quarter start productivity points enable do profitability. the getting our into perspective, automation us one like. getting our to watch next from productivity end maybe of we back next think moving we we to occur so and those just as inside the year, we to We're looks each on understand we throughput need XXXX, and what fourth really of happen an base employee year

Operator

affiliation. line state And your is please name, caller, your company Next open. now

Justin Long

were Long in I successful the with late with winning business a Intermodal question. you Stephens. Justin This for is Maybe know Intermodal. season. to start some bid Thanks taking

were share you gains. market view some would strip How the the out what the seasonality? in to quarter of you to from those If underlying as relative you tailwind third trended volume normal say would environment

John Roberts

that we two to that had, it latter had events part quarter that, to compliance we've stories about. or happened plus think bid of anticipating. allowed five really to talked kind even the there's more have bid us we towards prior four than grow should of we're the And that I the what down second events came

now we what think boats, saw quarter you've will. of and third seen all that's is and better what lifting you is second of quarter, compliance into in the the the I if in part that kind latter the than

big compliance has that us the the with us, or of four also rest have So then the five base but we customers have helped given a lift.

Justin Long

season going think increases margins the see XXXX? And growth, in Intermodal even order forward. Or year's pricing feel improvement cetera with to like better OR thinking do enough if need drive levers about et the questions bid we progression going Intermodal you you price in the and improve volume to to Terry, in for back to do service, rail in year flattish? is OR there's next next

Terry Matthews

Well, get would pricing quicker help the us volume so obviously there. to lever than is price

think moving have comps at new should year, first where to economy. into we it's some with regards we economy I that half next the staying have with showing volume the the volume up of momentum and macro given good nothing with the

question your much quicker. we cover answer to we question, will of try have what and that get to would how to be is So the add margin. the that to price The the move can are needle costs

Justin Long

just earlier, you up expect you XXXX? like costs if And pricing are Intermodal Do can even well. if your clarify contractually be you as at pricing you pricing be to feel Intermodal, something up the to is said said in truckload in down

Terry Matthews

so what in Well, that's XXXX. happened far

think a that you I probability there's see could that. yes,

Operator

from the of and affiliation. Our Hoexter. next line Ken repeat question please company comes Ken, your name

is Your now line open.

Ken Hoexter

more afternoon. for time, and America Hoexter from just good Merrill Thanks to follow Ken on Bank near-term. Maybe maybe the It's Lynch. of that

Intermodal just positive. that fourth volumes you're pricing, And not you're quarter. on looking perhaps for environment, about saying maybe If can could you're talk in looking positive the per segment? for load I you rate also only revenue be the guess for each but

John Roberts

that load the haven't quarter we fourth rate in think process. we I have for should conference thought call, mentioned that a the I changed positive Yes, in and second quarter

Shelley Simpson

too I competitive brokerage part would brokerage the Dave I current inside conversations competitive our bid and to would the the the pressure having nearly And just asset business, that retain in brokerage. early say environment we're different customers. of tell inside different starting do -- see season. to We say to with on I think spoke business both

John Roberts

has XX% that's will will I'll feel two-thirds side, does dictate. portion dedicated But not in pressure. up say of on And just indexes of in, the next our CPI so not not built in that got year, XX% that renewal business the whatever that for ECI, have any that there. those We get so

Overall, But our our some So rates good pressure feel about face business will would pressure one that dedicated is potential that. up of be could XX% that in way leaves market. that in about feeling. we face our

Ken Hoexter

versus volumes acceleration little Maybe quick demand East a from up Can it regional the any West cleaning trans you -- about talked volumes? the Maybe picked the in lanes, are is And or con talk -- just talk decline up. a on a there the for side Intermodal. Coast. still on you the still service out decline a volume follow issues about obviously, on and Coast about just the bit

Terry Matthews

to improved and helped was picked is the Yes, subsided regards we're our customer. to it have Coast they're on with -- fringes to with seeing continue velocity, East be. last targeted service that all at and it's what hasn't really where the the The But from up railroads year, time see today. had it's definitely pressure truck not on services the and where to marketplace they in

Ken Hoexter

to just So a is than closure competition main PSR from clarify, lane change or more it's it provider? strategy your of truck

Terry Matthews

lost through regards think with another or in for is January we to March were we five where those four have comp -- in we And January. starting months should XX,XXX the XX,XXX I -- Yes, or loads implemented. really still that PSR that the where hangover and

XX% of about volume. that's going on our in negative So in terms the East of what's

market of that But kind truck competition then The way. it, where fringe with percent last starts call service back our to X%, service X%, slash tighten port lost if to X% others picks the year, the regards couple up saw as the I that those usually we and the phrase, and a we've gives combinations to with the the if truck.

