J.B. Hunt Transport Services (JBHT) 16 Jul 242024 Q2 Earnings call transcript

Company Profile

Participants

Brad Delco	executive
Shelley Simpson	executive
John Kuhlow	executive
Spencer Frazier	executive
Nicholas Hobbs	executive
Darren Field	executive
Bradley Hicks	executive
Jonathan Chappell	analyst
Jordan Alliger	analyst
Christian Wetherbee	analyst
Scott Group	analyst
Daniel Imbro	analyst
Ken Hoexter	analyst
Ravi Shanker	analyst
Jason Seidl	analyst
Thomas Wadewitz	analyst
Bascome Majors	analyst
Brandon Oglenski	analyst
Jeffrey Kauffman	analyst
David Vernon	analyst

Call transcript

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Operator

Ladies and gentlemen, good afternoon, and thank you for standing by. My name is Abby, and I will be your conference operator today. At this time, I would like to welcome everyone to the J.B. Hunt Transport Services Second Quarter 2024 Earnings Call. [Operator Instructions] Thank you. like Vice the President now Brad over would Senior Delco, of I to conference turn to And Finance.

You may begin.

Brad Delco

Good afternoon.

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

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

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

Shelley Simpson

our have on assumed great lead good next everyone I'm to afternoon the and CEO and by Brad, growth of to as our the on and the humbled recently I'd you, to journey. phase call. saying Thank company start role honored to like

history, fifth only moment, big company's in a clear. is this be me our as organizational the let leader recognizing While XX-year

and mission vision, changed. Our our focus not has our

for We have provide markets. customers. excellent service addressable We large

people talented across our have organization. We

My ready, for are the our we quite set, message X was simple, to and growth. are execute day We opportunities go. primed, on to ready on team

capacity. across customers foundations, and consistently, people, business technology remain number a service investments include mindset. in company suite our our we provide and of on say heard you've span committed of across managing our key the we have our long-term which our a areas, investments with us As to our complementary value our Through to opportunities behalf offerings. of significant investments and to these These

win. deploying see but remains and to cyclical, a we areas generate focus do areas we vast an financially Our returns. We our in feel managing confident transportation and where on We we term on and remaining on long focused this experience. operate the capital disciplined, industry have long-term businesses the the opportunity that in share keeping by our costs that can on compounding take industry focus relying of while is compete we effectively, in near term

of growth growing introduced a for our our meet execute as to an needs long-term investments reminder be our through exceptional three, our capacity; foundations, technology and our value excellence; one, in to value a shareholders. deliver as our the on team continue this and and which for two, returns We shareholders. Earlier our people, customers the for priorities, these priorities long-term while management XXXX, company operational are and as we are: organization which scale to long-term drive driving will company prepared to customers year, we and and

exceptional. focused terms we've customers. In While on our of service and our performance, our record to levels this safety, in XXXX, has delivering challenging the has half of to in our been exceptional customers first continued been value year performance financial remain we

year high this multiple received service customers. our level have We for awards from our

disciplined from prove Our the with to meeting growth with to dedicated, been needs. ICS integration flexibility its on-time and business to to their to on an cost, and our business. we we need able profit work joint running and mile intermodal providing continue around balance progress above customers continues offering to in in performance. In improvement areas service Final continue we've customers with some on see Quantum plan, make while well progress the is value be expectation our BNSF, as underwriting service new initial some

Finally, we for the business about our remain proposition potential and encouraged that customers the future in JBT in value trailing drop of business.

While the across for to this we market admittedly, and us been challenging, success throughout has have business. up growth set the downturn invested future

vision our strategic continue to people. took capacity will potential will from shareholders. The head but our of John assets at controlling We same our team in to with company, network the more and drive long-term near that, stay deploy Walmart attrition intermodal jeopardizing same the to while, year, our course, efficient potential, will increase advantage earlier long-term create term expenses believe the the we our the this of to on added in provide focus for call network opportunity the count also time, our long CFO, with returns America. With to We both to we our to to company which the long-term their continuing acquire on the growth without transportation over John? productivity our through like most increased North the prepared enhance technology the a focus of term which but turn and managing Kuhlow. in comments, summary, I'd details the

John Kuhlow

to Similar high-level XXXX. while to efforts will investments Thank a update allocation remainder for growth. everyone. also balancing my the on cover of an our I'll cost the afternoon, provide Shelley, review and recent of comments control support future on update our an with good capital quarter close our quarters, you, plan and

while we pressure a to performance. margin overview, pressures, continues As our environment cost rate have the inflationary deflationary in moderation seen some general

consolidated ICS includes period, review Operating our GAAP a trailer either drop diluted the primarily second quarter. and JBT. Services of to prior business and quick lower basis volumes which X%. revenue a XX%, share Let of On start of lower yields XX%. were and declined me income drivers and earnings A declined with decreased Highway main our in year per and/or compared Intermodal the combination in rates businesses, notably but business brokerage lower most the the our revenue

elevated slightly XX.X%. was quarter the in at rate tax Our

our we full to rate of to XX% the range to fall However, in XX%. expect tax continue year

have with of business continued the we year-over-year. cost While exception our JBT, our revenue on the segments, improvements our margins operating lower across put to categories, margins of seen across many improved pressure FMS which and

been thoughtful investing which $XXX downturn have annual an to We our million this Last approach managing to was our through commitments an we in quantified our represented, aggregate and thorough what business our on quarter, in basis. costs.

