J.B. Hunt Transport Services (JBHT) 14 Apr 202020 Q1 Earnings call transcript

Company Profile

Participants

Brad Delco	VP of Finance, and IR
John Roberts	CEO
John Kuhlow	Interim CFO, Chief Accounting Officer, Controller, and SVP of Finance
Shelley Simpson	Chief Commercial Officer, and President of Highway Services
Nick Hobbs	President of Dedicated
Darren Field	President of Intermodal
Chris Wetherbee	Citi
Justin Long	Stephens Inc.
Scott Group	Wolfe Research
Jordan Alliger	Goldman Sachs
Ken Hoexter	Bank of America Merrill Lynch
Todd Fowler	KeyBanc Capital Markets
Brian Ossenbeck	JP Morgan
Tom Wadewitz	UBS Securities
Ben Hartford	Robert W. Baird

Call transcript

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to J.B. Hunt's First Quarter 2020 Earnings Call. All lines are currently in a listen-only mode. After the speaker's remarks, there will be a question-and-answer session. [Operator Instructions] A replay will be made available after today's call on the company's Web site at jbhunt.com.

call recorded. this reminder, a is being As

It over President to my pleasure sir. of the call to hand ahead, Mr. go and Relations. is Investor now Finance, Please Brad Delco, Vice

Brad Delco

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

expressions call, These I to forward-looking intended different I like forward-looking risks Hunt's the forward-looking may are introduce Litigation set on J.B. and on these identify today's future forth statements of Words provide meaning results regarding Before some in Reform be take disclosures cause plans contain the could XXXX. based to activities Securities similar such statements. and would time and statements. the current to within and speakers uncertainties to call materially Private as of estimates, expectations, Act intends, involve forward-looking those expects, some statements. statements are or This from the anticipates, that

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

and Roberts; of With of of John Officer, President Highway Commercial SVP today's John the introduce our Simpson, and Kuhlow, call. Chief President that Dedicated; to Interim Officer, by way, Shelley Hobbs, on Controller, CEO, out our Services; of the our our This joined and Intermodal. speakers President I like would of our afternoon, Accounting Finance; I'm Nick Chief Darren, CFO,

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

John Roberts

has teams Continuing the thank that in the conditions to particular, continue will and maintenance remarks, format our and around driving faced pandemic, this the with recognize country Hunt in efforts J.B. let I me of Okay, and hard we've and forces opening the work for start occurred our during want commitment response sacrifice by and to the thanking tireless Brad. of you, our teams.

We have every had virtually full show day. rates staff

drivers maintenance remotely. As teams and cannot all you know, work

to wish making the appreciate our adjustment the On greatly all work behalf effective swift remote-style to drivers in office a leadership support and team, personnel to and I Lastly, of you recognize customers. work of all. we

human twice ways. macro Obviously our be company year of senior disrupted the balance issues the quarter all the advised across conference that of this the impact the many to on cannot and to and cycles, direction and will relating potential safety, commentary we Please dynamics do on or staffing, management by daily COVID-XX resources' customer situation this be via stay meets coming depth timing in change. of magnitude clearly the sense this covering of data and frequently by current agile. get a but very for predict We

and Our generation, views trends. recent cost margin sheet recovery, exposure, balance saving capital strengthening levers, projections, flow on cash CapEx portfolio performance, the current situation recession performance deployment, trends, include weekly-monthly liquidity recovery focus and prior preservation, on

review our we with will in coming we on We the work calls as will today topics these touch you others and and have.

move freight coming Darren how Intermodal networks, the the internal will which in impact of to will and both activities weeks including private see fleet to our categories We're and In opportunities of businesses also Intermodal. slope import capitalize turbulence, our the during us understand present better the months. discussion. external We're will trends of evaluating on we longer-term the XXX, Services all, help to existing on comment our information estimate environment Mile our and disruption and but several domestic Final Highway showing to near-term studying timing expect the that priorities, many efforts and and outsourcing market our in with data

mentioned, remotely where approaching at in are corporate locations. As our above possible, working our XX% field and which XX% include campuses, we

all technology in pleased investments that aspects of recent needed. our We infrastructure report delivered and to are strengthening the resiliency results have

ability us customers, our our fully each drivers and Our has kept stay other, operational. with to connected

some In positioning the as of enabling platforms, and for good needs we cover capture our May. in response our are in XXX. be early of needed the a will will This different no-touch our known to reporting to of we a A the Shelley bill example workflows, This to digital addition customers of testing electronic management connectivity proof here. available had carriers. recent all to details traditional currently delivery customers, us on, option in people, environment. signatures lading a continuing is a of expansion freight fast-changing and our comprehensive by been type program XXX, to of and baseline carriers is development

offerings The customers. comprehensive our nature many of transportation to our create benefits

those reallocate our long-held to us of people. advantages, we our options with to addition and In assets that broad presents services are seeing reach

some declines As others. with in surges channels seeing noted, we in are

ICS. options There we in DCS, demands to in handle from available Truckload, are several Intermodal, the and customers the our us way

call During resources -- pivoting resources sorry, across how segments. some we I'm and within will of and our out examples within discussion today, across providing we are

presentation new A of of Final the Mile element our Services. breakout includes

hardest and Of assets, help this on more offering. near-term in to equipment trends hit one to Lastly, Nick in be we our provided the this Final has to able nature you our to services drivers, provide the relocate Mile. the provided. some to been our information for contractors historical will of get expectations all ability lines, acclimated data and business the due

model have that it least in familiar with While get difficult more strategic can seen the current the effectively turbulence, the you at business Even our the we any in recent company. trends. near-term, this we changes of in that hopeful are environment our in we area are make nothing will direction to

meaningfully. have In encouraged and be cost and plan changed near-term, fact, we plans positioning, about our not discretionary the are controls we long-term to thoughtful while by in our expectations

on our planned questions to up close for Brad time, opening that. ask and John? John remarks, this our comments then I'll financial following At will make state, some Kuhlow current

John Kuhlow

you, Thank John.

