J.B. Hunt Transport Services (JBHT) 16 Apr 242024 Q1 Earnings call transcript

Company Profile

Participants

Brad Delco	executive
John Roberts	executive
Shelley Simpson	executive
John Kuhlow	executive
Nicholas Hobbs	executive
Darren Field	executive
Bradley Hicks	executive
Jason Seidl	analyst
Ken Hoexter	analyst
Brian Ossenbeck	analyst
Ravi Shanker	analyst
Justin Long	analyst
Thomas Wadewitz	analyst
Bascome Majors	analyst
Scott Group	analyst
Jordan Alliger	analyst
Amit Mehrotra	analyst
Jonathan Chappell	analyst
Brandon Oglenski	analyst
David Vernon	analyst
Jeffrey Kauffman	analyst

Call transcript

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Operator

Good day, and welcome to the J.B. Hunt Transport Services Inc.

First Quarter 2024 Earnings Call. Today's call is being recorded. I would now like to turn the call over to Brad Delco, Senior Vice President of Finance. ahead. go Please

Brad Delco

Good afternoon.

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

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

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

John Roberts

afternoon. to but an new better and we nonetheless the journey our XXXX we to and confident of address be to and strength company. turn your year questions. on and I some and with on quarter, my to said the organization brief reservations our comments, over it are Brad, bigger you, few topics Thank goodbye you good and give I updates their good hit concerns build in to welcome with I and but want will a before team to Last riddance even the

of remain how execute have to have our on heard behalf who several focused our people for and the last being the term, we long for years, about talent help knowledge the Over us disciplined customers. financially being business the for and manage on talk us you and

somewhat From we're remained ] and had and current we staying course. we has predicted. decisions growth. impact made we decisions critical, some changed, and and longer in observe remain what positively same the the confident well in committed course faced is has strategic will confident and than are time, nothing have have and the persistently taken company [ for remain in that and environment some strategic fair be But challenging I risks I direction remain the that that To on perspective, challenges, is to we Over charted. our calculated

discipline afforded stand eventual position coming financial and the to better strength prepare to for turn, a nature, from of opportunity us has ready. invest we conservative this Our us throughout the period

To Our more the work hard. know challenging playbooks company becoming our sports we in future a the and muscles, working use state. putting exercising ourselves teams the better are and preparing we analogy, our are lean, for

the to it's support in and in following what that our metered Elements appropriately discussion against While our performance I characterize optimism. that with remain see as I be will a hard financial would that leaders. should disappointing view standards, from light revealed of

last capacity this will serve to years. for honor the Chief Finally, XX earnings has announced, Executive a tremendous It be this my as Officer. in recently call last been as

team. a my successor taken of Board planning our in Our and and succession has approach has confidence Directors leadership tremendous very thoughtful to entire

our call and Shelley President So Ms. Chief I'd like Executive, to over turn to incoming now the Simpson.

Shelley Simpson

good John, Thank you, and afternoon.

be clear, The costs future great the an the can while is confidence balancing our focused position manage today business clear, control need we opportunities term. the pretty be our how shareholders made long us have challenge to control and what our customers face exceptional We strategic growth our we in John and challenging. we and future to as organization for success. deliver on continues the As value market to To we in over the managing gives prepare us best term. business the business remain across to segments near for

introduced quarter, we our for priorities XXXX. Last

as drive execute which as the last always and Markets on Even hard equation. and the for to investments three, team our technology a operational compounding both management shareholders. exceptional the priorities, given are more wild are: our seen an and so scale on swings organization to the to supply to demand reminder, people, company focus our a value Our side two, we several returns capacity; is of predict. our which, excellence; years, customers long-term one, have through over deliver and in these foundations, long-term are

know One one some side sure, or overcorrecting balance markets thing on return other. to after we the for ultimately

the committed We remain advantage. And are been view a in We efforts season to to result, have as of and out rate our continue control as thus customers been change. We've balance when environment to the market the and will current we costs. predict bid far. by the surprised our taking can't competitiveness

Importantly, though, returns we and our without for to greater opportunities long-term grow company shareholders. the our for this doing are generate sacrificing

In during first the fact, we've Intermodal fleet. purchase of I investments our the made. container Most would with argue, Walmart some the of we've only quarter notably enhanced it

terms we how customers also commitments. our approach are our and in We of adapting in contracts

said, be we we with be thoughtful in will always work and how focused customers. our That will have long-term We strategic. to

and business maintaining strategy approach are to our capital and the remain thresholds. while intensely I in on through growth Our long-term [indiscernible], manage discipline team focused on of this our and confident management return efforts our on part leaders cycle. cost

future will only disciplined company. and We performance to continue thoughtful enhance the that make our of investments

severe, this in outperform and of and to our quality, of we both has of on part depth market duration, ability growth. more the service believe strongly cycle in been certainly terms the magnitude the value While

our our people, We our and have and customers continue ability to outperformance prove deliver to our will shareholders. for

for uniquely future. is people, businesses, our experience our us our strength, our scale positions in confidence financial Our our complementary our and which

a technology we cycle will committed but we've investments our positioned the this continue as As in we people, ourselves challenge of capacity, am vision confident result to I'd call CFO, I will we be past, our the network costs. out as most John? remain our said in on and we better turn the to that create efficient part to pursue over like transportation that, to With to to Kuhlow. John coming America. our the in North continue of disciplined

