J.B. Hunt Transport Services (JBHT) 20 Jul 222022 Q2 Earnings call transcript

Company Profile

Participants

Brad Delco	Senior Vice President of Finance
John Roberts	Chief Executive Officer
John Kuhlow	Chief Financial Officer
Shelley Simpson	Chief Commercial Officer and Executive Vice President of People and Human Resources
Nick Hobbs	Chief Operating Officer and President of Contract Services
Darren Field	President of Intermodal
Brad Hicks	President of Highway Services
Todd Fowler	KeyBanc
Ken Hoexter	Bank of America
Allison Poliniak	Wells Fargo
Ravi Shanker	Morgan Stanley
Scott Group	Wolfe Research
Chris Wetherbee	Citi
Amit Mehrotra	Deutsche Bank
Jon Chappell	Evercore
Justin Long	Stephens
Jordan Alliger	Goldman Sachs
Jason Seidl	Cowen
Tom Wadewitz	UBS

Call transcript

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Operator

Good afternoon. Thank you for attending today's J.B. Hunt's Second Quarter 2022 Earnings Conference Call. My name is Amber, and I will be your moderator for today's call. All lines have been muted during the presentation portion of the call with an opportunity for questions and answers at the end. have our to Vice host, Finance J.B. now conference you President I with to over Brad Instructions] the hand pleasure the of [Operator Delco, Senior Hunt. Brad, proceed. please

Brad Delco

Good afternoon.

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

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

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

John Roberts

today. good Thanks, for call Thank Brad, our afternoon. and joining you

to much that areas position factors about of include delivery position quarter including nuances highway and of networks, complementary and certain have fleet of solutions and the for to demand gained ability addresses the the learned [Ph] our and asset evolving needs [securely] a for each from we our to pleased our customers characteristics transportation constantly leadership different truck years as in The conditions. most our with flexible, position in of company. services services many remain worked cyclical in evidence cycles. a offering businesses teams' market segment chain, position, be I in business, many, of the performance in around us the macrodata values. strength the implement our and ever-changing, healthy, and company we experience and be that changes in That am a the such are business, a financially over encouraged that spot balance conversions in a key results current despite a equipment Mile lessons business and We businesses, rail of an navigate aiding based present growing through These see rates and quarter availability, economical lighted second offerings, continue experiences cash-generating position enhance There economic advanced a labor, to our in position all our across supply the to of informs did service. are to segments across and should in compelling of shift and channel, used global we our our reveal Final more quarter many carbon-friendly full-load private our importantly, said, on Intermodal, managing on challenges in

challenges providers. are our experiencing address we service the me with Let clear rail

of made Intermodal, in We the and to committed have where to the no are confident levels with with be we investments reliability service for of expectations to continue rail through and velocity. decisions noted will improving we the active are need bring We and year. to to on back us this to improvements be. the in discussions our with highest plans that our to on made second-half remain changes the the path show remain work our providers right primary We

in year made no have for the In capital allocations. we expenditure at this and fact, to plans our point, equipment alterations our

While all experiencing, and in we and view this extended for know we timing and more will we growth needs replacement that acknowledge as challenges, are noted, covered have long crosswinds recognizes delivery categories are so-called a during be and take assets. call. we there This position

is Our using data informed aspects each key our input all of from and fully direction real-time on customers. business

over leadership each quarter. Kuhlow, here is CFO, I team on and the his turn Our more specifically you. the John John? that, cover will But for will for business thoughts before our call to

John Kuhlow

capital. our and the Thank the of in for in strong but two you, pleased growth revenue a operating highlighted on and the John, provide comments I'll growth plans with afternoon are consolidated a of deliver we with basis. off-setting results our priorities quarter GAAP recent performance and team the review XX%. XX%, My income earnings today CapEx our income in also of quick incur share did large items was quarter, We good the able per everyone. partially Overall, growth statement will quarter. XX%, And to on update

growth million continue with respective net casualty and increase were below our insurance incurred in sheet compensation the quarter the balance discussed net provided with We've sections. maintain and not of and with one is lag revolving the insurance almost both our CapEx reviewing notes, income due the $XX.X in recorded our line. impact are to $X.X the billion retiring efforts, of and for alluded XXXX on The note] our target we and in behind needs claims cash, We quarter, are which and versus remain liquidity our in obtaining we zero and trailing on times to million year. we our strong that $XXX benefits, second, First, On to million segment [But an release, in the wages, these of we which be our notes, concerned equally $XX benefit plans coming net given recorded million to as claims, continue plan but replacement We John target the on CapEx, a are $XX.X growth workers And we entirely and to is impact of [Ph], by our $XXX to ended forecasted line to in million of in credit XX-months a slightly But we facility. basis. plans that challenges EBITDA leverage matters a you, equipment. those service committed statement. debt with our in for drawn pleased options. salaries, customers.

remains almost We're reasonable to Board. million presented, value stock our support of quarter by the to now accomplish as one our long-term reminder, shares remain as focused buybacks our committed a for management and priority my dividends remaining as to were in capital reinvestment our As and generate concludes this opportunities which disciplined remarks, in our supported able number back building capital a remain and priorities returns This over our our I'll customers, on one. for turn capital shareholders, people. fair We and allocating it to sustainable to business, by tool, and bought Shelley. and

