J.B. Hunt Transport Services (JBHT) 20 Jul 212021 Q2 Earnings call transcript

Company Profile

Participants

Brad Delco	Vice President, Finance and IR
John Roberts	CEO and President
John Kuhlow	Executive Vice President, Finance and CFO
Shelley Simpson	Executive Vice President, People and Human Resources and CCO
Nick Hobbs	President, Contract Services and COO
Brad Hicks	President, Highway Services
Darren Field	President, Intermodal
Allison Landry	Credit Suisse
Ravi Shanker	Morgan Stanley
Justin Long	Stephens
Amit Mehrotra	Deutsche Bank
Scott Group	Wolfe Research
Chris Wetherbee	Citi
Ken Hoexter	Bank of America
Tom Wadewitz	UBS
Brian Ossenbeck	JPMorgan
Jordan Alliger	Goldman Sachs
David Zazula	Barclays
Todd Fowler	KeyBanc
David Vernon	Bernstein
Jeff Kauffman	Vertical Research

Call transcript

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Greetings and thank you for standing by. Welcome to the J.B. Hunt 2021 Second Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. advise conference be being Please Instructions] that is today’s recorded. [Operator to I today, conference would Instructions] hand Mr. now speaker [Operator first like the your over to Brad Delco. Thank you. Please ahead, go sir.

Brad Delco

afternoon. Good

take speakers, These statements. XXXX. forward-looking call Words Act anticipates, the may within expects, the I Private disclosures statements This Before intends, forward-looking such meaning time provide some as some would introduce estimates of to the like contain Securities I regarding Reform to 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

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

John Roberts

Thank you, Brad.

customers our overview new XXXX. sequentially how that work peak us for traditional some will the is a quarter XXXX. total increased for we revenue and out and in all over the increased to in to but situation of half are the to the and all second operating ongoing see delivery. operating ICS per earnings Services review fluid and into add This Further looking Mile segments for we revenue and release. Mile increased share adjusting and plan and in income ideas second the year for term were the and continue with our with gain A last across operating on both with shows for when progress us heading sense the on consider data views noted to call our time is As you COVID recognition onset we our general That of delivery balance vendors trailers makes equipment fits open in discussion the program. our to our believe position J.B. as gained on all we year We said, current will with momentum. our of for enterprise. in our the during and second being the this increased meaningfully of virus. with quarter our to throughout needs we we it orders working quarter of for equipment we approach the and the XXXX, customers earnings our are last where comparison XXXX Dedicated A provides revenues, of seasons. our this level Intermodal company Final our Through the call the that income meet accommodate we for containers confidence to a Hunt increase keen QX able decisions high visibility we that focus called Intermodal, for have of these we XXXbox Final equipment compared failed this Shelley year. Truckload creative of income and deploying color

what point you, be forward performing segments present As discuss the strategy to from strong are momentum support I we well leaders here. this evidence for and that segment both as to believe will our move and solid our all

One confidence last pipelines, order lowest coupled of and data inventory we us seen our sales I’d progress current with trends, to this flows customers, of transparency Given have Sustainability the point levels is company momentum efforts. revealing in like our in give the our work we highlight the is and have accordance and have the continuing. the with overall leadership completed demand frameworks, some the GRI, Under made sustainability accessed sustainability our SASB TCFD increasing website. with Officer, on Chief the easily recently via Craig which report published our our in focus first has Harper, we

our I Sustainalytics think have these by Disclosure reporting broader noting last unique Craig and calls out platforms. that improvements year who disclosure XX worth EcoVadis, helped Carbon improvement. people it’s CDP, internally with this our also with efforts the have many Project, sustainability SmartWay, recognized the formally meaningful over been in and more across

is a now will comments. this over for our his John a for to John? Kuhlow call for entire As not journey CFO, few turn the I but just and noted, organization. our

John Kuhlow

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

related quarter revenue, costs, certainly and impacted were income as wages, to into JBT, As first operating higher are our and our across and both pressures revenue, to serve the ICS purchase notable on assets. shortages, more demand John their the -- our are noted, with they other was salaries to labor significantly we ability operations. EPS service Current the and in by quarter, and over but effectively Cost with importantly, and they results costs achievements in our second. quarter our strain pleased the transportation carrying putting were growth networks Services from quarter use a quarter primarily Highway prior-year momentum for

increase for XXXX. We orders communicated this CapEx quarter remains approximately $X.XX for our in we’re call, billion to $XXX hopeful our improvement, in guided approximately the ended still be with While concern. of an million and we On area equipment quarter cash. an our first

some are of to all the also of XXXX, these on waterways to still the because in and push we While orders place, anticipate congestion ports. the at

equipment on quarter regular serve for in We acquired $XX billion, and close that are to is more closer expenditures will challenges needs. the delays but million, customers, stock capital our these and approximately second We out other rounding to buybacks because have to be $XX view to our basis million committed capacity net to obtaining year-to-date. XXXX resumed today $X.XX of a

through on to year as cash leverage dividends basis spend the and will and closer a the buybacks to balance normalize. trend to when metric equipment, EBITDA environment the times of our begins on We X opportunities unfold net remainder targeted our continue

As primarily to the quarantine. item prior segment and nearly comparisons John in costs a needing like salaries comparisons the to noted, $XX would year-over-year but prior difficult consideration are PTO the million quarter reduction year to pandemic, an from of on COVID due decreased which is year employees for point wages. in second for quarter, I out the because to for

salaries called this drivers and was items the reduction by and offset release, increases in The across all as out employees. widespread meaningfully the reopening to now remarks of pay we non-driver we impact concludes However, for in turn both and wages importance over and this see continuing retaining of area it the my because of attracting I’ll is Shelley. challenges people. This our and on