As team is specific the on mentioned, results. the to John cover going segment

pandemic our more importantly, comments a to what on during We I'd addressing entered expectation and the to provide obviously the ultimately very approach with transpired. XXXX quarter some different So, of going forward. and the quarter first like

uncertainty to offers While not in years, many focus level a the remains needs. customer's is for recovery, pandemic our of seen and is our the J.B. to consistent, Hunt which essential sell

our strength balance liquidity are We sheet confident position. in and

to have that EBITDA, we of quarter warrant, million and go Our and we above We and which approximately the if $XX so. with We ended which zero afraid to near-term ratio conditions times an March currently close and maintain is our to in resources in target have group. revolver, strength cash, the target take We're communication has leverage landed drawn XX. where confident remain of $XXX we our in capacity, the billion. the at to to banker, not is $X one this with option do up that ability access we on given million the cash, borrowing credit

addition, expect we economic and emerge grade environment intact. intend investment In to with rating from current our the

our we daily working going risk outside into flow the the quarter customer's ability and With a monitor around of liquidity market, capital We freight respect in understand to beginning pay. our risk see to and discuss to to view on declines basis the largest generation, second in we customers liquidity we certain to an reaching liquidity increase are out and in communication to. issues, our have terms frequent providers. and while we with concerns, that agreed enforce We're their our customers have cash

the must suppliers pay to expect and same from we returns, and according us expect to carriers our customers. Our

people From opportunistic our we'll business remains and repurchases. approach maintain a to standpoint, an our and has our growth, and to leverage the and dividends, through approach share in positions, shareholders This will we capital deployment We long-term. the invest working so will return for capital remain continue been focus value our same.

our environment, framework this certainly adjustments we make us as allows discretionary recognize approach the to Although, to current believe needed. but

beyond with expand XXXX capable terminal to plans have the near-term, but happen, are that critical during those facility and must We're a being expenditures growth In in are based the quarter cancelled, XXXX to can some Southwest be reprioritizing on our long-term and our of example that that those evaluating region those of accommodate second items. essential spend our to needs. we we deferred,

of on liquidity based paused more until Further, project this are the environment. in However, for we at allows current in predictable a have discretion the approach needs state, we our light time. opportunistic buyback

have planned buybacks, So, interim. while for be may we the historically the cash for cash hold used excess to to have at we

will the determine on will and for so opportunities, difficult funding delaying M&A specific while to transaction travel, process, other has potential non-essential evaluation follow cost pandemic as do any needed. liquidity consisted evaluate mostly and the which Additionally, of our hiring have still continue to our discretionary we reduction canceling It's to pausing and actions which impact revenues considers costs. requirements. normal the Today, activities, continue had spend, market we

we our million quarter. the However, bonus identified which approximately for $XX not quarter into of largest have approximately specific our as release. costs the million, noted $XX that The was were special going planned first of we in in

of are structure, cost our Considering our a large costs portion varied.

to XX% purchase cost, nearly loads. Our transportation is expense, heavily represents of tied which our

wages, in cost costs salaries can a expect mostly offsets Our the we is to to is see due have made pay. less includes paid nature. in due cost, employees and near-term to increases our largest more driver to not Today, that variable variability are which considered pay item quarantined and adjustments time-offs to in fixed driver you next for reduce slowdowns. Well, pay

monitoring However, to environment, necessary. prepared we are carefully adjust and are the if

planned that tractors, includes we canceling paused we've orders appropriate. originally non-essential to or with and equipment, trailing containers, Lastly, near-term. respect canceled CapEx, the XXXX that for view for delaying where certain CapEx was as or This in

is not may to under production our mercy manufacturers CapEx to of million. be control that mind we our forecast extent pandemic provided between to of accordingly. suppliers. we're all We in the the slowdowns To keep XXXX our of the as at a this million previously result CapEx have as adjust $XXX $XXX However, need our

the This the for to $XXX the remainder million of view $XXX to due range success-based is growth million or is $XXX roughly million. current to maintenance, CapEx. is factors now million noted in and Our of CapEx $XXX

remarks. that And covers my prepared Brad,

Brad Delco

and Okay, thought investor challenges what providing a ahead market. opportunities great. And little worth and on I it'd Kuhlow's is what freight just the and we to in follow-up detail dynamic be John be likely briefly quarter, see regards a comments, John Roberts speak with more to to in

prices. network and trends declining into talked competitive from imbalances demand revenue continued quarters, as several on in our pressures, per imports as well rates, backhaulings for to which had fluidity. In with weaker both trend and demand in relative lower and some truck well headhaulings, Intermodal network In that fuel pressure East we've to business, imbalances stronger continue, network the we anticipate West Coast. particularly metrics, about puts pressure with as as We load the volume instances,

to was We Asia continue list effectively out behalf monitor to by February continued and knock in our anticipating thus of plus did volumes March the late more capacity we're That off and and it volumes in March, goods seven, January month. order into we far of go off customers, a the drop will plus plus Intermodal question, because April. eight, see needs our of has ahead flow in and we on the provide was planned said, was most meaningful five. which

cycles, the the been than to some said, to to That withstand may business to the cycles, ability is that in Nick that all our confident immune impacts this in during I'll the recognize flows XXX% and more come in Q&A, what DCS we saw prove detail near we feel should severe of we will not In acknowledge high built we in and service strength of model opportunity the we that from economic demand in let pronounced but J.B. of couldn't was service and we have an that Dedicated, future. our they've ebbs have to business with expect see customers our Hunt, short, QX. discuss to level more and

platform. technology, the digital out will we continue, remain three and and building the investments people, into on scaling investments ICS, focused in platform areas: In