Shelley Simpson

Thanks, market the across John, of and people, market to position our are all we good utilization ourselves put our business unique will an effective how afternoon. of at provide across capacity, be and fluidity, and chain. combination to presented of differentiate in on to the delivering to for network and remains the to update availability, product cross-sections in our continues velocity provide dynamic, and value in the current also different update our strain continue confidence My with to of The our supply three which have exceptional dynamics key technology, and customers. and our cover conditions, capacity. continue on inventory areas scroll priorities us allow challenges I'll evolving freight around and to customers. commercial Labor how of services value addition broad available our varying mix

way discipline also Careful market eliminate moving the is been our regarding our of multimodal the drive waste, for last services transactional at were to effectively said customers to system. were, waste today. a opportunity for professionally recognize remains on see in cost, and optimistic create like to remain Intermodal We capacity system. and suite created inefficiently, healthy entire our in businesses we our our and help demand are additional solution greater create and XXX, a to source eliminate connect tremendous J.B. that we ability best with highway in with businesses largest in scroll Last customers freight to compete and and outsourced demand Some has two, DCS, provide today their to customers deliver but built than product durability, continue last and our Hunt tremendous visibility, I open the our capacity full financial XXX Enhanced efficiencies, needs. point creating top remain Freight not their powered by trends and dialogue have remains planning, a from remains by this Hunt our that customers can J.B. by opportunity that opportunity capacity platform. frequent we we remain, identified is and quarter, our to needs. efficiencies capacity or the concern, across services the customers a costs platform, out to quarter, the any and mind. leveraging true year value fleet the digital a our are over across The offering softer We strength spot for we execution, scroll overnight. with trends of broader thought, do frictionless continue of

foundational new that helps our company, who member define customers, for of what what expect as launched and During the are our a organization. our a principles strive quarter, as should behalf on we we we of employees

you that that Hunt. empowers, by say-do and no people to entrepreneurial, is innovative, comes first. people is is these our fact, That technology founded accident and trust, It principles; on In capacity culture J.B. deliver.

similar people our in to processes. our to our efficiencies finally, it and we collective value We customers of with our in for continue our take it technology of help care people, provide As our top And investments our take customers. productivity is, our empower remains care capacity meet our in deliver and provide I of organization, in allows to priority who and quarter, to customers. to last different our of flexible invest as believe growing on close I'll needs we needs meeting fashion respond our dynamically did approach us in to and solutions a to deliver customers. the mode the

cost, in and position my right capacity, That it of best in us provide our solutions three over comments. have investments turn in and key capacities concludes the now to technology physical And to service. to customers like people, Our areas for our the I'd Nick. the

Nick Hobbs

Mile afternoon, impact and remained Final Shelley, strong good operations. update I'll professional drivers as review and the start solutions with fleet an of our Dedicated Demand our is our professional quarter. and our in performance outsourced that evidenced you, the having on growth continued and by segments, Dedicated. and I'll for equipment, provide fleet during Thank our private the on our

added selling After to demand we to momentum the and to case unprecedented sold second nearly in today in versus trucks strong. and last quarter. remained also challenge. to we a as the the solid the team XX continue pipeline and trucks seeing put remains growth quarter Service for onboard on that engineered XXX in talked our and business XXX the in stand has backlog Fleet the the trucks the Our business. We business, responded We've has months, new out which slightly last over QX, highly strain This organization, well continues competition. X,XXX our extremely about

and and to But Mile, our to on earlier we the and far discussed operational all efforts moving excellence, has properly sure improve for our our Shifting valued investments will Final focus the I'm remains the retaining product 'XX service forward. our deliver had as differentiated which year, with a attracting best been profitability. we is growth more pleased making in revenue so forward, our to value this plan, success marketplace, work talent and on remains we've our customers. our remain quality the in focused priority we and supports Going executing

in We see opportunities for value have end some demand category. our softening new strong markets, also service But customer in furniture continue the demand with mainly seen pipeline. we some the to in

the million is performing Lines and good is opportunities contributed of presenting Freight in growth. $XX Zenith quarter. future revenue acquisition, recent for Zenith well about Our

seen at across manage needs general long-term unmatched but industry market trades our on remains market the it the in Closing this continue forward, than performance That we've the To replacement growth a piece stable and challenging year. cost. to challenging, remain remains Going chain. be more investments has support some while extremely said, tractors it our this in make roughly supply feels providing in will in the impact we growing support that we and intensely effort. are our with the of on an driver to considerably leg holding believe competitive to We we having higher service X,XXX organization, support around operations, operations. our the on equipment but second this will committed comments to we and will

Additionally, utilization of are as of a inflationary cost the frequency result pressures fleet is repairs meaningful. on ageing tires, impacting the an parts, of maintenance And our technicians tractor equipment. also higher

closely the That remarks. work efficient to possible. most to OEM and the in most continue with We safest my providers fuel can concludes equipment we way secure expeditious our