Shelley Simpson

focus J.B. you, digital Thank commercial as peak the our John, with platform. and as good making season our organization on market Hunt and an an update on are My capacity for general freight plan XXX progress customer’s will afternoon. expectations multimodal needs, our we update conditions, as well

present us XXXX with As could quarter, cautious year. market the optimism opportunities during we last entered we to about the the discussed

too end year persist, across the elevated services our challenges. challenges the the to capacity is and through over, that remains are chain present at around Demand tight, the and halfway levels. remains at likely solutions opportunities of but across clearly still year. least are Now the of scroll so very just for bountiful, supply the velocity Capacity the are fluidity and

our provide of is is our to most to the and our no that capacity these address The longer that platform speak assets, allows provide we As behalf peak discussing physical current result efficient customers an by out of our next. together limited plans even conditions capacity across are serve. ability evidence us to on prepared have exceeds our for place our committed as that I’ll source as organization, the to during we our to market in of of with power assistance segments customers. we dynamic customers This challenges far trailers approach to working containers our our and and all be for and Thankfully greater trucks, the to is will business demand our to and remarks. people our value

As ensure that peak to our bid season, meet have and we their season approach collaborative we we actual to customers approach with are provide needs. plan taking solutions an a to capacity the

of customers even was our trailing Truck One during of by our Intermodal this across our detention the year, and which biggest equipment second challenges the got worse segments. both quarter,

accessorial new customers. with did increasing with be certain these through addressing issues charges the we not customer are are accessorial in instances of To We and and our direct we conversations intent the clear, customers or cost restricting implement capacity augment to some locations. of our programs

by intent plans our to be our for up to plan customers. peak confident to season, turn to capacity. comments will very our needed being additional incentive ability we appropriate customers able with the to developing To able on to on encourage improvement us provide our improvements provide value my our efficiently. to deliver was wrap in customers afford remain our This we Our execute are the more equipment to the to

ability and performance by our items. determined three be customers service to capacity Our around key will our

J.B. third, for go exceeding onboarding improvements Shifting for equipment in fluidity of fronts will orders to trailers meeting containers quarter, customer platform. velocity; a expectations. in JBI and gears way detention these we rail second, our time, improvements dwell long in customer or progress specifically last the and the discussed XXX First, but XXXbox; and on Hunt and

the optimizing breaking the build both and our transacting supply our tall our and by that time system experiencing real and market the This we’re engagement trends typically value as serving in shipper unique number in restrictions believe exist of and continuing largest frictionless during see the around our to platforms. currently. in momentum our user considering shippers in we in a activity, both is like the history growth an digital improving and customers in continued record We limitations are process. We carriers task evidenced across carrier quarter, organization

technology, us the on lean which maybe of forward, I all a to customer’s needs. we organization, proud network and believe bringing as we think those for power supply look help strong closing, their of most statement, leverage J.B. North across opportunities sets for achieve experience America. have the mission in remain Hunt our Going solve our the our I people, efficient position I’d to like needs. our solve customers together. to in continue to in elements as scroll important, into are our as is we the unique transportation scroll excited believe and most chain, them access, our to and assets, and our that for visibility extremely improving I transparency the to us across In to remains up focus create

previously as culture the making the lead the and on been of Finally, was enhancing our we’re of inclusive quarter organization Resources. area. disclosed, EVP and discussed how role People encouraged I of Human could in this responsibility about I’ve given our that Last belief our I progress

President that Vice I the update, we an hired of want As first Inclusion our during have to share quarter.

ahead can excited about are progress to We now I’d in over area. like journey and make we the Nick. turn this it incredible our to

Nick Hobbs

in afternoon, I’m good brief my performance addition and update current and and our in operational detail some Services career. as our state DCS of comments we addition challenged in time the Consistent driver driver to market from remains reviewing, the Shelley, start focused of our everyone. perspective on operational Mile you, the quarter, current thoughts the I’ll some greater that providing giving of processes. the of my review some the a other with I in to to focused from spend processes driver my quarter. on market with last quick Final going current XX-year seen market are on have some Thank

the operations, few over believe market. ranging As certainly, road hear impact of a warehouse is having from availability meaningful labor driver in and the Darren’s of supply across to almost you the rail operations, a from will comments part moments, terminal chain, the every ports we

driver and paying with to over some XX% are While jobs to market or the we operations. in truth with being industry’s relatively of Dedicated, Final intermodal best believe position and Truck of our are regional the The the immune Mile not highest-quality we is a our jobs either in local we challenges. dray, in solid continue

cost operational sure update am review to driver are my benefits, I a entire make To across addition on across best to our organization. elevated that on and ensuring vendors with properly in we receiving comments, our to recruiting our for make our aligned businesses. pressures brief hiring cost suppliers leading value are to goals, close inflationary the driver continue experiencing We sustainability wages and and experiencing want we also operational each efforts are and adjustments to of I while up provide all

focus net Final $X.X with demand our even services particularly of the but furniture Now categories Demand stronger it what of the quarter. said, growth the strong, from its tempering of delivery quarter. and Operating let the across Mile to and be income press continue in across in benefit our million performance fulfillment is for Mile settlement otherwise in That our appliance to Final on and of services. home claims million, me shift big across availability able services. my revenue Final comments Mile bulky strong did inventory, particularly for remained was would of streak Services. our performance was disclosed as release, $XX.X XX%

