R - Earnings call transcript Q1 2022

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Operator

Good morning, and welcome to the Ryder System First Quarter 2022 Earnings Release Conference Call. [Operator Instructions] Today's call is being recorded.

If you have any objections, please disconnect at this time. I would now like to introduce Mr. Bob Brunn, Senior Vice President, Investor Relations and Corporate Strategy for Ryder. Mr. begin. may you Brunn,

Bob Brunn

and XXXX. are due differ within More Good political in conference available President Ryder's may market, and and website. welcome Act business, remind call. presentation, contained the Financial forward-looking Chairman are and during with regulatory much. factors these Securities management's Exchange information filings factors. the quarter expectations and Litigation measure GAAP changes you Ryder's Ryder's based today's are XXXX this each statements some John nearest detailed hear earnings this I'd you'll materially are of current morning's meaning in morning, and very a and non-GAAP to of Vice in competitive, financial results Officer; and of to which Commission presentation Private Diez, Reform reconciliation and first Robert on earnings is that call Securities the Executive these Chief Thanks like to circumstances. Chief uncertainty Actual on release, expectations Sanchez, to economic, measure on subject and about These call statements Presenting changes the in from Officer. to Executive earnings

I'll and President today Additionally, the available Chain President call of for Solutions Solutions; following Global Global turn of Tom call and questions Havens, presentation. Supply on over are and Management Fleet Steve time, This the Sensing, to Dedicated Robert. the Transportation,

Robert Sanchez

Dedicated increased exceeded our strategy will We'll accelerating Supply take call you first our our we're in us. Chain to again begin John our with and to which you through the performance quarter, this our excited outlook. this businesses. for in on morning, then share the value long-term growth Management Good quarter then discuss a strategic shareholder expectations update. Fleet quarter. our everyone, that progress and thanks I'm through create very return I'll with joining returns pleased and higher providing results, significant I'm by making and

X. to supply pleased share both Slide expectations. Distribution Whiplash on Whiplash grows in asset-light in acquisitions our recent scalable System, our e-fulfillment with to accelerate start and significantly and our offering. our two growth omnichannel e-commerce fulfillment and chain that well business. acquisitions, with multi-client Let's strategy network line performing supply our support Midwest I'm These expands Midwest Warehouse are & warehousing chain solutions, and

$XXX accretive in rental companies Supply remain first provide record decisions. in growth to and We as all and focus supply capacity this on and strong impacting growth. continue drive revenue be vehicle We period, maintenance half transportation higher importance benefits chains We're market XXXX costs to ROE pricing Sales supply Dedicated Dedicated opportunities segments prior share chains from well FMS this leadership Supply cost from in to ROE XXXX look us with following for value year forecast we well XXXX activity of reflecting expense year. our expect again the extremely in announced year, Chain and from also strong, in as repurchase multiyear on XX% in and recover in to make We're no We million than complete and pricing percent both used to residual labor to as sales company's labor, in our high later second and the the previously reflecting market. adjustments Challenges prior outsourcing our benefiting record reflecting program, October. to expect of trailing single-digit XX-month XX% accelerated from XX% lease they because a truck our and target the as increased our operating is wins EBT to a the improved depreciation ROE source as production return of pricing executing environment FMS. in XX% as which generated changes. tight of declining contract truck companies track acquisitions across strong to savings Chain also of XX%, in long-term our the to full forecast earnings. additional of demand initiatives. to new quarter estimate to

us related We an leverage RyderShare our in overview drive Innovative our capabilities activity. exit expected Slide year to and the asset enhanced enables provides $XXX and the deliver remains free e-commerce that full of sheet cash FMS of balance in XXXX from profitable quarters, Chain U.K. element flow to reflect $XXX key from investments are higher a cross-sell In for to high new and business. previously Supply additional Ryder in accelerated share and growth U.K. million $XXX to to our last-mile strategy announced strong generate to offerings. provides acquisitions solutions Mile in Our market technology proceeds increased Last logistics we're primarily and returns. Dedicated, to sales capacity and areas provides our highlighted delivery to repurchase in million services. forecast and our growth previous brokerage demand. Developing X freight opportunities value-added making fulfillment, I million,