As will relationship that on and supply between demand the should expect, the based you we serve. was in gross in relationship challenged markets QX. fluctuate Clearly margins

platform mitigate we and customers The Our for their QX. respective our vital to drive how during digital revenue the the able in leaders helped be market share raving as will platform. well and as focus here additional for fans remains the freight segments costs on executing business creating experienced

usually area In Mile where shuttering the Final seasonal an impact is business with challenged. This most Service, business QX to results we're the seeing this with certain our is most normally operations. customers

it strongest, may in suggesting the QX losses this accelerate likely see are and business QX. in QX While seasonality not seems normal that typically we year, will the

the truck, more asset-light model. to towards move a business In continues

see towards model. that would a result, you a performance as structure dynamics cost a brokerage a see should more As trend variable similar

While assets, business we invest even to as we are namely enable this more as investing well less in capital our to with continue trailing equipment, evolve platform. complimentary should in technology the become XXX and power fleet physical that

This concludes my remarks.

of queue, return would one ask analysts and Given I questions each to and already one the ask seen then queue. number question in we follow-up, that

So, Nicole, open that, questions. we'd with like call for the to

Operator

Certainly will [Operator Instructions] come The Wetherbee line Citi. of first question the from with Chris

Chris Wetherbee

us question, April. drop-off a and the far, percentage guess you thanks give color starting stands of magnitude to in you the seen I of helpful bit we've look of per of if to weeks the operating sort and April, on around loads still maybe really that, for the little maybe through what Intermodal on about shut in like of on first sense might that addition pace I as currently? be sort guess two what's of afternoon, I sort of the color think I side, and down of what great, it's guess know answer the of think some it Brad, Intermodal, commentary about the customers can good when maybe guys. may Hey, kind of the difficult you but the month so the thanks

Darren Field

is This Darren. Okay.

on. question So, we would obviously early knew be this

on volumes Coast a going on West as an So, of slowdown there a the China when exports the was import or of March, what to China result from of side the we on slowdown of impact came out based in was China.

of mid we're meaningful tune March volume April, high come we're we've digits. of to single to experiencing and in probably out in As declines to

next the about that And learning Intermodal my in to half to expect for visibility probably I get As expect just the we quarter. represent, we're negative in May don't certainly the my and would double-digit and three opinion alone, into that what I future, of trend opinion four volumes would into but to weeks mean I be have back we continue. the the the what June for

Chris Wetherbee

Okay.

I turbulence months, or little depending through several are helpful. trying that. Okay, the maybe appreciate a long side, the then around the next we go that's this how to toggles with wanted And might hold the context and spending we process lasts, that as gears bit you just that to understand ICS on through of you'll liquidity over strategy guess, going switching it weeks about XXX there or wanted of on do see investments some -- come on you in on COVID? where off think preserve to that of How you this to and projects the what's sort I make.

Shelley Simpson

for reminder a as just so us. Yes,

areas that Our investment three in was Brad really to. alluded

in watching our think job are focused have March, that we people watching I good costs We coming on side, and done our even through April. to as came which we a people have

technology projects projects; create are those We projects out not network. over period that those are are That are believe time. two-month of in also we a helping those and And more our invested transportation spend, one in projects longer is focus. a or planned efficient critical us the

will continue from technology and carriers. We from data seeing have that both plan on and some that of based confidence we're customers the spend a

at was association be ability our exactly And and that an customer customers happen was and know the those and should really to of plan which shipments time with that that. connected as our revenue our process, Finally the really which the or scaling onboarding carriers. part to on would the acceleration carrier are risk of with

did normal, on invested had activity release January. business. about in from two our of what total. more about on -- about it talked and we the first unusual in most really margin and us, from to though earnings then March side unexpected we scaling about invested the the pressure January XX% supply -- For perspective February total, planned. was was first perspective on we the margin a XX% the if That you COVID-XX, in in certainly think pressure and constrained coming over created that a I weeks, that quarter come

better nice a plan, a offset to total, our from in our people plan we did in slight plan by miss than from So and being worse a job total. margin perspective revenue

Chris Wetherbee

Okay.

for Okay, it. that's appreciate helpful. Thank you very time, the much

Operator

question come with Our next Justin will line from Long the of Stephens Inc.

Justin Long

on a Thanks scale maybe follow Intermodal to standpoint. price about and as price up the an of side, are going you're in addressed margins over say Intermodal below and opportunity this get downturn about to this on curious targeted from aggressive you're how this but the curious the more the Maybe good to remainder focused you on environment share, you more bid I'm just hold and you're leverage network the on see season? thinking afternoon. line bit Intermodal, how Do the you given that structural forward, volume or into strategic going would a take trying advantages pricing to downturn levels of what thinking balance

John Kuhlow

that Well, Justin, go think That's based that there believe take and demand any to the "Balance," how I the need game mean for shipping downturn it. share. we term, I that's we on don't of you out exactly the about we says downturn. I would one used plan specific be have opportunities our we opportunistic been that equally with have Absolutely, kind would not a of approach. when that is beneficial opportunistic any we network? necessarily Would would with in to we been think had our something not customer opportunity be business but

aggressive a opportunity pricing the to that a cost that in time. exists, at would And ever to we would and communicating suggest wasn't our and providers at look offer some that are allowed could happens all more reduce certainly we customer, Certainly not I sacrifice want if our of don't we with -- have then one when did, look philosophy. our margin it that. I changed -- regularly, So bit rail where about manner to do a we us again, those little proposal one it