John Kuhlow

costs for Thank quarter, margins, impact of everyone. on a an you, and as the additional afternoon, on plan our review well and color update as provide cover XXXX. good comments high-level Shelley, My the our capital will provide some on

pricing continue cost inflationary we overview, face facing pressures general a As to deflationary despite also pressure.

be, to our highway not is Intermodal our we that to is and decision We remain committed some while recognize drive market growth. it this to particularly performance by in some want investments where to to related our driven financial is dynamics services. Our of future

the As combination consolidated yields combined were diluted to by high support revenue control to Shelly while decreased maintain resources committed [indiscernible] with primarily a On future level declined with to to last first lower freight our year, GAAP declines and basis compared to pressures. we quarter. inflationary a volume, driven costs in X%, earnings The share declined efforts our cost of our XX%. growth. and balance alluded per XX% trying to, a the right of remain start I'll

expect effective other year. rate increase The to the annual adjustments, discrete and tax was XX.X% continue XX% and be to we the was Our versus items related and our between quarter XX%. in XX.X% prior rate to in

and cost As market additional structure, to people, our pressure previously to our the performance. our our putting commitment addition investments are mentioned, on technology result, margin in as capacity dynamics, in our and a

too the of business these resources their capacity our We have time. visibility people having each to our costs performance million that consolidated to primarily on with and On related for costs these a approximately to segment. over into business on impact we scaling and $XXX plan current levels aggregate many basis,

initiatives cost remain address, opportunity said, to committed areas impede support should of identified growth additional of That our which to we business. ability and have to our not meaningful our

to our without earnings now, how is are near long-term business. diminishing our right we our leverage in best But the term scale investments. We in ability our the potential built in the costs control focus and have on we confident

gears Switching plan. our to capital

ample a needed sheet as us shareholders. value are our for strong focused capital with deploy to long-term on maintaining drive We balance liquidity to provide to

our $XXX availability million retire have We while conservatively at below senior remaining or did debt leveraged our environment under Xx of to We that challenging target freight quarter this of credit matured navigated with facility. EBITDA. months the notes XX trailing in our

$X we an announcements net to billion for previously $XXX For capital range expand to no we our some recent Intermodal to that segment. million and change in XXXX, capacity our to have expenditures, spend further despite between expectation stated

I'll and repurchases. over And concludes it finally, remain with remarks, we share to This will now turn Nick. opportunistic my

Nicholas Hobbs

of of start update on an give good John, operations. Final across focus afternoon. businesses I'll our update Dedicated Thanks, provide area and Dedicated. an Mile I'll and our and our with

I'm strength XXX towards we trucks annual solutions during held the the strong During current. very and year. new private approximately the pleased results We are for our to of of sold for target the up with fleet new quarter, trucks resiliency the environment, the despite freight outsourced swimming sales well despite against feeling challenging start has quarter, gross X,XXX X,XXX professional demand the first our

the confidence start course sales quarter, us do fleet While in downsizes in throughout pipeline into last some said strong, remains or losses of the our these gives strong year. losses as The backfilling have visibility some over we we XXXX. sales

We businesses. pressure terms are accounts, in seeing continue some our stabilization to in our although customers of our feel across sizes of signs fleet their

fleet also business While some continue moderating, to but recently. we activity downsizing to see some here bankruptcies due

disciplined our targets. we to deals on the types of sacrificing underwrite continue remain We without return

recent the growth. pipeline. environment pleased will focused to able our on knowing it customers been maintaining remain business, I'm the our this our close value in to delivering we've with sales support and future and We in activity

its forward, our over differentiated proven to in in has ability confident Going compound growth this our remain years market. and [ large penetrate our addressable further model resiliency and we many ] that our market. tough

Moving to Final Mile.

metrics and levels, create quality, all stabilized good made customers. improving and our profitability on of for behalf to have service while continuing from business our more We revenue progress strong value

service see and and their the final customers want bulky needs. high-quality to to a on national continue mile big meet market We scale evolve delivery

furniture first a industry both a year demand demand vegan in claim. prior Our of $X.X from soft appliances favorable of results with the mixed in demand million equipment. Overall, include and bulky stable remains and products settlement quarter did benefit for exercise a

to modestly engage in by team. pipeline and brands Overall, we are new our with sales we our encouraged continue discussions see

to with be in continues products customers' customers. focus on secure deliver we focus being our into and highest as business of service level the Our homes providing this the strong safe a

appropriate business will our returns improving the business growing on We focused profitability. for with staying new disciplined to while remain and ensure service

of care our motoring Similar to but last to new aligning safety, in comments quarter, training invest also enhance I'll our close our the people, to some taking continue safety employee on technologies foundation with we performance. company and with public, and equipment of

out over third to of complete end goal XX% rolling trucks of our cameras the are We with by with inward-facing the being the complete XXX% quarter.

have in that have We a mile million seen cameras per trucks reduction installed. on-road meaningful and collisions

reduced Additionally, compared quarter DOT approximately we XX% the period. the year in per have to million preventable as prior accidents miles,

cost mitigate at our safety to remains risk forefront our performance concludes the This efforts exponentially, possible. safety continue of remarks. claims up my focus our to move and on of enhance new further innovative the continue our to find ways As where operation we as

like it over would I now to to turn Darren. So

Darren Field

the I'll for give to update and the and opportunity review call. to you continued and business everyone market us Nick, during Intermodal you, this service the thank deliver of quarter, highlight the position. of with our improved an I'll the customers afternoon Intermodal joining per the on our was have inventories performance our performance in Thank stakeholders. we start while all weaker our the for Intermodal's performance. for customers demand more imports Coast a balanced have value into than are Overall, our Service West expectations, and and on

yet that January, month, Volumes X% in down into any up X% service to in valued year-over-year have by X% March. and for We we're meaningful in flat February in in demand see down product. and translate the our pickup were quarter

