J.B. Hunt Transport Services (JBHT) 18 Jul 232023 Q2 Earnings call transcript

Company Profile

Participants

Brad Delco	Senior Vice President, Finance
John Roberts	Chief Executive Officer
Shelley Simpson	President
John Kuhlow	Chief Financial Officer
Nick Hobbs	Chief Operations Officer and President, Contract Services
Darren Field	President, Intermodal
Brad Hicks	Executive Vice President, People and President, Highway Services
Allison Poliniak	Wells Fargo
Ken Hoexter	Bank of America
Jordan Alliger	Goldman Sachs
Justin Long	Stephens
John Chappell	Evercore ISI
Amit Mehrotra	Deutsche Bank
Scott Group	Wolfe Research
Chris Wetherbee	Citigroup
Brian Ossenbeck	JPMorgan
Bascome Majors	Susquehanna
David Zazula	Barclays
Ravi Shanker	Morgan Stanley
Jason Seidl	TD Cowen
David Vernon	Bernstein
Jeff Kauffman	Vertical Research Partners
Tom Wadewitz	UBS Financial

Call transcript

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Operator

Hello, and welcome to the J.B. Hunt Transport, Inc. 2Q '23 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Instructions] [Operator

turn Finance. to Please now Vice Delco, conference of President go the will Brad over Senior I ahead.

Brad Delco

Good afternoon.

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

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

Now, our of CFO, and I'd I'm President Highway the Brad our afternoon of introduce COO President Hobbs, Services; by CEO, of EVP of on Hicks, Shelley and President This Services. call. and Contract President, Darren speakers today's like Kuhlow; Nick to Field, John Intermodal; Simpson; Roberts; joined People John our

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

John Roberts

and afternoon. Thank you, Brad, good

Similar some to few key a approach last reemphasize manage quarter, the business. I'll items aspects we and touch on and about how

key each have our to leadership of we members segment. of usual, specific As team areas here discuss

our current said, is some for pleased mix, we which for shift the revealed several results we in for in the We've noted That nature of in and product second complementary with industry, dynamics quarters now that remain quarter. our of collective the see, the results. business shifting part, the in and our

areas with expected see demand meaningful business, segments with in growth and unique in power-only notable areas in a Final to meaningful Highway forward. and example, of maintain improvement For all large DCS, our performance looking offering our opportunities resiliency in We capitalize areas in Intermodal on addressable growing with in business Services. present opportunities and XXXbox areas growth market like the that certain of Mile, investment and brokerage perspective we our

As you've the remain including and the now, span term. foundations, heard our The time to technology quite we managing committed for in across consistently business our some our investments our say long our us and for capacity. investments people, company

meet of large in We customers We market our portfolio. on and provide our opportunity service vast complementary being across the business have and addressable J.B. meaningful pursuit while to remain here unparalleled and staying and cost in customers needs experience value at the our growing on prepared to disciplined of together Hunt. a better our to relying our

remain I closing, confident team. in this In leadership

differentiate our to ourselves Our stakeholders benefit the for of our long-term approach and ability return-on-investment-focused in market. the

over turn the President, our Simpson. Now, call Shelley? I'll Shelley to

Shelley Simpson

Thank you, and John, good afternoon.

capacity; I on for shareholders. to one, wanted align how that to in customers; and deliver to our people, our three, our I've XXXX shared, to: some areas of and focus discipline exceptional with long-term remain the our provide investments two, an compounding for update and are long-term returns committed previously technology, priorities for which they drive organization value

to people, investments company capacity. around mentioned, and technology, our committed we John our As remain foundation:

we we valued, create and environment people, ambitions. empowered are our heard. fans our creating before, work people our As people growth customers, When a which services our I've our providing and first. to our take take where respected, stated intentionally care of in safe, raving care for in believe welcomed, turn come and of We trained feel supports who

and in our our trailing investments mainly capacity, in with We support this equipment. and trucks growth technology

growing investments, we needs in efficiency, of and committed meet the productivity, on capacity safety. service with to prepared investments By Importantly, remaining customers technology offering. highly focused our our our valued our to and are are

We reinvestment competitive supports price our to our value that business. provide at a have exceptional to in customers able be to

the on last recession. stated in calls two As earnings a that we are freight

is for customers, remains and still approach. we muted, grow environment and we with capacity continue our our on remain remain the how While focused we very to in uncertain, demand will disciplined

the We by managing our business prudently will do this controllable term costs. in focusing on near

customers. We ability needs and committed putting support to will We sure a dynamics. and the company to on with market appropriately our in in people serve inflection to share better eventual the make are position aligned gains for also and continue our market and accelerate competitive resource to focus cost and grow we our to growth remain

balance to We progress. and will continue we manage this as approach

closing, remaining to ability our and our to investments am our our for our capacity, which long-term to confident our committed long-term deliver sustainable supports in technology, ability in for I In shareholders. by value deliver customers, returns exceptional people,

call With CFO, to the John? that, I'd over our turn like to John Kuhlow.

