J.B. Hunt Transport Services (JBHT) 16 Apr 212021 Q1 Earnings call transcript

Company Profile

Participants

Brad Delco	Vice President of Finance and Investor Relations
John Roberts	Chief Executive Officer
John Kuhlow	Chief Financial Officer
Shelley Simpson	Chief Commercial Officer and EVP of People and Human Resources
Nick Hobbs	Chief Operating Officer and President, Contract Services
Brad Hicks	President, Highway Services
Darren Field	President, Intermodal
Allison Landry	Credit Suisse
Chris Wetherbee	Citi
Jon Chappell	Evercore ISI
Ravi Shanker	Morgan Stanley
Scott Group	Wolfe Research
Jordan Alliger	Goldman Sachs
Tom Wadewitz	UBS
Justin Long	Stephens
Ken Hoexter	Bank of America
Brian Ossenbeck	JPMorgan
Amit Mehrotra	Deutsche Bank
Bascome Majors	Susquehanna
Todd Fowler	KeyBanc Capital Markets.
Brandon Oglenski	Barclays
David Vernon	Bernstein

Call transcript

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Operator

Greetings. Thank you for standing by. Welcome to the J.B. Hunt First Quarter 2021 Earnings Call. At this time, all participants are in a listen-only mode. now today, hand of Brad Investor would to conference Finance I Relations. speaker your Delco, Instructions] like the to over and [Operator Vice President ahead. go Please

Brad Delco

Good afternoon.

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

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

CFO, Officer joined our our of I Darren Operating like Human Intermodal. Hobbs, opening President President Chief to call CEO, this John Now, Hicks, This call. Services; I Resources; People Mr. the our afternoon turn Kuhlow; today’s would speakers and by Nick John? EVP our Commercial on Roberts Officer our comments. John At to to I’d the Shelley am Field, and introduce time, like of Services; Highway CEO, of President of some Brad John and and Roberts; Contract Chief Simpson, for

John Roberts

Thank you, Brad.

terms entered demand call, customers. with what informed last we cautious, needs we could outlook XXXX we replenishment from and discussed of our during in As on positive a inventory our expect but

view direction forward. data of in events and weather encourages supports our by most going presented disruptions temporary expectations the are optimistic generally those from the of Aside February,

is current stated needs that in Accordingly, customers, originally evaluate increase our warranted. conditions have plan we plans our in of we to determined our capital announcing are XX% the investment market for JBI. a such supporting milestone As an increase we a and our for clear The $X.XX of capital tractors for chassis and new reached the year, investments as containers, company. and trailers, the this needed now projection our incremental equipment procurement for enable billion

by to a We increase for target which units have secured X,XXX approximately for container addition Intermodal, to containers. units over XXXX XX,XXX are our bringing a net X,XXX XXXX, another our in controlled little temperature of contracts fleet

We are also fleet trailer total Highway for units expansion XXXX. that in increasing to X,XXX our by Services fleet bringing X,XXX

growth programs. add All expenditures XXX% this container fleet just above XX% his our will of remarks. increase our an expansion to John on plan Kuhlow increase comments our a XXXbox our equates for to to his trailer capital and original plans in

year, targets our plans a and discuss we have will Let’s over clarification our under all with margins. specific had announcing here goals targets call review After segment for for the margin you with understanding during issue margin our that to these reestablish today. last we

appropriate and Intermodal, it For XX% serve XX% the also this company generating to customers, sustainable with XX% we and that the structural to from grow an presents ability is our to for with lowered fundamental The to change goals reason our while margin ROIC. XX%.

positive opportunities our chassis and component our a all Difficulty] improve per also which asset As ratios, turns adjustment, of [Technical evaluate tractor and of and see would box this to the month we to be business returns. utilization for

from increased to XX% DCS, XX% XX% For margin to goals our XX%. we to

disrupting a business it the the size, realization it is fleet step-up a occur be margin core without expenses past. and growth to increase which fundamental actually appears change in as start-up in to of in this the has While the expectation, allows

the a lighter mile business lower activities, given Another which element removal revealing of fleet margin final clarity for the requirements. is asset require the the

needed. DCS, a the for business asset always been each margins return and intensity margin set given appropriate the an discussed, are of As has provide to higher

position are we out of this more our of we trailers do X% focus and change not transforming reinvest. requirements in are from lighter JBT, is a adding and the that focused We levels continue the reason tractors early ROIC on asset and support model investments trailers to stages primary recognition to we in range this adjusting a forward. for and evaluate to appropriate to XX% point XX%. the X% achieve market growth going as margin margin we’ll to The between our For on

X%. going and For the ICS, targets margin X% is we add these availability we between the range margin will long-term for our providers reaffirm and expectations long-term care segment on drivers Services, And for under unusual our our Mile and margin between professional comment for leader comments from Final rate currently. the and reaffirm target X% target ROIC Each businesses Final our resulting drivers forward. pressure main of me on asset-based X%.

likely are driver are at tightening call now more the address in John increasing to While with previous benefits and for color prolonged. turn taking Nick management comments. for improving more add days, driver on amazing pressure and recruiting difficulty of eligibility compensation. from field entrants believe see during perspectives. we focus cycles, expanded in, course his over new ways Kuhlow of mentor wages diversity explore unique our to current currently we degrees in new some the driver our inclusion to efforts a a new field important to Accordingly, critical have our I hiring on of faced and by All professional driver retention and and reducing days being These and XX and and challenge. of place efforts comprehensive awareness brand, vitally meaningfully in for the systems, to the the hiring issues Shelley our time advantaged efforts include train our steps XX we we and vast this to drivers overview varying teams. will the our pronounced will we