earnings are our primarily or not areas foundations, capacity. We our namely X investments continue of cost related These would that prohibit our our people our to ability power. in to costs to future focus in support efforts our our future our company and growth

these burdened in of to also, business costs a As to expected, be segments. but our lesser extent, our and JBT the are JBI ICS majority and

ability to up remain scale investments. Wrapping into to to confident an our grow these we plan. in our our update with capital XXXX business Importantly,

fleet reduced moderation Walmart's the are We capital expectation million. previously to of the updating our guidance include announced both and additions to mind, This trailing this in to million This be projects. of assets. intermodal of of does estate $XXX year net compares largely a million addition to real $XXX $X plan Keep $XXX for for range to the reflects billion. expenditures in our purchase tractor previous in

below end the of earnings target leverage at quarter been our EBITDA, of the under While performance has our X.Xx our was pressure, Xx.

use cycle, purchased Spencer. we expenditure believe over and quarter. of repurchases also prudent a to stock we are capital it of We capital and concludes of the a just $XXX updated the this With current market in reduced in remarks, where dynamics million our at approach and net turn share time. This I'll view over now my disciplined to plan, our is

Spencer Frazier

be the well on from It's our include our on call. market My and a and pleasure as feedback perspectives Thank good are remarks strategy sales focus joining but we the you, customers. some as will to John, afternoon. marketing hearing also will

second quarter, saw the normalized across business. During more our seasonal patterns we

to we're On second have pandemic in the JBT service more started and were able the particularly due levels what prior the evidenced we the but strong felt little XXs and perspective, to mid-XXs quarter, the time. levels, with the to primarily where our meet used both did of improvements to We timing compliance experience high June. in which for businesses. a seen the slower bid This seeing to end-of-month demand April JBI typical some from a in disruption. side, customers we end-of-quarter was to a we in quite what accustomed haven't be demand Easter in seasonal levels in demand seen our across like quarter lift

most have sales activity inventory Our current rightsized feel their with and excess customers levels. appropriately worked through of

scroll entire stand we will their While across our meet we our market needs know services. when cannot inflect, growing predict the to transportation ready customers of

expect Regarding experience. have capacity services suite a service consistent our level high of our buy to our scroll, and customers across come

buy XXX scroll our we've JBI over fact, have recently nice in of our solution In service amongst buy XXX services. the our or greater customers more and of from us Among more We X top XX% the customers. top and have greater see XX% ICS from power than highest segments, overlap than than of assets, to converted guide indifferent wanted brokers sales efforts and some Being customers strategy. as always mode our the our deemphasize customers offering to favor best result. as wins and a go-to-market will JBT of the in their use X

with modes freight having market, see still on shippers and overall to both the at look provider options freight. we move across all we mode oversupply their As

though value that service. top now but lean of Now value is to which the now, and there customers the to concern deliver awareness continue some are remains and with into while change primary can this we not capacity an our we is Currently, differentiators customers, unclear. cost the right right premium point, for timing at a will

needs. That Hunt. I'll investing We business As and grow of happening with that the cycle most and read we will expect transportation getting peak portion a the for needs service the years forward we expectation freight in length sets they've we of the what's customers wrap of the around remain this some same some customers headlines hear that chain many remains a transportation our This see when same shift or months but peak season. could have the know the pulled going on customers macro over resources season into with their season my seen. The early regarding to J.B. peak in quarters, water, moves year. you this have prediction. the multiple previous and be feedback pull forward concludes that committed That an inland our make to to working created we're plans said, properly term year, come said on peak being data freight feedback high meet a supply up magnitude the in domestic solve the hasn't their we to to impact couple market. ready with We're we track of to of levels translated from is just peak positioned ocean factors peak with aren't have to long later has given But to their for remarks. an yet. ensure but don't a

turn So now would to I to the Nick. call over like

Nicholas Hobbs

good business and final and Spencer, of operations. update give update an with I'll start focus mile dedicated, afternoon. Thanks, provide areas I'll an on across our dedicated. our on

in highlight unique While on diverse to believe believe on our of We focus fleet the our continued impact during differentiation value our private our we to group providing our addition resiliency outsourced model. to and our strength broad overall not relentless to we focus and to delivering business is customers. the the solutions are of immune professional by customers market, a the quarter of dedicated results supported

sold new trucks quarter, During of we XXX deals. the second

downsizing those well XXXX, to While return discipline we deals in importantly, we have to remains has the of some thresholds. solid team losses. done remained or Despite challenging pipeline types backfill market committed and without sales have losses of throughout we underwrite the our our our visibility some sacrificing conditions, our to

remain ability high track customers, our onboarding create with to confident proven years. compound and transportation we our renewing a in continue of the the for our on With levels success of and business to have further needs service We to and our customers. value our existing record opportunity growth over new to customers our ability execute business many

