J.B. Hunt Transport Services (JBHT) 15 Oct 242024 Q3 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
Ken Hoexter	analyst
Brian Ossenbeck	analyst
Jonathan Chappell	analyst
Jordan Alliger	analyst
Daniel Imbro	analyst
Scott Group	analyst
Ravi Shanker	analyst
Thomas Wadewitz	analyst
Christian Wetherbee	analyst
David Zazula	analyst
Bascome Majors	analyst

Call transcript

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Operator

Hello, and welcome to J.B. Hunt's Third Quarter 2024 Earnings Conference Call.

[Operator Instructions]

I would now like to turn the conference over to Mr. Brad Delco, Senior Vice President of Finance.

begin. may You

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 the 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

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

like call to turn Shelley? our to Ms. Simpson, now for opening comments. over Shelley some I'd CEO, the

Shelley Simpson

afternoon good and on Brad, everyone you, Thank call. the to

to to The in these with Hunt support them by in those J.B. responded our take our First, are and continue thoughts and efforts the the recent the will relief communities. Florida. were and support these impacted our time I'm has how will company hurricanes impacted, Southeast recovery employees of Many rebuilding and efforts. proud of

quarter. the Turning to

customers, for on our around can and needs service focused a their on We exceptional future while focus we preparing environment transportation our providing costs, navigate remaining continue to to our safety. control challenging freight maintaining what

highlight we evidenced our will As have seasonal which their patterns to in demand a remarks. as normal the businesses the across team quarter, in seen discussed return third more quarter, last

one, reminder to in company in and our for to our deliver which two, our value customers strategy foundations, as we excellence; exceptional and through investments are: technology on as are priorities, I long-term remain drive shareholders. execute operational our value three, which our confident a our long-term returns scale and capacity; people,

remains focus out customers excellent for their looking supply for with drive while service, deliver can to our we value ways on of Our how waste chain.

capacity have I do our we to around volume in positive some our occurs, our better can to market in highlight freight on returns confident cycle more and that see We investments returns this awards today evidence third-party our at signs customer support more focus that shareholders. deliver particularly Hunt's scale to appropriate the strategy in performance. value surveys trends, the J.B. for and in work our area, business our additional capture technology maintain share generating and capital as inflection people, I on remain our

are ingrained eventual dedication We is for customers well. need can we on our all to customers operationally prepare the for of to in the service that reinvest in a and know delivering in service our providing and should testament are and high-quality we margins returns market, now, do, to acceptable to have our excellent ourselves serve focused what these to as that churn the our we same be in we components we to being business, key people. repair grow value people that the that By As controlling our freight have customers. position knowing time, customers with an well. we in our we great At which right generate our aware pride organization unmatched take

strength continue which of and summary, our discuss. to performance, relationships. each through businesses. provide performance, helps that more to our is have our a continue we long-term The Customer we we used in a and core record is conviction this Part I value is culture or Nick potential strategic the across our business team safety we details have upon delivery, Creating growth for process value roll continued our have the and CVD, out create while and what build our business, of will as on will the value entire for of we strong around company. last But organization. our do strategy of customers and is dedicated to year's in to improve our

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

and Our confidence investments our comes our scale, our our from people, our strength. services, our complementary strategic of financial suite experience,

vision uniquely as North the position of efficient most the these us to future transportation for America. our All create in we pursue network

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

John Kuhlow

Thank control remainder and of quarter afternoon, to Shelley, my a will the XXXX. quarters, plan update the update good and our cost efforts comments recent everyone. high-level on of allocation on our cover you, capital for Similar and review an

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

a compared our a basis year outperform third which in declined normal includes revenue X%, period, saw Let also the business, consolidated in quarter. operating income services ICS to share and decreased seasonality, XX%. particularly sequential quick We review our diluted but volumes a of per both X% JBT. JBI, prior me the with earnings declined On start highway on GAAP and basis

yield on our That put pressure said, areas margins to overall pressure overall continue profitability. these and in

to productivity, focus of areas to on businesses. enhance cost our performance continue and our all across discretionary We efficiency,

return intermodal our be dedicated. industry-leading We believe and segments, and supported by evidence this and both believe is in X largest we what performances to margin

tax to the our fourth imply our should quarters. XX.X%, decent year, down we step compared X forward, in to which expect a for tax rate prior be quarter rate Going full approximately the

potential. operating focusing efforts, cost we compared can in services earnings prior business we their to the our period. in remain our in mostly and the costs, margins power controlling improved term JBT made growth have rightsize update what near the both support to and ability ICS thoughtful jeopardizing We our To year our businesses evidenced improvements our our managing cost without on significant our on to approach control structure aggregate to across highway as future

million. Our capital been our of revised which and to focus on We with to span million, now million expect of previously the up plan. $XXX be $XXX XXXX covers the an net entire our expenditures update company. our broad-based year expectation approximately to cost has $XXX for Wrapping is below our capital

the Our a update acquired from retrofitting of from reflects purchased we've chassis of sale not the largely we the quarter which will all prior the containers following fit assets. those that Walmart,

net assets greater even confidence that of shareholders. strategic the those gives and the reduces sale transaction of for and price us customers in The our purchase importantly, value our

million approximately in on repurchased needs Our balance repurchases we to where prudent strong, and sheet near-term capital time. of are the this to dynamics at of current continue quarter, a and limited use With regards a we stock. our market during capital remains is position, to equipment, the with view share we $XXX leverage believe approach our cycle, disciplined