So, it I'll turn Darren. to over

Darren Field

up deteriorate our dynamics, Nick, you, afternoon, update review Thank of reviewing Intermodal for segment in April, the X% take modest have Box our were continues the more quarter said, capacity the quarter, by versus and I'll X,XXX continue and performance in behalf the in up up quarter to and of both the in I'll volumes the X% we've of basis. activity and segment. the to We for took in demand of current on improvements we quarter good flat and while in the first I were than the XX% capacity. expectations. a velocity we our in quarter serve year-over-year Intermodal to That essentially performance be delivery the second in customer to expect velocity and greater June customer the May capacity additional of an ability our first seeing significant demand. After continue also of saw and network on the volume resulting give and in everyone. will place the our in throughout of we performance Demand to our quarter. you on underperformed protect second-half by turns rail month start quarter. investments an system network customers, our to in invest customers. the that programs year as containers quarter, the delivery meet needs were made performance in disappointing

here sit and to as long-term near are and today, improve that As opportunities rail incentivized Intermodal partners continue not the will we we of of front business our to those well in and slower, us velocity rail be optimistic channel rails opportunities. are performance aware growth remain move for

rail on all becomes As John new address rail BNSF, early mentioned, improve by fully available improves. available from available filling to our we that feedback available of with are capacity, which working improve, demand for we does is to we supported also channel Starting next closely velocity capacity anticipate the to fully When capacity levels capacity challenges. our but expect customers. velocity levels partners that as year as us service

a the are As to closing, in to In and serve continues reflected proposition their inefficiencies in so to carbon needs removed in to a more network, to that present fully way. we customers be cost efficient value customers Intermodal our from friendly to and cost customers. our rightfully capacity expect significant strong product our with the sustainable, serve

even with combined Hunt serve people, XXX our long-term concludes capacity the to investments needed and We allows J.B. and differentiated remarks. needed. believe efficiently We our growth the when will equipment my in platform power that our of turn of so Brad backed support our and needs. over is to our service market, it to to I'll by prioritize customer Hicks. continue us ownership more the when the to That source better

Brad Hicks

review what Capacity our I'll the services. we everyone. afternoon, Integrated good and Darren, highway and Solutions Truckload you, segments, Thank performance call of collectively

our volume specifically in X% contractual comments. the in I'll a service end see But year-over-year, teens a technology start growth business referenced shift helped than first our touch to our percent a customers, truckload was and shift comprised But that to the our our Hunt in our platform demand truckload, quarter instance, assets at an on that a of the offering. upper people, revenue increase us was top While Shifting our needs. volumes goal line light us to more, of X% of truckload I about experience per spot think revenue in reiterate also and most our network. this transportation were blending our function of rail experience tremendous increased in and their X% decline just remains dropped what in deliver volume model gained a assets let's about ICS, more down This this and offset rates deliver continue opportunities, a the great capacity Unpacking J.B. earlier, of customers. basis. most from live growth delivering return appropriate separate our Intermodal freight by We networks, which mid-teams shift customers to continue capability ICS efficient but X%. we largely on That by trailer business. customers that this earlier this my in did customers. believe drop and live investments growth demanded to America. and growth That to network we little target network our between with asset we intensive supports did XX% view, to leveraging my the investment network our while and market quarter, related our capital. evidence service our profitability in business, our load. growth. see the our move. a load right our over freight public business adjust and to trailer, large year-over-year XXX assets closing, side to unload on which in North believe help a trends our in the quarter from but complex as efficient value supports a opportunity, and network we will of focus believe efficiency strong Hunt managing create the the technology that parameters, belief drop improvement progressed, strong capacity differently saw our customers on and the Volume confident to our scaling of dials technology value fair our balance to for that and right committed valuing was of and was the have industry mission mid-quarter we the said, in the begin rate made we trailing to trailer and offering on We asset I people investments power see the spot the increased drive down J.B. a and on to blending service of to the our versus over an of In the right call of goal would network more as all on and in remain year strategic with we valued on of like concludes some business, business comments. support long-term platform is to of importantly, we our XXX outperform remains and trends freight am the in acceptable spot been source and the versus historically people, I We capacity platform has to We've

So, the I'll give Q&A. opens Brad turn before the instructions call back Operator it to to some for

Brad Delco

get please I question And the want ask audience to if queue. remind just you and don't Brad. Thanks, mind, back in one

of the call lot folks a on this afternoon. have We

So, turn Amber. to that, you. it with the I'll Thank back Operator,

Operator

thank you. course, Of

from question session. Q&A now Todd, Todd KeyBanc. open. now line your the comes first with Instructions] [Operator Our We will Fowler begin is

Todd Fowler

afternoon. good great. Hey, and Thanks

in don't wanted at about of the you expecting there's fall progression that but are demand of kind potential would you're there, based environment. we in out start, the appreciate if on this into around John to pricing pricing year, of the peak I impact curious, just conversations color is of the you stab crosscurrents I'm help be the are that Thanks. feedback? first-half on some but this, Any a environment the the maybe level-set any Shelley or second-half weaker think environments the have commentary change this in where now? that for maybe based demand a maybe indications lot as take on if a guess right relative And I or to we customer then Certainly, that you second-half helpful? the know were So, to to around Roberts,

Shelley Simpson

Todd. you, thank Okay,

three I me think you questions. gave

So, I'm them my to going possible. answer to best as as do best

So -- speakers]… [multiple

Todd Fowler

so… Flower, Todd was That

Shelley Simpson

with generated the really continuing the the think, labor our are pandemic I that supply from out behavior. then just is inventory, occurring be happening talked activity what We there around we port chain of market, conversation last what's uncertainty having are good our at of was And challenges which happening is also two customers, creating chain in coming in last bottlenecks call from not customers particular still our in that part what's in to, with really years, the to But the unlike that the each in happened consumer are with China. general. certainly supply in