John Kuhlow

Thank everyone. you, good Shelley, and afternoon,

our a on I'm update plan, a with topics of comment quarter, high-level going an review to balance the quick on on our including touch my and capital remarks, sheet. three

and These of and first the XX%. and prior second consolidated seasonal quarter cost On on capital pressures, also costs, versus volumes areas quarter. wages, XX%, and was demand freight and Starting expenses. patterns a results. declined GAAP and per freight revenue year-over-year, trends basis, salaries as income earnings declined were diluted normal year the inflationary lower below compared muted quarter operating pricing for share Overall the parts maintenance XX% primarily to declines and by the and related in primarily decreased driven

can and We and continue invest where costs a the business to long-term also while in manage expenditures. mindset, we prudent with being on

expect to $X.X we range, brings end our of $X.X to relates down the high expenditures previously range was billion. our of billion the the $X within billion, year, to for fall which it which net capital As plan

timing Some where of current it the also this but prudent sense we environment. is being are makes in related,

draw touch funds September last portion million we new to to in elected available quarter-end, expire. the At before of sheet. the the Finally, cash facility had put sheet. us term balance on I balance of the under to commitments would wanted place the We we on briefly credit $XXX

lower debt is level about but a corresponding maintain and $XX a prior As debt net will This result, million liquidity. versus you quarter. to higher see done our was maximize flexibility the our balance,

of which terms include our other than priorities, reinvesting themselves. second always quarter, shares in XXX,XXX our dividend, and opportunities our immediate top investment-grade supporting will is repurchased priorities rating business, for other as In have our for liquidity Other we active shares. no approximately need remain present we credit repurchasing this In priority the maintaining and opportunistically capital.

to concludes This my and Nick. remarks, turn it over now I'll

Nick Hobbs

and to also I'll on on want of give update good afternoon. an Mile an focus update Dedicated you John, and Thanks, provide segments, our areas operations. and across Final I

of the and of from our cautiously the XXX year. start with Dedicated as deals. nice with target of sales model. with new quarter, I'll resiliency quarter our the in the Dedicated. by remains in we X,XXX ability In our particular some, the pipeline pleased to for our first but acceleration to Demand professional trucks the quarter. sold I we our new our gross moderated sold trucks on X,XXX private for optimistic strong to of and sell and the in our fleet (ph) hit evidenced deals outsourced has remain am [XXX] performance ability a worth approximately solutions business We

our fixed components escalators Dedicated Circling typically contracts the differently, reminder, variable linked CVD, delivery, with other back our model spot we our indices among or customer not price XX% rates. are proprietary payment with do inflation-based of we average to customers, exposure and, annual five value supports on to by to focusing in and rate. terms the customer value believe our features. drive resiliency differentiated as our Said process have We for to the ultimately years retention a market which to

Final Now, Mile. on to

pipeline in discussed That pressure. while big products, previously compensated and and and several said, and furniture, we equipment, is sure the are for demand quarters premium activity. seeing As home we making market it. also differentiated a now, overall our see product to as bulky delivered remain bid for committed in including We being providing service appropriately our we volume, shared, some for we appliances, but into the exercise this have

We gains evidence customers service of by value backed as are our our seeing market brand. share product

focus the share quarter. our and discussed on profitability improving see I'm of to also as this pleased have evidenced some progress We and

some equipment. I'll on close our comments safety and with

on and to Shelley we alluded both where earlier, John costs our we focused controlling are As can.

Our focus with aligns inward-facing the also cost. motoring our we discussed and public the on our focus quarter, rollout safety milestone cameras. major safety journey our in on Last for employees another of with

opportunities and, in and been have some thus to importantly We coach drivers actions, correct but reward to with presented the pleased from fault. and cases, far are also exonerate what rollout certain

year-end. out have We XX% to rolled inward-facing expect of to our fleet by cameras

Finally, on equipment.

to some pandemic. on expected renewing made disruptions have We progress OEMs due our of following the faster experienced fleet than

safety Our equipment expenses. to help fuel average on and age maintenance-related of which our improve, reducing continues will efficiency,

We the third tractor be of with up replacement quarter. by fully end expect to caught our the needs

remarks. That concludes my

I'll Darren. So, it turn over to

Darren Field

Thank joining Nick, everyone and you, thanks us. for

I update performance our opportunity review we have to and our our business the Intermodal customers. and value plan an the deliver give on to of the service performance, market, to

the performance for inventory because cycle Intermodal activity. by of lower in resulting activity reviewing by I'll remained the overall the and capacity in start Intermodal's quarter. destocking tempered, primarily Demand driven declines import

X% declined and Volumes down in June. X% by down year-over-year, in down in X% X% and April, May, quarter were the month in

more moderated. in to volume evidence drive a our green repriced of to being While some experienced of significantly of We our handle was quarter. is is portfolio presence we customers related pressure margins of portion leverage this the are volume. our has our any hesitant to June in built unit process the saw the suggest quarter, and to Volume that lack growth cost trend that the inability as the to shoots, needed in largely broader destocking down cost we structure on from

up entered environment, to the season service the pricing overall Intermodal bid as the as market our of but year, domestic towards wrapping overall within end lower season trended range but our expectations near fell those the progressed. bid regards for of in here portfolio to expectations the we specifically term, With the

vastly in discount Intermodal the a versus versus at line by on truck to value of present alternative. at strong the it all with XX% historical averages, emissions to haul with the freight carbon cutting a average continues stands while improved load proposition service least As alternative on truck today, customers a