encouraged the both onboarding remain more about our remain growth inorganic and and organic the to long-term. importantly, progresses, the by going business we’re year forward, of pipelines, over opportunities as new encouraged Going

growth our close continue customers. focus will I’ll DCS. committed business, customer on comments As some experience for to in investing with product and scaling and behalf we remain we to the in results of the of service our on and protecting and

not we’ve highest pleased the new quarter. pipeline of of quarter, to has amount of end as single is trucks private prior in end only will truck the for startups fleet am is the per Our week, a XX%. in in seen. the new we company to truck the across strong and to accounts, also decline average target from By revenue, growth contractual any a are XXX which the perform addition prior we per our added able backlog third have of fleet significant dedicated idled adds annual onboard saw margin to and that I diverse had industries, from We while fleet defined June, as escalators X% year-over-year in as was productivity group continuing supported but levels. of to by XX% our established, by count price driven newly which revenue of equipment year our all long-term within XX% range ever growth

locations in to in additional network, able performance have wages needed to and Additionally, funding with our in maintain we maintain in the to productivity competitiveness to regards standards certain get order support across been our investment many driver markets.

account in it’s was driver our and the travel year income lower turnover, sales have Operating operational prior faster. the availability, and we trained important anticipated that experienced in down our personnel X% the to year-over-year have as entertainment ability expense current grow equipment higher of managers strong addition we to governing recognize with efforts, in to lack startups think ability is cost While momentum and tailwinds to related as quarter. in and driver moderately addition of to returned and

trucks grow DCS XXXX approximately the Importantly, quarter us investments my to we well believe business into out our momentum year-to-date. selling ended round X,XXX help second the beyond. comments, will carry To we and

it’s targets for X,XXX the to XXX sell assume remarks. for to to our the concludes safe year. guidance will year, that you my we That prior exceed our for Given full I believe

Brad So I’ll turn Hicks. over it to

Brad Hicks

Thank My you, the performance which or the on includes Highway afternoon. quarter, both of our will today Integrated Nick, Capacity or business Services good Solutions comments and ICS focus JBT. Truck and during

deliver to team our Let needs. our saying their pools opportunities complemented solutions J.B. by were and I digital me customers drop Hunt platform present trailing by capacity respond multimodal us am serve trailer and off both with how to our to see to capacity XXX freight enabled with solutions the by our start excited XXXbox. These truck

focus was or the the evidenced within provide third our ICS comments on row the XX% this Truck both driving with solutions highest organization. as since since most was platform This has customers, which on the and is technology, of level capacity this continues segment $XX in our performance Services the growth achieved investments which further XXXX. quarter my revenue delivered second quarter delivered in continues million, grew Highway to quarter JBT support strongest $XXX a Operating is segment recent to for people to XXXX. and second and our the scale our which Additionally, by the organization. start to value these JBT being across income I’ll highest by This our million. our segment. Revenue across decisions

performance continues continue ability growth -- trailing to assets, with our and Our with physical by be to our solutions our driven provide assets. capacity or to without trucking but

by our price for a should strong for at the the continued what product. way solve to XXXbox to ability move right Our at efficient carrier, load demand right drive the the most time is right finding and

access to to customers to ability yes. us allowed able quickly our our importantly, capacity tell More has be

we our focus shifting on more investment. to continue returns future. calls, to scaling had a as model investing we asset-light while and efficiencies we balancing discussed a on As This and staying on adequate see scale the in offering, with focused growth service focused prior our network our the require will in remain we’ll business generating on

Next growth broke delivered just specifically on the set freight demand from challenged segment of Revenue grew revenue, record strengthened ICS, elevated in up XX% the XXX% volume levels. within quarter which year remained as volumes Segment was dynamics year. XX%. grew Market fourth truckload period. last the previous million $XXX whilst the quarter, versus already our prior

country, the the While capacity expectation. margins, seasonal which was which remained our with result revenue on constrained pressure of puts across consistent net

see of the seeing productivity XXX trends investments and the our people, by engagement technology. our enabled our and are to we all which with is carrier in people by on continue encouraged solid both platform We and remain shipper our with

deliver people, the to make our In our closing, this align and by scale areas, with to gain volume continue committed of our We JBT is to grow customers best access freight remain technology key comments. performance across leveraging Darren. and our the vast platform our a which in amounts the to invest into ICS value decisions in our do in and remain in capacity Service to investments. using their deliver quarter chains. platform, our data opportunities well our to objectives, over creating market three of these our across and critical system one share by help to We concludes see and and and our to a this waste to Highway our That to it supply customers eliminating platform. frictionless my way excited digital opportunity the solutions I’ll capacity pass We multimodal future. businesses about