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

Spencer Frazier

saw demand would we some and normal and our expected and month and customers. on the the trends strategy our good the quarter tightness afternoon. segments. pockets patterns, country, market, commercial In which you, Thank more provide the quarter, experienced an should end. intermodal around seasonal hearing In a are from end we across feedback third or I'll across some update of improving particularly continuation our JBT of ICS, we highway be and and modestly volume John,

capacity some on business, highway are customers in general, use the side needs. to of in the bids some market While out-of-cycle capacity the available more mini remains fill readily beginning to

there balance. is our met. customers having to When have present been customer more Additionally, focus supply collaborative, we the highlight more conversations in of business we long-term demand service that are around their and both with engagements have our all in strategies. planning of discussions school interest around Historically, ensure becoming these needs are being value excellence needs, and on transportation can of indicative

our create and scorecards. to leveraging of our our to clear our an in improve. with customers' sales service of this others, we've is some we neutral on Through with we a while Hunt each have mode is customers, our work with goal their Our suite top people, needs to believe the full J.B. services for With the market. to opportunities We some achieve develop for provider optimal ranking goal, strategy, customers value. differentiator technology solution our achieved

Our up living on with customer providing experience to our best while focus is we the every have culture. say-do interaction

our We peak first feedback developed excellent that customer supply opportunities future leads our the I'll season hearing achieving committed we we with execute with some are we across both. beginning growth and to First, customers. chain, customers: to from we are to know are close for the plans time service

demand incurred also resources we some serve to were QX. in to pulled season customers' our QX, into forward start-up While peak peak costs preposition volumes more

customers Secondly, on each size our what is and industry for customer, are term. will portfolio, and of near medium regardless needs look somewhat their their diverse within like products for mixed the demand the in transportation to unique outlook our

technology on their our to importantly, the consistent share we the a believe levels. most we based we market, people, service view take our that in with is for and can our customers, position value While are on strong create

been are of Lastly, uncertain. top and a inflation cost significant the for that and shift, dynamics will across also industry the but as there concern we current that are they not rate market under aware is margins has capacity sit though aware pressure. remains here today, customers, Customers our timing are change

help knowns, we our while balancing their with to supply to will our to work drive need continue them repair chain With margins. across these efficiencies

growing We consistent they've by remain J.B. business the over and concludes the value remarks. That at in investing to customers levels term service high expect Hunt. from my committed with our come to our long delivering

turn to Nick. now the I'd over So call to like

Nicholas Hobbs

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

this model private to professional the and during supports resiliency Our business and out the go-to-market solutions in fleet We is well our market stands our the in providing performed quarter. believe differentiated strategy. focused outsourced performance customers and on segment model dedicated

pressure and we stable size a growth. as downsizing future return ample result on opportunities underwriting with While believe have market remains the bankruptcies the our fleet on due customer hurdles, of to for disciplined some remaining discussed we

QX due we quarter, sign deals trucks spilling third with to timing. some over QX, of into the During expected we to XXX in new sold

Our of year. team remains strong, and most have experienced our those has worked to hard we truck sales losses pipeline this backfill

we number margins returns quarters, impact a has importantly, replaced more newer, X that We have by to on of started as margins trucks wins business less capital generate will business. and mature they new customer appropriate maturity. on and new remain That once this are ramp confident said, disciplined both customer the over and an business significant locations which mature been had our has past up on

Going new quarters. income expect fleet forward, remain an growth long-term X,XXX to But range a by lags in few keeping stated within typically sales to trucks account our in of basis. we X,XXX mind gross on stable operating annualized growth

Shifting mile. final to

We to process. the revenue have the made significant health cost remaining focusing progress our of on through business quality high-quality while service discipline and overall improve

seen customers remain big Overall, the providers for soft demand delivery demand appliances. with high-quality exercise scale standards. safety have for continued and trends furniture for bulky products We with market in strong and for service modestly equipment with looking bulky somewhat and challenged and soft involved national and big

new the line sales its pipeline customer and line remain in in engage we top quarter. some continue discussions While have our and performance impacted seen with bottom by which we to churn, encouraged brands,

highest the deliver Our secure. priority into of level customer homes and providing the with focus our being remains customers' as safe on on service our products we

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

encouraged provide. the that business Going forward, profitably value are improvement focused we the the on Mile we year, the by with recognize our right while this growing we Final remain business in customers

some Similar comments on with to last quarter, safety. I'll close

BOT culture. to have enhance rolled rooted I'm cameras company year-to-date, quarter. our foundation further. trucks already and far, innovative and a continue announce just Our pleased safety of to culture million we accidents to rolled am and that not in we preventable equipment public, safety the continues hit only improved people record XXXX, In of in performance and say so with These contribute strong of a our our invest terms miles, many that our safety per for to XXX% we also in the we inward-facing the had have previously motoring I cameras end stated out safety of by training but being one to is are we pleased out third performance. of initiatives also to goal our in

elevated, This have Darren. I we remaining the call my As focused remarks, of cost turn performance. would like mitigate over risk continue but are concludes aware, to the claims you to so our and by on manage safety to