So, areas might season, and here I into started. be we've with the sure. I had different having new about that a still To with entering pricing season If perspective we've feel July be the we're from would how think there you, in we're be we're businesses confident what our seasonality normal seen to peak. and having think of a since months. we're to we COVID tell not a perspective, finished We in pretty going seasonally do were a bid will extent, bid much that conversation a July think in We that our of customers. couple first

for happening in set spot So, all of is in across much except total. what's our market pricing businesses our the pretty

and challenges, think what's in I transitory cost can happening is we versus talked helping them supply structural trying we our speed, get to about are them more efficient create a up cost transitory chain. to trying have and to where cost start our are customers I understand there our cost.

customers, of good a what's bid had significant coming our but -- say? say, I think and the So, I started upstream it's think in have couple season inventory way are has on are did have chain, I I challenges next all of a Nick, And, to but had the long-term. second-half. they to be lot for are those we supposed even our some something would a say supply in customers will feedback the short-term short-term months, changes haven't haven't to more going than and I prepared downturn. you

Nick Hobbs

just which from in our the dedicated Yes, to the basically our day, trending to watch I up going is was up. warehouse the business, count as in say, load we volume is and our store,

So, that it's looking from good standpoint.

we're So, closest seeing -- that. and consumer still strong, demand we're that's to

Todd Fowler

thanks Great, for color. the

Operator

Thank you.

from question of next with Ken, your line America. Hoexter Bank now Our is comes Ken open.

Ken Hoexter

Hey, great. Good afternoon.

you see customers, So, and gets about just X% that? as you -- John, think price the thing Thanks. on outlook mentioned you on levels, service, thoughts the the same service pricing can rail think you as bit I you about guess, loads more see starting delineate about then you how second-half service into the are about terms about Intermodal. price, flattish, your -- in poor said from peak? we're for we impact? right, service great should an then better to are on Are maybe go of should Maybe down if we while maybe could And job rail and I can pricing into because talk think excess talk that improvement, you up a there come the how

John Kuhlow

second service. quarter. some are Well, providers operations their let about actually know me during deteriorated none rail of velocity, start today. We our the We satisfied that on talked with

onboard a better crews, our extraordinarily a find in today providers of all is to to pathway rail and the efforts service high intensity product. think new at all I

year. a The question. for see rail the to second-half I initiating, and they we have that that the understood. answer continues. that. I we're during understand I confident there's us improve will that's that the do additional railroads I have universally think the providers us And I in volume year But to don't really service. additional I will think revenue, that, we're additional programs they're our confident that think is collectively, of to on key demand, when. the And improvements our improvements waiting anticipate that mean, see as question and all going some are great answer And

tried we pricing to programs I that's to improves. equipment But delays customers are as for in more expensive think all customers, is buy at to areas ownership the to there is the cost than where it's accessorial equipment. addition not out certainly front from there's velocity cheaper remove today; on those ever that, highlight

really all along in our industry, and would a J.B. when at pickup some there. channels will be Intermodal the Hunt anticipate I would equipment think And so, those least improves, velocity passed slight And costs customers. the have to of rail we certainly would

Ken Hoexter

the time, thank Appreciate Right. you.

Operator

you. Thank

Our your Allison, open. question Wells Fargo. line Allison now with from comes Poliniak next is

Allison Poliniak

Hi, good evening.

should think just ICS, of similarly, margin think on touch you are there? Hunt you any that cycle, can thoughts somewhat growth gross offering, we So, within that J.B. of the and downside we kind -- scenario? where how range particularly we you that in as with think that, XXX, through can touch to product that on evolution then And with associated

Brad Hicks

invest value in is question? do But customers and 'XX. it part and the your Allison, capabilities find that And again create Brad we're our its behalf XXX say Hicks. say, as the And Hey, by behind the to about we made I very of the investments investments when make both public this for XXX, in into that of the and to really expand continue question. 'XX Thank 'XX, I leading think We on and ways about you can us. that as well to improve two I would me our it. carriers. foundation upon not remind of continue won't that's But then, large, to -- to is platform, guess we

Allison Poliniak

we scenario about segment, think the around margin gross ISC, particularly should there And through downside we be range is just in within that thinking as that a just this?

Brad Hicks

the cycle levels. well the for pre-COVID to to are to versus relative where We just we mentioned of we'll with what were that expanded bid there publish certainly is at we structural and the that say, advantage Certainly, PTE to that managed it holds down, early north still Hard Shelley of an in with reminder. think the take pivot rates. feel But by the But appropriate we spot remain. margins, certainly, costs through but as certainly. in the expand come had placed were the in way. peak? to supply. you able probably historical have the been were I that predominantly Is has second and can and the or pleased quarter, you for Yes, in still around like margins capacity our tell. see dramatically pressure see too it's saw second some we Obviously, quarter Thank second-half that, results we

Allison Poliniak

thank you. Great,

Operator

you. Thank

Our next now Shanker with line open. question comes from your Ravi, Stanley. Morgan Ravi is

Ravi Shanker

Thanks Thank for a you. bit some insurance us elaborate related everyone. the the understand more Good thing incident, this you. time. The or quarter, had loan the little you item? kind of a $XX is if that that was an on ongoing of it million Thank and you help one-time in quarter, can claim or to afternoon, a

John Kuhlow

in was in Hey, Ravi. that one-time, referring we address This one but the outside calling the that to or We There that prior of going charge are as of -- is three result of were our settle to limits claims one have for the part John this to quarter Kuhlow; had a -- avoid tend year. I'll coverage incurred towers. two try claims settled charge. things or were one-time or

is everything again, to but periods. prior the business, these related so, And part of

Ravi Shanker

Great, thank you.