Justin Long

business, made the liquidity, think customers helpful. on of then maybe revenue prepared risks that's comment view of that that on to about your how John following kind the in secondly, the there think hear the we as by down risk about of in we breaks of could percentage percentage around And way And of you a maybe, that customers' size that as of up Okay, Nick, a risk. is it customers you those from the or remarks terms market end DCS and front? the from mix

Shelley Simpson

So our we customers And us. in evaluated total, some of what we base good and having essential conversation part customers that goods concern and customer and calling total had have our move communication the around are segment. with by nonessential in have

are objective not that the Our customers been, bigger in last to hearing our from, main concern and work closely of sales weeks, several that so we're over a customers. with really lean organization and has

our We that are a don't any do I having regular top make on customers see do we're I so sure and but think to staying risk, conversation we're surprise daily that. on of talking think just regular it's customers to I that there. cadence, with far a

Nick Hobbs

office was so, down furniture those of some XX% particularly falling think essential well. down our so suppliers food than other, us, home improvement Yes, our business, far move pandemic more segments just once was XX%, impacted as from hit apparel, assets basically, but you flexibility were as and some of around customers clearly off some our our retail and to this nonessential, that up were was see, versus mix or XX%, I automotive of

was very consistent. Ag Our

portfolio. that going very a see forward. to move And continue as got we we've you're So, diverse to

to move were we've average from they And may over of -- some accounts so base about move thousand on day the they have down we slow, for around we able may able to been those be shut to over segments a -- or were others. moved trucks a their an

bring struggle any And to you busy. over have that's another assets been same They where when private very the that the outsource. So, great control don't you we that's move with a to assets. are with and have slow you operate some private fleets. very, a and to within fleet flexibility But of us advantage Dedicated, the something customers with, have where repositioned lot service again, that the customers as our we've visibility

Justin Long

And seeing kind thing then on of payment is dynamics Nick, seeing? are in to terms on to you your that what follow-up, -- the just business, similar and Shelley and

Nick Hobbs

into would is I more more. folks we are up little Yes, When Final say over a the -- side. volume Those furniture more so bit we the a see impacted on we're same. little dramatically on the the furniture would see I Mile get

John Kuhlow

our with I as set objective having want And very the and we, conversation is we we're too just around how to vendors. customers said, that are emphasize how crisp up that John pay

for terms, we in in to not good getting and conducive of work response. supporting through when be it others, we're really So get it's this right might as in now, really line us talking now it's not but extending something

Shelley Simpson

maintenance would keeping our just That necessity I drivers Yes, for our the them. there employees of customers the I favorably been has viewed and customers. ready add, from our frontline understand think on us

as space. As change for our community we payment terms truckload the carry from well a did

only up anyone pay moved So month in payment days. in to in have of moved XXX we Carrier days seven a the their March, that shipment

understand them very we're so to They've of We're far. to be that to more what just to get been and of doing cash make trying we're sure be explained So our help. that quickly. all front trying they in We've offensive, it, receptive customers.

Justin Long

Great, that's I the helpful. really all time. appreciate really

Operator

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

Scott Group

All everyone. right, afternoon, thanks. Good

down volumes the down So, bid are happening maybe of you're then Darren. can season want that some results you, quarter and double-digit, seeing? second Is with still in the if you And share to under start sensitivity guess think margins help to well. about way be there it's does sequentially as how -- year-over-year I What and margin -- the us double-digit can so any pressure? it's much

Darren Field

question. season is Certainly bid answer okay, the So, bid season I'll ongoing.

that a going a the to of completed from on that, little to any world our we than to about lot pricing expected work had had more -- third bit about them of maybe challenge results we, economy to a place. really had home, have of we had what were people that of and from first business, the We the prior [indiscernible] this probably taken be before

the they've but we the exercised a have have for they're results, spot bid, of and in we of that that received While they've not a weeks, a it. customers -- start last handful four to implement bid delayed are good

Some a May of those delay. be have June would to new a maybe example Xst An delay communicated in Xst just a pricing.

Some you of the customers have effectively until give said, "We we will delay can answer." different indefinitely a

have actually customers that asking quarter, in handful to demands of capacity may the reason that got the are looking secure they've cases be -- to We second is they're us they're increasing know to the faster they're and and for faster, they're those that. shipping and a ability go do going actually

most to. the I have the we would would it have has say for -- So part, season that what the I expected bid been

customers and work different activities, those host project are we kinds occur a may not year that a of of for price just QX. in in Now, heavily projects some every may year involved this spring of

not probably into activity push the that historically the the they're happen. quarter frankly exist. that off or It's they're volumes shipment there's just So going not now to third to ship, -- to business won't are just going

but slowdown percentage bit do. that's that And so, a world, a not we of little what huge of a in there's

affects that utilization that margin cost what certainly sharing fixed significantly And assets. the talked in of the weaker we've impact still our terms of just the price is more a from past lack true. or In of about lack margin our a of volumes, remains from --

normal the than years. system we different have containers looking for significantly However, the to our The of fluidity XX last impactful. having work is idle what balance do is is believed or network over

the of West Coast the East of volumes higher that length move some are some and rated to of business. the So we longer the haul

West Midwest, surged other, has on population base country the consumer business the interior has the have at the products support that slowed the the up of same we time a So from for little more volume that than to Coast from bit. and

lanes, volume an at backhaul loss So, in and in lanes you've and increase that's got of volume headhaul a impactful. that in

your to there So, to direct decline the answer a but certainly specifically about would have as I'm with of we challenges not impact going margin, question the volume. anyone