Operator

now your your question. Next ask caller, your company Please state and affiliation line name, open. is

Jason Seidl

Cowen. PSR or are I improved you of far be confident down fuel. you market you But going Obviously, is sort from rail capacity see you're you job going forward. the did breaking Jason from not Two guys see how guess be One, good going Seidl service do seen XXXX? to predicting And next thus a ones here. what economy quick that This the in where implementors you've in truck the will year?

John Roberts

other rail think commodities from get Well, especially railroads Yes, as a will bit better, slow. little I are continue a service the perspective. to

that have what will seen anticipate service we've their to out set I And they they will this better. met improve not I year. that rail versus So get think meet. the have targets They

Terry Matthews

or you Jason, And truck about truck you you are are service? talking market, iron say the talking when about

Jason Seidl

Overall truck capacity?

Terry Matthews

I you if or I'll someone meant I price Capacity, no -- asking. about thought to that's -- the that's going was -- trucks I why used that. know okay, meant don't I'm of you talk let Shelly not let

Shelley Simpson

hit as So budget from I demand as I would side now if think from capacity down our view. are know it's would say not would the and confident macro view don't that how done the in being we've in budgets sluggish or XX supply perspective. from that years mostly change market never for we our a we capacity strong a up that anyone like. We perspective, the obviously,

next -- I of year So similar sluggish be first half to now. more could right year next would say

negative. think Second half, of will macro be I more a

Jason Seidl

implement something And at only envision form the point? them main you my PSR, who at some western least I that Is guess here follow partner a is your ones up that or is not thereof. doing

John Roberts

had The have form have for a conversations them. on railroad them PSR some said with You that really decade. that going we the they've to had they've of in over ask

So aren't they PSR. but that certain would they doing -- things, might it they're I calling think

Operator

repeat question Allison of Landry. next Allison, please name, from the your Our affiliation. comes company line

line now Your open. is

Allison Landry

earlier of terms Allison Landry from aggressive in about commented Suisse. some Credit rate. contractual Dave, brokerage you've behavior

you are entrants the freight a might after either just some increased or that peers normal also So competition be or that if cyclical your tech-based seeing curious digital think traditional from standpoint, sort more that's of going marketplace? from you of

John Roberts

I'll let question. Shelley answer that

Shelley Simpson

view technology in has our been. customers general would more think Certainly, level than the changed of I predictability. it way I say the has competitive it's

today, cost, I space is than a what's in year brokerage ago. service more So right and and it that predictable capacity think now was happening the

likely more into pricing early Our with on asset based discussions based they customers last leaned early bid into mix. shift this brokerage season brokerage on say more would be more are say customers, here seeing leaning comfortable there it that would I this the In I think view, competitive. more year, this season is to season. and bid a could I they're from season at macro a

Allison Landry

a repositioning as or that Could and extra costs to give that Maybe help bit little was up seems you. you saw us in worse was on network anticipated. color just drove little in the quarter, then what of like maybe you imbalance the give bit follow terms than that? what it quantify of a JBI. Thank us and a you had And in sense a guys

John Roberts

that of compliance of they part out, us, bid its they that the we to third thought from last that. The the that sort came came created freight customer we give and of bids the where balance didn't of some had thought customer cycle. that Yes, going us that give the were

would OR that think improved that. I we the second mentioned we our if have it costs I'll I what think and quarter, I extra had hadn't that that with versus leave

Operator

of Our line your question Weatherby. the company comes name, from Chris, affiliation. repeat next Chris please

Your is now line open.

Chris Weatherby

Chris Wetherby Citi. from

follow to on we was continue make question costs quarter fourth expect repositioning XQ? that understand not to Just sure that likely the up that I to into should into

John Roberts

in seen really off call. continues It's If tell. costs. We're the days days to Coast that last like XX could extra in. the stay to some repositioning It's XX fades it, the only early West of too that strong Typically month. to make early we've too have we

Chris Weatherby

I it, make we appreciate put sure to numbers the it. around some then tech And just coming helpful, That's maybe spend. back

mentioned us sequentially. if And could million $XX think dollars. quantify spend so you it goes the maybe million it XX% think, But right sort into is? you I you know I math said don't going don't up know Dave, of forward. there. is if mentioned you I what my maybe puts that Shelley, sort tech that or of up, I

an that little want annual possible Just of maybe that we mean in trying for XXXX? how to this? maybe $XX frame million sense get $XXX spend just of is to this up or to it up a trying go I into I million a about bit. adds as we're sort talking out

David Mee

talking are wide inside Well, enterprise you or ICS?