Operator

Thank you.

now with line your from comes open. Group Scott, Research. Wolfe Our next Scott question is

Scott Group

afternoon. thanks, Hey,

in, sort for think maybe in see truckload of Intermodal would you expect trucks that upcoming all so the are planning and for that later, in I'm second wondering, And then bid to margin would the a the how year to trend last Nick on directionally together? side, targets? So, those the as would dedicated and kicked relative you separately season, divergence pricing performing year. had, those just really just or a growth start you you they quarter

Darren Field

Yes, Darren here. okay, Scott, Intermodal handle first. I'll

to intact channels. And influencers, is little on or it I or not Intermodal underlying will But water typically overwhelming this in there other putting truckload the largest what that those it's spot as are think, then all out change highway feels know pricing. on a evident think the we're rail drive to don't I channels competitor the prices costs certainly, West. with of capacity doing out costs certainly than far the this against massive Typically, more bit that's market, be still Intermodal competing is biggest going and Intermodal. influencer is pressure I costs like Intermodal

on value Now and being certainly rates with business play East, said, convert real they All for that are, feel point, to influence Intermodal challenged to Intermodal. translate in improvements highway like that against see with for next I round which where being prices can when we velocity to in we compared preparing provide highway. to customers should a can the the the this think our velocity off the ability fuel highway can

is have the on than the structure channels, for respond. meaning there I or slow published will are tick bit a certainly trend in the to the really if it different think Intermodal, the think of highway. be highway a take even I what trends But cost, some down, all cost underlying is convergence, certainly prices little will market So, or flat to Intermodal

Brad Hicks

Scott, all there Brad. the that to does early from would I of I least just safe at entirely mean be XXXX? too I into mention this think be tell. going would highway to Yes, it's anticipate a really that standpoint, it in What think flat-to-downward maybe would shorter-term. is pressure,

get pressure, fall to looks demand what we'll maybe I more in understanding from But, highway into and some standpoint. supply. lot a terms know anticipate pure think deeper that we like of a certainly, as relative we flat-to-down

Nick Hobbs

am question, To your of that's is us, points the been All 'XX business operating entire XX right, basis at within base a Nick. it's for around for adds of our long this time. looking book and Scott, I

well, including December. doing up deals and So, that November in is that's very started it

and very our it's pleased we're with targets. hitting So, that,

Scott Group

Thank guys. you,

Operator

you. Thank

Chris Our line next Wetherbee Citi. question with is from comes Chris, your open. now

Chris Wetherbee

thanks. good fleet, sense use add the to not of kind continuing to fleet how you curious to haven't Intermodal Hey, improvement question get we're going XQ picture, to maybe much if pickup And But of that's Darren, if fleet, there the think in of sort the through rail to over and of to there a next really into or Thanks. here a year. up are back-half challenges you've the the going bigger the dynamics about a service as and months I the of seen for year, to to Maybe wanted a result crop answer. or course other several So, container of doesn't in cost that? that additions growth of Is rail the a so the about maybe adding grow service, start to forward? rest are obviously, for get continuing proxy been get pretty successful better? we challenges quarterly

Darren Field

Sure.

capacity to we're on So, containers, to well, XXX,XXX and quarter we just marching announced our years. next to the plan our expand the over up five XXX,XXX ended above three often

well what with So, do. this of plan, short fall is in QX think I only that if ads we year, we of would X,XXX that

come onboarding changes be prefer going on always but on will land don't will what's what to But will to equipment those I that be to about, be probably be will XXX,XXX. demand stewards through time be see grow at we to for opportunity think to market. came capacity new and that prudent the and velocity to steady, already our gain continue related equipment steady as on improvements. with just there's into that want try we this but and we the to and certainly ROIC that guide based And adapt us the exactly need to will investments. pace capacity that it same we added, from flexibility customer the point, say our continue just quarter, march own, it equipment opportunities we be that process. of have with each with us announcements it's towards to flow would know and be obviously, to it And velocity to same. the be of our in you'll adapt will would we going at I As don't that always Northstar to we'll we able our

Shelley Simpson

Shelley. Chris, Hey, it's

in note a one have where providers. will unique thing opportunity have January Western do there Railroad to we is we Just more our capacity on

order. So, to short in I system, present more to opportunity challenges and in the we're of equally will that trying getting containers the move think the here be balance Intermodal

So, the going with Western are around well conversations customers our network.

did more for where customers can a in we the to grow. the us customer so, with great challenges lanes performance we we'll as through even do be ourselves. our And to think that. our the And But surgical will second for continue our really on railroad about sense job, growing and for quarter, that made

for we going for important that as think to I ourselves. we see equipment So, to it's onboard room growth continue be