John Kuhlow

on our couple first quarter everyone. comments Thank by of good afternoon consolidated you, a providing from John and like of start to XXXX perspective. I’d a

to the With significantly ICS other to EPS the over the industry, closing Given respect weather, higher and million increased and from overall prior-year higher capacity our Services retain revenue, to costs and networks storms. quarter. were to previously labor notable guided the the cost weather and demand and pleased our quarter, up both million, were as $XX achievements Other constraints. determined with February Highway we income operating our for be which congestion to are tightness approximately facing various drivers we in in from our the revenue includes to $XX driver primarily within impact across growth with quarter, opportunities this XX,XXX the and impact $XX due and JBT winter related and income estimated In million operating we operations approximately this Intermodal costs of attract a lost to constraints, loads. segment freight pressures quarter primarily

for is now XXXbox the million the to of investment but this updating You XXXX cash and also outlook. between part to review will our are ended with know, that and our We and by driven capital we John the trailers with our longer-term being This $XXX highlighted. CapEx billion, program. by $XXX $XXX that had we supported $X.XX million by the for current million adds environment, guided Intermodal in investments previously quarter be in the approximately primarily container had driven

for as by included may opportunities mile further review margins, segmented was our businesses our consolidation conclusion also segment. and current targets business specifically plans, our the state our the as regards not future margin in of While informed cash of CapEx in noted, to final arise. With and allows our of liquidity the

ranges revenue contract our capital, quality, on terms the our our rates. underlying penetration include desired terms market of commitments] and capital [reciprocated to desired contracts, of of our returns inputs customer In regarding and the both nature duration. in risks intensity Other

allocation in but the stock in opportunity back our buybacks from continued blackout Finally, into standpoint, quarter, and found half period. capital we less then fell the a

anticipate investment, continuing note towards A guided throughout buyback COVID have our XXXX. capital on we final significant approach While still costs. we

continue to paid to We to that off time needed or quarantine. have employees PTO, offer

providing when to been be WX members ensuring quarter, from Together We’ve host than be members and to to field and with vaccinated employees time not vaccine them away employees work our PTO members. allow area committed organizations to XX,XXX vaccinations of the corporate to adult our to headquarters working at healthcare with During vaccinated. needing impacted clinics thereby family to local under their is provide vaccination eligible guidelines working to procedures. other provide community are to have more community inoculated and our applicable of we their employees, we assistance

the result like we experienced it of a current quarter $X in incurred to efforts, $XX to first to costs, specific That that and over we concludes turn in the my costs as compared XXXX. Shelley. designated of remarks quarter in COVID approximately As the million million I’d now have these

Shelley Simpson

well making afternoon an this our update on you, for conditions and an as expectations good on year, the commercial as with My afternoon. general platform. Thank focus progress the as market we XXX are and our John, update organization will

customers John we customers. XXXX equally market, us. remain procure last lack our XXXX and current to highlighted supply incurred fluidity. overall customers, These the on as persist to about elevated our honored in opportunities likely a to chain tight as challenges opportunities landscape As Those presented our and the behalf important optimism cost will commitments means alluded the capacity to with cost earlier, recover and labor include for very to for challenges cautious by present capacity year to of from solve a throughout capacity, the entered opportunities of we but

our We, our call, on is in earnings to discussed we what higher. cost train, our committed as to drivers a labor our on the the capacity and I North quality, As our cost. on on discussion remain last meeting America. of to to of meaningful more so important the also and revenue This that commitments cost doing customers. itself are capacity most network encouraged is truck assets little pressures view meet and presents of qualified serve in interaction of retain we cost our mission elevated our as hire, well transportation subjects a by than our our the industry towards customers, in whole, while very our is an efficient the needs pricing And reality needs the and the primarily and utilization professional with facing organization, cost focused by level create customers or today equipment terms. remain recruit, striving and the honoring of

expectations with costs closely to to our this fluidity. our carriers chain, As our carriers as And network from rate and fluid, I’ve our supported platform are by easier this as shippers we real platform, of to ability to will across We we our extremely J.B. customers continue system of customers. about returns In price customers Hunt records our in could assets, XXX have our the to the with equipment prepare transact and in I invest the our weekly in forecast are support of focused to serve our supply optimize friction we ensure to making are to in making, capacity to the the so the gears quarter, the enable area appropriate as not last continue our remains break needs These level are investments a working remain year, which to and our equipment, shippers monthly. time. Shifting we of that and meet be on as on an very and as outlook in seeing ahead. needs match reducing well progress return. to our new equipment in investments for engagement it approach technology as more for our people our for KPIs add the our opportunities are well our better encouraged excited been record on and turns future we growing

our the One is chain visibility to customers’ we collaborate big the in and alliance extremely to to Google solving supported opportunities co-innovate have by people, ability make in all our the areas biggest and us and on about proud needs am are presented services. opportunities and solve utilizing as on excited encouraged across industry’s products our for problems. our these focus our of announced with I areas and transparency some progress the improving recently we we for of of supply

technology for to into Our needs. be platform and powered diversified valued leaning solve services to by in the by customers our or [our supported continues their us our marketplace scroll],

about the of Finally, Resources, as share encouraged would are EVP I culture. doing like role People of have the how and am we I our inclusive added to Human I recently work enhancing

to area now early to our like I share our While organization turn journey, discuss in I’d future. to and in see in leading the with over this Nick. it to more