Chris Weatherby

Both…

David Mee

We the $XX in Enterprise that's just September, shy I we're side. the million tech million of enterprise Inside OpEx a a $XXX wide -- in that past piece and think side quarter, quarter. itself, wide, to guidance that's bit of ICS was easy. is little ICS cake, through yes, the

Chris Weatherby

Okay…

David Mee

on that's up And the development just on year-over-year, and -- side. that's XX% that's the just

Chris Weatherby

And generate to sort a the think that growth What and to frame a towards understand guess start us -- of hurdles don't sort turn Okay, think And guess see to guess this for then as the how and think lot can then be makes about sort we of trim a are call, start we through think we are numbers about want I return sense. we you your make sure when out I on of return? thinking perspective? about you sort revenue but XXXX. the what up we I I income I about of this know maybe this should sort can the from you talked of you investment? I how can help just marketplace

Shelley Simpson

we So tech from more of the we we about earlier I what do most the a talked driver significant in base total beyond. expect be In the moving on total, And what accelerate working next enterprise. from year have to the do part are perspective will our budget to we what five continue need our but of be do That's also with platform. the going to still into our XXXX all We ICS book of revenue and for and across year. data.

working Our that talked are category are hurdles about scaling. that across really every I've we towards

that and again get so that the to to our XX cost take we currently that that percent we're as inside percentage platform, heavily investing we as as out costs. we leveraging need have develop revenue. touches don't will into start us So a the really high E&P too It have scale board costs across Pretty believe of based I through space. revenue much employee we too of or high maybe on, months the a

Chris Weatherby

now we're thinking from that, Shelley? XX thinking way is right about months the So be to

Shelley Simpson

Sure.

Operator

repeat the comes from company Our of next question please Yang] [Ren your affiliations. line name,

line Your now open. is

David Vernon

returns first to wanted Vernon sort question It's sheet from Bernstein. balance David sheet. ask Dave, I sort you, so long-term of the here, on out balance of and just of outlook the for

holding sheet, balance kind sort on of any that of worth in XX and guys religiously the a much pretty of that down. practice? bucks cash you're manage prior cash sort prioritization reason why used million sitting or Is about of from there cash got of to available the we're You've balance change

John Roberts

period change. No, David, lot end anything I There's inflows in no faster than do it. public in when outflows markets with a cash time can't of where we'll of times up with

And repurchase putting the wall equipment purchases. sheet, programs because my so deploy balance on in I've just I'm I can't basically it a it either of

kind of in it's time is it change strategy. So than any more

David Vernon

is is other And there that equipment aside or held being a than it like something? draw repurchase, on or equity

John Roberts

particular purpose. in any Not No. No.

David Vernon

in DCS bit get little question And to historically. of investors help other terms a I'd then intermodal the understand bit is business of business than faster change ICF a growing a little the helping is in mix. love your one Obviously, business, the business

these kind businesses about long-term? of are things what Can think to J.B. relative great of level the is you profile help about business the that is high how just been of One return. that's kind Hunt the us of the going shift return understand affect of to

John Roberts

of Well, to to of of which allocation get debate we then simply footprint because into regard up allocation want to services and comparison and I ROI profile, internal with you get asset shared don't do out a for haven't having issues. end the piece lot you broken

this capital time as a model light to at probably But next lowest more truck. said the -- we've own, in think highest anyway. even its is intensive ICS the in that is or money the in in or we going returning that that point the the we asset convert for be definitely debate in that term a segment it's What that portfolio, have asset run to should we that we longer be line. have We Intermodal because today,

next those peer how -- being Truckload and then be I relative would that be everything asset is so be ICS so And say brokers. said, then With groups, Intermodal on measure would truckers. each the less to Intermodal asset the Dedicated. units would we size. based peer And be it -- So of obviously, would would to groups. is asset light is business truckload the relative the intensive,

what model type to. star land a compare possibly is maybe ourselves we So would have to

itself. is in an business of Intermodal

those quasi Dedicated, that And of be it players. easy truckload. can is business, compare it because So not kind a should if it's it one way not is truckload, to pretty we

is We it rest standard to while does carriers and those the compare of Werner's go that through. the hold which doesn't because and the truckers. typical it kind So it higher price have phenomenal truckload traditional itself Knight's, of have to to fluctuation

of So I that comparing the would Knight's, the say that things you an would end end carriers, up nature higher truckload Heartland's, to so it ROIC from perspective.