working providers very to We enormous primary a on continue with Highway of amount to comprehensive build opportunity. closely and our have from networks, capitalize our rail capacity and been freight resiliency service to to see the in convert Intermodal to offering an

our As overall customers. relates experience from even service but providers, and work collectively we and quality, are service an seeing better to towards more velocity the on-time to by commitments for I it importantly, proposition am the encouraged overall rail trends value in the

volume and position of the service our importance handle rail our by joint domestic a are through a feel providers to to is volume in where our ensues. for accelerate a We value stressed our that's our confident intermodal rail customers. ability for and we We'd with providing as differentiated have market today. more and proposition We sustaining service recovery believe provider's in unique recovery the position focus like growth

make significant opportunities I want with sure the we reiterate our to people, In to and I making the customers our to value have in closing, are deliver we technology capacity. investments

and has last have evident prepared We As network the significantly today. spring more of meet to we our this customers. to become executing better quarter what status a needs I available coiled in quarter, a resources we volume remain built more than handle future probably are and stated

That concludes my remarks. prepared

Brad I'll So, over Hicks. turn it

Brad Hicks

afternoon. good and Darren, you, Thank

and call an update review the Hunt I performance Truckload collectively also XXX. provide will segments, J.B. I'll Solutions Capacity Services. on Integrated what of Highway our we

load similar perspective expected the brokerage by XX%, versus be the muted from period demand volume of truckload Top-line and prior-year segment would with down seasonal was revenue the XX%. coming driven revenue comments, XX% and per in overall some Starting out to QX. of was ICS, down a prior what for down

is business up particularly year-over-year. business but firming how front was holding spot business, This in up market, the contractual bottoming some in business and versus at contractual out on market double in or better on of as our activity year-over-year. highlights the declined on Notably, our our Overall, competitiveness also spot digits the volume margin. our the to gross the that the spot reflected towards much end has least seem saw the rates there be a we spot quarter

market too continue J.B. ICS, around resources to in currently the many moving of recognize to on work instance this this in we'll the in to for our the activity our up have forward. to adapt the our to to set our and up level which make technology, in investments remain carriers, and people. XXX third-party Wrapping area is we our better adjustments us long-term capacity, to We we Hunt committed swings model system

Now moving to Truckload.

These all XXXbox with last served or over moved quarterly tractor recall, to chain out for for primarily is Hunt their source by drop segment or on report. Dedicated company our third-party you XXX assets this service of providers carriers efficiency we driving or trailer Remaining platform, non-company-owned the of trucks offering independent drop supply loads contractors. our available our our As operations. almost asset our own in and trailer customers J.B.

pleased trailer relative demand of to their by be value drop the it continue encouraged and appreciate for and flexibility We as strength provides customers our operations. the

investments and in by the committed JBT, drive XXXbox area. we to drive this product our remain and market's the service to to in the remain continue on efficiencies. up make our our young development offering Wrapping demand growing XXXbox growth of to still service strengthen are relatively We for will encouraged long-term greater investments and

on for our platform and and maximize interaction overall market the ways and about waste carrier eliminate informs up in to of drive we solid organization us The focused Wrapping remain the provides productivity level value our the quickly a in chain. to supply across foundation in operations the customers community. XXX, on engagement the and

to by customers of masked on our company confident current the ability we for remain some is investments. the our long-term our with environment, productivity value our and While drive

we focused shareholders. always will remain with our the investments returns long-term is for case, compounding on disciplined As our driving

That concludes my comments.

it turn operator the start Q&A the back of I'll portion the call. to So, to

Operator

Please comes Poliniak question of Instructions] Fargo. go Wells Allison with ahead. [Operator you. line Thank the first Your from

Allison Poliniak

evening. Good Hi.

still with is back of the way that a there's Intermodal mean, modal today? later made you still share that service better. a starting you pricing. getting opportunity an shift, is on? see going something accelerate shift Is that that that of as comment there to are in is Thanks. terms that better or in in you to understand? Just to I Rail terms Intermodal, seeing discounted Obviously, truck

Darren Field

order commented loads many, we've on many to for the environment Thanks, for, be with know to Allison. I can be as we better service a know for that it's I'm and rail day Intermodal with amount should and that. and When service The the rail in that forward, than providers any reality experience last to will pronounced want more our that achieve move product that current solution call for every our customers the That develop it's more focus been today of we predictability, been we're we going better a is last, difficult. continue the service correct it, in decade. working of and years. our to tremendous five years has seen don't we

this by improvements, investments environment, seeing in we're help significant and today's area. our we're commitments, providers, rail However, seeing including us in significant to

Operator

line ahead. of next Bank Your the from Please comes Ken go question America. with Hoexter of

Ken Hoexter

X% a noted from little down with shippers prepping down to into Hey, you June. little to great. yet Good How about peak volumes moved that Darren, I and shoots, talk about for green bit afternoon. you you It's thinking thoughts seemed May about guess, hesitant your discussions on you Ken are Hoexter. season. to as that shippers a Maybe forward? look and talk you X%

Darren Field

coming we all And relied on goes we little the what we're year Well, forecasts, expect were on. year, into customer and on the still cautious heavily today, as largely a they wrong.