Chris Wetherbee

so it. much. Thanks got Okay,

Operator

you. Thank

Our is Mehrotra next line from with open. comes Bank. question Deutsche Amit Amit, your now

Amit Mehrotra

Hi, business, be think I being operator. the of not. a to could from to I implications feeling ABX my Thanks, of everyone. the vast One had questions. potentially pretty share the guess relates quick Intermodal opportunity competitors as majority decent market it is given wanted it just understand couple I trade your is a your drivers, you implemented, do in-source

update what you initiative Darren, that about get think of more up in the So, or industry a that if the being position few what I you for drive step the J.B. hoping giving are with just terms put to us the volumes? sort improvement Hunt's you how I specifically and release, in BNSF facility the would love ABX on update implemented maybe executed, was could overall is I function a you more transload that guys then, to if days made now bit terms access can of the just saw or clear progress come a the in ago capacity, and Intermodal, can of is press implications little implemented talk to the in that's the that BNSF, an joint on they've if

Nick Hobbs

XXXX been good take or We new don't material We like independent a contractors in our we've our years we're and we an on effect expect ago, California watching really use spot feel the Amit, Yes, on our that. operating the ABX. to authority. it's Nick, under discontinued And with few I'll have of first that law immediate operations. basically since a

J.B. there, out so, And employees to carriers. motor use Hunt we either or other brokerage provide we

very probably into So, our to out in Intermodal it's strengths our side. confident business and play we that not feel going interrupt the particularly

Darren Field

outsource we thought drayage say Yes, our than… you you that Amit I that of I think more heard activity

Amit Mehrotra

Insource, insource?

Darren Field

that Yes, I up, right, didn't that you just it right I to did hear right, that appreciate. going clean didn't I'm sorry hear if

So, an yes, way. is don't to of influencer like operation in feel any our we going be ABX

feel But in that anticipate year. mission confident not way is capacity. should that's from you BNSF have seeing on all are that come right and on to still soon sure frankly today. as very all I today mean, and there's things and So, our just service efforts our the be that joint that I capacity dominating all we as more it continues announcements we velocity improvements that with focused things to you'll relates I'm BNSF think it, it like BNSF, something next available, read probably on beginning in improvements as now. new We're yet, think system with I focused our expect very conversations elements communicating

Amit Mehrotra

time. much. Got Thank very it, the Appreciate you okay.

Operator

you. Thank

open. comes question next Chappell Our your now from Jon is with Jon, line Evercore.

Jon Chappell

Nick, on the have as you transportation two Good massive of unique fuel. chain rate chime but parts for I others mean, see is contract rail look And this have still I can this think in truck. high pretty they and in a with question afternoon. Thank you. you you, hand, elevated fit. this the one at very

hand, over On had we're you've service rail the turning spot in know velocity the And for hopeful I other improvements. issues.

that were very I in think we hopeful April well. as of

the whether or that's different the of all pretty shift position look J.B. in of of missed of dream Intermodal has Hunt opportunity, different there segments this missed kind window quickly labor, shift kind you're where permanent and you a servicing modal maybe customers, so, a kind never dollars at if the really you to concerned to et way dream? cetera capital do going As this your gears that mode if is point is how of Intermodal

Shelley Simpson

Well, say would Jon, than our Nick, are but this customers, with is voice Shelley, I mode I our higher opportunity indifferent. have a we

what talked in understanding their remarks. a what how and develop specifically is, needs opening important so, And we is Kuhlow as result, capital John our about his in how we deploy much strategy like

plan for value customers, deliver segments on our we're to in think Intermodal plan all the across we but our us, we're in over great our will and our our bullish segment, bullish of growth Intermodal continue growth that For long-term.

different targets returns growth being vehicles one But great beginning and felt and channels us, customers better, that more over and some consumer way yield the are we in there segments get there own rails of the but years. of will five term say, that think home of an better, our the we will margin will will. those longer-term, segments And that supply have find to environment well for the we window see you pains growth here inside of from has their for get having really our will our a if do supply final that in take to opportunity that the "Yes, product where So, is will get and think all the short next right Intermodal five customers several our all very our across a do balance, locations, inventory of think all normalized strongest will the Each one be better ourselves we area. to they of to chain chain start anytime is need it." able

Jon Chappell

Okay, Shelley. thank you,

Operator

you. Thank

Our next with Stephens. comes from Long Justin question

Justin, your now is open. line

Justin Long

on Nick, much of Thanks, curious how sales extremely remains dedicated a share run with despite was significant strong number if up fuel truck prices recently, that the in sequential margins what's right we've rates and the could seen then, going to I of with headwind was you spot now.

reflect couple that coming is that fleets how we've are sales, would you much from years, you the of that say strength strength private versus on out sourced? last as and of in secular cyclical So, seen dedicated the

Nick Hobbs

first, still this about look a in is that thinking I it touch higher would pipeline, level, say an year. was elevated back through I and dedicated jump just at on our it I'll when that, time than last side the

looked of the there. is And and detail, fleet the reviewed through we demand I our it's lot think when I so, a And private other day, it conversion.