In intermodal into of the container entered intermodal as outbound by competition are in in growth how February, some are seeing disciplined we surprised are been we valued our much Southern lanes, with remaining [indiscernible] While in bids, we particularly offering. have business service multiyear capacity but agreement toward seeing includes increase our Walmart's we with XXX,XXX available will execute we target and of This containers. an stated that service announced, a purchase our arrangement assets. Walmart we

demand to in customers' customers' time. the we XXXX enough a is a we this providing After to that While to and meet capacity been this as also make our to saw confident needs service having growth high-quality 'XX, capacity not an opportunity organization will capacity over product in we front consistently out growing not unique needed moment, meet the while investment our our to be at ensure beneficial reliable. feel we are is have that

with approach pleased provider and service to levels, are commitment rail growing We our their Intermodal.

railroads are communication ways drive to growth. the with on constant We we in work can together

While decision-making, intermodal with given our we of be due anticipated volume see dynamics. performance said truckload the current we resources we that significantly share at is previously, the freight handle the have to pricing XX%. and recapture converted believe been have drag from and of [indiscernible] more we have has on that than of a overcapacity over-the-road large and currently more customer to what least capacity and people and to both than This should weak to place duration we to and continue tune to the we market depth influencing the grow capacity margin in our customers amount are handling a

We on ourselves to trying continue our balance meaningful challenge the the business support needs to future to growth. of while costs

In of intermodal their strength trust our to the to new and strongly innovative continue us, to believe find ways customers we in our serve and closing, we better needs. transportation continue franchise,

That Brad We environmentally current these allow that us place with prepared growing are competitive to my cost to solution. the it and people, I'll demand friendly customers meet in efficient technology results into our more and their remarks, to Hicks. turn and concludes pleased scale will investments. to an excited over have and remain with We work capacity with

Bradley Hicks

first few an Thank you, and segments. ICS work to of decrease rate afternoon, the on from a perspective. Truckload volume of BNSF review of contribution driven revenue Darren, and results environment figures both update little quarter performance declined which our a from Hunt reduction quarter. X% XX% with our revenue I'll by and and in competitive gross Segment XX% good brokerage overall Solutions Starting provide $XX some the in the volume in year-over-year to past These J.B. load. a revenue the the similar over Integrated in will Capacity everyone. Logistics, and the our per in a also I remains million quarters, contributed include XXX.

medium-sized previously, and this challenge the penetrate of optimistic the As theft the about business that we faced we've we the opportunity shippers expected, had I'll we but the through with on touch channel. additional comments. quarter are in encouraged our some later challenges integration to in remain have proliferation One small which cargo discussed and is of strategic my

We while greater adjusting current our in to the resources business business. our to progress driving make on accountability levels continue

spot everyone aware, under As is to of be and pressure. rates continue a lot have

some January, capacity in some March looser While gross the of and margins, tightness weather-driven recover in helped to pressured February degree.

productivity ways results Closing but make the out to while turns. current to on pleased profitability enhance focusing to scale we the market disproportionately on with our we when improve allow to to costs adjustments to ITS, aren't continue us

current truckload. volumes. XX% driven revenue X% as a XXX That volumes for decline soft as per Moving a said, down reflection trailer prior year-over-year, demand gross quarter up Hunt bids. for over we what X% and Segment Overall, we of trailing in our outperforming decrease our in the demand and market load is drop year. characterize Box a was again revenue would offering seeing the overall by versus in once in are J.B. and capacity were the utilization to

requires. specifically greater trailing XX% what resources and being as underutilized. we intermodal, Similar view heard capacity capacity in demand to than the current have trailing environment what our than We you greater

customers held seen an well on Solutions, but our us demand have a Trailer XXX and Hunt while costs, Box ultimately has how this from up on solution with have encouraged cost-competitive certainly more rates. We Thankfully, return we be opportunities for for present variable pressure generating will to J.B. to been think appropriate model our we us capital. our by allows scale

with available Technology our we with drive comments XXX. and how drive help on source enables customers capacity. efficiency people I'll some productivity and our and serve close also to

foundational we some have in of and in the platform. thousands system, our security theft, engage given bad To us, technology strategic to adjustments While a [indiscernible] new sophisticated harden these combat in groups the opened is access increase of strategic further that are security through loads theft making it new for to to platform. deliver will our to future actors has our the pillar organized initiatives for the enhance of

that implemented. and are new notice, ] continue it these and for in Delco growth for our create That have the to and I'll our likely productivity term, instructions be Brad you and will us position to efficiency As operator call concludes stakeholders. provide are confident over Seriti my with we these investments we the to our some drive manual until features comments, remain for long-term to Long value us better shifting [ believe so investments Q&A. opens to greater allow are customers nature gains more before technology turn processes to now

Brad Delco

light in we ask the question one one question have Could only. and at Lisa, time. the analysts

Operator

[Operator Instructions].