Darren Field

Thank new good the comments performance for in this Intermodal’s working season. listening you, I behalf quarter. Brad, and and network capacity of are we remains to and improve how call. our My will capacity afternoon details and approach during including everyone onboarding of as our containers also robust. today’s on operations network our on the provide some velocity focus additional to afternoon we peak Intermodal customers turn for Demand in on will

our demand to rail capacity, performance to our detention of fact, customer remains outpace trailing significantly continues In which equipment. and addition by restrictions available in constrained

the plus May the of both plus Volumes availability We down continue the in as railroads, particularly labor on X%, customers warehouse operations. X% our XX% in these in in increased for that in June. minus April, month terminals center of X% the and their to by quarter believe origin challenges broken in and their

across for our net by in discussed as as Network be approximately as which the in we a we the evidenced particularly velocity a restarted. X.XX continues box during year positioned were XXXX per quarter. month supply the turns chain properly month us the ago, below strong equipment -- our As had surge turns, for activity expectations well to June was demand

across rail congestion detention with the We reduce rail customers of focusing capacity network are on and helping closely our improve working the by their infrastructure. to providers across reducing and equipment terminal our very our providers

onboarding the our new few we on equipment On our forward, peak more of in we capacity Going as us delivery front the in of began last approach even assist speak. new the we as equipment and weeks water have that customer’s needs, our will also serving taking particularly season.

we the point this time higher into we to of now rates current early previously the costs remaining a implement turns about latest expect earlier significant West XXXX. equipment challenged protect equipment expect forward, majority QX. the utilization We cost at to this in challenged to XX% end and We of and pricing to our wages necessity for way activity efforts of to stretch this of our into the remain in our rail ownership, the which the right and rates our low cycle XX% put as in yet cost By due bid pressures came of even which return in to steady our At an generate are believe in increases. Coast addition the that the to moving and expectation, is remain our were by original bid have people of if of customer driver re-price flow re-pricing continue equipment likely on at adequate Inflationary business present high-single season the quarter, and we investment recruitment outside end of had in double-digit of themselves and place for both the structure particularly the expectations levels discussed. the volume box through our control. events programs to

execute plan. that as customers very confident due Customers to it approach our wages and offering lean is clear very to now prices, to in Intermodal because to service even cost XX% value more As the season, but rising in to environmental continue rapidly carbon our we continues want of truck Truck lower alternative as its intensity a the than Intermodal fuel capacity more of is alternative. our so to ability peak also and benefits it effective feel we and our be driver

will path us meet capacity their our business That to growth. needs sustainable a Going comments. appropriate on forward, my our in delivering customers, to long-term value to returns concludes keeping and generating future prioritize toward continue prepared we reinvesting

Brad Delco

Hey, Mika.

this a mind, to the don’t Brad, Just audience. if is you word

question one quarter. last We’re like we did going do to again

to for over call you to it open questions. turn will the I Mika So

Operator

first the line All comes Landry Suisse. Allison Instructions] right. of Credit from Your from [Operator question

open. now Your is line

Allison Landry

Good Thanks. afternoon.

for wanted you’re the highs at So just all-time you second presumably, and accessorial. is Intermodal, the detention ask mentioned to about customer charging quarter that equipment in

So could of sort this the was relative to for QX us a you run it normalized or hoping in quarter quantify in what rate?

John Roberts

it’s we’ve been on -- significant don’t really the our for base I highlighting last and had I our really talking had during impact months even several customer the know capacity we’ve challenge. to Allison, that. in quarter year about that as the changes don’t this cycle revenue we’ve into been we always talked about

we’ve I incentivize base that think don’t unloading. customer -- the know that we’ve second our so quarter, that highlight of the and with impact is during when quarter. what more to the how end recently trying was the that been beyond But towards I highlight probably to faster of doing second probably

Allison Landry

do going mean, shouldn’t modeling that that of what I sort in we of QX this was result getting positive I a there guess, you think as be a I mean, you again Okay. forward? I’m that at, margin benefit experienced

John Roberts

the conversation don’t I Yeah. accessorial wouldn’t in the as relates was related material say, no, there margin. to break it to just that anything think can that. I out quarter we But

Allison Landry

you. Thank Okay.

Operator

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

is line open. Your now

Ravi Shanker

Good everyone. Thanks. afternoon,

are of re-priced, But, current gross book Thanks. gross the for op don’t well ICS, to of the the us help done understand of of Just given what your kind year? spot back trajectory assuming forward? kind margin keep there. we B, black path at of has the guys you percentage or looking the Clearly, you and margin here can collapse of been the have on rates A, from kind

John Roberts

Sure.

with quarter might pressured where QX Just historically, seasonal to pressure. comment second so not We were join that to landed. the anticipated two. with quarter we that, the always a in And we we I respect experienced. start surprised second call think the highlighted by margin think gross But that margin I that and Shelley we performance was our or quarter more definitely and

So we on would as norms. based from lift and away Shelley… QX historical move we into QX anticipate that seeing

Shelley Simpson

Yeah.

John Roberts

the on data? … bid

Shelley Simpson

we’re where slightly bid JBI, further a perspective, implemented. from ICS behind in what season are JBI along. Yeah. From in is is we

the in the in of because general. market that’s think happening I that’s volatility brokerage

I per result with Just under carriers. our to near-term implemented. that inside of also say business as moving been in contract contract ICS a XX% revenue has changed would load versus more

did and And our per a higher but lower margin so per up. that was yield gross margin load revenue still percentage, a business load dollars gross

to the oranges it’s done changed because what per dramatically. just load revenue bit have So little a we historically so apples compared has and

Ravi Shanker

you. Thank

Operator

question from of comes next from Your line Long the Justin Stephens.