focusing on strong fleet. Shifting year some with flat end count and many the throughout of improve and mile. our the in to brought The progress high-quality, we half levels of for despite bulky QX with customers the are This be to new overall on looking pleased cost high-quality fleet final scale. year, our sales I expenses national ago continues would disciplined as the I we focused delivery with then Going trucks start-up secure our forward, first our have the for the expect big are as service into business. relatively market made to service and journey additional evolve revenue a to process. to truck quality from continue new health a provider remaining this started safe differentiated years and to

results and with encouraged for For claims transparency discussions mixed exercise include bulky quarter from net our furniture new softness with in big We did X purposes, $X.X brands continued sales team. our see of and demand in pipeline continue to remain benefit second offsetting but for equipment stable both settlements. Demand remain million and appliances products modestly our a engage by demand.

focus on we the strive deliver safe to products of into customers' secure. a customer our and level continue highest the with being homes We to as provide

new while appropriate business grow improve business profitability. to ensure with work the We to our will potential we for disciplined service returns and remain

expect quality fairly Going the to comments would called the seasonal we safety. revenue performance out with quarters, continue margin the but close excluding on as on patterns, some I'll forward, normal last churn quarter. Similar to for to customer unique in some focus we follow item

invest Our for enhance also but of to already foundation people company not our in safety was the and strong we motoring to only on culture. equipment a public, our training safety and built continue

of with to on complete lead cameras, the rolled the our XXX% to industry that track be quarter. third and over we continue is now by out We inward-facing with fleet XX% remain the end

innovative for best numerous to safety DOT our of other may help and further testament say, our cameras accidents per recall, are year-to-date. so our the record of our safety with initiatives, safety seeing a far on the our along culture was we you drivers pleased miles, This improvement quality XXXX to company. the is of million preventable performance I'm and with As inward-facing

mitigate up we concludes As our Darren. to possible. This I performance finding would focused of remarks. my now safety remain innovative the risk cost move to turn claims on over new and ways enhance exponentially, further continues to to like where it

Darren Field

while resembled on Thank this of an where the the continued customers during value offset bid was trends and saw you we stakeholders. I'll service performance. I'll the in review you, on directly the impact our the to X% a of give our Intermodal down the our transcon demand in the normalized have seasonality by market we pre-pandemic our performance, year-over-year. to highlight in X% business and opportunity depressed update Nick, start one-way our primarily all volumes down the truckload and thank quarter. East that with quarter, the were quarter, deliver for truckload, and our us this and season competitive general partially performance than we X% of This driven quarter. growing offset This volume where more the market compete more was for in during more with Intermodal's Overall, joining call. drove business afternoon everyone and

up our April, see digits prior to May in in down strong down year. By Southern were consolidated up the demand June. out were versus California, where volumes X% of month, X% double X% in continue volumes We and

network. June, volume, levels, did a strength end and nice toward of in customers' lift service During our of to strong particularly month, with we flexibility meet able and highlighting capacity seasonal importantly, our see needs we the the were the

that intermodal is the freight converted a economical believe it at to friendly. of look road be we continue over As large we more and market, see amount the as freight we environmentally from should to

share stand to and say from and and moving before it place again, to forward. I and service have in the our meet needs said capacity we and people recapture customer ready I've exceed highway the it want As

is margin we related to due both quarter, investments. year-over-year the see to market also This and but did the pressure During on sequentially. yields largely pressure our capacity our

absorb wasn't mean does ever than and volume modestly volume volume and our capacity, cost higher yield higher only us enough While now our pressure. sequentially underutilized before to slightly to lower more deflationary year-over-year given our

bid wrapped up quarter. earlier and in competitive year, was the the discussed season second largely As during

East, We took particularly believe continue shippers that unsustainable, is the we advantage. to in and see truckload pricing

our our providers, each recently first from portion been nature market. pricing into commitment the we a bids and half as occurs. In pleased completed XXXX. With once demand Intermodal Given of made to our regard come rail with providers, we with our service the the the the will living our their large to the to increase and volumes have inflection to of railroad we of know and franchise. test maintain be overall the with investments higher our will of overall said, of levels That cycle, continue offering service the intermodal collective in the service our of collaborative closing, partners strength strongly believe in We networks. remain high on service being true the work confident we freight growing

and continue serve their transportation customers trust we and Our us, innovative better new needs. to find ways to

Our are our overall level service exceptional, are can customers' demand our confident we of as increases. levels continue service capacity that for and this

not future are excited results, customers an with growing to it my with efficient business pleased the with Hicks. demand our Brad we our friendly current optimism cost and hasn't turn over remain our environmentally work I'll We solution. That to changed. concludes of meet more on remarks, and prepared to While competitive our growth their