We TD will question our with Jason Cowen. now Seidl take from first

Jason Seidl

about talk Thank little you, pricing market. to operator. I bit wanted a the

it how percent of challenged the the and side. XQ? then was intermodal book is reprices a what What You mentioned percent in bit on

Darren Field

Yes.

we quarters the and So price Jason, first about about We've this the is quarter. Darren. each in XX% XX% of fourth before, said in X

that's 'XX is but And that less began cycle XX%. the complete, around of half October so something pricing than in

Operator

of question We'll from Ken take next our Bank with Hoexter America.

Ken Hoexter

in steps. congrats. Shelly next luck of your best John,

of kind get that? process at the -- rid target. on want through cost is If about if million to work talk $XXX you maybe the this out about, with $XXX walk excess the thoughts shrink of of just down your point XX% do lasting to the I mentioned think you guess, here, capacity about cost. to us I getting the Maybe John, industry you and cycle that I Do So longer. capacity talk million of

John Kuhlow

Yes.

So our would for additional people about and impact remarks, these Ken, talking as we now our some of And opening a the of helpful on while the transparency provide we we've been in kind in investments. be to our investments it equipment. said thought

measure. do quantified us we productivity into you. that we've and our We good that's metrics, this and insight so for informed as And can for cost best have utilization of

short But a our if so the have around long-term call in and the were valuable resources. play And we on strategic our a very view company here. and on focused to we decisions different be there believe term, we investments, could and our

So if consider. the there into growing for to environmental our holding on focused But was long a change this and right to may we're major our capacity term. economic we people now, on commitments

Operator

take our with next Ossenbeck from question We'll JPMorgan. Brian

Brian Ossenbeck

on with seeing a just and trends, international intermodal [ West of primary the going disconnect in your a when look their you and ] Darren, thoughts lot total clearly, volume volume big TransCon volume. at partner real your line volume versus

on So now? bit strong is the that a overhang I an for track. precursor more imports a there's for and and this to while, that be losing wanted a domestic you shift perhaps get transloading, to pretty been Or think some international your share more do coming, is have going thought to of sort of

Darren Field

Yes.

was the the so a very for poor strong. imported comparison of ago, volume certainly ago year think to difficult that look West course, degree, -- a year Coast comparisons for But seen imports those that I it we've has, don't to was on so some disconnected. So

Southern the highlight, eastbound network, The for California volumes just the for to flat by our want double did other were quarter in volume our quarter grow the thing entire digits. I while

some volume our did And growth experience segments of so in we business.

drive being And earnings means volume areas. about capacity to with think we growth out, X% That's didn't lost we and truckload actually customers further that to fight really, Eastern the in dog I for in the we we present release, other network. value prepared cost and for obviously, a in grow be the negative pricing being Now in continue talked been our move ways really year, And competitive. look the to future. as into

Operator

Stanley. take next our from with question Ravi We'll Morgan Shanker

Ravi Shanker

also to right of intermodal of a are confident the But market you to some of is of peers? are being just be nice you. up Or excess function Thank here. also kind I competition seeing your like know if guys you do more the a follow truck where Or from capacity, on -- because you Just now? truck? little to sustained the it start kind you pricing back? loose this come that is here. obviously is feel that even And cycle may it it INC volumes pointed of just

Darren Field

highlighted over that it right an improvements. and will competitors, is pricing it's -- So cycle of the I taken history spot there of the we're that really in prepared the volume really that both have we're -- us in be out think been to difficult will for future advantage certainly, that been time seek future in come a and now. trying gives Certainly, comments would has said capacity it's or probably of that. pricing predict out think the where customers balance, it and when really now return. in competitive. opportunity really, other and pricing it's truckload tell we've I a Shelly's that intermodal, We to of where intermodal it because years are from And us business whether X we

Operator

our Justin Long next And we'll with from Stephens. take question

Justin Long

can you about John this some But to the I ahead. commentary sales were that you you sounds look a and year. see to more Maybe the pretty truck the could hard revenue you to backfill a at for it bit you're in call attrition they quarter, from to Shelly, confident profitability first when like and dedicated strong. the And of the on I the pivot wanted that both Nick, ask DCS, announcement. prior congrats be grow to it moment

Dedicated comment flat more on put competitive feel Dedicated can hold it do in in well. you all together, relatively XXXX? environment you And So broadly could when the as you just like maybe

Nicholas Hobbs

Sure.

quarter, quarter sales good very trucks XXX good for a us. is had we a So

to So start. a we're good off

good. that publicly From who lot looking a the standpoint, say is with competing a see fleets, competitive not I pipeline private we're companies. we a lot traded would of it's Our of our

feel that we competitive And good so market. in

so bankruptcies. that's had you quarter, We our this we've we tenth customer about would I lost to look say, that. good losses just some And feel And going. where if at from largest

all sales that we pipeline, guidance with so think said, hold our be given with we we'll year. we've of I flat the do, to And think, that as able kind towards

So sales be feel good that before and about pipeline continues at to strong. we're the

Brad Delco

Justin, this is Brad.

would mean, I interpreted time with difficult what about our of market very But direct We last on the has we stated to visibility stronger think we've the of -- previously last sales anticipated. minuses consistent that QX Just than want some that, -- that Nick it said. lot guidance performance a don't for providing that. think be I flat. would being our or begin But is I is say in some talked of comments know relatively I I pipeline we But losses, to pay deals strong to light year DCS fleet pluses most some clearly, think coming record the there. be and since in I the were out grow. bigger

a pickup also those the seen of But positive have Nick's I that's bankruptcies. comments, say, and negative we some so side, the landed. was this side in some would in Obviously, on

performance we've of to start that maybe offset new to seen so little year. the And the a that's the some negative positive sales a bit of on

that just I want add So in. to

Operator

Wadewitz UBS. question our take we'll from Tom And with next

Thomas Wadewitz

little a more about bit you ask Walmart to wanted I the contract.