Nick Hobbs

applicants driver facing driving and the the presented is of the Hunt. market to capacity going the my pandemic and fewer that earlier, driver am the of I market. environment, the results the around Alcohol Services the In and decrease comments afternoon. industry results out Mile opinion, most the a Good and target including school at additional performance some and finally, spend few areas giving Shelley. that I’ve several Clearinghouse in of J.B. and graduates, combined you, Thank meet approximately segment. drivers that have Dedicated the Final the start driver needs. with career estimate John minutes our Drug current XX-year range margin quick impact updated in today thoughts and with review context for by available industry some I’ll resulted challenged mentioned and my performance the to seen We XXX,XXX topics I’ll

approach and result, I our delivered benefits job. Dedicated time. our a wages believe utilization income several driving an wages highest Mile on including – for and to home are our quarter, results. our challenges recover adjustments our Despite and to efficient professional who of our retain assets. agile of attract focusing our it company’s Dedicated it. and professional Services. some professional are responded to of and comprehensive while the regional of As professional have Over consistent quarter driving we Dedicated, history. operating On disruptions and and operations first at the respond thrown the and drivers Intermodal worked the and in We more revenue focused in the on while a for to believe driving Truck across all for Final a taking is in to workforce, best execution routes testament local quality the also DCS our providing team and in we weather-related of services, to that jobs portfolio opportunities industry jobs customers, including dray, XX% fashion staying continues perform safe its drivers

off and first professional see a above in DCS XXXX, our evidenced result, while strong as flexibility approximately customer of strong the ended pipeline. trucks retention we rates outsourced to We quarter continue customers start quality XXX solution a selling also all XX%. As value in private fleet by in as are to our remain the

DCS Our stands on range, XX%. is margin update prudent of topic the XX% intensity margin, we our the at the range favorite of to business. about proposition, of to segment believe XX% efficiency, scale, decision previous the everyone’s capital Regarding it targeted to as from market our well which following: this XX% value the now for Informing us is as

see to way, on Final a quarter the able my into maintaining in Final presented our noting of business, it itself but start-up peak has to in future opportunity to into been discipline model the like is the with as what wrap and up today importantly growth. drag Mile capital. Services business QX, of same comments realization strength season norm. changed, More nothing Said the us quarter has customer our while I’ll presents seasonal desire worth we us Mile revealed which balance continuation operations rather scale returns performance cost on experiencing it fourth not different is current less around to Services. was pricing our it the strong our well the has the grow in grow rolled associated deliver that the that our to an while opportunity

and with and on get the delivered across modest customers conversations While results. a performance to to did scale disrupt only and to current were and grow capitalize our and remain recover the able to goods overall year. new our active impact our we plan customers’ in throughout We footprint business and weather these temporarily, experienced opportunities

range deliver we X%. our are on a will to of satisfaction. targeted and to standards the service, product margins, continue Additionally, maintaining invest regards we safety, of X% we ensure to focused customer With differentiated high to

value-added Our range greater concludes my That will asset services. we influence with gain Services non-asset fall offerings Mile as that growth continue trajectory where to Final we of scale our remarks. our within and

turn I’ll to So over Hicks. Brad it

Brad Hicks

opportunities, the by down environment. in in an decline volumes, the a of previously-mentioned revenue which prior the the our of volumes our change us consecutive truckload is the higher to which XX% along presented of to contributed offset, Hunt pools Services $X operating over digital our Higher volumes, Marketplace of and Truck digital in now and you, with Thank freight the since XXX our to customers JBT. J.B. growth Hunt The to with present market organization’s second year-over-year some load. quarter. our of includes increase comments evidenced by highlights driven or however, for Highway trailer fourth were opportunities Highway both opportunities enthusiasm million, to help revenue Solutions platform, drop continues and journey platform further our in transformation. gross quarter and up on otherwise XXXX, $XXX our million the the our or of our with continues solutions. J.B. start results able with for provide our business progress was a will excitement Capacity businesses, My supported provide powered ICS. to I’ll to XXX. by ICS or by today profitability deliver year us and solutions be source income efficiently short, needed customers were while XX% of customer’s constrained the Integrated Nick. LTL the Segment the contractual briefly mix on touch XX% capacity multimodal per of and complemented quarter APS effectively utilizing spot capacity which combination X% capacity by In rates, deliver Services quarter Similar market

presented people, of opportunities remain us growth three the the right focused areas, as balancing we our technology, mix will our platform. to forward, our Going and investments in scaling volume remain committed to on key we

target and of X% revenue believe by be service business was is segment by income able alluded deliver offerings margin $XXX move in which Growth since to model is growth beyond to XXXX. which just our JBT XX% our segment, XXX as shy X% in continues Truck, and As remains for following heavy earlier, Operating achieve quarter Hunt to highest the $XX was matures. John the we cycle, non-asset scale, investment achievable or the to as year-over-year segment in light this this we the first million. platform. a and powered first J.B. quarter asset supported million, driven In

has shifted power-only This the and fleet is an to for previously model, this trailing may strong JBT ability sourced offering. As customers asset-light be contractors service for increase have XXXX. of or capacity J.B. is Hunt to that more the hauled by disclosed either Demand or we independent XXX% platform. our equipment to through capacity prior own provide supports to XXXbox trailer our investment an

program. from in X% those targets Final performance grow closing, focus as people, our relative pass to Shelley concludes efficient, We our comments are excitement investments now That and will as returns solve investments our earlier, scaling Highway to a I’ll asset, targets to Mile prior of which to evolves, to includes which needs and our my it margin across the platform, as more to like recognizes frictionless Services our X% to in this and more growth committed and That investments our our to an of the Our shift business. alluded would our asset-light core JBT business Services, XXXbox see the and we to and remain similar Darren. to be In to said portfolio expand over to remain dependent capital for reiterate XX%, the I always model. way. our opportunities the on the just but customers’ the intensity XX% it on technology