rely capacity we forever customers them. and on -- feedback as We all together for will to work provide for our solutions from grow

do. I and want comps And move volume say an element and easier, hear for shoots. what know the year. customers So, our that us are forward, is was as green we we the with last grow But and in ready capacity demand anybody get want to that's be as we year QX we the their confident frankly, when I don't to we'll What would forward. move returns, They have we that. strongest

Operator

question Goldman next line Please comes Your Jordan from of with Alliger ahead. the Sachs. go

Jordan Alliger

that to I targets long-run to Yeah. below happen? I specific it to sort around of margin target little does Intermodal, am Afternoon. things it Thanks. is and but give Is given you or need Hi. there leveraging other XX% a that, take was bit simply curious to somewhat what range, XX% you don't loads return guys range? it or your that know

Darren Field

this negative. Well, us driver and We're as are with this have prices going equipment. extra far Those yet more and At just base all of took so were which elevated need certainly, fleet utilization supporting We unlock has then year wages -- year our drayage business, us up the would we we we our improvement in certainly ago. not both carrying challenged of market extra certainly our are container our cost from well utilizing. volume to stay a improve an the really and pricing our cost wages as to and profile. point, fleet as in margin the give employee takeout system

Operator

comes Stephens. with question ahead. next from Your Justin Long the line Please of go

Justin Long

consistent perspective, fleet the And Dedicated you a improvement a from about second with market the despite clearly strength remain seen. you're to Thanks. I of wanted over we second wanted of the the in with seeing versus was pretty for your the what for year. sequential we've you attrition to Dedicated. in remainder a business do is combine of saw we fleet margin level still expectations freight quarter? some think source there quarter? and new weakness resiliency ask the just the the quarter saw the that get sales, can in But I That When question room

Brad Hicks

more see about truck we Yeah, I'll talk what there. count and

feel say, I pipeline, our lot there. There's fleets different a is very full. good of still about We pipeline. would Our in

like And so, we seen. really we've what

slightly. just up ticked is rate close or rate hit Our

like so, we where there. And we're going

about we Dedicated. feel good So,

of from trucks take got our fleet where up. clean to year. the Going some close maintenance to We to size out the and still be is end about other

I be we'll QX older of As the and that extra trucks. with end with at primarily said, truck the done

So, have we'll out but in that some help deals see will some count, start there our year. truck there on we'll the

kind just but there, we to pull way little they But it's know very closed I trucks does of a I more in to a trigger consistent QX, still the reluctant had are would throughout the previously. the pipeline. year say seem but people sales be on the few demand the

Operator

of ahead. next question line Please Chappell the from comes ISI. go with Evercore Your John

John Chappell

Hicks or and the ICS. Brad pricing the Thank you. to to I relates spot back out of bottoming see you Good firming starting as afternoon. if it some go Darren, season. that can bid you're pricing on said to

You fear talked about When where end. we pricing those any where rail had as conversations market as lot gotten maybe an destocking trucking in versus better? mid-July, of, discussions now a you bit in the better the bid little gets about in to a was there coming think the better March anything are bit and in as little the I a we gets service think, process has just April, go

Darren Field

I would We're customers service a little that product of have is we probably working consistent from constitute asked our say service, a given us. better can. think Well, on direction on What bit more that. for more would really I price than providing

I that's in we're service think in focused correct the economics two provide quality. that those why And value as of well has the Intermodal the to areas. balance as

think I we in pricing. forward, together are our had As customers with can we take discussions find cost how advantages move to out we've around the

pretty customers have a spot Intermodal. our never the role market. influence certainly, the a on drop spot will eye It's economics of a form And, is price severe. pricing that the one more plays is truck of and we've quite point. any purchasing bit Intermodal Contract of that on. our Truckload small of showing that with the pricing lag an customers. keep terms in then, it It's I little the in trailer the on of market on up Highway influencer in a Intermodal the overall. It's influence And always data dialogue side many as our know we But might seen market don't

Operator

Please comes Deutsche question from Bank. line ahead. next go Your of Mehrotra Amit the with

Amit Mehrotra

now. or operator. I the Hi, anywhere if you're anything to shipper on first, else, note any just Yellow? the from around on know Thanks, Yellow whether I any brokerage it's comments seeing side right guess, response noise everyone. around

or know, I And really, that, really you're like Darren, and low, containers. of I your don't bid guess, then, is I still XX% still XX% something assume stacking, compliance

point your thoughts cost the and share Just highest could the have then does variable structure offset to with the can variable just guys it you're in a I willing so around because you that structure come more maybe like was drive You the some because as be pricing much time you in take system price that, cost of the opportunity, lower market industry. cost in have there great the even this and leverage embedded where a wondering, cost well. volume? seems to

John Roberts

Yellow. related we're prices whatever question Hey, wish may probably certain we were comment be I'll change we Amit. sort today, in to But happening industry. to not some benefit perceived LTL that. upon on I address the One, stock the of have in based the industry, going from guess to

question over pass I'll second part of your then, to Darren. And

Darren Field

We asked if do volume? get rate, is two as you you reality have think. you And would the ourselves just not as more are cut yoked the just long

then contributes it sales exercise our we loads it. to organizations. in then pricing we described time not They process those level, the our you opportunity Certainly, do itself, the investment economics correct spend can at will. them cut as growing We in organization that. way of we and at experience that one commodity always with correct haul closely opportunity comes as volume have, teams, and a pricing And time, is always at look and can presents if meet, your together You like lower the our a our work the for a same lot quite amount price of very price.