My new talked the along about the it with think in was I that those containers. prepared you freight along containers. remarks you the were understanding adding lines of way also adding was

to that. of give the John us think you're big would us numbers, Is be pace in of well. more how we you a understand if remiss ramps you if should could thought give wonder really about how to of see could on? containers bit enough And Shelly, that your a just if just also, something congratulations that a that of I'd say congrats, I kind that where quarters? perspective bringing And I think as wanted across And I to couple on you volume So would we to kind didn't but just that? see something and be the

Darren Field

So confidential on agreement, and agreement a us it's between Walmart the Walmart.

to created container the That's certainly, that limited the going for in the in what I say value it future that a dialogue I'm unique some There when for target didn't opportunity commitments, pretty agreement. the was opportunity to And been in volumes will towards get us quarter. that build are from announced. existed a XXX,XXX can of with that market certainly what and grow capacity be So time. got really we would has there, for our that it inside program. in by encouraged long-term we're mean first mutual obviously, capacity Certainly,

doesn't here? I it storage I last volume. fleet down blank a of can course It will the grow until the Beyond to say we what from over into potentially would going the that, that year. in shared a the Certainly, -- will our mean was I'm What it the perspective, on unutilized question we've comment and timing think be probably of not will to much be capacity. go the able I think to onboard

Brad Delco

repeat last the you can part the of Tom, question? Yes.

figure is volume builds think it the I something just would to trying we year. as see through numbers the out, this that affect

big would expectation see too. could a be been but that, on to the actually think enough offer -- you I see volume it's you that thought if wanted to numbers, in I that's our it

Darren Field

related on looking the of our grow probably Certainly, volume we're to it. Yes. comment customers. all with to can't really I

Brad Delco

capacity Tom, we've evolving as at And we that or while We the -- question an an the down duration part containers. us adding we're example, how quickly. and and the depth mentioned that John which you've then the developing cycle that earlier And longer really we're link, me, Yes. to anticipated. we to temper on with has this of pace than as market wasn't lasted are the recognize current approaching this Obviously, this, to tough do I want question Kuhlow about our topic, investments. seen maybe of

on of those I was seeing think taking which additional [ And paid us back of we some pull are ], you containers. deliveries recognition that the

was And transaction, have capacity at to was so but I adding to industry. back XXXX, thought this our we was certainly what pace without accelerated a attribute getting in which of good opportunistic additional the which containers, we announced XXX,XXX

just it's wanted reiterate a -- good for to and I highlight just think that I audience. so here, the And

Operator

next Bascome our Majors Susquehanna. with take We'll question from

Bascome Majors

profit you you at driven that trailing was volumes if compare XXXX XQ, the big or has X%, adding back about I we challenging but after the and the at and for so this to railroad current outside back yield X.X% compounded look circumstances And Intermodal. high -- revenue picture for is look of -- So to at insurance quarter. a -- of realize a just control. to And Hunt's if context, year this driven cards single-digit growth that the last lot and numbers, the compounded that's due intermodal all

allocation But you and be and if over year into backdrop volatility operations this beyond, the the long more growth how and capital less cyclical priorities term? do structural next your differently of continues manage to norm

Darren Field

honoring important provide XXXX between intermodal with jointly from with when that announcement and to and the customers, to genuine rail for the for in are capacity think, that others But ready was mean commitment are need each our our support in did intermodal well making then and grow. through really and customers commitment other. 'XX enough them to lesson comment. an really companies 'XX, and jump perspective BNSF our going a when commitments an expand sure there they providers aware both as we to us to our and are those want could that grow I'll I teach market not that to fleet Well, I joint The back grow we're have we commitments. us capacity as may

Now cycle. to magnitude if little front down the out hard be really can clearly, cycle cover mean of to then cycles enough painful. much that greater, inflects the up that it's be a can And in the more the

But we adapt there know our better those serve more over needs. will and to bears continue our we're And the just as our of to for the customers so to can we more forecasts long their get with when we growth We'll fruit certainly support our for this opportunity. can. shareholders in customers' customers and best it's to confidence term identification ask we gain how demand, ability certainly work better as

Brad Delco

of I if Think add, you will. might to businesses, can you different this capital well. is a add terms the down, allocation. Kuhlow, pull as success-based in John capital just our about Dedicated

specified So it dedicated to And underwritten return discipline of because that capital. how invest when continue do are us each in to we of to will we targets. deals those sell requires new the deals,

about investments support the think front assets you of growth assets. primarily trailing what on to way containers, bid out are are the intermodal, of or those We've needed least they're If at most there. in year XX-plus obviously our

network. our equipment capital of parts other replacement platform then right the the where intermodal matter we see in so XXX right the of it's of balance utilizing cycle it's for what a sourcing is and what's third-party dray for then And trailing would Box the or growing capacity in sector XXX And equipment. what's an finally, maybe we're whether

of flexibility capital, a terms deploy how we an there's in year. of So lot a example of and this I think is