Bradley Hicks

Integrated declined volume remains decline a a on second and the increase volume, offset by partially Darren, XX% environment the rate. J.B. you, in our overall quarter revenue revenue I'll pressure and good in X% by XX% both Capacity segments per and gross on Segment driven competitive, Solutions ICS, in with load. everyone. in Thank year-over-year an update brokerage review also XXX. Starting work afternoon, of while some performance Hunt our Truckload the of with providing

market some checks said, seasonality and business margins June. quarter heard, the noteworthy part later which we some have our for is since contract. of around the in tightness our quarter fourth XXXX, of gross with in XX.X%, in road see the we've the are the relative highest XX% under of were volumes seen the you As did given That

in right We announced growing on potential remain we the performance about quality platform. some indicates. Admittedly, ICS with some continue progress but we the agent the seeing and on our revenue business. integrating underlying of our and are our optimistic encouraged Logistics masking are as legacy yield previously to acquisition BNSF focus model challenges the customers are of challenges These incurring of the

forward, Going push our ultimately, further through more platform to in see cost rightsizing need material focused remain order volume improvements we our will our but we structure, on in results. to

Moving of over resulted was which gross price, and down driven to said, remain customers of revenue right we see the freight That year-over-year, lost our was best value we by the a per decrease and in to revenue on JBT or with focused in network are the service in Truckload. on attracting X% volume. Segment and fits right volume decrease season that some a disciplined load. our trailing This XX% opted capacity. network competitive, X% that

offering capacity have working we to supply currently have that where network, our right customers from the hear ensuring ensure growing. trailing their that our in We service are are the chains. and the trailer network provides excess to around flexibility they we on have high where discipline that appreciate our right markets our needs While levels and we drop they capacity our customers in

service this the cost competitive customers depending appropriate variable more return opportunities ultimately market, while for ensuring believe to our us presents offering generate scale capital. be on cost we to us allows model Our we which with on an with

our remains enables some Technology ensuring trailer on rate forward, productivity people, J.B. focus network. I'll with across XXX. drive is on improving capacity. created theft our and helps capacity our close our while drives efficiency our comments also available to in balanced how foundational also groups source it Going operations. our with we the Technology company, utilization strategic Hunt opportunities for our serve is but customers to and impact

to risk, platform deploy and carrier on more are across prevalent scroll the with We technology in the us have who in to Long feeling our theft be stringent our particular, term, our drive customers. That for to the gains position impact. productivity comments. to will which security increase my and very efficiency continue become customers and system mitigate to much growth the concludes vetting better and industry enhancements continue cargo to continues for long-term investments of our

the questions. for to will back it the call operator turn I'll So who open

Operator

line [Operator comes of your ISI. Chappell Instructions] Evercore And first with question Jon the from

Jonathan Chappell

little near a that I'm June of volumes. you the of spoke to on a going the pickup season little Darren, peak end regarding themes that about you just that up bit have there Southern some California, some with the wondering, in do the mentioned in about does else a Or gives more of Spencer the transcon optimism something on, is moving particularly bit? cycle?

Darren Field

just throughout highlight, X referenced through of in one general than 'XX Appreciate comp of I just on 'XX. question. throughout or Spencer's of California a factors quarter want comments June Certainly, the Southern second we the had Yes. that resulting overall improving first more a quarter. to volume working days June. imports do many is -- in X% June trend negative

certainly an second we went on, double digits as trends of that's the that quarter customers. I comments for the some in again, the comparison. improving our quarter. experienced Southern entirety also from we prepared California out that in highlighted And the up of were so But influencer

maybe was shipments that peak for season. some early certainly, that highlight customers result of a would So

Some some to highway converted Intermodal. and we in customers highlighted cases, had that generally improved, back had their business business

kind it's everything mash that during of occurred quarter. So the a some to improvements see of

Spencer Frazier

to season, that. for to QX month, are that When I I base, normal in different of that's with to prepping place talk things. promotional things Yes. to about for take events of end quarter John, end like other that July across back seasonal something customer trends, normal are we and really that here a school, need related this is -- add that to think seasonal bit little about I'd our trends, Spencer. just think really

move looking seasonality that's going from started forward encouraged I'm on. we customer show something base I really think as that So normal us. up that be And to our to to we're for

much in that, we think still a really I trends just prior disruption. seasonal seeing struggled so way. There years, normal with the was in

question. the just appreciate So to comments. wanted add I those

Operator

the And your with line next Jordan comes Goldman Alliger of question from Sachs.

Jordan Alliger

bunch So feel about a that mostly you've given before, of per season done, feel now just reached Intermodal sequential that function you for load now. the is next point have But do quarters, a largely excess talked it know the -- story. recovery revenue getting this capacity move margin I is I to know a you per looking -- the you of do load? revenue contract on the at several you've least And up? stability ahead,

Darren Field

Well, will the is certainly, target. that current achieved current, can I'll during we and is long-term cycle on this Those one that a technology that but to us volume said have. And improvement We're our That to pricing the can not our volume be be and quarter. be the every worth What or largely today more the than of changing just highlighted then that improvement. and in what having be second than to term, efficient always But we should and we be us recognize to day. call just all the efficiency, as areas activities our were can enough of do utilize margins business but satisfied as our We've believe improving inside completed XXXX the quite the margin we better? over will we customers? pricing do most our underutilized an order we ever of strong do Certainly, bid we result system more run. our How improvement activities returns margin to long on we often, as prices of give valuable yields with X margin with that's work all operational just How element most a We're can couple get our can important not things that before. people. the That not more operation. area efficient organization? drivers drayage more and cost. currently inside of the certainly equipment much