it charges they it performing, today. year. past is we've the lagging XX-month And given taken the not way are Intermodal Historically, today. obviously what but is the is a is basis ICS lagging in on

low And so is a trailing it's transition. on no pat. months. going Performance some XX Truck is through

performing time, our And a this better expectations. it's the improving. turn actually of Dedicated all board basis than over point in at So is kind but on

Operator

from comes question next of your line affiliation. state Your company Bascome, Bascome name, the Majors. please

open. now is line Your

Bascome Majors

there. into revenue was years us get hit Bascome heading Thanks. through some recession how you and you scenario? about much larger from there? growth to how think in the twice business, overall performs that as the last that's one X,XXX Susquehanna. had contract the vulnerable Majors to you've three XX protection where many And Can the On business, times that over truck generated dedicated you've pricing you've you going billion weaker after recession X market? from walk in you the the revenue volumes Where that structures as got truckload are do way typical a plus Dedicated, trucks,

John Roberts

say, average, years. some our years at longer, least just X X.X X, about would contracts on are some I typically,

so conditions. in a you talk we've financial economy there. you we as we goes protection that seeing But somebody about through get the bankruptcy if see years, as a typically some that through because the that And out gone downturn see just what of and may of

then down do them accounts. our impacted we that we'll a the as and flexibility new of the may the that's trucks So we something like those in accounts. at shrinkage trucks then trucks at on see depends that's or and take And offer customers most And we cycle, place the we that. some industry XXX may hit that with take

But like what Dave going means that their scrutinizing are they're CFOs when south, the and capital economy really that do. turn to

And and and capital we in and so them where to that about them more talk deploy it it and going their a to to do really way us money. they're capital take let go save deploying opportunity efficient

that of lot hit that up during selling was way. and hard have we of So a we time the CFOs success

our have of that timing for depends does is exposure Where economy the pressure time one we of it, when have strong, what business given up that. our when on portion is that that the again will the on indexes way XX% it of renewal market in some portion that some business, at to face is of not

could of team a it But of something I would economy fleet. potentially. like up get people I that business just tell because be turn say. sales to hard when private of that it's XX% But to want So you or that the our the heat just out our on goes their south, there's lot

CFOs the ever to so more us time. are And than before available during that

continue to I so us to And expect would sell.

Bascome Majors

this Thanks. follow preliminary you look updated on I there. detailed $XXX Can and up Thanks, us the thoughts appreciate CapEx at a spend could year looks net any like an year? was you full million approaching Dave, next through And just give like year-to-date. year for look what answer the

David Mee

I forecast tech. going is to north number The was somewhere I of capitalizing amount I going $XX on to the probably in be Originally I on I year. don't one know my be have million. preliminary thoughts $XX million this range the was missed we're on thought

to million spend So $XXX that's out, around being it's the be to and tech CapEx all is year the somewhere by is probably up accelerated going due time the capitalized.

Brad Delco

Michelle, Brad. And is this

have We one question. time for more

Operator

comes your of please affiliation. Scott Group. name, question next line the Scott, state from Our company

unmuted. now is line Your

Scott Group

from It's Bank. Scott for Thanks Wolfe squeezing in. Group

else, got you worse? year just I is sure, better about everybody of wasn't us margins for competitors. And inflation you've Terry, of you was. if some or cost trying you really PT a a your versus then there's difference -- as And your to think about were So much what there sure help rail had I can east transcon comment say next way any there? expense point wasn't similar that earlier

Terry Matthews

My challenges, likelihood to increase point that rates. on of rail than likelihood less all is have having that intermodal decreasing of of PTE the providers rates is as the

different obviously than are programs Our most.

go that. won't And So into of your your question part I was? second

Scott Group

versus there's Transcon margins there? of much if east a difference

Terry Matthews

previous What I we've load. is in profile associated there of think different there's you'll is much of iIn transcon isn't a find the that calls, more in that. difference load terms of the a talked revenue to

load So a with to to a of less income similar be a take able time for margin op ex-transcon total that load versus is But load will much different the execute. margin. smaller

Scott Group

Just sec 'XX? Do you've you PTE got back on less more directionally. headwind a PT or in versus think for 'XX

Terry Matthews

Less.

Scott Group

with just that the help quarter can then better I us just about you -- us positive. you quick. Anything volume. fourth the real to similar lastly can model. you in September, or think And know do Anyway help sort But think just worse? said it's X% of

Terry Matthews

than I on better any Positives guidance flat, so don't real that. have

We haven't really given guidance that. on

looking couple So we of be probably a should percentage at.

Scott Group

you time… the Thank for

John Roberts

a expecting Nobody's spike Scott.

Brad Delco

call. Michelle, our concludes Okay, that

Operator

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