Operator

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

Scott Group

Afternoon. thanks. Hey,

downside sounds risk price. Intermodal still and Darren, getting It the volume earnings still some key you like higher. is to it to So, think feels like margin there's maybe

figure into Intermodal term? trying a the second to So, out, resetting I lower and think quarter? bigger lever you earnings which quarter margins in the guess do from the ultimately, bit the third keep I'm near is

for just And then, maybe question just term separately longer John.

made a lot Just is dialing market. investments The of back Thank business those losing money. to in how business brokerage tougher guys a You you you. -- think now the some is that? back you of think have Do XXX in investments? about about

Darren Field

me Price start entire will for on Well, improve first volume margin. margin case Scott, always our will the will. career. than let my That faster be

four I heard an influencer to a volume opportunity talk in the because help need see fastest. most we at with some over any about think our term you've now container us for be quickly to when the don't correct return, might that that to anticipate announced that's XXX,XXX to growing I grow our focus. continue likely the our going what target market like to Meanwhile, improvement volume of see we with mindset the is did our and margin near sort volume. more as two a growth as will that's of years, we pricing

John Roberts

more that that ever they've been in as standpoint. capital probably are aspects water, of comment good see strategy kind a from overall, allocation to organization. that the make and we me let on general, I vision XXX. then, Yeah, just ask we're But where we some while think turbulent made I comment see the know invest here to in all lately changes a is in are even discipline with of certain the being as opportunities I'll encouraging in Brad, you we are

feels right now, remiss morning, but with into we really investment consistent confident to that what would this addressable a moving so of services ability perspective is very off strategy timing power long-term is of slow market people huge we it are a the I as our JBT Dedicated -- step down. in that out instance, execute the know to such be front and and the opportunity that brand that is For I even be and such of us. to in team on little committed have of I and high-quality just really, a and business super a continue

let hit. me And Brad, let you

Brad Hicks

Yeah. window I'll as to in that from J.B. we remarkably to don't value we relates this that the time things of XXX environment behind is Hunt. platform, add investment a that stay but ourselves the and our just invest one our probably our committed carriers. the to add find standpoint, difficult capabilities technology our We careers. and about to platform in it most for think all will customers in, which it as us relates in for continue many of made investment us we've we tech experienced Largely, features have is in to of the

think of we're committed, the so, to difficult And in. XX the I XX difficult but remain J.B. days. to we for out come see drives the idea see Hunt. better what value the it's platform it And to that really that a last in things Scott, of are we'll And days, that in there's be last lot for as we

a if growth poised our we to for when that not that Shelley And but scale very well be said quarter, to happens, be we're of think, when. to it's our able believe bring matter last the going and I that way. customers positioned

Shelley Simpson

Hey, this. add to Scott, I might

when I think our our really customers. value to more leverage to you a function change step foundations And our ability and serve for were technology. in a XXXX about one the things growth of and our technology then in up, customers we delivering is our from company able investments perspective think have to XXXX, step

serve if two look technology to ability enhanced years, customers. XXXX, our of and you further into tighter will, at you As our COVID, then coming again our if the

from organization. as not our from investments and evaluate our an at look we technology people the get an across on is across we can every And return what our idea that we of investment that So, that just entire we're investment comes lens. making,

the we as us, that for over drive of long-term They customers And let continues on then, so, time compounding a period feedback. and have help shareholders. longer our of play you technology behalf company And strategy. grow out returns give to us see our our

the So long we what that's spend see and changing. a term. how to always that key prudent part of we're watch be But returns over can our going strategy. we I get and don't

Operator

next Your line Wetherbee Citigroup. Chris go of Please from ahead. question comes the with

Chris Wetherbee

Hey, how fourth much contracting quarter? just other in third thanks. much left in in words, the maybe guess we're and afternoon. details the the of business repriced Darren, guess, of of and quarter go? to in the in how the I the environment you're terms Good second what's through Intermodal I has been in in

we do And lowest sounds longer-term growth going to in the like been when the forward? time going that of of constrained at of It as where that in your where see exactly we count, kind that then, could slow How more launched term maybe be. sequentially Is we'll box the some are bit look you the is growth back you the that see some was quite not maybe sort something a the now? initiatives. a we right down to sort as think little profile needs it's comments of about bit growth return be from of it that near here

Darren Field

first in typical likely in quarter calendar XX% next pricing in and I So, in and on the would year, the XX% We the in pricing second, fourth repriced be the different. year the the I fourth. the the most third, XX% cycle. quarter, first in quarter XX% this guess, would implement the XX% front, say or no is XX%

So, this implementation. quarter, get up finish really as we we'll through

this we general, a as move customers just that think faster little some I had a year.

So, been historical the it's has what earlier norm. been than

left to we there's implement that not as third the much through move So, new price quarter.