Darren Field

the give everyone. and demand and range plus that network quarter, some investment on additional with plus cap in XX% balance, quarter Today, Thank and earlier. declined it target X% down fluidity perspective March. in capital John comments provide month, thoughts about off Volumes you some and updated on a by first Hello the our February, provide margin and January, highlighted you, to on Brad. pricing details X% X% broken some our performance, decline in will environment in I

not in February, quarter the us XX,XXX out the March. the has over second the we into primarily signs in by The pre-weather network challenges to in so to far earnings effects move in impacted service of as continue to we expect levels quarter. are Intermodal shown improvement rail through fully did As called to are release, weather we April improvements back estimated see we and but the carry have loads although have

customer the are refer customers known, has a market service level well the from our is challenges as to incredibly in topics velocity highlighting experiencing customer the behind inbound another commitments, we year challenges driver as honored are hiring. for of this and warehouse direct both levels. driver significant rail wage a the ownership. While pricing rail units year we with fully will last The for the increasing manner. cost drivers. performing our challenge are what true of timely attract as Demand challenge our results costs equipment increases is the to congestion believe are is Intermodal strong falling related are cost inflationary in at cover remains and we and we contractors and customers, as pressures and labor. driver at terminal to we customer operation rail to the unloading cost which our but Certainly and wages also street well a order new on the labor face We delivered challenges be our are to as We higher continues rail retain on take hiring Inside our unloading the time, terminal increased expect challenges. industry same

quarter. highlighted to we conclude, As add you as John our environment the fleet supports to and be decision earlier able additional last capacity discussed pricing our should as to

come in double-digit higher we low at expected the point, things last optimistic more trending And to towards pricing at range the increases. high-single end said call, that During for feel about adjusting of we this mix. to we

entered cycle XX% over rates. cycle As quarter just By end volume XX% over quarter, had rates. of the bid business the implemented XXXX just had we the bid of of current the our

XX% expect finalize during will to by QX. the end and to of that We remainder climb QX to the

his have in adjusted comments, covered margin opening to we range John the target XX%. XX% As to

and is per We return appropriate approximately presented end believe have that of dry capital highlighted public new we generating including focused the believe in John the capital market, future other provides the the higher are of intensity growth times cost contribution load. many invested between have begin of market. the the our a that business The as on through achieving to challenges capitalize fuel we support driver an Intermodal of the as and infrastructure. industry chain alternative capacity, highlighted, need arrive opportunity bright XX,XXX We the returns, XXXX generating expanded facing, containers, right returns it for strikes the continues while we order year. appropriate in our reinvestment our remains long QX in of is an on remain container economically to of the range intensity, and both output including supply attractive our targeted and to will and the carbon some by factors, in that by including turns, sustainable on this new margins what are consideration target also influenced balance returns asset to Also temp-controlled investment

customers more bid cycle, is our and moved capacity capacity. clear investment it current through As bid our responding. we the support we this additional customers from thus are from have far The commitments us during that season in fully want

the value to delivering a meet growth. toward appropriate on that our us focusing confident are strong put comments. needs invest That concludes to will long prepared my needed their and We support to returns and customers sustainable path

Operator

we the While to Delco. over roster, Instructions] the floor turn I will Q&A [Operator Brad compile

Brad Delco

off one – just so comments presented we cut And going with quarter. know you our We long, to a question, are we guys just you. you this went thank lot Yeah, to there. prepared one

you appreciate those So, following guys instructions.

Operator

Please And question with line first of comes Landry go you Suisse. Allison from the ahead. Credit

Allison Landry

Thanks. Good afternoon.

ROIC just you the saying we sounds think capital change invested like mean is lower I margin are could the you see not which the And expectations or then, through know, the ROIC? model you. shelf, if us towards you you about wanted just that? just broadly, you longer-term moving are I Thank So, more maybe you curious on more target, to on Intermodal, towards help and business it QX, talked on that, maybe business or asset the thoughts to consolidated through to you could how what alluded but know returns for the on moved light obviously going think your a

John Roberts

At know time, Well, revenue pretty day, load this And in since per times past, are increased me we been the the rapidly. question. has to times our XXXX. first since in appreciate it's touch prices that substantially on At the Intermodal the a the XX. past, year, Allison, let in end of at while we again, increasing ran the XX

Intermodal, XX to were when that good load even cost, in returns have as as to a side. speak used that translates used at which on invested they slightly And basis a the let level of on on some even than leaving So conversation. it to to the are Kuhlow XX I'll be margin still in capital range, at is that's to And to enterprise weaker per that similar profitability us driving really we more a be. still probably what's better

John Kuhlow

see – a basis. it we really know, at So, I, from manage ROI look Allison, consolidated you we from

overall investment we order, the huge at look the XX so for capital in us. that's current different investments year times, investment have we in a that year. example, with obviously individual announced the container And segments, But over the we the life in increase

have on of manage we of to time. increase level are the those on so investment basis. at And segments going that we balance consolidated decrease and depending that a just And the the

Operator

Thank you comes - line question and a from with your next of Chris Citi.