Darren Field

the you, and Thank Nick, joining this everyone for you on us to call. afternoon thank

during outperformed overall volume year-over-year, review start which we the momentum me by and a Overall, digits second with The the third Let from the TransCon volume into third up growth volumes of in once normal the as our again accelerate saw quarter growth the X% with outbound quarter this Intermodal's was driven Southern performance modestly seasonality. East. up double during in X% quarter X% growth quarter quarter. was the California

from month, the directly to back due we we up X% and to up X% one-way ability are quarter, freight evidenced were small but our volumes our up levels to to our in capacity consolidated service strong by more with needs. in of September. compete this In July, volume By meet X% customers overall and beginning in truckload, amounts August as East, improvement continue win their

to and We look environmentally a both see years friendly. capacity believe in more Intermodal people it and in that place ready to we over-the-road we should our stand exceed from economical and warehouse, is service meet as continue and amount the ahead. bid As customer the of have now needs, to we converted large and our to be freight

we did despite did third in additional and quarter, sequentially, the margin quarter. During margin improvement pressure a expenses in see year-over-year the modest incur we

true. before, us say that means heard to ever right has You've volume it remains me and that now, more than

still has is lever been the pricing and to margins. biggest improve However,

during network, of in Southern While did our network see absorbed quarter fluid volume to imbalances the keep specifically sequential the California. growth, expense we caused by additional of our strength we light out in the

greater are future will we the bid which provide customers in in encouraged We us lane the in by drive the are fill imbalances better improvement network. efficiencies opportunities compliance, seeing to in and

the XXXX. forward, given Going XXXX large our bid reminder, season, a that a we And pricing during portion to with XXXX and pricing pricing current from implemented our service bid experiencing. ability be will of levels season through have customer do given just been like nature our we the off our the we of demand as half the kicked and of cycle, remaining position first and quarter. we our third We living handle search

network. pricing truckload in particularly believe is We unsustainable the over term, continue to see we that long the Eastern

are have some freight look we We that we from proposition convert shippers service of to truck our provide. rail the them, been and commitment overall levels recently small highlights the rail Intermodal amounts growing in and service have pleased are the regard to to seen which East, encouraged by our our we the each value providers to to and with their and of providers, able With rail from market. service offering

and we freight test come collective said, know demand providers on true once That our our will service the volumes railroad with of overall higher increase networks. our

that handle them of growth experiencing proven demand, of conversion show customers Intermodal many today service significant could that over-the-road and the can moments service, to case for maintaining dialogue we growth in serve constant maintaining been periods proper stronger we during with like collectively are have [indiscernible] supports one freight. additional from while We as

Our our conviction hasn't Intermodal of in the franchise wavered. strength

us. trust customers Our

remarks, prepared Our over concludes growth optimism hasn't service business Brad future our on and to the and of my intermodal our changed. it turn levels That are exceptional, I'll Hicks.

Bradley Hicks

J.B. pressure everyone. brokerage I work we afternoon, Starting with on review of gross and the said, remains progress competitive Hunt also I'll decline Capacity ICS, the our update am an increase our per stabilize in the load. good to Segment made declined a in third Solutions XX% have business. some and by offset trends and a by encouraged in overall of Darren, provide environment with volume you, Thank both on XXX. of Truckload performance X% some the will revenue revenue year-over-year by I X% partially the Integrated segments. quarter, That rate. driven in volume in

our are customer starting yield and volume Sequentially, to ICS results. efforts strengthen X% our diversify as base increased to

we While made the business. to legacy cost quality on also our and structure our business, we of especially revenue ICS rightsize customers, continue strides to right in have with growing focus the

quarter, bid were work. aided disciplined Segment some at high our by and the strategy, margins highlighting was effective gross also project-related XX.X% sourcing for

We current an our to progress our quarter. we continue assets with impact million the the as of additional approximately negative Logistics, quarter and resources our compared business of expense on expenses aligning $X BNSF to had In in costs make related the the second quarter, incur to on some better our operating brokerage levels. did the which integration

customer focused base, technology scale leveraging on our will diversifying to growth. structure further cost remain to forward, continuing and our our we Going rightsize

We will with business acceptable the platform volume the profitability. scale business to more need the of return to levels on to

by was a to revenue XX% in per gross revenue JBT Segment over X% or a year-over-year in decrease and Moving Truckload. down X% driven volume load. decrease

in Our focus meet right that the allows us our better is the We've remains the that freight best business. network plan in and JBT needs. across attracting fits efficiency compliance positioned our network contributed to bid ensuring to capacity improve which customer our customer seen profitability markets which our our to on capacity, year, the throughout improved by has provides right

in to strong model, level service highest since shift XXXX. J.B. and at levels been have the our XXX Our the very power-only Box Hunt