John highlighted Roberts well. equipment the it really I as far goes, as think And

to where customers, business don't we're did customers. the opportunity to value bring said, being fact our not into see most going time, hesitancy grow ignore could. back a We our represent That continue importantly, that to to equipment. we any off that slower to and ran with we our we I on that want this to enormous to

prudent we're we prudent will fast but then, the be equipment, as we'll our going pipeline We continue to as We're of to our going can. capital. up it we can. be our And with speed to just expenses extent with

going to a to I to. that opportunity, bring a demand equipment. a and can long-term it, that time want on showed was lesson kind that the as we're at the or do stopped unless There bit. us down fades we we and think we our we're about growth But right as forced three to actually at ago four believe years in of for can, time big that continue don't be this and point, slow when But and little we to we that quarter going taught smart

Operator

Ossenbeck Your comes the of Brian from next line ahead. go question Please with JPMorgan.

Brian Ossenbeck

last in ratification. have the month Hey, of since thanks for done quick on interest the info for up at level agreements, coming in taking still resolution. ports one the the terms terms come over you Darren, of question. least margin The Coast just Any that for to West or gateway? the the that's been labor change one through

been spot And some then, There's the view your half well. rate lot a if going the carrier? us Brad, just you've here they're of health given Truckload Shelley, in to about the bit small on if on updated year. especially capacity as a maybe, but the to the the of give wanted your written The carrier, the platform around more you bouncing hear anything Thanks. run or about commentary Hopefully, updated small into thoughts cash can market, bottom. I kind just the is of your seeing you're think in updated and a back crunch of

Darren Field

number as I'll Coast Coast. contract some Coast. would that of they We back complete, consider the East moving on the highlighted as So, West of customers had through start was West that a the imports soon negotiation

customers We visible answer. fastest our West talking dialogue that about for We to lowest still haven't us, cost is our confident customers we not that with the the are seen. but It's opportunity of import opportunity. been in real many Coast feel

So, all it. a not the move of West, we're will slow see that to confident back we

will to stay East those Some serve the in we went and markets well. as East, the that

that glad is look point, So, on. Coast we're certainly as the this to continue behind for West the and that so, we'll year benefits moves labor negotiation from some at us

Brad Hicks

hang second -- XX quarter. and And at previously in commented range revocations would can from that then, on this carrier the as be month tractors that starting we're what at Brad We've a to typically we point. a XX that XXth to nineth Hicks, of And carrier kind a in depending continue pick of the cycles, PTE throughout pushing we see ranges. replacements on the Truckload Brian, capacity elevated past see is levels where month is on net peak carryover community we're down, orders in that you for back pressure to some a in on seeing We notwithstanding new range believe COVID. also window,

And so I prepared us been has kind in of makes my that comment remarks made feel that like that realized. that bottom to

then from volume us, here point, but lift certainly pick anticipating prove peak certainly is do to But normal this back we could half, and we Now, expect it at up very in not don't but going from know. any we valuable to know to would the any what here. don't

represents. that hard the of in it's If were deeper that our were to able historical that look tell much of save data could some to they the from elevated carriers maybe at revenues of than carry pandemic, the how benefiting you peak it

closures in bit And still certainly the but little so, and see, more of losses or wait a seeing indications today. marketplace

Operator

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

Bascome Majors

fleets existing more gross or And customers, issue of private that to Thank this in same more bleeding you. look a -- a are from cyclical big from out we this is adds cyclical where pressures is You've net the start in just to clarity adds? how adding competition a otherwise some the cycle but the we just some you some trucks been customers? been situation response Dedicated that to do think along environment can volume are far basis like from How Dedicated, where your comment, how gross really on fleet from market. far in the those of where a add at life in you've of

Nick Hobbs

would up. out] and seeing continue say optimizing CVD is if I put to routes things the about to Bascome. on remain and fleets. when pressure all and But lot there's pressure I Thanks, a what demand customers. answer Yeah. around, can't going we're And of is turn our just economy to is process slow, (ph) cost redesigning they'll our [cranking going is pick

do And up. till that the so, we'll volume picks continue to

been to cost the Our to to you stores We've tell and hardly What we'll any would dictate. because not our homes, steady, -- don't pressure competition. around, to consistent. pressure just going our want deliver misspeak most as here, I I seeing DCs for continue to we're we're volumes has from the drive we're want out seeing it's part. cost fleets, can but seeing existing outbound turn not say, we're internally I been it's just on volume our when so and coming we and and just from

where at. of kind that's so And we're

Operator

comes question line Barclays. of next with David from ahead. Your Zazula the Please go

David Zazula

seeing on up activity evening. and Hey, you and question. a relative little the taking eventual how the that Brad, unpack were mismatch good moving forward bit how a Thanks for resources planning that in Can my talk to of you're your businesses. about for you you you're upturn? had mentioned managing setting in yourself

Brad Hicks

Yeah, coming We David, the question. of replay and that thanks you QX. downward for volumes We pressure on really the if QX. in out saw we saw itself, will,

So that decline. radical it's really

in on headcount, we back we continuing successfully have that have how can prepared that. remaining this is focused our to so see. we for ready does resources that turn, be we know And can diminish what we're to and want when more you than to reduced We because as capability then grow really the

majority a spending us up right-sizing the point. so, can. this large, is where making lot and time we at But for I think that, behind tightening of by we And ready are of sure the vast

Operator

of with Stanley. question Ravi next Your Please from comes Morgan Shanker go ahead. the line

Ravi Shanker

Good Thanks. afternoon.