Intermodal solutions So, a And now. lot growing, I of density have going density helps it's We lot long-term. of we a we us, and synergies right of with good there. lot have on of think a to customers just kind got a

the try we it's we're And think good different I don't road I that So, say it's out. proven I way think this cyclical. just normal has it rates. over to think than one rates, momentum. the And

impact. is very will strong, that it So, demand

Brad Hicks

Justin, DCS; and I about add a is did Brad, expecting it little on kind margin in it that of there. on to I'll a XXX bit the year-over-year work least talked this was some basis. to point at percent question, and fuel Hey, We basis headwinds

on it sequential decent amount a We you improvement sequentially. looked at also have basis. margin And would a of seen

industry. aware us, impact through a it a dollars. of general EBIT report surcharge, margin. for of the shouldn't the we excluded don't you're fuel is you If statement, say like headwind or But some pass in others than was impact really fuel, it margin our a and But I want as a fuel did to

how we've to did little talking here. just I'd I with a and on thought bit that. provide so, color And and Albeit, consistent we're about we be in just talked how about the I DCS want recently, more past reiterate

Justin Long

That's helpful. Thanks.

Operator

Thank you.

Goldman Alliger comes question from Jordan next Jordan, is open. Our line with now your Sachs.

Jordan Alliger

quality help maybe profitability bit working the the x you of business? or think And obviously, hi. of thanks. maybe it's the that profit sort Final a on? business, first the like that from the because so segment you revenue up in that on of been bumped ahead, Can have looking in Yes, quarter, initiatives through to guys sort look Curious talk demand sort working Mile volume what

John Roberts

Yes, so still It's is the demand strong. spotty.

really one customers having value, he with furniture were there, the things, nobody one with, six a we it. of were told get hard those demand jumping ago, side is said, to year-ago, months his he's our of release that me in the CEOs into of fish And fish boat, had jumping the work I in on sales. as companies now in, hope some, of And to press to

there. was the that analogy So,

Inventories side getting furniture So, are that's other value busy. still is corrected. lower side, the really for the end

our playing lot we successful of we on good and lost. pressure in well. locations our business lot we up background is at lost of seeing some, we're picked And a new service separating And be feel a that, checks. quarter, would we there. this you're were And existing we that So, lot put some a to rate seems but demand, the seeing us And really what's business. of about

up setting And go. it's more to So, some room we got good.

Jordan Alliger

profit thoughts, The I though, in did million you given $XX second the the quarter? think

John Roberts

happy we're to guidance, with now. to where but Yes, give we're think going at going we're I see, not right we're

Jordan Alliger

Thank you.

Operator

you. Thank

is question comes your Jason, from now line next Jason Cowen. with Our open. Seidl

Jason Seidl

all. to little focus afternoon, a Thank Good bit on Operator. you, ICS. Want

then mentioned, you an volume the Could sort those you gave quarter down give a volume of into made made idea think side. tweaks I the after of for you us X% you I think some growth you maybe number, tweaks in improved any and quarter? on the just truckload

John Roberts

and the I a about, April. of wanted think Jason, were volumes first we price really XX in we what decline to sharp to And I days of when some throughout help rates. able the that in but activity our saw were positive XX of pretty those points month March, Yes, our is kind understand around that we and intelligence some win of QX, April, algorithms use spot and of talked wall, we a parameters as up hit then our really that's finishing artificial to at we change were

for provided April business did this we that it segment. see timeframe. from we've so, that And Historically, not improve

we today. able balance step that the the April that up position, know the the were So, was that I'm of of decline to occurred show going not quarter. to But from where and majority

Jason Seidl

carrier rise when in the given movement may seen your helpful. and be that's the of the spot the at in terms you have you have drop hanging or smaller very fuel, up carriers, look and keys? Okay, base, any you size people Also, seen those micro off

Brad Hicks

has a on consistency for a into their think were think benefit. growth contractors relative own, element areas are out do pronounced system larger which of to operating of segment, that a I is bit that, attach people of independent that freight that that it better we've their seen more the we looking is that little in of our I JBT the one are seeing think I our

is And attention would I Obviously, day that in highs I certainly likelihood great there not to, but pay an of that balance up. element in volume the do that close of seeing. more highlighted year. carriers we're that's of we in saw thus every saw it many so, that down environment just the spot levels we rate we know in 'XX given particular, we if how the last those the of in that the think in in numbers operating the hanging years that prior just that anticipate, historical probably of data authority. news, certainly some from are are terms far. people there're well people year, And Those purely their that

that improvement even seen be So, a certainly like of feel I elements, going that to of hiring, relative way. that some for we've less people looking and place. people driver And representative they've are we've could our safer do experienced

Shelley Simpson

add does Brad XXX. what new not us to those some of Shelley, records is in this allow that. environment, And overall Hey, tweaks more Jason, to I But platform. talked for came out Jason, just us hitting move because this the platform us, be might to see we do is market large, I we would to the make That that, trends might add in the so readily. of quickly, it platform, the inside about, allowing inside are just unusual.

that. suddenly, Sometimes price, what on price sudden when for movement take the it's to difficult shift or it flip recognize happens platform the and will to do our

activity, to faster up more many in have seen intervention to we have are platform there. records So, up, as signed more that manual some are second that in. we a There rate rates retention retention do the or have several logged do But carriers happen higher carriers how we signed we have quarter. higher

business, from So, but us that'd I that we've see. it think out I going be difficult think for to just from seen of perspective, carriers

Jason Seidl

for Thanks extra color, the Shelley.