Your line open. now is

Justin Long

number Intermodal turns second in the quarter? in of be box sequential loads second Thanks. the afternoon. half. a ramp delivered thoughts think key about the any is Intermodal containers of expect to ability in the around color about the Good mentioned to as remarks, the you wanted XXX,XXX there prepared to your we in can on progression and I the half few drivers ask but you to volumes of Shelley, second your capacity sequentially any grow the you beyond give

Darren Field

Justin. Hey,

the is have strong think customer has we highlighted that I and We on this new velocity the been been demand key bottleneck. today. water to certainly very has the very, containers

quarter. X,XXX between the strong third We our confidence and receive ability in to have during X,XXX

fourth highlighted into filter as announced some We The the receive the call, earnings stages X,XXX more at like the will QX. for highlight to continue team containers is quarter, early XX,XXX certainly the in quarter we first those we we that now to can of working into of to but also X,XXX XXXX. we move every feel day of

providers the faster. certainly an out to we’re ways free rail to improve And on velocity. up key on we’re And customers aligned effort. faster railroads, equipment of velocity That’s system. our think rail ongoing with the the with find then velocity working of I the there front, that the all their to their mission is getting

is quarter. And ours expectation that an during so of the

X.XX slightly you’re in to second asking not yet for it’s a turns quarter. think believe in to specifics, but somewhat we ready impact that If at the to going can the quarter, improve this. third material highlighted be We real

Justin Long

Darren. Okay. helpful. Thank Very Great. you,

Operator

comes Bank. from Mehrotra Your question from of line Amit Deutsche next the

line Your now open. is

Amit Mehrotra

updates from some another shutdown the Hi, eastbound to for much. Intermodal movements their question. had so everyone. rail terminal. obviously Thanks Union Pacific Darren, global We’ve

has the be on sequential what you about you’ve really started I about impact bang the month. the may this bit in you’ve also and through second move in third intermodal question the to margin been trains from quarter as quarter? meter of own been the implemented. at Can similar expectations then little you the helpful think last think as improvement on maybe past to margin terms terms to about progression the of help volume And gets is, space us just the what least headwind this pricing in talking its BM of end a further

through guys in just drop a answer the can third shown the through, expectation You continuation quarter of those have What’s that Intermodal two the at on if comes much. be the just gets questions? as sequentially that revenue you XX% should very least Thank into as growth re-priced? the some around pricing you incremental right good margins,

Brad Hicks

is Hi, Amit. part take of Brad. I’ll This first the that.

details and I turns and of did a really box demand clearly, containers, lot of giving where for expectations think good Darren is. a job on

I get rail UMP service volume. to address that terms I the to I’ll across. anything provide let in the maybe of Darren stuff, So but and don’t we more think comments point just need wanted on expectations for

So Darren?

Darren Field

Sure.

that you’ve to international Union appreciate Pacific, the questions. well, the it’s on on only. The we restrictions from UMP is are, be Amit, operate So, understood thing but largely don’t those heard

that volumes. impact a that are and in create our to do the velocity, to working day out customers And we in and capacity the BNSF well expand is everything our help not terminals improve us order provide together of J.B. loads scheduling, we’re fluidity every domestic doing there we So working effort with terminals. an to draying on on at can and and are to lot Hunt really of

of doing order We’re work a tremendous improve to fluidity. amount in

So when of restriction you’re it’s international than domestic. is that focus hearing it some sometimes more information,

saying not from from if but energy as, have rail in on the the benefit We on various international has on that’s for international free up international for certainly the some of would can from I’m focused announcement been doing, be congestion domestic, productivity drags was to that they’re focused eliminating to certainly what I more significant have certainly, from capacity order we some chain some terminals. UMP stand of only. that. one the they think, supply And the

Amit Mehrotra

And then the progression question. margin

Darren Field

margin. The Oh!

XX% said thought the some XXXX true. we long-term target prices on would margin said, on be went of we and to last We think we I implemented make as continues we to that our improvement call, that, and we XX%. restated as

that feel inside range. good that that and inside stay range we will moving forward We’re

Amit Mehrotra

Thank it. much. very Got you

Operator

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

line open. Your now is

Scott Group

you another that want -- it margin up guess, on Thanks. I on volumes end had mean, upper but the because just guys. And do quarter? so in not Good these back of do half grow volume the think Do you don’t follow the as you afternoon, you towards to towards year-over-year get like that pricing, year? the -- you margin Hey. and full there think I’ll then it potential clear. of guidance of one you impact side, to question directly, some more can get know I’m accessorials you I ask the third I -- sounds just kick I is in the

Brad Hicks

in volume Brad specific Scott. prepared our our containers think, think three are those I be customer going fluidity, -- locations, about the of remarks and rail influenced main of some as to of talked we by is the tension be we do as Hi, new talked on control. This her We in And out the guidance containers. you Darren gave well what factors, quarter. to I again. at will Shelley, will onboarding you mean,

going give you that So specific than have. what we more be than to to anything hard other it’s

that of part, I’ll respond then the second just question. it your to Darren. to over I’ll part to turn And So

Darren Field

refresh on I’m need quick to going second the a part.