Operator

question the with of Fargo. Wells And from Chris your next line Wetherbee comes

Christian Wetherbee

down, that also little bit we to on were up profit wanted I guess down I I saw a guess volume margin I we know sequentially. going sequentially, touch yields saw and comment. but

a doesn't guess up. necessarily from I show So always perspective, that seasonal

So of or we make from I cost it's operating here? understand, from margin I you was something improvement in profit incrementally if improvement thing kind be from here, perspective, quarter, a with guess this dealing I sequentially able volume that sure want to if should to we were see the there see just

Darren Field

probably factor a pricing behind cycle has implementation profitability. driving really the a change element bid to largest non-normal Certainly, implementation seasonal of It's earnings is sequential the the headwind the improve. seeing in been

We it always will our will pricing indicator leading be and often. say volume. will Volume lag

we way that as for believe, year so opportunities business, our pricing to will our And improvements long rest certainly, we lag find the through of the volume. and the grow look over term,

Operator

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

Scott Group

these we down So it'd like And you wondering term. of up at you see expectations some just margin? much sort reasonable more in near quarterly quarter load of of expect maybe get Darren, the rev to step per in guidance, full in be place So have bids, if one But think has we implications -- next the that's think impact if then you on think just seen do not do share, we and that should longer why guess so I guys I take downturns, really of sequential and as you give should a the that in point. helpful the know going this you don't but for thoughts next In too we've cycle. of term, way forward. growth to I'm -- like you bigger prior sets seeing earnings and time, picture. -- cycle you for that that what We're if a up

Darren Field

your bid at XX%, the big in cycle lot a same this that did year. was pricing the this it, there second chunks, quarter. of We Scott, listen, cycle So has implemented there. the implement portions, always cadence it question call throughout Certainly,

guess quarter I could after something would second you of expect the So all that entail fully implemented. that

I over don't quarter mean, in for guidance throughout that, implemented have getting of pressure. I -- everything any big so second I a certainly step quarter, of terms have and we anticipate certainly reflection the but pricing better cycle. negative pricing third time, did -- the you fully downs. So fully implemented the that don't like we're anything There is

terms truckload highlighted there some I volume we gains, transcon our mean, that I -- the marketplace. think, of In do And has share have substantial. are we've significant from we headwinds in the I have East, growth believe been pricing. dominating

think value about our continue as that with as get we discussions well the to optimistic capacity, to will this of customers proposition and the having we highway as concerns second into I half about about represent the are look that we we're grow. year, we

all have to comment that's on your So questions today. probably I

Operator

next question Imbro comes Daniel And with from Stephens. your

Daniel Imbro

those that would that half, rolls Maybe one, start start of the we softer, start-up Or you guess as first to and online, move in continue with about a X,XXX the you few anecdotes a kind hundred where off? of hear the with that the as margins I business moderate we were think dedicated dedicated bit trucks. seasonality, how side. as summer? more market. sold costs shifting to to trucks competitive inflection through summer we should move business see Dedicated we Nick, underperformed through a margin sold to

Nicholas Hobbs

the for Yes. Well, first, Daniel, question. thanks,

had we're starting to First, a say this of from starting chunk start-up July. just month some start-up see We costs, good in. costs those come I in pretty would that's

some the would a seen see tell in that, disciplined model go competitive QX, pipeline, you, what most one-way our very little segment. us. From been more other, very retail you're but just and after, just we've see a to that pricing quasi-dedicated would from in sold. I I of said, going seen solid, so little is would replenishment, standpoint, in where for the of that's I models from some say thing we retail, in we aggressive bit I truck basic and that numbers the stiff competitiveness in good And the a we've or bit a we've competition, what call that in as and you've so is our But our

we those have of just what footing sell. areas. a We're think we're in some bit of to we on still very good retail facing So pressure going little a

Brad Delco

little really of more similar did that the losses in for for a he be too, we He count bit to But some prepared remainder Nick's have share the we add the expected is year. some just saw year in there were this clarify that, Daniel, Delco. to Brad is QX. ending the comments. we some visibility, to I'll fleet how of what get fleet to do things

headwind if QX start-ups obviously, to So will. start-ups think of little at And And side. mature occur -- them losing that time, have of trucks on you that bit state are the that those we the sort and in are at margin of have a same QX. their

on sort So you that, guidance forward we to was bit a our on of attempt bit to give comments that were remarks had prepared the and little give more of in a forward. going -- that an wanted expectation little clarity our we guys

Operator

And your next of question Bank Ken comes Hoexter from with America.