ensuring of the which This supply was discuss and chain our offering, full significantly by aware of to awareness capabilities. key of marketing fulfillment brand acquisition recent enhanced quarter, and Sales Whiplash. customers a are e-commerce array our our I'll are

better Ever sales growth also to drive increased in capabilities additional investing have and and increase marketing their leads. in significant opportunities. our We're digital campaign sales force Our driven presence a expanding qualified

success to geographies and with way M&A through have verticals. important venture corporate on aims over and/or in opportunities $XX start-ups. this industry Dedicated, are opportunities a record Supply fund an to continue adding These pursuing accelerate especially expect new in focus growth, We to capabilities, and Chain we strong direct million RyderVentures, in five area. a of capital track invest our years investment

products fulfillment and digital two autonomous by provides within and to solidify customers startups of e-commerce offering, ability are areas with whiplash. this provides X recently fulfillment best-in-class customer our address expertise branded with have fulfillment to to retail Our X Ryder's investments solutions as combined platform XX% that needs. portfolio customers. micro our seamless e-commerce deliver we staffing, of here and to these working logistics important offering, an to RYDERECOMMERCE and benefit industry-leading driver at value exciting look support days Slide technology, position in The the investments made population leader. advance and within vehicle the We've development strategic fulfillment relationships with industry such a Through new to combined bring the significant numerous closer as U.S. direct-to-consumer, XXX% warehouse nationwide e-commerce our day.

e-commerce with integrates Our proven customer facilitates platform sales and onboarding platforms. technology easily customer

Additional to streamlined as seamlessly to to excited with this growth to accelerated Utilizing of over market, emerging a the enterprise turn scale drives a seamless chain. improved about to management key orders as flexibility to time. scaling over pain automation can increased of who ability enables results. point brings include will meet as optimized partner, and customer as carrier the expect and safety selection. in be small- now medium-sized well We're I'll to the the and growth supply by and benefits retention addresses the has Whiplash The needs enhancements also cover footprint. same the quarter the within large John costs, we key and value contributor for to call first well support scale inventory them brands offering businesses The platform RYDERECOMMERCE brands. lower productivity, robotics a looking

John Diez

used of revenue from from Robert. segments. in per FMS X. operations Thanks, in reflect company primary reflecting Dedicated. year. first continuing the for billion the our declining share Total increased quarter, well earnings the record reflecting $X.XX the estimate improved lease metric, prior changes. first for results in impact increased in the Operating were quarter $X.X year, rental revenue performance also on a growth and Comparable trailing as prior improved Higher on the from depreciation as quarter first primarily $X.XX improved up XX.X% financial value in in period prior results. Return from XX-month three business vehicle sales, equity, FMS reached earnings residual Page all from Earnings XX% performance

flow cash higher planned in vehicle expenditures by prior capital partially higher reflecting offset million from $XXX year, $XXX used free the to quarter First million sales declined proceeds.

quarter from increased Turning $XXX higher up higher pricing Rental XX% million, realized to vehicle revenue million of FMS $XXX rental million operating prior driven X. revenue XX%, used pricing. by results is a classes. to lower from strong by Management Fleet reflecting Solutions primarily on this all Page depreciation year. and the due rates vehicles across expense higher higher and increased sold demand improvement X%, gains on $XXX value record earnings on pretax to of FMS Improved residual FMS significantly above increased was power of XX%. the prior a year fleet average pricing from X% X% estimate Rental quarter, average active earnings. smaller Results to which revenue impact related prior in also the ongoing vehicle also and momentum from performance utilization fleet. offset per lease rental the contributed changes. benefited provided active partially initiatives, by in increase a this lease XX%

up activity vehicle North double year-over-year and upon as We in at market the first proceeds quarter percent reflect segment's OEM leases higher Sequentially, and trailing proceeds target North of as and were production vehicle tractor doubled FMS for digits. XXXX. versus conditions to In X years. XX.X% we robust used approximately were of reflecting sales going both the benefits months, the the trucks. reprice operating XX% conditions see renewal constraints. the more freight due Page expect and than for EBT incremental Higher XX% remain good low sales market proceeds proceeds three revenue rates fourth long-term continued quarter. for next America, the quarter was forward, tractors up XX.X% significantly pricing. to truck a XX increased above supply highlights America Used results over tight