Brad Hicks

Scott, refresh second question. us part on the of your

Scott Group

first Yeah. part place, quarter don’t you upper the scenario? Did that the June the the place that just volume just same Darren, the in pricing you and the question, a of It about right to we in is get really maybe there do to you of had the have the was where a last boxes of then remember? mentioned third I was month year, get was year the right ago boxes in a to margin just the the accessorials, And potential we clarify full -- as impact end range? that

Darren Field

volume Okay. quick on just the stuff. that real Well, hopefully I’ll move we hit will on from and then

our us, during last fluidity of depleted stored we quarter second largely very at for part weakened storage -- containers fast created in the which of June -- into gone had XXXX, So lot of year. a the because the we during really

so really equipment strong? So positioned we during the strongly. have No, quarter third didn’t was demand

the challenges which the the lot a to velocity a back was we equipment, reposition of year really to that need ago. drove had certainly that So

it’s for challenges factors and not point, the influence and cost On drivers, this is recruiting a outsource the a at we can our the It depends Certainly, it? hiring on need and capacity no terminal. because up achieve some that. dray cost on on out in let is order let capacity, to of there range, challenges, front, the really lot of margin retaining there loads secure to up to of

just real, of the, challenges the think stick on So within really I I cost comment be and say going to all that, range the within all margin. that’s we to can got are those it’s so

Shelley Simpson

Scott. that. to I could If add Hey,

the at regular on our try our with basis, most working to are We -- to on a customers with work level customers those detailed tactical seen have that very I avoid probably, charges. plans is a

are. doing to identify front we’re So try where a on bottlenecks to lot end the the

have haven’t have volume. really Our intent to about these in more it. we things We do but line, thought to is three come move

us for not more gain to Our bottom margin incremental there to or line. accessorials are even our dollars

accessorials Our there. are

dwelling as box can we we containers those anticipate properly if are be and So what’s rewarded that can’t sitting. for XXXboxes that happening that

Scott Group

Makes sense. Thank guys. you, it. Appreciate

Operator

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

Your now line is open.

Chris Wetherbee

DCS, should little and heavy it bit a Maybe bit will a a obviously, XQ you of back I question of sort just ramp, acquisitions it the could, to was costs in and you in a little see could contrast do afternoon. persist give maybe if or pace XQ into Good a kind bit? that of fleet decelerate that how the of if startup go us the half expect of Yeah. with we on quarter this new curious quarter, year of how maybe if sense of

John Roberts

to strong drivers. pipeline, on hard very -- right. our make We we as we got you well, got think think that, saw was We QX tell well to make got based and strong. equipment. We Well, it’s QX. All sure on will be QX sure we got

into fast So, far of things how start up, but on can just full, that pipeline equipment a those side. even we and lot of management that metering some a there’s unknowns out. is there lot say will the I is go drivers, the that

So, say QX but I as would is very well. strong looking

Operator

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

line now open. is Your

Ken Hoexter

Great. Good evening.

the a of great and labor everybody about Nick in the ahead years, environment talked pressures in I little and and keeping highlighted fluidity. bit So hiring XX costs, rates job Nick, think to hardest keep Brad,

maybe rail on starts a just gets precision it seen the meltdown step railroading of not So, spreading a network hearing and and network John, about of able think networks, some the and concern when of of not fluid? starts especially is up your like some their they’re little one concern it when any take from that to there out thoughts are you’re back to when networks adding spreading the scheduled capacity you we’ve give rail when embargoes gummed Is area, and overhauls? wider labor advantage there on the bit impacts of that on

John Roberts

to Yeah. that. let Ken, have me Darren respond

have look it. at I a think better he’ll

Darren Field

have has So railroads think, that there fairly a an unusual shown meltdown, certainly I a the that in XXXX a volume to quick year. down slow of kind concern challenge. step if been is heading of all a towards

about meltdown I labor I it’s about -- I the system, with rail that no, when we’re but, think mean, really do talking any need in expect hire. that find think I staffed railroads. So, challenges fully don’t do kind the order that or locations of that from we need amounts These a of challenge kind just massive, be and X% aren’t X% now. of to overcome they in to employees people to more massive talk they’re

like are like I feels don’t feel we’re unusual that these significant highly and they focused I would very it a very point. railroads that this is think a the And on out sort and risk some all meltdown be at So significant are -- of them. of addressing challenges

Operator

All right.

Next from question Wadewitz Tom of line the from UBS. comes

now Your line is open.

Tom Wadewitz

such get to driver model. Good thoughts labor related intensive afternoon. it than is look I on less tend I important is I question. labor your your I Well, to an a topic. mean seems trucks. think how Yeah. like guess, obviously of wanted you at Intermodal intensity

states started we’ve if have I just if you this I advantage could ease you some say, have Hunt also payment to seen So certain that signs thoughts tight it J.B. would offer know to it’s if I truck in just way? advantage the But you unemployment. any labor think think provide a to bonus tight does improvement? some of could market see And then of on the market. a XX XX about versus you wanted got, in or up labor

no Thank availability? labor light at there So improving end you. is is of tunnel kind or that of the terms of in the

Nick Hobbs

say, said say very just a very, my I as would tight. standpoint, I in would from I labor comments,

a responding do to job we think very I good that.

warehouses, concerns in fulfillment individual site it’s Our we how on our some Final model whether specifically. rail Intermodal specific very can of it’s is or ramp pretty whether agile, labor address Mile

think very we I a team a market. driver have So solid corporate robust approach then the personnel us very labor and helps we that got in

side very So it’s is, alluded just I say Shelley challenging. relationships would And other the with have to good, it as our we then of customer.

that them. open. show that, We’re those to try and stay ahead areas to of ahead try very with metrics We get in of them

market. it’s think an us, in I tight personally advantage So the to

No, been the not We’ve we recruit rolled we pain? we then we question on that’s been Now us there? early to unemployment, And in pain, don’t too to benefits? probably It’s more have as tell. about conversations mean but does unemployment it’s to say. Have measure states much about others. able as have that early can for the having some back too your

roll we’ll QX, of better the country know end have the I on by a of for the supposedly think September, of I the will at feel end that. back that. rest

little But to time. it’s that’s was at will going that become of Most clear kind think and I early if in very too of South I right tell. to just the it So now less little all less pressure they’re pressured, South little a so.. than would was pressured there a be in area other the in it any but say the general, a pressured, less