Ken Hoexter

So the I of of growth up kind want to some your transcon that discussion delve into was X%.

conflicting mid-teens of were but they from talked volume some West double the about statements. seeing Coast You kind ports, kind growth, of digits

So shores, that season some yet you has peak hitting move. noted to but early of

seeing can. be loss I we dynamics inventories? the understand, for on of on share we want want that rails to with kind Burlington variable there being now understand other used rates you are to in Are are peers So that if of I you? to to the more building some market just

Darren Field

would Southern to on the market eastbound volume. fully domestic outperform California expect I

I domestic don't we're to any So other losing believe intermodal channel. share

answer was to share what's the West the in it imported back California can has XXXX. It's cargo. the the Now domestic so share pandemic volume there happened the believe -- goods of or in Coast. We're of versus of East with percentage and East if customers, trying in or a Southern domestically to and that Coast, on an more Coast routing that don't through the because as I some our the deteriorated do still of believe I mix I XXXX, the of the constantly converted terms of during Coast intermodally. happened gateways, intact, of you up our far into maintaining later? for go through share that's say window, ship hard intermodal from with that's import slightly. moved that even other Maybe it international to it great that storage though uptick so XXXX West intact to transload question. is communicating would growing a learn -- than I volumes on cargo Coast. we'll have and is intact about with I transload eastbound Is moving it the through a international. domestic don't today, West was and that Coast, from what's it and reasonable West we're confident intermodal it the I'm it's

We highlight digits. imports keeping of strong I not I are we're In and just why terms as said tell you digits. as with double double California were Southern that, up know. many don't our did up the I that necessarily double they didn't how volumes are digits.

our pipeline other we to eastbound So California and for there we business, about markets. grow and will to good look continue all feel

Operator

of And Shanker your Stanley. next with line the question Ravi Morgan comes from

Ravi Shanker

volume of ICS. there? BNSF understanding XX%, what us unpack is the shifting Just Can you Can quite business bit to think volume on elaborate a little kind well? what kind that bought you more the little the you to being not a more of give that bit better going alluded to of kind expected. just a on decline a about you year-over-year of of talk shift, bit as I you little

Bradley Hicks

the a competitive and for Ravi, Yes, an It's been been thanks certainly difficult That's incredibly market. question. factor.

volume of also on we've quality, some the acquisition. of remarks, that the As to been commentary, impact that's And the our largely in challenges BNSF prepared in in on previous on we we've stated made in reference quarters, I weighed had of focused some my the and losses.

there were lost we acquiring brokerage business that Logistics is shortly we really BNSF some unexpected. assets And the so what that of see after

came I'm we a say that We've integrating successful cost happy have been also half. accelerated, with and first technology, but that to largely the from in some in incremental

us that with it at encouraged And ICS. When the and the we also trends. seasonal bigger performance however, our what no so about in I focus there's we picture kind on am, has think we're of referenced dissatisfied our down. where doubt that's been, weighed saw and Spencer

even June basis. our Darren month by When our ICS good really and only May business. mentioned not volumes second a month JBT. both we I volumes at similar, on from saw also but in their the saw a saw breaking quarter really we something think about We think they workday what down into in step very forward

And carriers. so in partners, customers like back feel to fully forward And in can't see. a and do quality take historically what with nice that, is strategy I form would we quality see it growing part, I saw quite that a than our results step-up Again, quality we but greater starting step on our yet, our believe we volumes. took on

Operator

from question Seidl line next with Cowen. the Jason your comes of TD And

Jason Seidl

should some side to think coming equipment. back to your about commentary that a How about bit from we related the increased And utilization get Is sequentially? assets? and lower about think Want on Intermodal I the little should margins. to that the of how Walmart costs

Darren Field

I mean, -- results is equipment acquisition of inside fully isn't point. Jason, hasn't -- the our our at really Walmart we -- the -- this

today. own, it's have more equipment, than our fully whether what we So Hunt Walmart J.B. or we're mean, utilizing I

as calls, certainly have handle XX% In we today. much more And said as true so are, that capacity. we and what significant we where I were previous able to remains than have quarterly growth

significant to we work. current putting that Hey, have also pressure of doing lot in moving think negative volume to performance. to also have moment, back our to leverage forward an equipment on margin margin a that certainly, I relative which okay shareholders. gain is work again, for the headwind we front, pricing awful to we're have our So and we the obviously But to returns area, get by the adding we do expect but to at industry,

Operator

line Tom Wadewitz from question And your of next the comes with UBS.

Thomas Wadewitz

you the you bit how on volume ask more even in think did about second more XQ little traction growth about So last we in XQ, think, a I half. some I in Intermodal have in so wanted year-over-year to volumes year.

get you the do to thinking performance some flattish Walmart coming -- about you in on should you So year-over-year kind -- that be or and would year-over-year? think the we the kind there help do comps momentum or are stay of loads visibility Or have of some maybe to as worse tougher?

Darren Field

aware as I'm I'm caught always when think efficient and going transportation I second anything, feeling to an volume. done, highlight like tried we much are us ask surprises not customers and of aware with were we jump just Well, as through and the to to momentum, kind in are kind to that when our that we've move here -- of Spencer feel quarter, by it as comes that, surprise do they last of is some our everyone best network. year, that And maybe

So with of we're engaged our all in conversations customers.

wait We always grow second some sequentially we'll see. But to went business. our and for have Both will needs, and the ways be capacity quarter to solve certainly, felt have our and look their goal. momentum to continue as year-over-year We'll we to have on.