We and slightly. a is XX-month the EBITDA trailing year-over-year, on the where up look cash down certainly debt-to-EBITDA were down from quarter but we end at of basis in our first actually is the balance QX,

stock. opportunistically an back of do the opportunities, we growth at but would a rating. generated really And be our credit cash will organic quarter. be in see capital first core so our every not dividend, #X very in maintain buy the And support flow won't to And our investment-grade invest change. in #X, -- who priorities in are. business; we strong that's #X to So while, once

that to And be of will forward. our going discipline continue so kind

Operator

question next Research. We'll Group take our Scott from with Wolfe

Scott Group

Best luck bigger of Congrats, had Shale. to question. John. then a a term you, near and picture I

load to near-term should we intermodal margin just in improve intermodal, QX help So QX? picture. to from expect bigger then expectations, just set [indiscernible] to sequentially And

right? duration and or the of guess, You longer than the you the keep change, cycle what's worse I guys to thought just catalyst depth for this about talking

-- a we're recession not coming. the fine. overall demand It's not some like is and It's economy recovery in there's

it need possible, maybe just and 'XX in I don't change? terrible So that like going years what versus just 'XX, we mind, those to to Is guess, I feels your just actually were but is ignore, unprecedented it know.

Darren Field

QX first -- trying but QX. suggest QX. better, We're be would to than case. telling [indiscernible] quickly would I'm doesn't QX history the I'll guidance jump and volumes predictive. tell that would on That in a mean versus your be history we're question QX been organization, hard are that's would around Scott, we in on not Certainly us better that you average

a happen what pricing And stage have make this any to prediction into to would as beyond we that, that. visibility with so don't at

Shelley Simpson

So, second question. part the the take I'll of

lows in last in X career. about you more any If opening and my time comments, I the think period highs said dramatic XX-year my have been the years, than this

And ability predict difficult. our very to has been so

fall periods have then seen of We positives that off. quickly

for could so future, we've those customers our that see about times be seen retreat years. signs asking cautious in over of team but couple of here knowing And I management think some a you are our any we several being as the what us positive last seeing

Think in that's to [indiscernible]. what's there's middle of the not they're even oversupply and of in us feedback for on also us what's businesses segments. all what across from for grow That's giving to an and quick I X the our about an our of all customers' think enough. our capacity, of able market, confidence important happening component feedback exiting be happening

that service customers. we on differently. we our great more think focused value why about can So are and for how so delivering That's

our to a service time. deliver also, for confidence the Hunt the and over period customers longer great And really time of railroads ability, build our and J.B.

and that's the to over and with back our the and several consistency have the time that's think customers, take confidence. railroads from intermodal of last win J.B going something right struggled from gaining service years, level to collectively Hunt I their us

It best say and season that. what said we're are and customers the opening customers but we're all than through us to has and them we're think in and that been our long We're trying both giving a our difficult, watching us. managing say working more would expected, about talking customers, our comments for will things to bid that about. are we also term those really with we this competitive our this, what's I I So good feedback.

Operator

Sachs. next our question take We'll Jordan from from Goldman Alliger

Brad Delco

really some static. having We're bad

Jordan Alliger

how you in resourced. me the Can going Intermodal? work bit to a I operating think leverage XX% little help understand is you about over mentioned

inflection How could guys cycle does do and you get the absorbed? we you think that about? price, the talked range get targeted when back how margins to turn So that in and get have quickly quickly can volume up

Darren Field

capacity been is Well, a than to can going with certainly, it terms excess expanding to pricing margin. the valuable challenge. system in cure But play more always the quicker That's for role just of today fastest our XX% volume. has never margin raw contribute the volume on

feels can been than can grow XX% still a and it where quickly how answer market right since we very the We're X decade like in we confident XX%. business So for. it's the certainly be more grew truckload overall into should Well, of intermodal year.

that, and card, XX% year's know that's I to we'll a in time. want see. that I don't grow tell to in But wait you we're going that's the to have that

not necessarily built is that's it see. system and for we'll but what it, could Our accommodate

fast back get to target, sort pace timing a that certainly, inflection is capacity happen I'm from environment. need of a and be demand prediction I sure mean, curve does would the the I perspective So when we wrong. into the opportunity, What's And pricing the if of you see what margin is of to sort exit? the how of the on it sharpness that, gave in

Operator

question next Mehrotra Amit our take Deutsche with Bank. We'll from

Amit Mehrotra

March? questions I about typically Darren, you typically X a maybe XQ, couple to seeing because Did XX%. are back want to talked than any of XQ. just in of and any any X to I being you that? guys you mean when it of seeing of April evidence it's down were obviously, volumes of down go to Are to better it X% XQ ago we you at see the end

And ground. so if it understand on actually seeing I'm just to you're the trying

rail Southern, they're exiting Norfolk intermodal Does And a space. to dynamics in in at partnership strong their the on lot get there's on going length. on And then removing Norfolk they weighed And given have going their of XX% there's an you and of -- obviously, your obviously, basically East. XX% happening you would there have service have the impact? love a announced usually, on it out at on lot that guys Norfolk that opinion

Brad Delco

I'll start.

intra-quarter and and on here. the not QX question that volume, do guidance. on forward updates not we're going Just your mean, I first just we're provide about don't in history to

we'll question, to limited turn Darren over I'll say your what we'll comment be part the on he too. wants it So second to of if on there, but

Darren Field

intermodal by almost was Southern related. announcement Norfolk the Well, international intermodal changes completely on the

think we're So it way Hunt comment involved in appropriate going what's that, at just J.B. for in and it's on hasn't impact in been there. whatsoever to I me of any terms that. an -- I don't not on