John Roberts

model JBT I’d just or the Nick, agility think that’s very your moving you that question, part we’ve I pivot carrier have over since last ICS. that, experienced into going asset-light XXXX And of been that’s asset-light. tapping via had to access first good add that made think that to towards more the quarters talking we’ve growth several base XXXX and records an the facilitated in and that strategy by we that in term use we’ve the in the we’ve represented that and your about our I on that to well

us so has be just more and do certainly platform environment that our more enabled And for be that. to to in is flexible example for able XXX of them another customers good

Shelley Simpson

just might add. finally I And

at. today to to is the about to them where of customer. our of really yes, make we a It But a comes down easier costs. points for much are on customers to talk One us our certainly behalf things pickup it and pain with say,

have take XX,XXX been trucks, on extend our drivers and reaching platform nearly last behalf than cycle. more our customers maybe when we different than would the is ability X our source in of million it our to to that So what significantly

we meet cost intact. helping a helping pressure to and say, their our with and perspective, budgets means yes. from make always that just that us down are can customers It’s So what sure

Operator

from of Brian JPMorgan. Next the question comes from line Ossenbeck

is Your line now open.

Brian Ossenbeck

XXX the one Hi. about Good and particular. just ICS wanted I for Thanks evening. question. to taking ask in

favorably. was moving was end of but of per so the first some quarter, still the at bit little count the employee number So from good pretty period loads employee average the a up the of

for So on the just you’ve and just all an the you I got you terms year? you productivity so metrics, forward the of the scale. different And also an as the here more seems rest the you. progress XXX? like about had, see we people, next productivity wanted Thank like give investments in of then It look you then some here seems if talk and at maybe in can made the in for that, where give on see near-term and could platform if to be technology of roadmap, investments update the us going terms maybe across should but us investments going update to in

John Roberts

that A Thanks, lot Brian. question. inside of Yeah. Yeah.

critical definitely our gravitating our We’re with we’ve you of the progress satisfied people, our towards areas technology that three made. Appreciate and scale.

with XXX providing on that that Google for the from carriers. the that doing think quarters eight work that make Obviously, last we’ve which will and about co-innovation the we on. the good scale, last grow the enhance as to to I how and can invest continue we make has and for several we’re demonstrated gotten platform our continue for we’re how with quarters to over that sure investment will window. customers and to that allow been us that come we’ve around profitability, value Investments talked back decisions continue we to will

you add make capacity, we’ll really Shelley, things visibility, feel think to investments and are don’t clear and the our and decisions create most continue good continue we transportation goals I access, important say network are I transparency with North the anything want about forward. most that, and if to and to to around that in I is it’s service on that’s sit how that would real our America we cost, customer that. efficient our respect know where to that. where to to focus we move

Shelley Simpson

that that we’ve will I at good Yeah. marketplace. the -- place internal I believe I what’s last XXX, in with we systems work connect first people out put year rolled the have of we this, modeling made help the called our have did are across We we five-year still might XXX some with in Board. at very happening internal improvements our end when happening just mentioned in that Match us as our we looking do see add that

And problem gross the truck inside that those time, be scaling still percentage, improvements need left piece, find we and frictionless occur margins us as when at digital a the of do there. really our so modeling. us And continue platform to use and to carriers five-year overall. that certainly the made to right that our improvements customers people right we in and externally really to our that then continue numbers need to with right allow we’ve have so that We allowing believe the connecting behalf to solvers at our will margins that in on price will we still expand

Operator

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

open. now is line Your

Jordan Alliger

bit Yeah. to wondering profitability. if was Mile you little Hi. could talk I a Final

range I X%. X% think to the long-term target is

of half. peak, do the of to within of be year? could could kind and probably what’s first general going been sort you stay cost in targeted a the range through the You’ve -- we there pressures, mean, the various Thanks. think balance With I strong

Brad Hicks

Yeah. direction. our there in There even the contractors, warehouse so I’d up. One, that contractor of box our say loading of clearly that going is lot of labor alluded second is moving a we’re of on. going lot inside only, a things rates trucks, cost pressure you seat to are

headwinds But it chain. some there. the facing we’re supply part just the is of So other

end the very chain. at We’re the supply of

the at got there’s lot you that, a lead the product furniture to of look long we folks. if there. sure a are industry, of lot chips make The times, So appliance is that affecting

of range, is but towards of lot is target that, in that things lot headwinds in but you. stay on there a just plan going our there’s So a to

So it’s right hard to clearly say now.

Operator

from Barclays. comes Your David the of from line next question Zazula

is now line open. Your

David Zazula

wonder asset-based taking my or an whether asset-light comment of course mentioned shift I to that asset-light due kind just a segments that’s normal within the the business for segment. that’s Maybe whether Final stop per of just between model Mile? Final down on revenue question. towards shift if is one you a more Mile, and for on Thanks Brad another could intentional you of the

Brad Hicks

are both our very customers. pricings. present We with agnostic We

now. of now be it the tell right asset being on you the recently. buying to customer what just side it at the is seems -- But was depends which non-asset just And would so time. couple on a Right deals bought was I

I say and moves There the on an it moves while the part. side non-asset most hard for asset play moves around. there that pipeline, is a the what in So see is it predict. I but in in so once around, every It’s more still to would

them. of all pricing We’re

of our we on so in the ROIC capital based adjust we just amount put have there. to And

say, So, but more right on pipeline, side the now. would non-asset is I the

Operator

line Your next from Todd the of question from comes Fowler KeyBanc.

now is Your open. line

Todd Fowler

Great. Intermodal okay? that Thank can ask Brad Delco, what were I you. yesterday? Is volumes

Brad Delco

kidding, please. I Todd. Operator, ahead. next am just question Go

Todd Fowler

No.