Scott Group

customers Okay, about from Nick, who pays then to Dedicated I so guys that, that you are can't are that have and right repositioning open, in and you how or for that pay when to not not you they right now those that still that for operating trucks reposition talk guys you do trucks, are works? and extent shut now, then, guess I'm the sure

Nick Hobbs

Well, in trucks Dedicated, of working. are our Yes. all, of first all

in around. all so, So, looking the moved they're them but bring Dedicated. They're up, accounts, is places, got other we've Intermodal in that for and other supporting some surging account in we it's other equipment,

we probably businesses, grocery our example, different So, or nine serve XX grocers.

and be the if set. that's credit private other so, paying we equipment, that other that accounts, up fleet, them, Our one account, where of XX%-XX%, trucks a and business from that is the account give and basically is then and that they is all very, they'd they're had we'll for to a if pays pay so, bring those the very robust, and in so, can't handle back the and driver busy it, cost

that that's So how works.

Scott Group

for you Thank Okay. the guys. time,

Nick Hobbs

Yes.

Operator

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

Jordan Alliger

Yes, hi, everyone.

potential closing think accounts, have you year, of any in -- instead new on Just color but we for way this missed thoughts as given Dedicated, some maybe truck sure into business, maybe adds on you can and all the talking it right through now, bit a on question to another the that talk think to give I go hard you business on some know, that, seen maybe to it's new is, the you. to Thank it, gauge a going you could uncertainty, your a get potential of -- about alluded of or year, it you little that? adding yes, I to you're presumably opportunities

John Roberts

Yes, I plus we just contracts trucks. XXX good do that. really QX, will I that a In signed will start. tell we on to you were off

of couple down, meetings, trying teams hard our weeks as have us. do of very a some are So, signed Microsoft, kind to it, With name it's ahead, We good you those that's get right Zoom ago. slowing being for look to now. priorities that last a we're just we but customers said, quarter deal meetings, other

that So, we little verbal continue our a we're just a bit, down and slow bit. just seeing to expect little

at about recession back by XX%. the 'XX-'XX, look our you down in went sales If

to So, that's will what it's I pretty to close here. assume happen think good pretty probably that

think gave of XXX I So, guidance we to X,XXX. a

we'll customers need recession, they the sales, could on a to it or of downsize on little way with at So, XXX some bit, see and to for and but customer, to we so, during the of also fleets some our the take lot it those out, look long-term a is We long-term, out. two those be works out. of our truck take take XXX we'll our a model pressure the

pause a then but to fleets, little still and may have demand our think pick back the we and we as be come they there just year net that, with So but adds private been out a past in of this we'll pipeline, till be is again. we there's not going years, three the out two full as got this, or robust for up still

Jordan Alliger

ends, the real accrual, and one loose the it's this $X question, the assuming bet related the point. sort Got the in then question quick of that I'm a time it, and XXXX, and it's up now that is million, quarter put just at just on and to

John Kuhlow

the end at award of XXXX. the received we actually, well, So,

XX. we on think October I that announced

to what entire to about. As XXXX, this through calendar first actually up month the understood that how we true paid XXXX. and two announcement and much we the related year, or was in that's award we BNSF went for of year that the for was payment It implemented we needed that

Brad Delco

this it because want clarify of kind Nick's And, Brad. do to to it's hey, is I important. response Jordan, did I think

Nick of originally this XXX of some so, some Dedicated comments the see budget. his a these have opportunity provided to equipment essentially, optionality he why XX% fleet So, of sales an capital new where in slightly and their awards, something in in said, some where already of customers the truck seeing adds net size that, estimates, of that those that's to be John below repurpose process and could Kuhlow and our thinks see sales that's some can but to do we you're take flexibility from decline X,XXX that but that's terms the shrink we year, could original fleet,

would So, be highlighting there. I thought that just worth

Jordan Alliger

much. thanks Great, very

Operator

The question will Bank Ken come of the line from with Hoexter next of America.

Ken Hoexter

afternoon, the everybody. Appreciate Good Great. balance. remote

to So, may CapEx segment new the or to talk I of and assets about level if you how Thanks. walk don't orders, about tractor discussion that, are? growth just you the now your on are of you've be what just us you there, talk some canceled the CapEx what and get can John maybe know talked or by want Brad, guidance, container growth reduction that, through you follow-up targeting? what targets

John Kuhlow

Yes.

John this is Kuhlow. Ken, So,

of of -- to orders. timing the ability clarify today, the most Just but we kind have to mostly it's or those cancel, delaying

CapEx, more million DCS. kind we're a what segment of by sense are, Intermodal our per little and better until and $XX around XXX for roughly or at probably or you truck deeper on we to $XXX of perspective give So, XXX bit that's million maintenance have a about needs but

in mind company, million maintenance technology in that's office and million is to keep $XX the $XX for the in that investments include still Now, the around includes we for back also year. what the our

the primarily base success segments. any we get that's $X Intermodal is for million to those and So how rest we growth in have Dedicated the might that and then

Ken Hoexter

understand that just want like customers how and I the and Great, maybe can delve out, is near you're breaking current you around now it into then, you're that asset if the just about segment, term you to Final using about that you don't just moving assets. just Mile can you talking as what financial flexibility the have kind it, pay. of the you're know, not shutting losses, or of the you flexibility talk

John Kuhlow

give have So, okay, on into we some three answers basically down broken that channels. let that me