Chris Wetherbee

the just you Hi, is, how to of thanks. words, about the account today, in sort caused this I congestion? maybe market want capacity market, look think but the maybe I by demand spoken stay that's and about utilization of in guess if I well other XX,XXX these So, been I'm I how that's a long little guess into under sort for? Good also from sort core on the takes is relative could supply what do Can little you at said to actually more do and demand containers wanted ask more you sort you to afternoon. today? creates containers. or when it understand I Intermodal bit think those trying to the I think you. they're think of in taking what customers already of your talk a And the actively you deploy this market bit

John Roberts

I adding is when plan we significant. our in containers wasn't So, us we January. earnings the just on. from we quarter the we supported on containers could way still made market. under us. the X,XXX say capacity in customer fully fourth clearly in customers with velocity the this And utilize an call announced puts based current that wanted these would back we've believe that order will our capacity the environment any opinion that announced, those as not challenges I'm of And demand as decision given to much containers oversupply that I expanded knowing in the We've order some market velocity into the there. be that

Operator

you. a And from Evercore with comes question Thank ISI. your Jon Chappell of next line

Jon Chappell

Shelley. Thank for Hicks, Brad you. and Question maybe

of in you did in XQ back profitability and XXXX, you a went XXXX. profit in guys expected turn six XXXX. better profit the half to months ago, did XQ an even a Then expected you and ICS said XXXX, nice on second half know, You profit

And of and we scale margin the to in with especially profitability the second in to looking an if you So is hoping step the this in XXXX? when achieve business, that's achieving hoping greater at half change the case, the of the collaboration this even question that you're were there are is, that you potential layer attain Google? gross still

Brad Hicks

take further add maybe other over Jon. afternoon, comments. stab and send Good it to I'll any Shelly to a

ability think investment of cautious window eight very know, year part the at We're about You of been when end we also we seen But in think increase we PTE as about a still history, we levels quality, too we've have the ago. The overall highest PTE. that QX the but what too may accounts quarters first the per seen. revenue get is to load spoke I are are at that market and the in are favorable for revenue have level this our the really amongst our held. we conditions as clarified, rate in heavy

combination with favorable as us. into we two we those by, where in encouraged of very And our platform turn feel QX for which the we're at very is development, so,

satisfied it we us And Certainly the very are had outcome but we so, a would that we to that still QX We some investments, that reinforce anticipated? journey. of heavy our are further to you we have than output work to know, on do. ahead did still with and get place to allow have But degree. Shelley? at

Shelley Simpson

it necessarily cost add, capacity and we customer focused When like. across bid to getting, we So segments, market competitive in really still looked the our on versus our very started scaling feedback we was of were reflective alignment are what on season business. the our all our

in spot the expected of moved were quarter, you beginning a amount versus we disproportionate than of the what shipments volumes So, and look historically had if lower at first we at first quarter. what moved happened we published

we and larger across progressed bid seen and moving have highway. significantly, customers us really and giving inside awards, our into we here into even through segments, us our quarter, April, particularly have As that lean

we are think that, So, on on work more that focused should connect our do as margin move line, targets. said encouraged price be with and into specific very particular, a we'd be still in that say more Brad our more our pricing alliance, Google think having will published focused now right our bottom visibility. primarily environment, together beat transparency the QX, in to that with We basis. to are seasonal But will In to that more results. margin having industry we working we was annual reverse is on that our are on in And and I ICS, we an in spot QX general. co-innovation challenges which pressure, our why reaffirmed help solve there

a America. efficient in are focused create platform very critical network have great most transportation We to getting North that on to scale, laser to

Operator

ahead. question a of your line Stanley. And go you. from next Shanker Please from Thank Ravi Morgan comes

Ravi Shanker

everyone. evening, Good Thanks.

also obviously targets? top clarification which off it a a growth, for bit I very you roughly little get trade very, flat as the line in in reasonable approach. higher down growth to revenue to mean and seems on of like underwriting a to DCS, those Just margin level But what targets margin you a of are guys [IM] margin targets. looks like slightly keeping kind are your

Brad Hicks

Ravi, Hey is Brad. this

long of know, don't is And than you particularly some of market. for have over should the we know, reason advantages. know, Intermodal, but like feel we've rate at the growing You give that because guidance, you believe a said terms we we we typically around we other be things faster time a publicly, in period

transparency what going And guys is feel opportunities. capital, target presents to us we've year, Nick's to appropriate to think dedicated Intermodal. margin comments worked future our the so kind to with talked what to we're give those what market then we growth that's right And you on range get more as We've of targets. we the each generates hard into about provided target sell well not us in and that you about like grow allows I revenue but on obviously returns the continue the specific

Operator

Thank you.

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

Scott Group

guys. afternoon, thanks, Hey,

three a you the – last at it Intermodal XX% a guys years. margin been So, have call

new this one-off on of or then higher, a reset this should margin that rates billion X.XX the we basis? an to you'll normal? think as be As closer you annualized think do XX% And a CapEx about

Darren Field

Darren. margin take is question. this the I'll Scott,

we've just long-term don't we – know, you given You target. a

focus that land expect And say and what into certainly to so day expect inside And work we our on. to we target that's goal. we and every that's come anything,

John Kuhlow

Hey, Scott, I specifically, a through from rate paused, year use be might this run a from a there is as it’s our of bit little John. we But will last pandemic this this of obviously From little bit pull bit forward. normal going be elevated this, there rate standpoint, a run CapEx wouldn't that and a where forward. carryover little it's elevated going a from, the we've was

Operator

Thank you.

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

Jordan Alliger

that. do on business, a was And Maybe which give Mile pretty really sort I'm obviously, [trend the be strong. of standpoint. that around and the and beyond robust we Thanks. Final been this Final has curious outlook? profit you to that Hi, how know, it's I from there's strong sort the of say in of long just curious, going some specifically, you lot year extend a pace fairly line]? And just Mile could mean, thoughts trends, fitting think would you

John Roberts

fourth lot QX, Yeah, would [indiscernible], into I supply quarter because disruption. chain I would just of of saw pushing we say the that a

won't at so And really, normally are trade a forward, very But almost profitable. and got big it And and least QX. that boost. like was we slow, QX

back we go range QX, so normal to and for expect QX everything hit the in we'll our Mile think And be we target is what to would Final year.