Spencer Frazier

share appreciate we have all that question. Darren, just we Tom. have. the I'll things. a the every Yes. We and for customer conversations Thanks few Thanks,

looking the we end end they our the plans. how season past. And weeks trend with X in of struggle on One They their now forecast, I of quarter, month get But the talking customers serve we the that. they and And data well. still of be we our peak with. X an area to to we the struggled to forward that's They then to a are look about focused struggle the they forward, what customers' working collaborate up on today. things, as do when to for ask think do and that's our them teams and up really going right going What try them team, sharing demand our need is is customers to need well. If our that data, them at ops expectations their what actual into from lean we to months. to understand here leveraging our really really what or look ourselves set and really set our is and with make anticipate don't their we're to expectations they from and we serve can

Operator

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

Bascome Majors

the up do the improvement. profit season. just about fourth If sequential look typically comments you see Following peak on you some quarter, made we at

typically Hunt that ICS play and and that more performance a high customer at separate the the Intermodal, mile, just a final some just But you will Truckload peak And in big would talk conversations the out? fundamental one when have bottom good you into lift in maybe about can mix dedicated. you level, to You that normal -- actually conditions season from disappointing give would season line? visibility peak on good how holiday

Shelley Simpson

the thanks Bascome, for is Shelley. This question.

those more that you I with a you highlight pre-pandemic. heard this we're to customers. did conversations the would would that what we've seen is And nice we time our Spencer normally with similar Darren demand think highlighting encouraged seasonal those. be I that we think having are job tell I having

consistent feels customers would like tell looks This how be more the I conversations you with pre-XXXX. would and this So with we had in past.

on I bid better compliance better. their think and understanding our their job have done a customers volume

are clear steady hesitant. I and to little bit can couple all false think just had and that starts see sight. last over of that want make We've of we're the just a we things some sure years, line we

a are I think skittish our they customers little what bit even can expect. about

providers. fourth would by board, across outstanding and quarter, an great job us, customers. say, the surprise. a did We our did they did servicing our we I job, us third railroad catch last So year,

that. realize customers Our

more Now the from we're to occur a a if why a seasonal profitability expect same perspective. and What those is these demand having we perspective from back How things do would we think about we plan? that's conversations. to pattern, Certainly, that? move

Operator

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

Brandon Oglenski

much but pretty of It's Shelley, seventh the market? haven't you sixth conversions, maybe this I do to if and do we But wait can of we from declines can X if point operating I your follow this hot welcome business. mean know up I income years, need Or that the just guys. of is X inflection in consecutive there, in mean an for or ICS. volumes about seat you highway is the look that at the position? more shareowners we Intermodal from your back losses quarter changed talk CEO. material at to all for material there really quarter

So potentially even the in to the in you do outcomes maybe interim without inflect market better your change what can business you? for

Shelley Simpson

focused been Appreciate XX-year and our in customers are here. Yes. that quarter-to-quarter a of very Brandon. that but pandemic think long we most prepared from term. One detriment we was our from headed the was understanding how where years X time difficult need are our time last learn long-term thing customers, my the and the Thank has and been the predicting basis, Certainly, most to career we comments. to the we in It's weren't for did difficult you, and on about ready our success.

shareholders. and you, we heard in and think a our for I strategic are be to want and means also prepared some that that us long long will the even up service. from for customers, that. people, to then our know We past, know to and That of have the us we for is tell that that term. have capacity expect at for today we they deliver the we're levels things sets made ourselves term, you've do decisions best-in-class ready. service customers. We giving technology businesses and our our we separate preparing returns think with to it they strategy our this our from in customers We our the best I that invest believe recognize and long-term value creating more consistent look so on Hunt J.B. basis, that can our

some today, heavily that customers with the conversations comments us I our with think on. in of making in we're they're towards focused the that areas we're encouraged

quarter areas, that would look our expectations, I pretty performance ICS, our I so profile, to those calling third say, focus would mean signs that or our the a is That better. we're moving are here and you, inflection. here moderating and relative our been today, to we're pleased closer least we our things happy, we second at not with to that say that's relative and good. but but know we're pleased performance, tell share us we're that market making will has doing to gain, getting one going are at perspective, competition moved we're we're how continue ICS. as We're on. I but with performance not quarter, when to calling return a are there the profitability we doesn't where we're what do And some thing kind that from I Not I at of say it in will tell progress, X into in

think that It is a need would to skittish. tone for doesn't cautious are I've prepared great. that been our customers we're But that sure from that we have our We changing I last information are And close us things say. mean to very to not conditioned you're to the customers, says, our get you, X more the listen, now over I and be the we're we time they're better tell signals. we we better. Today make hearing years ready. that targets. us And on

our We have to all that. best strategic a make of businesses make to deliver and move returns We long-term will decision we're that our to across sure be shareholders. goal we the accomplish That appropriate sure our focus. think we taking

Operator

comes from the of line question Vertical Kauffman Jeff next your And with Partners. Research

Jeffrey Kauffman

to magnitude think you back side? back we this real acceleration. wrong you of forward what do for it and seeing in think to the the the think little of any the volume we surprised about pricing here, and everybody in Congratulations, want Shelley. this magnitude feels are I I turn? what this, volume more catalyze a got seasonal, guess bit picture view looking trends because I Even catalyst still I coming downturn, guess think, terms of us there's this no duration. expected. weaker on about just And on than pricing bigger And though takes do