You’re partially kidding. kidding… I understand. And I’m

Brad Delco

Yeah. Oh! Thanks.

You’re absolutely right. Partially kidding.

Todd Fowler

season. about want What of hype I this a of a did to there’s around ask is, lot anticipation, peak lot

typically is for partially shipping think customer cadence of the seasonality longer second where in situation of peak a with habits maybe about of should then pull we an year, of just to EBIT customers than either partially Shelley, it just forward level of going the we elongated peak change where elevated of or that do a earnings going is? and to the And Thank what the earlier as maybe John the expectation period demand for that activity be about or the the in kind environment our we is see? for follow planning are think be you. this Kuhlow, start So more we’re kind this at half time how the

Shelley Simpson

Todd. will the of year. believe and continue I’ll it side and you, and in today The we I’ll that into question. the to the the continued part all take occurred disruption through the then XXXX has John turn this rest on last next through of over customer way Thank year

heard Our we when it need get customers from and you say they have do date. ordering a have date to a displacement being customers from can happening from an to a by inventory me our perspective moved

been the is be that delivered so would in today that typically supply And has chain there not there. inventory already

some So pull-forward. there been has

I particularly supply think the just been disruption global it’s based that’s happened in lot of on the a chain.

believe of for would the problems we doing there year as will next in now caused occurring I has hitting every the call. customers. from we issues upstream that rest parts U.S. kind would customers on that are demand be the goods finally, a peak our it’s strong I delivering well say perspective our this chain year the planning. ton as of earnings of certainly say, in across last peak know that supply are about a season, well. that the and the And talked I of So into

again segments. doing that all and five now of really that across we’re comprehensively are We doing our

sooner that so, focusing help needs then are do on what do look can And we success occurs in disruption what a we that the customers. we will perspective? customers, more how will the that more when like outside from locations what we we together have understand The of are can of and with peak our our will

John Kuhlow

to our their Todd, as have is, know everything What the I answer apologize, what probably understand and to half. shoot that can giving without with for margins are. doing we’re can don’t And I Shelley we that down our your talk but how really you guidance on question demands second customers say will mentioned, second I

in people And we what that rails try some equipment we We’re needs. to be of get see address orders and Darren mentioned, try to do in working put best this both to resources the have to the can place as assets many as to trying with possible, and to the as congestion. with position those alleviate

guidance add So ranges we’ve margin I further that’s target really all can to that. given and the

Operator

comes next from David Vernon from the of Bernstein. line Your question

open. Your now line is

David Vernon

you CapEx, should of to next that to level multiyear kind and little elevated a XXXX? kind you with a we you service time. fiscal wondering feel expecting term should turns then do and we’re of be I in this Question equipment, Hey, be box the like deliver longer as mean, of the across less rail guys. seeing on for Thanks we or sort for CapEx would just for allow of spending than in you year to of bit recovery look demand year, I’m taking sort

John Kuhlow

comments on consolidated Well, just we’re at. and I’ll what looking CapEx provide some

the what — mentioned, placed, are into we going to some we those pushed be orders have As of that of some XXXX.

so, will We orders and those that haven’t move. changed

CapEx is our be that so well. expect I to And would going XXXX elevated as

with what reduced on higher the so that tractors, still to XXXX the have this trying capacity and a we to of some CapEx to trade-in replacement are. growth well. have our available and in needs we We’re continue will just year understand maintain as probably Frankly,

are as XXXX, not that those be but right would I now, CapEx over seen as going -- our is will be elevated to historically. say, high So what XXXX we’ve

Operator

Kauffman Your last Vertical of question line comes from Research. from the Jeff

now Your open. line is

Jeff Kauffman

had taking earlier any Shelley, for tight them. as question. you mentioned how about inventories were customer there and you thank Thank much you put way you’ve x my into very relative as we seen can that to us levels perspective they should idea where with an y where just or are either or to customer be? inventory give of anecdotes customer at Is

Shelley Simpson

have speak can’t think I I anecdotal specific some it’s, that inventory the earlier stories. the at But those they at Obviously, they have I said they I exactly which wanted where what customer Well, of the or don’t timing level. is, wanted, either.

or on season all Christmas they through will think this inventory necessary available I e-commerce about the there channels. are and of concerns shelf have

or water the water on coming that their concern catch take But in up just there back of our of half is Christmas some of so whether more stock customers. shipments aren’t ahead to into from on normal product our that several peak of it’s to levels. this here yet already a the supposed lot concern are customers the Inventory schedule that’s time will So are to concern be and there year. a here stories

Brad Delco

you earnings for My anything email have I thank months thank if Okay. we our phone with number want Mika, to out. before is you. address then, the you questions. and three in to your reach you free guys touch will Thank release. on Obviously, be is Brad. time. just This and feel everybody for in

Operator

participating. conference This you for call. concludes Thank today’s

now You disconnect. may

We use cookies on this site to provide a more responsive and personalized service. Continuing to browse, clicking I Agree, or closing this banner indicates agreement. See our Cookie Policy for more information.