Operator

next your And line UBS. question with Wadewitz you. the Thank Tom comes from and

Tom Wadewitz

you overall, contract and guess could about the if Yeah. ask contract Good you talk to I I want. wanted Intermodal rates, more little about bit rates afternoon. you a

expectation of X just rates thinking contract XX, February XX% get a after we rates would to trying You like ought step-up or of impact. the Should we about be a you some it instead this, like large step-up XX. seems be? I’m of sense strength, is to a kind or potentially be are know, saying about point thinking for to in weather contract the clearly big

John Roberts

Well, Tom, I attempt. the appreciate

we feeling more we that highlighted and about the higher in earlier high-single You of low-double, confident end comments we're that. reiterated to know,

enough As that. say really anything don't outside I to I it's, of that beyond think don't know even yet statement,

don't double-digits. I you to guide know to how So, beyond anything

John Kuhlow

digits. Tom we it triple we’ll update How goes think you, if about that?

Operator

question a Justin next with of line from Stephens. Thank Long comes you. And your

Justin Long

John, for On looked Intermodal progression a I more versus about to margin guidance, share intermodal $XX detail Thanks have margins you can assumes rail And go margins, intermodal little the and like you was what million what service bit we the ex-weather? was wondering a impact into intermodal thinking if quantify out the consolidated called of quarter. could I could if know, that then you on on and congrats – you today? where would are longer-term impact the basis. weather what in on

John Roberts

Justin, I weather really sorry, look – load at from impacts the can Yeah, far as standpoint. Intermodal, on it a as we

takes and was margin, You translate a what of know, said it XX,XXX removal, that the speculation, lot claims. into insurance snow To loads. we calculating

There's volumes. that's the that translate And we looked what many I is second how on there. had ban. your subjective to so And had know think don't we like apologize, have have question. best I And just and way. what the insight good I the impact part of the not the forgot margins too in would loads weather the I into things

John Kuhlow

I'll take that probably one.

improve going we've that I will don't beyond? do. Do to times at have as tell has back to terminal velocity an days challenged – not velocity? since I we rail that I and a more new probably either that of it impacted ready how I think some service stuck think to I not in particularly I have somewhat our lot and mean, slower think many those range you get play it's anything, improvement down I'm I'm we, rail that and highlighted expectation supply into has an XX you with than much get that to he was asking, the levels. belief it expectation this will or the – does think the to rail that ability I remain slowed or velocity railroads know, do do margins, in or level. they're labor margin I think that challenge the the our in are or that XX by well, XXXX to

two can help velocity, I getting So, see that ago. some back I or know, but which three years I expect can don't levels us, you know rail was, to would improvement, that the

Operator

Hoexter of Ken Thank of you. America. with And from line your Bank next the question comes

Ken Hoexter

the Hey, how the congestion over good lasts, your low tightness, of can given contrasting then thoughts little fear about seeing now that that tightness the ordering maybe of we equipment. on you're and If inventories long with the versus afternoon. benefits a just the this and bit talk

some with you're excess you stuck near in and the congestion clears, So, or term equipment impacting see do rates? as

Darren Field

Yeah.

you along the part there strong for ports a such isn't eastern or in that Coast. Intermodal’s West attached Intermodal for to the from congestion necessarily of is country know, conversion think difficult highway I perspective, demand services congestion particularly at the

have feel somewhere? we in in a did be the equipment very think possible. blips continue Intermodal, will of quarter that's I guess adds of confidence to that's We long-term we lot the frankly projection why a But it. I ability our there to about good grow

John Roberts

highway side, customers much I would that of a or program, know, to rail our on terms from services with and add but we unload the congestion, so predominantly port just also box congestion congestion behavior. see in not you Darren, our

we And challenges on see and so, the impacts ports Darren see ramps, that side. at can that labor those mentioned customer also from know, you the we behavior

from And that middle paying to we would, so, we today. to lift would And at last saw really a close we to of hope we very where see attention are expect we're beginning year. that COVID deteriorate, and

equipment. ability we're customer’s availability and closely negatively the being is and them velocity equipment solve that that working know you that. unload try so very by And impacted for our to And to with

Shelley Simpson

will continue view be to say persist issue second half this will well, customer inventory, And from as I an just I year. of and maybe the a would through think

are we'll line how the are cross work planning. across services, help challenges sight on season, better to work together. our confident spending peak of whether time is on whether that and customers side is and and that different the particularly feel in back more our happening or with that about what's for really we I year, We XXXX. peak right you trying professional really just have customers think the happening to will good this have in experiencing, consumers time particular the successful from up the at or we're Import that's would it's to that as coming all half is we're and us is labor that do port a side say, newer a QX, if with focused and how the I be I news, continuing that in drivers, very see through take selling issue the of rail, major replenish doing very the

Operator

Thank you.

from Your comes Brian a JPMorgan. with Ossenbeck next of line question

Brian Ossenbeck

Hey, good the question. Thanks afternoon. for taking

And Google terms where as of and you announced partnerships of skill you Alliance, them? in to wanted the ICS as clearly announced are sort network? in trying you look feel Just you out really like another are spot build to think of are do a KeepTruckin, how you're What you're against benefiting market with in you from XXX, partnership to terms but how far mentioned, scale? And the getting strength, we measures bit you you you from for? do of tracking the should see

Shelley Simpson

you thank that, for Well, Brian.

our for to advantage access so announce and and we connect other don't and – costs, any shipper we of do a continue we work are focused connections that through that the the of quickly really partnerships that to don't J.B. the We capacity. on see happening to XXX, leverage we strategy relates solve piece We openly But multiple, review a will discuss specific is you that Hunt and work able to We J.B. skill our efficiently in work inside or expertise, those service implement. perspective, want or be have people's for make that transparency as we will three across for and have really directly can each bring XXX, visibility. make, to and continues. simple key it friction. Hunt because on a our carrier of that removing From that. areas and in that. customer that And call as one have and every market we’re them We and do

on. say track the home. to can so to scroll we scale, but will Domino’s our number the Pizza a then customers time. the a we'll their that's right we then we the our and want time be So, for a right customers time to ultimately, track it be full solve in to reflective would the call get focused our truck they ability sure shipments technology what transparency. or And to I highlight continuing gets way from to And to we're our at able the be making same scale, full mode, from Pricing it also perspective, one the that scale, access right from that