[indiscernible] Our growth us position drop future customers. flexibility combined levels, existing for service and new the of well with with network the trailer

see volumes. some pressure Going forward, on we to continue to expect

to the network to said, foundations the with head our is significant company in into of discipline lot of piece That to front comments bid I'll continue we our we season. been market have capacity growth That leverage our that serve complete. the available into of us to foundational our that investments and customers. XXX. and confident XXXX the new some close into the Technology have we foundation as I in the am opportunities. people is on platform and A have empowers this we connects said, the opportunities

out markets rolling our Logistics platform the BNSF and the SMB while improving example, of the security and also agents LTL the acquired from assets For to business. cargo in brokerage we to also

provide and to the with Q&A This comments, We call. us this turn long-term across and call customers. technology efficiency continue gains will instructions the greater position investments so I'll to goal growth concludes the the operator my for drive to our for our believe productivity of portion back better

Operator

[Operator Instructions]

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

Ken Hoexter

appreciate upfront. Shelley, on November if I in off by. will I how cut Great. guess, Wow. points would I And asked Texas you many me win XX,

So I will not that. ask

You catch-up noted slowdown can earlier forward, hurricanes Darren, I'm just or a the from a the aided wondering I because guess, the looking now, post if given pre-shipping. I the the guess, normal lot there, in was to And much much we patterns, Intermodal faster pull strike season you is understand noted the know of how peak of impact pulled I'm is but at the forward? business estimate see improvement? this I those shipments. trying was were results strong how but by you

Darren Field

Sure.

talking customers look of Ken, the back well. freight many peak said preparedness appreciate had question. capacity season the the standpoint. Coast Coast. and fit West some we into with shifting get of that business of And peak. from shifting a had communicated a We the could to from of there about normal we I as back So overall our East labor East might an potential west we their customers customers we that advices had forward East were I'm finance. thoughts for We because and went well. on that the as the We sure all know our just from many, were prepared much Spencer customers and their strike pull as to customers network fears certainly Look, planning, because have it

forward, terms it of I bag think was of don't So don't I you really that of really know. want how in results mixed none we pulled the that in are was. to tell terms much a

expect fourth Some a of of quarter. do have we forward. a We go that normal it continue peak was through as the to pulled customers certainly lot

know, our kind wait behave normal. faster we and we're things we point, thoughts at do this there. and I Spencer, demand consider we'll if think anticipate share have services, expecting So I a it's down. some to to do you you'd see continued don't for of pull have like But what to

A for question. Ken, thanks the that. your of the just strike Darren, things And port in East. appreciate I regarding Yes, couple

As Darren different mentioned, customers strategies. really a handful deployed of our

a Some shift of that West. to was a little of the bit

inventory say, their to had XX. of And ahead we've maybe right consider I'd it East of got something Some to weeks deadline really flows. just extended here sit approach. we couple got pulled to in strike now, when a of a others ports and normalize But wait-and-see that January for those this Coast some

that ran place going leading probably the as rerun are into look event so this to forward we January. up be And they now to

normalized couple for of around normalized just then of their capacity their as forecast they've And credit a have done done the that. Hunt. J.B. has a other better from their peak also, customers I'd want to lot needs demand things of [indiscernible] say They've with inventories a I demand. well our the job give work and peak as as that

improved. going to the peak also sure weeks. as to next active mentioned position I execute that. about peak think then to And with along to our over our successfully big think Darren continue Brad compliance conversations and see forward, have we our people that we still in We're several both happy capacity numbers make we're

finish a great have the to can customers year. So

Operator

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

Brian Ossenbeck

little So maybe on more season. peak bit a the

mentioned little project freight coming of a back. bit You

side. that think the ICS on I Brad, was

ability good closer or changes operations. did term new at or the medium the them here any COO, service, has [ how short around rail BNSF move expect take term and like at the for But out a ] the seems have that It West. the volume. a look that performed is you how to in with [indiscernible] consulting as it he I a in to of So performing pretty Harris the those guess, looks

Darren Field

I phone up Okay. but the it. know Brian, kind think I of broke gist there, of your

to our efficient terms we focused we a our provider, can Western he's their we has engaged all that understanding being that really aside together. when on in at Just handful of together questions. how to consultant our levels a I'm for merchandise BNSF continue Ed aware stronger created problems organization of and be It's of solve network. of be Harris more

I would say largest business with provider very this, fewest densest intermodal the industry. PSR. density in serving much intermodal intermodal to That in all BNSF, the the nodes is the things line moves and

to we're convinced intermodal. or Now I'm not their no saying the that to Intermodal coming very our in there lot attention is channel. they're years, a months from strategy of to changes BNSF commentary. they terms And to do encouraged PSR didn't railroad. at their by just have in there's It's growth There's We're no a that. deviation their business coming of grow

on. not If that improvement the by in focused of know intermodal we're area or positively at influence Shelley business see. that But make don't their network service. a stay anything, is [indiscernible] merchandise we assured could wanted if PSR to a and BNSF not on We'll an their I comment strategy wait that That's not. BNSF.