XX% is channel is first that furniture, and The probably light. asset

customer shut and for still So those build ongoing. the buildings may then still down, some when they some we those have we buildings of

our look will afford help So costs connected contractors, for it's but contractors, a and is away. time, direction it bank so of so then things get that all them paycheck to multiple them we the for protection go through this try you the them there at, equipment, to to

and and are some the we Then price retail shut that's basically channel company second they're non-essential, where drivers. they down basically have retail, replenishment. our so off is That's all now right

we we And as have some much also so, can't have as types tried on we different that channel work. Dedicated outsource that but to in there can, of Intermodal equipment go or do

XXX about there's So them. of

we we the back price when to pretty chosen will so online, that pay off those go, retailer's them and we've be retailers volume be ready will expect when come back, so, to And good. come the

third then on are those essential. is appliance the those are which And up, the channel, side,

some general going. to employees And so, doing the XX% areas it other That is deliveries of non-asset them. is side. we're inside, volume for is In and in company in or XX-XX still is it And the but still down but on and is there XX%, appliance still doorstep areas not inside. up that just

and so choose to we'll and them were a how them both agnostic, that. they let customer on And and we pass do of pick

Ken Hoexter

And Great. thanks, Thanks, Appreciate it. you're an Nick. freezer going. we'll guys; take extra if

John Kuhlow

Okay.

Operator

comes The question Todd Markets. the Capital KeyBanc Fowler next of line from with

Todd Fowler

Great. revenues we year? how second was the benefit rest dedicated think should about revenue, on there can his quarter Darren margins in some I know, And I the the think about and the decline, in see us maybe, to that bow think you profile, happening, that pantry good I you know, of on of other then on the move just kind but the about of overall we in a help the what Intermodal and reduction Thanks, hold comments you the into some how -- basis dedicated for a guess margin I do Thanks. volumes. would net question you have, gave up? was probably if XQ, year-over-year the would expect adds, Dedicated to we think, stacking maybe everybody. as you're expectations that the comments segment you overall saying afternoon understand the put Nick,

John Kuhlow

QX, for you home in just that typically tell improvement. Great. I would we surge see a big spring

so our up accounts. our revenue some those takes at volume And and that up of

seen good really QX, not I've our and We've We seen and a for haven't lot, what little seen a a kind had but what pretty is, looked at of bit, I've that. and we volume shifted to it's that compared customers, is and consistent different maintaining. seeing of but not it's around year, fall dedicated been we're the still Yes, across off board very QX this any. but

XX our that our feel about still I we're again, Margins, this surge parts, about margins good up to but be comfortable ought tell at So see what goalposts but it typically to we this us we XX as will same point, volume with would a in lot what think for at QX, saying some. pretty good was the you QX. volume in but to very you there being the is moving hit, I of point feel

Todd Fowler

the that's for get has on my for shipper change, market. capacity service changed helpful. other? follow-up, thinking Shelley, just And in Obviously then been truck the modal more what versus Great, kind or the difficulty]. be your demand in one to commentary I'd seeing behavior about I'm just of curious right response you [technical shippers truck market available available capacity, Are shipper the more curious now

Shelley Simpson

with a thing. have think crisis, like I crisis what doing it are I would that in feel that would to tell a this accelerate our We And you, had is I Okay, we during customers. relationship tend market. the we call -- our time I very that

on in but this his second key quarter. we're two opening I in think mentioned focused the remarks, Kuhlow objectives John here really

bit making right really utilizing would The one customers the is we're with robust about very a something I needed talked having needs of customer every people in that help a company, Those care across of different. And as that, all to our customers first nearly And and taking and capacity taking our other. we result care that's are are tell now side. segment, do meeting that that bringing of them. as much with first and customers different we're business services service grocery are say one I every and foremost, our Nick sure every will that conversation down, shut is in the we're you, that as promises. them that each of other second people, the customer's our The Todd, a little

I from To add XX% on customers to about bid of also on a they're what our probably to have what perspective. stayed the that path XX% think bid Darren season, said of doing

ones and see in other environment. a wait are just The

a I has think for we us as and business And doing with of think us, our the customers helped lot healthy those that mix I of that business into fairly are thankfully coming do is to well, well. tend this. customers

we if at our we to we had back time open-minded or together. pressure level. think do customers point open that very a efficient that most or business any downturn the perspective They're customer minded profit to I are a way business a doing in revenue went can from

pretty is need So do need I would we say as customer every to we to to what grow. open-minded and how

do us business. Then more lastly, more customers have lean seen into wanting I our to

we look from should board, say the maybe get across be graphics much you highway small-to-mid customers. sized at but perspective, I If how a just this the would pretty most business

in this some crisis even shut the You are customers micro really crisis that during time through little to are of you tend small, services. difficult better highway and shippers. kind the more trying they more be much that customers or too see and down and than flexible we're in medium largest mid-to-large being customers, with, a our to work doing having see either There's total, our

down, them, and So fluid, price to able them market the the for be money. going will we'll is help be save if

Todd Fowler

Okay, sounds good. everyone. time the Thanks for

Operator

line will from question Brian with next JP Morgan. of Our come the Ossenbeck

Brian Ossenbeck

maybe last those blending Darren there're lines. is some and I to expectations, integration, networks, and ask those going service the evening. just there so pretty relative service because good more think couple wanted about years, you to real within thanks, to balancing, significant on more speak declines Hi,

expect have going perspective service an to think some in XX% that's down volume you you look from would they do XX% So impact on Intermodal any as cases? what at

Darren Field

best that some years are it rail to ever the our of is The four their trains, that's in plans, network year today, Intermodal and we're I the but three best career. in And over them that time have they out right capacity in performance is on the think last available probably in working experienced. yes, belief service now their certainly and we success, the many my because XX my implemented of operating decline volumes experiencing having is of