John Roberts

and I from that benefit, it we how focused add improve that an standpoint, partnerships, to would cost our so visibility benefit. productivity provide execution customers efficiency establish that, just benefit, Shelley on we we're those that can for service constantly that key can as that

the on as so attention we close down aspect road internal to those well. we the capabilities as And pay of very move

Operator

Mehrotra line your Thank you. next with Amit the Bank. question of comes And Deutsche from

Amit Mehrotra

one on Darren, if when about the earmarked guess to ROIC. comes those diluted it's just capacity. the just Intermodal and kind know, capacity related to business I'm length and the of East, maybe it's of because growth, and good obviously I'm Hey, wondering if thing it's where can maybe and trying understand margins, coming, that. going? that, color XX% online, trying you to operator. diluted boxes, that, haul is, that, is to assume My give KPIs can just for just slightly business talk that even new not but it's of us mostly evolve to diluted capacity a it's in through new you also as think lot Thanks, the you the new and of improvement how but I for turns XX,XXX yield, specifically, some

capacity and when you five does coming, talk online? that it's So, probably comes know, like going, how where new just evolve the kind can there. if as about, in you there's it's But questions KPIs of

Darren Field

Sure.

in know, we X,XXX today some temp plan are temp control Roughly in There some a have the we're you into our X,XXX up that control those so earnings West XX. will and will updating announced to all been in for come Coast. call, there. our quarter flow that in So, time, fourth earlier and boxes equipment that

Now the logistics receiving bit Southern with predominantly QX, probably a you'll the that it be time. Those season. of little that going of the rest a really equipment Coast, California, and a so where expect for boxes some evolve. and right little at those predominantly be begin enters plan it's the for QX, deliver lot sure. equipment, are during to it spread would in there's you'll to year help equipment to that ways extra longer-term heavier life our of throughout get that Certainly boxes market continues our the during to is be us bring into XXXX, to the In capacity we're securing system dry for the really West box to to Eastern in and but to bit to into flow help peak diversified us network, out west we the

Operator

Susquehanna. next And from ahead. the of your question comes Majors Bascome Please line with go

Bascome Majors

this Wanted question. turn how contract bit point? Thank visibility based with talked your business ago, know, carriers you back at X, to local terms into Yeah. you it structure reiterated your a of and about cost trending this talk about long-term see little Mile, for can Thanks stages. in your you kind and, inflation X you of margin you. of Final the my taking target to a to in we that X years early X range to couple Are sustainably in longer-term on you talked

John Roberts

the you question. Yeah, thank for

go I with standard They're protocols. very checks the way all metrics we up will to good we way. of seeing the that not with think to able to going to The But are. trending the structured pass and we is what they cost our market the have Or highest customers we're dedicated security, top are we're our very that relationships tight, hold particularly contract with ourselves around. way performing the contracts background are amount do along the From way our contractors. safety up. with rates, try is our with that customers. yet contract We on to in for service

the to think there. our market be to So, to demands it go we customers back able get we'll if

the So yes, market I in we're range. think right

done with customers. You’re existing continue going forward. to with that do see us, margins. move as our And And the we going we've to to work improve we're some to of that REITs

So, volume X we to there. feel comfortable X more with the

Operator

Markets. Capital next you. Todd KeyBanc comes a question of your And with from line Fowler Thank

Todd Fowler

good Thanks Great. and evening.

the out the is above you're And really, to business? what there clarification, near and for factors be you you with know, updating dedicated those targets, And about could like changes normalized margin be ranges, and it is know, say, where those in what a a need be be any with that's should could is it think ranges, cyclical the make time? within segments, ranges then range? for you of are ICS period this in secondly, you're to pricing within or investments to below but And how can there you're that margin those you laying term other or we Just you certainly fair basis? feels that

Nick Hobbs

I'll we as model first. comments. just say, think very And we to the said pricing we I'll start scale We're changing with our now. dedicated feel not our comfortable. in We got

good we're year, With We've trucks the signed we've growth a good we're start. XXX very that to this seeing really off had already. QX. And a

we XXX Just week, last signed trucks.

on that XXX the able We got to productivity the impacting work us saw we've us marketplace. that margin, have that's efficiency the as marketplace without density our just increasing our this Again, that be quarter. got more to our density well very efficient. we about we're going to think absorb And then all we scale to that really we and customers. cost help that So, to margins. allows increased also, of without nicely, be our And

John Kuhlow

that, from to perspective. add highway services a Nick, I'll

reflection, we're tractor. of make to our to a movement of John historical having without towards box as know, did just investment targets, truck pure slightly alluded You position we more asset heavy an growing but our of program where a adjust the mostly light the

us will really think be. where that helped so we that shore kind up of And just

months than investment are we've We boxes today, the less launched on really that this we've increased still also just year. just stated, journey, incremental box as XX initiative, ago. And our for

And we the range better and and that And where more of Switching those on tracking really of we're again, investment gains, just seeing similarly, the be affirmation get we're But the productivity that over the things decisions. the heavy that that back because to ways. characteristics, ICS, reiterated. eliminate ability make period. so, reinforce able at know, our per and platform, see efficient, advantages the to see end our capitalizing we're expectations, to we're expectation. We John along you gears of to

important the it's And invested drove are for Fundamentally, And model, change things things of the [be use]. for it's about you our that us, think so, this in But those those that extremely us. the I are know, realistic in return again, but targets capital all on achievable. are the whether if point, things could that be influence then road. asset and model, truck a further movement that to at light think we down our