Shelley Simpson

No.

it on I together. expanding for the we're would really think just Darren said us, intermodal market focused say I well.

anything should you and do Hunt markets what J.B. roll over a around we're would benefit We're those conversations. do perspective us both happens in into Mexico. things from would about launch are thinking say that J.B. Quantum like intermodal we expanding Hunt So I merchandising and as well. and emerging for BN in and doing how customers continuing

Brad Delco

think that. put project-related you. I And is then a business. asked But Hicks Brad. you on Brian, This Brad about I'll question respond may let to you

Bradley Hicks

into that project We order, of start some certainly that have business will we'll carry and Yes, in Brian. had QX.

is do we the needs. on extra and those when small we at right partner be where of can they there's make first pockets that that have work a call to our have that behalf level of Some we're that we needs service continue Otherwise, seasonal want customers. to sure them that customers our where

been margins how quarter there think is the I the just The we've job very foundational that of throughout ICS, done the of a healthy. are think were right element really the And certainly, business. that around that proud and focused we've I executing the year in revenue that, work And of gross seen have key our particular. improvement in the quarter. all representative quality we that's type great on teams in of

Operator

Jonathan comes with Chappell Evercore Your ISI. next of question line from the

Jonathan Chappell

the hoping it I X%. help X% in East in your wasn't understand ] did know can down went load. Darren, I increase but versus revenue sequential per up was gigantic, [ up, you XQ it go

So mixed headwind there. conceptually, been should there have a

You've XQ, and been bid XX% in that along telling bake to kind of all us from XQ season XQ.

like So sequentially. revenue just felt you would mix load down have perspective that a with per everything that just from posted been

from 'XX, do here? So any that mean there is potential? of think does guess, improvement how kind up? how I of middle And comments about fully flat did you Or manage then we your about being baked that the into

Darren Field

played little load, the than And of results the mean, in was question results. quarter role I Okay. I those a third in that quarter of sequential in length pricing were second quarter. it revenue piece a lost in haul there on mix the Well, pressure, was actually the certainly, our there. longer the -- per your was

we're cost believe new that doing for talk move say we're know of through into we're some the customers, we've to just quality terms pricing of continue to from value where as are and have efforts. see we still gone standpoint the through I that that to in We customers business. to That the be and when on of out what pricing, plays do year that about position to our that pathway year. the execute margin of our returns and how our at sure service, is our implemented we'll behalf and we in the focus, our a world of good so changes, make we're us satisfied deliver wait next the prepared a challenges we going as our none us and to on recover with will help and

Operator

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

Jordan Alliger

X, Question on an the and the their you've or for to have update bit competitive tougher thoughts dedicated. new the and in over own dedicated sign that And the on fleets And just close that of it we've year adding maybe maybe overall environment trucks maybe heard some some been been so, that's that. you general if business? hearing Can impacting themselves I'm shippers make the over-the-road some give front. deals last also, of curious a does private if on guys.

Nicholas Hobbs

really I'll reading market on about Yes, where lot marketplace private there, talk seeing and not seeing what right. unusual we've been But as replacement. love Jordan. a we're remaining competition All well. the have competition focused the Thanks, pricing had. disciplined margins. our out would in fleet I in We we're in that bit. say, targeting. success about I the we're pipeline. a little and We're our We're dedicated love We what really any

feel lot and so in and And retail drop it lot of a of we commoditized. hook, the the more van hereby We're is more good kind see that. -- of dry I very about competition a

And but we not lot. a have there little a in bit

taking the X names last at in private X or awarded wouldn't the week, fleets the of we're looking over. in Just been names the that you recognize there, that we've probably

market, and sales we some $XX have and if good we're billion where from of we yes, we I about private $XX qualified, feel good $XX So that at say, would fine. going still billion our the billion I targets. about large growing private are look But that feel fleets. to the very now fleets to that's

be very business the I that about successful. we can see our pricing So with good overall, I disciplined read trucks. feel still approach, and lot competition, lost some. with a We've very, very our we some But

Brad Delco

mean a operating I has hopefully, by by up do that's lot trucks peer income And it's has call. recognized supported Jordan, margins performance sets. of of comments, in Brad look at do to the prepared of revenue of add think his business. performance I to this the I terms how talk the a is held relative I to want the Delco. well in performance. about Nick when that model differentiated and both And the business, you and been on those certainly the think that's

Operator

line Your from comes Imbro next question Inc. of Daniel with the Stephens

Daniel Imbro

than sequential too, this side, in, maybe to Darren, I better takes you're with hold capacity you can nicely color margin. puts the this pressure margin standpoint, pricing on talk bid the given and Can the and think, going year. historically. the expected just than Intermodal in upcoming Spencer And of from into then season excess maybe add more pricing but step-up a those

that a excess the holding bid we're going on about maybe the Strategically, versus So go year. growth given that now? as the just how didn't are line driving price capacity strategy thinking well year season, in you volume and in into this