Brian Ossenbeck

is a on this follow-up the Shelley Okay, for brokerage side.

any way the With of decent in really all? you've seen like up towards to do down, this is XXX anything As be would material this you there does last going at the is in Is beginning seem trigger to can really pinpoint environment. - going be it is how that even or couple Is volatility the and that way of helpful. of in sort changed people you on there competition. driven the lean benefit of amount it and a the more year, weeks think a really even consolidation

Shelley Simpson

dramatic And from seen a Brian, competitive landscape. I change any say I haven't would

seen they more aren't to think are lot the year. doing that's are that some stand that or similar well, started from spot as business asset off business awarded published fragmentation the I today. think I there as huge already, moving particularly I fall customers how because so whether have in It providers I else. that have the is a environment. brokers, stay someone aggressive seen or do brokerage of our it's companies haven't to and selected non-asset, we we to a they that so really the

I perspective, our consolidation been brokerage perspective the a think from weather to from think storm. I it's difficult

about of December price tighten, really cyclicality that the supply starting as it changing some second carrier of have part perspective. supply of on before commented from side happened to a and January, change in side brokerage that some from plentiful. the started there think PTE that the If from impacts shift both correcting the the to could will pressure in quarter downward had price into has as equation, a the how in really much think and brokers rising shipments are the think was market you XXXX while I It seeing was as perspective, and I moved push comes what the consolidation total we've business we as the to and because brokerage, then continue aren't the brokerage down of I result and PTE can really be

that crisis a From a more from data platform, shipper customers we our us transparent total and our with our earnings actually a and helping reported space. customers. confidence direct that's leaning grew XX% truckload I that we we're in we believe about the more XXX is perform release, have platform very more be through count and is open found perspective, our what gained the result us have shipment on agile this in of are to perspective, the in doing What the

Our together that's started we perspective have from what Box customers a XXX and have right right, load started we putting really into learning business. on the at why how see the they box they total, XXX from and the started a as start in business their leaned our we right also platform, truck us can that to do change

revenue the half part market. that create business in the the can is of into part nature comfortable that's actually of the put think which which market Tier the inefficiency those live of exists is We other with model the in the that of half part a we about two more you load business, together, networks complementary plan network. the that when Our that leaned QX and market, a efficient with our and plan feel QX, of drop we and and over from customers in increase hook slight our between had the we

comfortable growth Our we customers into are feel in that plans XXX. about and our leaning

Brian Ossenbeck

covering all Shelley. for thanks Appreciate that, right, it. All

Shelley Simpson

welcome. You're

Operator

The from will Tom next UBS. Wadewitz question come with

Tom Wadewitz

Yes, afternoon. good

and some pretty different. be similar Is did some their could that seems terms time cycle to at I around. XXXX this to of your guess of this in within look price on if Perhaps how be XXXX, kind terms you some likely in perspective. I pressure in of to XXXX, but that, you it XXXX, a is a might this margin we we have saw different in if in compared just John, like comparison? see the sharp little reasons, maybe particular on considerable on likely And wanted So performance, XXXX, thoughts good freight. offer best decline comparison you it see be, this Intermodal a or pressure And would maybe it's

have appreciate comparison? that cycle thoughts any So on kind you of

John Roberts

but we've the encouraged serve, way we that there's our in everything we completely of remodeled the no getting where recovery, we away Yes, of towards the were a drivers how long so churn fleets business the it's the going our really we stay that's time what today results that that approach coming that our from our some and the business, the we into and into our that in really us that on the doesn't spent segments. conversation us way set channels in, that doubt the in, and or of time from results and view trucking we're every I side knowing geographies all take good about benefited that so sort approach efforts of better a private of closed out time short-term can we we it. capacity to lot open then down length that confident kind from pointed up, recession, On with and in been we a the got our outcoming and got of out thinking versatility the that during there. not there of in from management because see away that's any going some about more were is the portfolio, the a equipment from and thinking impact that in really back had on the of and and we think serve and and Nick how but more work much halls game business I'm DCS more customer then we will have highway downturn the and what done

I on able far going margins takes long own nimble how think as downturn that put we'll that truck and and to pricing performance respond. out. that and that plus be maybe a out, and be see differently a a be so more low low as a to you we'll Intermodal, they'll event, while. can coming deal time I think we come I answer, prices real big stay from, for do historically On has can been, only really pressure much good recover expected going So fuels think trailer, more every in or then in every an to and and a I back not, When and not a a it's with depending to Intermodal that I pricing or quick and you recovery, can fuel into think there's on

though, total a So, and position the past. different we'll like been, good little more ever we've as a I ever it's see probably pricing our than really past. so approach the robust is in that from rich much been we're as be In feel in

quickly, much and I we of are response coming more better that so markets I even it's able and serve will we weeks are mean, in predict we timing that Our ever can months respond from than where much the is now changes been. to so get to see better.