Brad Delco

would and the see final by peak season experienced we I what Historically, talked what X.X%. volumes point sequentially is And normal you did market. seeing was point seasonality. volumes And stronger I'd to relatively saw than mention just overall I analysis, QX That of we same thing that and then by mean parity. QX than and the out at I sort think down wanted sort you we around worse at to make, again, out, of certainly though, was look and about expected, if

in which X% QX little Volumes closer And again, that flat. to so are normally if came were bit you our relative and QX, assuming down a QX seasonality. to compare volumes normal where QX relatively is and

Operator

next with We'll from take our ISI. question Evercore Jon Chappell

Jonathan Chappell

The you that one quarter season Darren, I to was what no just peak talked you basically about. was expecting. fourth set a going ask Brad

sequentially. trucking just The X-month was Why seemed If changed was third than the first through. stink pretty quarter. Your the volumes are way worse? market that up Pricing XQ even substantial revenue then period? we better step at better in to and Stan. What typically per back the load look in XQ from quarter, all

kind to of by can front-end indicative step of Was ]. the of another that we How in loading XQ service? something a is that So XQ the rail like customers? and period had green then shoot back economy [

Darren Field

the I think fourth the both for customers throughout uptick our a able we to in us mean, events. surprise in to a of accommodate I out same certainly, great answer our And quarter. decline ask the coming that quarter what We the Equally, was it. was system quarter. the in have of asking demand magnitude capacity you're was. surprised on terms the by execute don't to were catalyst of in I questions first

think our a in where fourth quarter of takes experienced in the of kind normal be to certainly a a higher as us off opportunity and the wait may back of quarter, at year the the see to first return what quarter got customer actually we drove this. Brad was and of little base bit I returning maybe certainly the mix particular highlighted, fourth we've

Operator

take of our Brandon next Oglenski Barclays. question from We'll

Brandon Oglenski

quarter. Congrats you to and guys Shelley, to being because and talk in brokerage focused on to it the I profitability Can as the well. sequentially returning around first John maybe just profitability ICS disciplined business. did think for worsen customers

Bradley Hicks

terms we've what market see It's now. particular Brandon. quality up the in revenue Thanks, and done. as of back Yes. probably what extremely January, been for we several only rate Hicks. X-plus of brokerage to it's a quarters quarters in for down think see Brad there, of spot Certainly been really to modest has about that the trough market in the tick last competitive level we that and kind seen

we stickier in that We're create customers with certainly we view. such can trying that, we focused grow believe that's can on for the value forward to where grow that grow and

I As those lowest recovered have possibly throughout that that our volumes, certainly we their our margin time feel quarter. harmed of of quarters, need previous the that do find. they solution at greatest the I've can gross And seemingly supported mentioned our but cost way business, in the gone like finding

hit of which to in margin we January, able XX gross for abnormal a little over recover But and saw during it ]. us. the a [ deliver storms We were is winter severely

volume. focused I on by we and think XX.X], were it was we're [ encouraged so that, certainly

Operator

David Bernstein. with Vernon We'll next from question take our

David Vernon

approach market the intermodal bid that approaching outlook in the just approach mentioned around segment? the full the you us of if of some you learned market So I'm volume in services that you're release growth give of be the the kind might the in to a rest segment. you've the wondering out what would press of year. how this season or the the disciplined Anything Intermodal kind can to expectations for -- year speak value

Darren Field

Yes.

early some had season, So rates that with did it I our competitive competitors competitive, the customers to in to identify with more we participate with think the truckload opportunities and were of issued can the rail be out as bid there, to we Are we has some truckload offer really helped that magnitude providers and that's we move the shorter-term competitive. us certainly a truckload, way programs of us we there -- in that the we was and pricing the forward? surprises by results, surprised can from we

year. see to the And we'll as we we're at seeking throughout at and land move time, all of that customer a one one opportunity we time, do those and continue a opportunities, where

Operator

take from with We'll Partners. question Research next Jeff our Kauffman Vertical

Jeffrey Kauffman

one John, following. big fan. is the congratulations My question and Shelly,

quarter. to basically driving out back the more down anything focus Or see done on we longer a experiment was count growing trailer is something I would pool mentioned going from franchise, something the there so we're much to little noting. trailer Are the normal? term. fourth saying and surprised that the is worth sequentially be You

Shelley Simpson

versus that the the period Jeff, So about Is of think I end you're average. talking right?

Jeffrey Kauffman

Well, it's down units. about X,XXX

trailer so down number of quarters. was the just pool division of that it much, I was for kind in So curious seen that growth the last we've why given

Bradley Hicks

is we showing the a reported QX just period trailers, little over which for Truckload Yes. same in XXX down period from our in XXXX. segment, what for XX,XXX at I'm

Jeffrey Kauffman

looking I you was a just come Apologies, I back offline. was versus but I to quarter, can little fourth bit...

Brad Delco

let's cover offline. Jeff, that Yes,

did we think some transferred have over were that DCS. trailers I to

that So notice of to some DCS a was the lot higher, that's XXXX. is you count if start of the business trailer and at related the transferred

transfer JBT the into in of We those recall, you the some of over that stayed for JBT we and If moved DCS some out year. trailer ownership of business

Bradley Hicks

my add just capacity. do excess comments Yes. have that from let me we opening And

the strategy. we in term, but so are where our good we're can abandoning Box company-wide around XXX making decisions And utilize way short we those in

that strategy supports encouraged we growth that the service offering. we of mentioned, remain I box volume network that, inside and As very actually about had

Jeffrey Kauffman

I As for Thank for. was you. looking context,

Operator

follow-up Tom a question Wadewitz. have we And from

Brad Delco

Last question, if that's possible.