John Kuhlow

I'll is felt the adjustment times, our well was sustainable appropriate, as as margin this role it? for I related just underlying quickly opportunity on real we're very period feel growth. of that that, we have is of that like live like good guess to certainly think kind and in cost, Intermodal, Do cost, and a would of at I the there know, to at you what what high-end certainly noisy expect through of I arbitration time, that's understanding we possible.

that to expect predict but to I for sustainable I Intermodal. know don't be know, zone to plan that, within certainly certainly a how would to You us continue grow is

Shelley Simpson

add to would organization. as maybe I just wrap-up an

will the basis underestimated think missed come cost our I have our or we when for cyclicality customers.

and our down, or continue made honor price think We what commitment that fixed our over outside based and anytime either with we growth appropriate margin are to changes know that based a a based target in could us on you will today commitments that that those the plan we've the to direction even in a and up targets customer on customers. longer-term, our margin we assumption range of see move on

Operator

of Oglenski with question line comes the Brandon next Your Barclays. from

Brandon Oglenski

think through of volumes, expectations. of I obviously, to up think this question. Thanks is again, is guess, which it's market ICS was get the down of and quarter, for share do I number operator. you back afternoon, towards better than scale, good competitiveness? my transactions know, can the here taking on you, you But about want we're with did you of And really X% lot because Thank year. Shelley, to read half you because You profitable that I everyone. it I price, on there get follow anything know, a

So, can setback quarter? a was talk or whether to this you not that

Shelley Simpson

Yeah, great question.

that a Inside we're starting LTL we what's our perspective, really includes overall our our an From in customer particularly see have growth, sector, key been happening. So, to platforms. have overcoming XXX that we LTL comp.

those of not directly from our bids that confident on talk customers. in bids bid we side. feel the So, were were overall. I about and LTL And But carriers a the to ICS, really season. did the plan. pressure our growth around were say, at in those looked this plan at just In ground of was volumes, to those in you I working, XX% truckload volumes general, if earlier about very particularly customers talking our of in first our in had not cost in were this all didn't that giving will competitive call brokers all the we the our part feeling educating to would base serve customers the customers what we that many quarter, segments although as and commensurate our price the services implemented our be first they believed of price, season, bid held because the were we align falling apart, through cost to been

quarter, then in again, as share well JBT a and how ICS for them with have right to we We JBT market across an started volume, quarter inside and what is space can our and is progress service and picking QX it that an the Intermodal and gain a market well. and organization, gaining our not our was the first confidence total, in as also to the JBT. strategy lot and scaling in in up we through entire in not allow share to product, as in as in of cost continue beyond, platform will enterprise, platform customers we just very just saw in-line really have first but Remember, capacity. our we from leverage certainly take both So, in and scaling more much XXX ICS ICS, the

Brad Delco

time more question. we [April], have Hey, one for

Operator

go a with your Bernstein. And you. David of line question Vernon last ahead. from Please comes Thank

David Vernon

in for here. fitting me thanks guys, Hey,

contour about in volume XQ year? that the Just and about the a question bit in the Intermodal for a was disruption how Could on what be COVID we quarter. volumes exit rate last thinking of you you saw the in the little build over the we trends talk should March

John Roberts

Well, remember, March. that There so bleed that, difficult Intermodal in little We into year, probably related disruption that did as bit of first highlight some but that at of all March highlighted February you're know, impact. had grew you part that of we was certainly, a COVID at time. X%, impacts, overall aware last March weather just was did earlier very and the

So you the get March all back disruption and we in equipment. to say hard markets needs be, that pre-weather our the with it capacity were continuing on network, rebuild to to get container volumes where know, work a in levels, to velocity reached better the front

Brad Hicks

provide with, X%. thing follow in we did give you Darren expectation this David, I'll know, in was should so only the up Hey, provide best we data point XQ. can you up That's the monthly, is probably of be The what March did Brad. and monthly, terms

and just perform. ultimately late our to that QX then did feel we're we start to how volumes going lot easier. But predict I get because variables a last all will look not there's like in little will March comps try to different remind what COVID play we a know, you, You do into

Brad Delco

John, I you're out. this think going to close

John Roberts

it I Yeah. of I'll in hard lot a was discussion the to the for debating organization today. presenting like better I'm close see lean are why make proud we start serve our to that when this there's but lot extremely I'll we this a not And been of through team please early hearing invest. can us of of again. a reiterate our also for we're us and thanks like XXXX, this and this in that That's this availability assure conviction year. it's here. need us challenging These rest a hit modeling, leaders I love these, of investments of that, challenge proud first out. am very only and to consumable. running navigated But And customers quarter. driver that very customers. for I'll making hear as lot changes and a with big I'd in everybody to do. say we what to joining here that the ground very

I a at think last then the think, results prioritizing more and forward. the are part really, and And this And it's of ago just the company about forward. hearing potentially seeing that. from And long-term I years to point, the industry invest our more be discussing thing, to think meaningful love future. we'll mid-term the I and bring technology in need

as a very kind know, I going a legacy from approach. to to, it It of said, started hearing migration really effort today, have XXX, is a comprehensive that as, and think know, in could what you're and forward. Shelley just you what seeing out good we be investment and hope you

spent about hope lot to today give and this to you the time talking on has to next around time as the and for you We helpful Thanks provided now talking we forward Hopefully continue quarter. that look questions a close to of I we appropriate. call clarity brought that margin. some can updates. So,

Operator

call. Thank This you your for concludes participation. conference today's

disconnect. now may You

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