Darren Field

than we've that Okay. Well, turn. can valuable at volume end would ever pricing said when more sequential role than to still It day, before. today more the the on the before, the of isn't meant volume, play margin, has us pricing

quicker. system grow. to margin impact role of that lot on gain drayage can certainly Certainly, up see operation inside can You our pick efficiencies our of we velocity when opportunity we or volume, play a a there's there's

is back not to California California. Southern going load Southern out the of low same as A a

of that what it margin is. result So the operates the of quarter very quarter the versus in the different. is second the is And third mix traffic

As we mean, with our like satisfied in the we're go the I into returns. said next not I earlier year, call,

operating at long carriers surprised has the that think below We longevity are believe and they're their cost. We're rates by it unsustainable. how We lasted.

the ago turn it, sure not even this I wrong. was I'm up. market pricing past point have believe have but when we probably year and to wrong that in been the would a believe about And I did today, probably We at I last rates been said and we get would say could I also that year,

to challenges capacity that And a the the in that's value enterprise about talking we delivering answers on we're at level. we so go serve have. focused customers the of our prepared Also about season, bid we ways, needs to cost about host talking and into their the talking as we're face, how

us we're go so that, to this has taught best the into experience as And process in because approach. we bid the this that's cycle, going room continue that

Spencer Frazier

the dramatically industries [indiscernible] possible. just way to margins customers, as the conversations they their have very them are serve at Darren kind rising chain optimal in in Darren, And supply I But with not with know transparent efficient bit wanted have where those costs are right most bid and in And across find in to been solutions budgeting with network. Yes. that now. to also we're know, said, process operate ways to add, conversations. their about the our And when say sufficient. our I'll that, design customers a to our we would this, and cost the they're challenged and and you and their while them Daniel, of do little And they're working

success [indiscernible] a consistently set and for leaning up ultimately, we're process. improve high that our our find service for ultimately, teams drive in And both them for that's levels match And the companies. the and hopefully returns on that value value set up,

Operator

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

Scott Group

So color of specific the in some ICS improvement think to in is I Any just couple quarter. the catch sustainable that mind, market? And pretty year? how up. this gross Is big the separately, QX in that, is you? to broker just that? in insurance that the And Any margin in your think more years dramatic pretty then had last on QX, about how accruals we've thoughts,

Bradley Hicks

QX, with there. gross work and to question, Scott, I'll unique second John see first The then we Hunt I'll to accomplish. the and percent the trying the to over and throw we've think, Kuhlow that part for margin in that your J.B. I is maybe start been focus

release, providing were purchasing And the terms our to going year. the well the the in against business after, really type quarters others the unique but feels earlier with our that like we some certainly we're see we'll think and J.B. testament to our our us. value XXX. That it's seeing Now in technology execution a of it's of Hunt we're what customers as customers I leveraging freight and through to of of that do as

together think a in in I QX. all way those that for unique us come And

Southeast for we bit the recently that we at have. disruption as of Now to opening a the comments, Shelley with we us. mentioned July on pressure the freight back can us that then so in fourth of there to Florida, that But in back and the hurricanes leading the more have also up terms we ] the of have book back seen see put little and potential happening little [ loosened in saw things

and we're trying to I could us. what I'm maximize that for great like the So And do work has feel the that be capitalizing team really proud of done.

Shelley Simpson

might the very margin. market. aren't add, Shelley. percent it's XX-plus I we don't model historically a high modeling Scott, That's for just for and

XX% of a [ would -- to norm. more it's the in average ] anything XX% be So

improvement quarter, And things there they're and that's so ICS moving some see we'll that have there happens been And and has that some some working forward. done think what yielded with. in third key closely customers I

John Kuhlow

Shelley insurance for did at in That dramatic it bit a And the couple the actually, Yes, And to significant around some and thought were Scott, last insurance was time. going quarters against in circumstances over little maybe various our years, this take so more question. is reinsurance. where we Kuhlow. point, as to more was these of structure was of of I the the settlements increases some John layered had going your charges we

we're good lot I accruals. feel working in so our with And with insurance made through attorneys respect claims and in and good to of like going do a like our actuaries our a our progress feel we've spot

Operator

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

Ravi Shanker

Just want to follow up on the BNSF commentary.

said to materially you anything you I expect change. don't think that

going anywhere. strategy And you do they does don't did, that to with at they're saying them you go-to-market if change are So that all? think your PSR

Darren Field

only Well, at year. I with effective are has each say on we all, would feel what from And up need now don't market. that BNSF railroads other. another channel implementing certainly that But we now than BNSF, can we heard dialogue BCOs be work efficiency to together, us we want is yes, Ravi, engage we most clear. very and about first how loud and importantly, that more have drive and believe efficient and together implementing And us we PSR. of the listens can I is talk BNSF to decades different PSR. like for experienced have how our ramped for you us that, They together more largely the what from

what we're their our business being their strategy. margin certain the Growing what strategy. intermodal that said, to isn't what and want to part to Certainly, that at All is they we part they is BCOs isn't margin that not way we has all it BNSF, be, it listen their commitment of be. their want their of need very have encouraged. want at PSR And levels us

stand as deliver that just in margins soon have we as market, execution, ready we we have to customers that the go our others together, possible. is with do in excellence So service to repair and to together to and our