Operator

Absolutely. And with question Tom last our come UBS. from will Wadewitz

Thomas Wadewitz

question. meaningful. expense. sounded debt a Thanks Great. was It was it There chance like discussion on follow-up bad some Yes.

I tenth think customer the Dedicated. to you referred largest in like

so year-over-year kind that I'm quantification was of Can that And effect parsing out how guessing if impact? effect or meaningful an a that think that in XQ. you maybe or any the on just absolute, us was margin potentially we could just big give understanding about --

John Kuhlow

Yes.

So Kuhlow. Tom, John is this

charged -- million. $X quarter debt So consolidated this had quarter in in basis a the me, $X.X we around reversal quarter-over-quarter had first million, was first We on a just our year. first quarter and bad of year million $X.X the expense we of excuse -- prior

Brad Delco

most Tom, of DCS. Primarily And in would that Dedicated. in been have

Operator

you. call closing And does turn to Thank I'd Simpson that like additional now the back remarks. conclude question-and-answer the any session. to or Shelley for

Shelley Simpson

and think market, you, difficult make Thank performance out call leadership as freight call. in I want the really hard people. struggling joining here a of have see for for good XX-year and financial to team, did to you really our we It's to see going I great think, and X hardest on we years when certainly I really my result, entire happening some it's sure you, career, a what's the everyone, things for thank freight in the And -- are market.

million our of think one, at preventable how by of people DOT XX%, Number as deliver the we performance per our we important great is miles, forefront operations. something continue that reduced and to and safety accidents

customers pleased that's focused. We long-term and can We about are jeopardizing deliver service, not talked and we going on we're on And value, without with lot be also that's performance, to our continue focused costs although expectation on-time control. we're our delivered opportunity. for controlling great to our where we that our what we a our

for of and to our in We're us. term in focus balanced right make deliver We our investments, stay on that's between us. counting they're to for our value to the customers for we being to They by return the X been and to our about an organization, to our the greatest customers being privilege we've listening want the have and we make want And last value about that them. disciplined want committed I delivering talk long we remain us the and being sure of And led shareholders. people. right John as leading Roberts But for if to company at the had we're I on this, previous think you years. sure XX our for end different me, leaders where has

John, back the is him. one that will normally turn spotlight on

our So since do XXX. into opportunity company period, now, time of benefit I'm over seen years, the sitting period Fortune and in that. In XX an entered also our grow get the greatly. seen in substantially actually the organization that course shareholders the seat to We've our John, I we've

with the throughout but leaders to As I step our but all not I fill, this great shoes tell that will sit have big into we you, only at organization. table me

been that something is that's think successful. I remarkable, Our has makes the tenure to in true is coach and company tried what a something

would with to just our I CEO you've you. the an I John remiss for on that weren't stood I to people years, want But And have say the you done, XX not turn leadership say opportunity for be him still thanks being John, spending team, thanks greatest to address over but of CEO, is make our that. our want last call our for and And to one only the advocates time if for of to give I behalf based I'll XX,XXX on we doing are and everything sure Roberts. people

John Roberts

that, I Shelly. appreciate Well,

as banner to of mentioned last learning through of XX,XXX with years, I this some know And for You scroll. this proud people, you this incredible under our to could tell could years a be and everything I'll has of all lead of last through the honor not evolution. not the in greatest the that professional don't been of quarter attention. them you of of couple that even I like growth be through even a part some and I of happened more years, career -- the my few lot group it's team get some

transparent. we be people our that And And growth customers and the first think want I that's good protect, we we knowing reliable, something our so to make a have compounding and put that always credible our our decisions. candid duty can information and way to that to owners return we and want that shareholders,

master, things We want hesitation are couple that Super to of around here I say win NCAA watching for of for my hanging Bowl, -- tournament. And win And kind can up win been the and the I see the I've no and see I with the at I the look last it team all. all. weeks

seen But to couple years. really right our hot. people is are I've for of now, the that. responding the it last fire And

of is importantly, person neither to and specifically leadership the team one this supposed without And team. are she to our leadership can very, institution, Our do capable guiding [indiscernible] to a way Shelley. hand go. and I I And right. this would get brand us in they're agree, very anything our

don't we it things. Make we to of on our right be sure level highest when right, it evolves. responsibility focus redirect we the and get that get keep the have right, get sure We right it

It's this in capacity, I'm of running experience we Ford's you I of am relationship services am -- a and forward our am the to honor. hope we've all last leverage and feel a is great and The best a this I I fun. being table. seat my of so amazed. like your at plus above. still company news of which XX just had look I things I CEO, with XX the the dedicated it's you trust. different humbled, -- been being but have in learned XX XX, was am contract I lot thrilled. have working of thank where years I many folks, to for Chairman a to an that sad, I continue

It's not a right Been just it a lot lot fun fun more of now. than hasn't.

go work. got to So we to

be Shelly and next calling quarter with So thanks for we'll helm. in, the at you with back

Operator

Thank today's you participation conclude does that And your you. presentation. for Thank today.

You may now disconnect.

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