on given destocking just Just it of shippers going follow-up reluctant macro of to to of on are to other -- inventory. the last Is with question are a One restock you here. kind are on done [hearing] kind but kind (ph) of that that couple side that conditions?

can little of earlier pan? kind just you have was about power-only? addition power-only in a question. of demand Can remarks, level a a talk Or growth we pandemic normalized And kind that second for we long-term Kind And in of flash think a upcycle, definitively in your fairly downcycle determine referenced industry? the story is that's severe what but that you the of the maybe more now pandemic-only the to of do bit you a cycled industry? kind the for

Darren Field

what in the question. inventory had the sales half, with start I recognize first to we they don't decline. What -- I customers we and why lot had coming a think into began significant orders inventories of our So, as XXXX made is

any they're level match their that of customer with through flushed aligned to to declined, inventory, some with it As and that. burn were suggesting we've any is that want with inventory they time mean, to they suggests that We're their took those don't with had sales full I inventory sales. not them trying maintain some sales. dialogue

have chain being I'm do that didn't in meant don't role. cautious the orders if their that want aware not at they any those single and hold sale were a and playing customer inventory to of all pandemic, faster just than a little I customers think But factors because get are on to intentionally miss risk I'm that wants down they sales. ordering customer process, during to a the of a they their aware inventory. bit that. of supply not wants allows Obviously, actually to more They're

Brad Hicks

entirety, see with heard XXXbox. may power-only was have question And around the we future for in that our we I the for had the say think strong I quarter. We there not second but part what in double-digit the I to have do just of demand. would question two, What again think continue the growth is network very I

can we're that that types spite down I radical the the learned think of double-digit so, the we're the up growth in we're we hopeful strategy for best last in And our the truckload swings a months, of we encouraged about in, and that future. have those by do in lot in radical capacity, XX to very environment align and a that.

customer we're the I'm again, did But that from value we on we both radical volatility hoping around that the decline very a base the experience, last to has the more welcoming been on that appreciation so nine that in we've six of seen that that to critical system them of the But standpoint. for poised advantage creates event future. box the in do what take over we have that flexibility level don't and up the their in I think learnings do, customer's and radical can of months. the

remain excited we that. So, about

Operator

line Your with next ahead. Jason the Please of comes Cowen. from Seidl go question TD

Jason Seidl

the a get wanted lot operator. Good fact you, do the the and side us? bit volume get inflection to easier that your a the about on expect an on you think side. little focus September. haul, they Clearly, been we easier some to then, behind the Should West should Intermodal Thank problems And gentlemen. pushed Coast of positive given numbers? have length afternoon, port we mentioned how maybe in that I comps

Darren Field

in would -- will see We be growth. the we'll to have to if lot a what holiday on in specifically see. is any quarter. we Not have the Well, season. prepared the waiting and just We're but I to that, talked of customers. some mix wait think, our We're a our shipping by improve results there to economy, to first about West we Jason, kind that's prepared of the And the I see with continue it Coast to factor continue dialogue imports with say encouraged be we're of and a around predictions grow. that, all I'd and guidance, could grow still you was as

question move depends to we answer answer that unfortunately, just your as to out forward, find our on question. what all really As the what waiting their sales are I customers doing, it same we're and like, can't

Operator

go of question comes with the from Please David Vernon ahead. Bernstein. Your next line

David Vernon

to what in Hey, XQ? XQ how here. would at exit Thanks a me is, year-over-year just can like of fitting for exit at a terms if the And trending the good us of whatever we look understand look fuel I'm quarter? in afternoon. ex decline of Darren, for then monthly sort trying sort rate give that you RPUs in sequential are

Darren Field

in -- can't giving moving guidance monthly there, volume sequential the and view been we're the we've monthly we during anything providing do pandemic, started I forward the really that's all going year-over-year, really provide. that to just So, is change

David Vernon

Well, mean, I the it's [indiscernible] question of a guidance. about more

John Roberts

of Well, cadence provided contracts the over of the Darren implemented let way. mean, this about me it course I answer were a how information David, year.

our of enter a portion business will larger of QX, we repriced. book As effectively be

commensurate of rates repriced are the progresses, of and so, more or we're business is portfolio at year more as to our the that And book in. more environment overall

like you're And direction what at should at. seems to trying or give an of you get so least you some it to answer color provide that

Operator

next comes from Your Research line Please Partners. go question ahead. of Jeff the with Vertical Kauffman

Jeff Kauffman

take could Thank the for from you a just during very quarter. answered. progression if of out, A Darren, look breakdown my lot much. I thank to I you been wanted this throw carload questions at monthly have of the the even talking because year-on-year East X% growth quarter I and last a stable, East West, versus was little the of comps. West, the to back pulled the relatively positive kind better, in the down it rate X%. know I'm bit In

related on of you more of that market? what conjunctions rail on Ohio? said a on eastern Intermodal West Was us volume shift this in Can the in come Coast the related accidents talk a about Could little that? give Was there East? kind You in hadn't you to lot to some color went yet. the

Darren Field

were February impacted I'm were the volumes the don't the occurred -- That right I early Well, first in don't volumes exact I They anything if remain think date. the quarter [indiscernible] back in think, the quarter I in, encouraging. if in recall Ohio. East in not network significantly certainly, eastern by encouraging. But