Shelley Simpson

things we didn't going you, one would Good Well, the I much occur. understand the question. think thing thank Jeff. understand, same we didn't pandemic how of the change say, through was I will that

XXXX, look Great had ready. and so back Recession. prepared understood our the in on and were And we We I experience, if we

that that in We're those I X as anybody our is things went know the price during I've pressure really least time believes my changes seen the would downwards cost. And that in One inside down. don't of they an Great price Recession, the organization. history happened as with occur did perspective first inflationary that, coming then, have. though so those cost things X at

disconnect maybe You one typically that and we've then happened you're a history, history learn make our from ready. we in just say, is there of know of was what's look then and at That, try sure to what expected. And would than prepared the with the depth, more I things you capacity. what used

estimated our and the we've been are now years biggest money It's happened. the is think not would unusual. unusual greater of recovery. out That that's history. mean freight X come market start losing capacity that would that so we And That X recession. carriers has years. And I from a this last for than miss would of of the typically That that

would or increase even more And haven't that that, demand would has We occur leave capacity side has been capacity but up the will more. to predict market. know I when pick able more greater, to we tell than that the demand likelihood to exit quickly would you,

few we say I'd things. I there's of if are better, I'm to things, team -- But the kind So known thought if be X anything things. the through going see. that we probably they X would a have those say, those else could that ask we've would the

Operator

Vernon And with your of final comes question from line the David Bernstein.

David Vernon

the of to that could I over that the impact the that trade? the ask is the service. I'm how while the color rate us transition about there around -- is announced you ago? product Quantum customer performing intermodal Mexican with us just little shift traffic just just KCS wanted an how give some to or guys North-South to attrition Can then any a the a Has you going? from within question FXE. on context And you Mexico or give wondering if in like update anything on been

Darren Field

Sure.

Quantum, So absolutely thrilled with we're the performance. service

customers. I of think even outpacing actually our we're expectations

move, and point a the replenishment. has anticipated. convert been than business decision that's probably business-to-business of slower Now kind fail that business inventory a call little we complicated transaction a just the the of a for not what would being networks have complexity It's said, highway more little that shipper kind the highway cannot to we of and

from utilizing product, Quantum we've with we're and long it encouraged we're with every anticipated, very to not by So as achieved, grown program that are and of runway from grow we're thrilled growing what while yet benefits our the volume -- the we It's the absolutely the a with got fast have feedback customers have day. we're hasn't experiencing as that but the would it service, probably service, Quantum opportunity that. been

announcement successful. beginning Ferromex of are probably the transition Again, we about was As with that year, concerned on a it converted the liked day us X clearly the relates the And pace from to would I about CPKC customers transition maybe the seen happen. think to transition at like have to not at the have that. that everybody

the ability Ferromex and change to has was As excellent. on, Pass lot us. And transition a had BNSF's success been swing gone on material their that a Eagle the hey, recovering didn't of has the our business at year going network, and with in volume maybe serve have we

certainly, Ferromex transition new more didn't things on, to our operate with today, parties good year be X that But on. network customs was done quite gone about longer result at as presence that to little we to the feel and But at about all probably work taken has education I program. and there's good immediately. moves education, an feel So that related around the as much where in terminals we're to has as Mexico we in year all in grow again, and our the involved the and a customer

Operator

the closing our remarks. I conference now turn And Ms. will session. that question-and-answer for back Simpson to Shelley concludes

Shelley Simpson

our for thanks call. and joining you, Thank

pressure be the with in You've foundations from our few and Intermodal, in businesses. midway JBT, pleased our freight invested although preparing until performance, and own and been complete of challenges that during this customers heard our pricing place and in our we've areas. this not in long-term for the our we And about this season opportunity reset our that's grow We've with customers, XXXX. our largely and been we're businesses ICS to through we're across season technology our we and business, us recession, talk in relative in our capacity, of largely transactional a seen expectations. pleased for with a Pricing's our will through are encouraged really people all and

final in pleased profit the both final in mile this well on recession. businesses business DCS DCS performance and resiliency improvement and I Our business very and fared of have and mile our our the am with margin returns. the

controlling to returning customers peak working is better levels, better the the that planning our something of XX% we on looking better means we're customers volumes. We're can pipeline between we're to seasonal and We're going around finally, and deliver very our predicting at with to back predicting and XX,XXX doing demand and job on that of JBT. expectations to shareholders. and customer a also people day confidence our our focus costs. more and us compliance with are continue There's growth and pleased their And having both Our in customers as Intermodal be with bid conversations our that our pre-pandemic encouraged at to our plan our people. hard more our consistent every gives XX%

provide create speaking we'll long-term look And to with and our best-in-class We're forward on our quarter. service. to people That sets shareholders. Thank up value to and in value call. and you interest will it for your maintain going create for comments that's excellence growth. our customers. the and We We scales allows next us safety, our you what us your for investments, for

Operator

participation. we this your gentlemen, ladies call, you And for today's and thank concludes and

You may disconnect. now

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