I know if That's more add to come we I think our the be would we to what able downturn. to out don't guys get expecting we're data better considered what as going be we're the respond want guess a to into anyway. system to of anything you I that? start

Shelley Simpson

say, And I have level of would from use that data we today John that has perspective. exponentially. think primarily that data a human talked we about grown that the I

the or So is not happening be customers, doing. more time. working machine a we're more with real towards of that AI lot more spend carriers, to what do solve is perspective we're we'll and validating future, with we and able own our work from our a in that in prediction people learning time for that drivers In

weeks moved And of take process. a that over has with data. too So weeks, us talked what point, much about interaction to John the days that that can has learn period a couple of only human machine of the still to right would at time level this in

step statistics key perspective April. for new records the watch both in taken here then we inside set and and February and we so XXX, that change in another we've March And

of records So, those XX stats watch, to in And two forward. that plus week continue weeks. of move here we broke XX% the last the new to those

be to So human and years by offer the it's machine can digits the very is the almost the better use customers. think and level do for business at machine that one level and you to we to change next do growing over three a level, difficult the do that triple of anytime will way it, I but our data for actually that solving consume answers to able at can

Nick Hobbs

our in there, more rock base is in dedicated think much storm more quasi so I in as than of even would that and solid base weather we the the it just And and fleets XXXX, XXXX be say so we're it's much business was solid XXXX. to able we did don't than better solid have private on today I Dedicated to side XXXX, back and

Tom Wadewitz

more respect you Shelley That's at follow-up all and yourself, Intermodal market. have brief but better just I the control a data, very don't to still you mean, helpful. responding pricing. had with I contract you're

rate mean a Intermodal think you or pricing side? you it to is that So there's be I a on weak for do see that contract don't while, Intermodal expect the think contracts and will down meaningfully stays realistic we if truckload chance

Shelley Simpson

Yes, it so from say a play across just longer-term businesses, the bid I in perspective. all is a would general

the to a So any other what's the that's going from or happening market, benefit spot the perspective. price of side in get they're customer

And we get the help so that this And there are through as in some spot market. market. want to are customers spot customers

into open want business market bid to meaningfully in this talked fluid about don't what's we're in to very across happening So the we would pricing our season, too being that say, today, but bid would we're take being far think and total, if I they them that into the season. minded I down to in their play of approach advantage

our everything difficult is for base have cost longer-term, significant to very offer costs that discounts Our off us we structure, be of today.

Tom Wadewitz

time. for the thank Great, you

Operator

The question of And take the with we final Ben one final line from will Baird. question. Hartford comes

Ben Hartford

the you a just the a is you're terms and accelerate throughout presumably XXX. the scale do interesting. being on industry, you across me permanent fitting the platform? I final XXX to in. Do XQ market, that to payment of within thing that that are I taking anticipate Thanks a terms point changing you for seeing into And the in March, kind what Shelley, management you see collection play to had this that? made into context brokerage that guess regard build-out as constrained cycles first being the of change the attracting and then about payment payment supply standpoint, what extent an guess terms from cash in opportunity change think the cash guys supply situation the of so, the XQ if comment in I change in And approach the with but does

Shelley Simpson

payment carriers days. can two also changes April, Yes, for month walking the so we those how within but them terms did free offer of through they all we're get paid for

is long-term. so, And that to available the over them payment made

significant This percentage bills, higher paid much platform, in factoring interacting free. they for may work carrier give documentation inside component a paying an in checking -- their account perform their scale company, they that the to two XXX change and total. and they the a platform. And to in We building think upload is over their for them be so all if two is they're their a do in that's days the important back us

the to how advantage can community them carrier of very through we they that. So walking take are close and

Ben Hartford

very the I year, the new a the the kind know rate sense back trying are now it the level for, as on run the just to from you balance and ICS out bit a of first year? gross And your a unclear but year run perspective operating up losses, representative for the kind in unique gross the these the this year. mind line, little the is EBIT then, within still and clear, of operating balance as it'll a be of of get you to in margin or compression play of normalize was and margin losses, just rates and the quarter of run see this it's kind on quarter,

Shelley Simpson

I think it's certainly too call Well, to early entire year. the

on happen what I to me that, I about year, for be and our lot our most transportation early to care in focusing we meeting less past our have of time I expect I could improved plan, numbers. I plan here then network and to talk being objectives. be for but those says have we've this confidence. part next of think efficient margins business, declined couple have committed in or talk we're the higher would the way I did from next the long-term as and In get weeks would we of come-off about plan it'd building think a get less total are weeks, to going spending say think of of the our of PTE And the scaled. over a taking lot to and people be shipments promises I two will couple higher customer of we're in total call confidence. XX% Again, of of have under there I in scaling do too April, total, that, margins over and as do QX, maybe

be is that short so the over focus long-term. our going and And to

Ben Hartford

Understood, thanks.

Brad Delco

Hey, is Brad. Ben, this

comments relationship remarks, challenged demand expect quite made opening supply gross that kind on QX. on the relationship serve. margins fluctuate the markets between will and Clearly my reiterate Just we of based in the I as should and to was you

So we up. have market seen the loosen

margins So April. a hopefully we've in that imply at net far would seen relief of revenue little least bit on thus

Ben Hartford

appreciate the Understood, time.

Operator

allotted we questions. the I'll reached speakers that, to hand have closing time for remarks. With our for it back

John Roberts

on team in time XX I'll without Monday a just much our you. meeting by this challenges. March we Monday Friday, and unknown would coming close Pandemic that This response called said be and working was that John on Thank saying is with a executive a we remotely Roberts. to

some healthy that is and customers, care I'm or that's important, XX,XXX many incredibly weeks. that no keep underneath you delivering a today We like I've CapEx and up all and every people expect I in fully picking appreciate this the having rates we these We taking doubt, should freight the lie, don't day, I volume sure we're your think company earlier in would cultures something I to that in a for and CEOs loads to of I've responded seen forward place equipment, of handling about folks that way and that not have single this downstairs of all the and We vitally just and appreciate coming but think to on overlook. we unknown, this in people they're CNBC, are talked time didn't is talking really to I team about solid, look way and proud today. conversations and the of making

Operator

today's does you We ask this you your conference And call. your participation please conclude disconnect for and thank that line.

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