And our to customers in those year eastern a we strength in I present and to think markets. had continue service ago, of we solutions business. a lot pricing our network

and year the that the the I a opportunity experienced that really grow price the that got as saw is enormous so see in service improvement give quarter, case say competitive work the the that plays role excellent and a went in to play quarter as continue customers service quarter quality let us in the the they first from network. service that our and so performance during wasn't in East with necessarily an but also we our significant in lot to providers. eastern can out on, of that and second of slightly a is we've goes on. our more And the Highway think our than And would more well West, we really it I

Operator

final Financial. Please the UBS from Wadewitz Tom line ahead. And your go comes question of with

Tom Wadewitz

easier than the in Great. that for or you volume, said seasonality? ad comps about a afternoon. a reason that think be opportunity bit the here. was know Thanks Yeah, call, loop earlier about year-over-year did factor. might question see you the being for for of a primary pickup June good the lot clarification the you've Darren. Is actually something better talked in better little I but One

to pattern one continue? structure the that's it forward, market up driven, balls if price greater cycles, couple John and last maybe anyways, Shelley. bigger I know look maybe you clear, up have or the is that bigger couple But capacity like that driven. for do move think aren't and we you then, when technology for thoughts. that's last going we'd bigger of we moves if crystal rate seems moves So, years? volatility I of seen in think know in potentially and Do as see just don't and another the down. thanks XXXX over saw in And the we but

Darren Field

June on easier actually was didn't of 'XX. for I the difficult intend comp. first from to comp June comparison all, it sound an was So most month like our period,

wait-and-see we're in of year. rest Again, signs So, the for certainly, in mode it. positive June had some still a the

John Roberts

down the was provided period, plus as benefit and May Darren April down the for monthly June prior-year XX. call, quarter In comp plus X X, was just the the plus maybe down on everyone the progressed. And X, was X, of X,

comp our June quarter. was the So in toughest

Shelley Simpson

comments say Brad between just and he you've Darren make might heard what's perspective. cycle happening I around Yeah. of a lots from

us perspective kind on into the majority some majority has agreements, transactional and as Dedicated doesn't price bid say I that of side. the our from difficult of longer-term coming business to from what's price happen in to for think completed a going of a into Certainly, a been it's they're pricing impact this will next season. I discussion. have say their industry

in this even board. would going will XXXX been through I So that, than higher, say the really or around cost certainly, the couldn't have is to say, inflation pandemic, but operate it across I go are

comments heard think so make around carriers I price in that's you general. what's from Brad why and And happening

the I I the want freight there really proud will say, of complementary had quarter, from were showed Dedicated things happened, great the make model, sure that results believe in particular, work. across strong see although operating quarter strength I business call income. record we're the I and pressure for continued a our and out second our said a a Brad recession, did lot of and you resiliency to in that

Final I who Mile, with making think important we paid to that for might the value also customers notice they and work do at. that's also especially I appropriately the we in profitability them. make we where for improvement considering as continue work create hard we're But sure were continued of and

customers. our do to we're to we of our the see XXXbox we We Intermodal are encouraged continue outperforming our technology and continuing do growth power-only that both And offerings in Services, deliver and opportunities with brokerage behalf our Highway think and to business on industry. going leverage is

ahead, We continue focus to we're opportunities have that's of growth moving that the year. meaningful how unique to second half on capitalize and the to going into and

our when. but isn't matter heard growth and of us prospects, lot talk about a a if it You've growth

people, short We where technology will appropriately in sure we're while we paid are remain to committed term. our and investments capacity in that the long-term our and understanding make

because value our we behalf great people the and on our for that's every our drivers particular, of XX,XXX of for long-term to shareholders. drive the delivers make us customers. returns day, do road, with compounding focused they're finally, And stay a in There are our hard over will great customers. sure working going who will We that job on

still take we matter that organization it's because out are in Intermodal position there's we across Darren and in if take a it behalf organization. on spring it a are of said So, customers not entire we our into something of when our the a of cold know but position and

that, With for over turn it John closing to I'll remarks.

John Roberts

of I've thoughts spend on do you term, of kind near we appropriately. need we as as our here. here, evaluate state, see to discussed Thanks, what what you help current most noted, usually in to continue this there. the That's Shelley. time we call, Great

can we elements and our I of weekly, we critical monthly run want with to And of It's manage of focus us on the apart one evaluation do qualities business. that that's a the think set segments the do it that I intense mention right. detail. when daily,

also other look that are talk vital, it's almost we approach a so macro, about big very the take. compliance that know we And when to when at and elements important that we surgical it's

not we the composure if our focus can opportunity we see I And than remain of short-term conditions, think are that our need freight question. current Shelley's the short-term that focused I for on accordingly, I just great be focused issues with work future when, while knowing on does long-term results. under because real-time more we on you recession that that from that leadership a future tell we're ready. and will us current the vision, in. face yielding It And, decisions a opportunity we positioning have to dealing that appreciate

be very forward very, our as on of so ability to we pleased future great emphasize, and updates It's coiled enriching look customers, work people's we'll give our And far. a just with I'm I thinking that our spring. so, great are here able we focus calls to to And a and the is customers, serve also. analogy, ourselves want a you to our and

us joining today. appreciate So, you

Operator

call. for conference today's Thank you concludes joining This us.

your now may disconnect You lines.

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