Operator

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

Thomas Wadewitz

okay Yes. to with hope I'm on ask going a Brad. I question you, intermodal. that's

had at the versus normal it strength container year-over-year? say normal it go probably XQ of like they're let's don't to mix -- is wouldn't continue. If on seasonal pretty good that you I back XQ? When that the You've can been questions but seems a normal, looking Darren, normal kind I imports Is of I still peak others, season. on some see. comment, guess, would have

over if are back a there hey, don't know a if go shipped another be November. customers sometimes little Maybe bit there's July, at time put imports it June, reasons that. way way August a I to say, in terms look would to in on So you more October, more versus why later of and

back a So I and could normal kind if think you just of in look of intermodal offer how on little historical more wonder volumes. you maybe terms about on

Darren Field

customers us, going would that terms to with told customers and to the changes their the telling say their QX the normal pre-pandemic gone sequential to go during going have way of needs, just what accuracy I weaker we "hey, forecast from QX they Well, None our and We a to when fourth normal, we forecasts QX expectations you of quarter the ago." I have we call we're a [indiscernible] what in dialogue what what in those that on our today. of returned say have would than month is are, demand which all their that don't levels. are has much

how many told they move you down for customers pull break Again, going us forward. did some to I'm not

a on Coast I the fourth the to I expect demand flowed at imports to translate summer ignore be intermodal but for market. factor. it, into the think in did, to us. quarter way them California, inventory didn't the from Southern don't don't West the throughout built West has this Coast. warehouses want with volumes we overwhelming market to but same continue that certainly time, season that in Some in It's our been the strong for it's the ports are shipping import peak volumes story There

I'm that today. do is consider want the you normal. way like the know feel define don't this would it what to, but way to me it that's And going defined I we I've I so

Operator

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

Christian Wetherbee

thought So I that Darren, interesting. a were guess, I you had of things couple noted

the was truck first potentially moving over from competition. Eastern comment The some about loads

while environment guess I there's it, to the of or you we in were costs start boxes were to driving as of I been get what the an the when Just there some think given guess you seeing persistent guess, growth some there. Coast. of more? the that I you of think Is that think the -- off extended pricing durability sense kind for that's I think to well, maybe think or costs and strong of how about wanted a maybe I sidelines a you until sticks second So and cost. something type the get that period factors curious on of for West piece related drawn around the positioning the repositioning about down what the

Darren Field

All Okay. questions, good Chris.

me So on certainly, empties first. touch the let

West to the ratio how kind that demand There its we're know westbound going the of certainly, or into the uptick capacity certainly has not flows, volume an balance new in durable, the with now, experiencing to stick in need today customers. eastbound find sustains California whereas whether there's necessarily not. way for The economics the to that in demand California uptick to support and of an is outbound. then off the Southern coming don't if I for it So Coast, Southern inbound is it's call

a certainly it's think that And our but move I will customers, don't forward. surprise factor is completely as we

off more it in in that that stronger a think was the we growth West saw XXXX, than East. little the I visible the it's opportunity Coast because was

it's that So order source for bit of little capacity. extra on to in a spotlight supply and demand the out getting capacity West sort

in say the us. did we we're and segments. that customers, business had to every the I are start-ups East, lots in some shippers encouraged moving Now What these business East, by single is small new had small We've relatively of week.

loads X,XXX a out able the loads whether acknowledgment about talking intermodal, over have be effort XXX can that in performance for because It now coming a it year. an to part, also it's be in want in [indiscernible] but get customers market. better sustainability they a year they a front to this of East. well us It's maybe the effort to So service chunks the be on what can will These truckload big, we year. ship are sustained believe aren't more big of back an to tightening a their be

want Spencer, to call move if I that's out that quarter a to it. we're has encouraged because forward. know, opportunity it at to with gain to and from quality of on is out, the was customers and thought comment we think acknowledgment look by part we at right -- many, intermodal earned beginning the the momentum it and I third on many we shippers And of this those many the sustained that very table that throughout play that don't as customers you new certainly service worthwhile

Spencer Frazier

either. thinking about None our And We consistently the market XXXX. one, growth. is this how of Darren, comment Well, a get what to on have couple crystal with I they then change? going in for don't from they also about our thinking service customers and customers number questions connects right, when are, us ball, XXX% think that you're a to of

the their or start They've best I efficiency They've that is best and private live fleet. with into would for historically, for And leaked capacity kind The chain really whenever and dedicated create networks highway with intermodal and into service drop customers more other customers supply what question do their adding say conversion. into leaned transportation to things change, and is have strategies. and exploring of leaned mix their also them. value the providers doing options dedicated the

And things really that business we change. to we're well operational are to have, we're of a to can across our starting it's and on so that see position be excellence customers starting focus conversations we serve the those why entire things the some so our as in

Shelley Simpson

add to going one other I'm thing.

recession, us through down up customers have. and is it pandemic, both shipments telling actually think what with I the we were on freight the would challenged this our the through important