Operator

Thank you.

line now question your Wadewitz next open. from Our with Tom Tom, comes is UBS.

Tom Wadewitz

Yes, you. great. Thank

on lot think weaker falling if some be I'm about Shelley, we in comments offer you improving versus seems lot quick a concern bit about like doesn't you or freight. quarter. of the margin, similar. see freight looking then, you XQ it like much consumer. just see at second seem But a we of kind consumer, XQ might or could of and or whether that should wondering, just in significant the fall-off the you the about pressure than freight of it's given freight added likely really sequential thought off got beginning in in been freight activity Do a And concerns on a that think Intermodal really the a it commentary it better to that that and how just and forward, wanted about people are hangs concern on consumer it's call the provide a the there's maybe expecting? have think fall-off So, maybe some been overdone

John Roberts

get. say just long-term all you XX%. quick, target And sorry, to is XX% in I'm Tom, Real that's I'll Intermodal margin

Shelley Simpson

bid is we say Tom, talking you've what So, of from the the a dislocation think would a and the guide season different routing hour we're heard in and I different from the of successful how service part result perspective. Brad market, this seeing about is of from happening lot of parts less a last shippers I signals spent we've our

and the and you're and that. is, anything we are beyond starting think had any should or all specifically Certainly, move. happening great good there. paying is that, because that successful talk that haven't moving environment, opening adjust certainly according as said to customers too we does we we're the inefficient, us goods should think listening self-fulfilling whether supply what's our about any will south comment, And the see too going aren't I year, make out stayed happen this volume. news about movement I in be in if we to that really What's the money think of I as for the there. concerned then and us stabilization market turns a way way say have we'll the prophecy tell reading well-positioned customers much are they are to to to I our second-half we early chain

a trailers to filling for containers. opportunity great customers, more our have cube out and We

and goods. If position because opportunity a also mode XXXX in move We a going think well-positioned do we're a the to will softer dedicated getting freight added any along more with a to we XXXX a thousand up our Brad be to be efficient in to a platform conversion, ready in start containers have fleets, I more it environment, to containers sets January, onboarded be will thousands have -- more and have of to we're with moving perfect that great in environment. great way

Tom Wadewitz

some haven't Okay. to but just fair? a signs seen But easing, customer seen at sharp falloff is do -- that this a input yet, sharp you point, pointing of falloff right, you haven't

Shelley Simpson

to more July. a seen have years July what would have would I last the supply is two difficult been The happen predict seasonal We normal. it's -- chain. in say been typical and

going would are in good demand the we You side which heard to seeing store. that dedicated Nick say the earlier be happen

is that inventory customers percentage. and plan located. a tell But on or inventory, downturn not coming having heard it is We any customers have concern the from large where wrong from had anything us there to a I've

Tom Wadewitz

you. thank Great,

Operator

Thank over back CEO, conference concludes today's you. closing additional session. to pass John I Q&A for now will Roberts, That the any or remarks.

John Roberts

Okay, importantly appreciate And -- and hope you've able I year. looking is proud next time I quarter been today. second-half more think, on spent us And the we give we've thank even the importantly towards color you. of. the some a we're with maybe into to here you

this being would the that. we remember business. we into in truck any And us here we today, And thought remind that we're whatever us focused on experience. have that And helps on consideration. change of about seen what's we a experience to this we're I that used lot inform managers. table is all something to want element element bids And what last call us. around very data-driven We the might taken our has that The about that first thing what to is on direction we've from values, a in time pay of regularly talked talk things going lot have to all attention does everybody like mean

seeing a very answer there's good feel very of whatever rail for good customers, to know hear they involved. reason number that this service is we're but amount us everybody So, confident, I senior think remember members these concern service, really placed important we itself, like We in talk will we've we XX-year the rail of through resolve as our talk it's all our better clearly I of a We that economical, I'm changes. that, and And I really are we're been that overwhelming here; appropriately XX is are, conversation. rail better a that looking the from candidly. with on here, at we candidly on am evidence providers. I

anything not our really so, And there. way there's in

showing answer. be company, system, that trucking as in very said, just getting on business through covered it think can that, not customers, with out, When I are us businesses blended I there. pointed yet as our comprehensive we to leading mode-agnostic I another we but happening it's into give be even Mile just capable are to. healthy, position or say a misunderstood, some think is We of that's working trucking they might balance of about with Final have can industry-leading, other. kind at just indifferent, I us here Shelley a really to of But recovery, puts keep the well-placed, the one described still And they company. managers, are these whole around direction, involved customers We our assets place they as that. of our just in And blend be a in being some been one or sort total, that's as businesses, an run think is But fear really great very, of really today, one where lot we moving helping or think is productive, questions. viewed patterns. great a highway that table, they lot I not by this nature experience that follow is same assisting doesn't to today, the And our each everything Nick a necessarily DCS balance. and need, need

So, it's of about this year. execution the rest

I pay seeing As look on we forward being a about data. what to looking someone we know to next you And that our And we forward second-half. all know Thanks attention to again said, we our are here. call. We the about. lot need think for to will

Operator

J.B. participation. your you Hunt's call. second XXXX That concludes quarter for today's Thank earnings

may You now lines. your disconnect

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