Those difficult level big We're last to in stability need build their ability the a X create in efficiency really is now over where in networks forecast second years. in X that has super the to are more reasonable on So JBT. been compliance our out intermodal more and a and quarter mid-XXs network.

back bid into So as now our this of is we season, network out to come of customers balance balance. because our coming

to So those you're us needs cost. able so what see going we're balance do customers empties and season, start our having the coming we're this our are to fill better JBT, and and to those to gaps in us into to network serve being knowing predict customers short-term are the to that inside Intermodal, things all bid both inside currently

over start see those for our business bid to couple That's bid be solve next not next bits season, able necessarily the for We a that this positive solving one will in but sign 'XX. be to moving for you'll season, seasons. solved into of over

Operator

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

David Zazula

and some wonder guys if strategic can could it's have I'm about doing that get relationship for do Maybe Shelley, that BNSF. Brad towards more those you talked some with if returns bit relationship. a I about wondering try if talk to little could you repair to about -- talk or with things nature you you can of you better back to you talked hopefully relationship For things margins. targets? that have mean, you Intermodal the dynamic encourage I margin your

Darren Field

on Darren, is this try David, comment and Okay. to I'll that.

way focused the in of a creates for to the a on execution. method today and I to growing load together a standpoint something function. assets is each change think BNSF, this Intermodal to our we up of order We've we Hunt. that We've that or goes improving up. going from get [indiscernible] or some No, then new going both goes we're picks to got accommodate assets new Growth drive in do efficiency and in other out think that we're our the from can focused contributor strategic that business how growth, together. J.B. come of we're very own don't and lot BNSF to certainly utilization a model got margins we'll we Is I truck growing. a areas now. that And with a be for there on

margin. up And then we would we margin our have there is work in certainly. our efficiency to certainly which empties, needs to order So how standpoint, some our done repair again, business, today that from pricing focus grow goals, to some a get to in for look to the our core network, can drive benefits fill be more

J.B. don't So with one I that's unlock Hunt any with necessarily. going to BNSF focus. how margin is project we'll think that

Brad Delco

for one we Sarah, question. have more time

Operator

from comes line [ Bascome ] Susquehanna. the last Our question with of Majors

Bascome Majors

at look the lot see today, different the what if a There's beyond, the any at next risk-adjusted returns where restore do via over and understandably to than from biggest X, returns opportunity been opportunities to on sit more does guys did grow attractive years. look of pricing X last and you we where X secularly But and operating you business over income you margin couple the in that years we'd the focus to say XX. of

Shelley Simpson

Yes. all for our years. would of X say, units, And is last market the if exclude profile positioned business well opportunity, and X, if I of size I'll Thank that. you take our each changing think the look you don't one see I significantly at you, market Bascome. those X we

outside profile our ranges X have merger our years the segments. been of for the last of majority Our

being last and the years, on see would over for margin we've look X line. those I guidance you what given profiles really margin XX if targets to So in

largest market is segments, large, size although very and opportunity Intermodal they X both Our the larger. dedicated, even are

move continue operating So size into to just to We'll for both both and our our be ability as high-growth those. to forward, those both And intermodal income categories. highway performance going the inside to ICS catch of and them dedicated. continue mile JBT take it's segments of final difficult and

continue revenue also think but I improvement see changing them don't you'll So profit mix our and overall, I significantly. see growth

Operator

closing question-and-answer session. to I'll the This for turn remarks. concludes CEO, Shelley call the Simpson,

Shelley Simpson

with us Thank been you've the here on And time like everybody I'd Great. to time on the a from We've we control. call, and you. things our on heard thank us, really lot that intermodal. for of costs spending hard discussion working delay and controlling it's can

across about to know of when services. a use, they to You've of important suite make them Hunt heard to for service talk want right J.B. in think customers their we of to now think want minds be that to sure want number they providing us very our of us who excellent go X we we customers, our our

We needs. are we preparing for future focused on can, controlling are we transportation our where costs but

then technology our continue we've for So the ready you focus our being safety. in people, made customers. capacity maintaining on And think that our about investments we will

I hard. working continuing quarter, of am to have this happened been our safety performance like we've improve. proud that several So things

repair in share XXX on base. ICS total. cost service or can our diversifying Our growth into improvement Final continuing more customer yet, the highway intermodal we not and JBT's revenue term, had there the quality business, long our out further margin. off good to and proving dedicated really X-year Mile quarter sixth but on but over improvement trucks Intermodal volume our selling high take that in of

very people. all And of XX,XXX so the of I'm work proud our

opportunities, although do. our I'm a much that great there's lot have we've still remain about confident so but I we and done confident to work, of

cycle. We I really And through the think way that's this important. of battling are part our still freight

our We freight of value, There's through part to on So focus to we're much battle seeing excellence We quarter. X the look last customers, going you our again going we're need time. capacity market driving the We're to XXXX, forward I've Thank equilibrium. in into the market. recession. for how to move you really maintain spoken into and that still next forward for too out focus that with looking plays remain on those pieces but talking to our your will about. more

Operator

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

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