prior quarter, range at our which fourth vehicles. Used a During appropriate due Sales transaction. below year conditions vehicles, used above estimates vehicle for residual were the the X,XXX lower end, X,XXX from used value sequentially We to believe our X,XXX versus well down value on and large market used outlook. estimates are target residual based Average XX% depreciation levels. to X,XXX our pricing inventory we is was inventory the our quarter retail of quarter, down purposes. included vehicle sold XX% vehicles

higher SCS growth offset chain prior growth strong excluding supply was Page new X.X% of business business in and as below to from and disruptions verticals, due by the acquisitions to acquisitions, partially Turning lower industry year a reflecting Operating revenue, SCS chain all revenue up due XX. EBT operating increased challenges. increased target. labor new automotive revenue supply reflecting EBT earnings XX%. to of X%, revenue percent on XX% Operating and was volumes. revenue versus

We that and expect in continue return reflecting the single-digit the second record levels sector. auto recovery as sales target the volume percent will of SCS high pricing in from to half well EBT XXXX, to improvements growth as

Page to a DTS XX. benefits higher percent and Moving revenue business Operating used at revenue revenue were gains growth, on X.X%. EBT increased target by due was These of sale vehicles due increased pricing. performance Dedicated labor primarily increased in XX%, on just offset increased of costs. DTS. Dedicated to XX% as improved to below and operating partially new EBT

and to in expect sales return will single-digit half, activity EBT new adjustments. that reflecting percentages second target the continue the to We Dedicated high levels pricing

XX. Slide to Turning

First to increased replacements. million due year-over-year $XXX quarter of spending was capital lease up lease

and reflecting structurally year-over-year, light- rental demand. which $XXX modestly quarter increased spending First higher investment in truck are in capital of more medium-duty million classes,

XXXX unchanged prior back from full in earnings forecast provided Our call on CapEx our is forecast year February.

North replacement the average we growth ChoiceLease lease lease higher to unchanged $X America, forecast versus year-over-year. billion billion $X.X In Our capital XXXX. fleet expect be to and reflects of CapEx

However, vehicles the year. be year-end vehicles, fleet later is X,XXX up in approximately expected delivered are to the as

in will Given XXXX, fleet primarily benefit XXXX. in this timing with the earnings this late growing expect lease we

CapEx unchanged fleet $XXX million our forecast below with rental prior Our and expected XX%. the remains average at to year is by grow

trends pricing on growth. we continue in capital trucks from tractors, by we demand benefit discussed prior on call, investing XXXX, as more are As trucks supported strong versus e-commerce to and our

light- the during class medium-duty Additionally, less asset historically been volatile and trucks a have downturn.

XXXX year $X.X billion. at full Our for gross billion to capital forecast remains expenditures $X.X

be billion. business, U.K. of $X.X sale Full higher in expect includes of We year billion approximately $XXX approximately the FMS billion. used expenditures the related between number to are million sale proceeds of exit now net to from of vehicles proceeds and and capital our $X.X used from vehicles. proceeds $X.X expected This

to Slide XX. Turning

flow As increased mentioned XXXX forecast earlier, free we've our for and cash ROE.

U.K. proceeds is Our cash million Balance free end sale is our in end forecast at the of XXXX assets, those low includes from operations. first sheet million the of at XXX% expected the the million flow quarter target XXX% to $XXX and we of leverage as $XXX this range. down to of XXX% year $XXX wind

and of to our strength recovery leverage XXXX now to providing the be returns in I'll and between to be EPS reflecting additional the for target over return range second back expect our expected target SCS XX%, below Robert the or year. for We share XX% on to second equity of call the DTS acquisitions of half year to the year, quarter capacity repurchases. balance and FMS full levels XXXX. turn for in is forecast provide and

Robert Sanchez

Thanks, John.

above $X.XX. year forecast Used our to $XX $XX, increased our key comparable to EPS EPS quarter to second full forecast. raising $X.XX, of our from year We're rental the year $XX above a sales of of year Turning Page providing vehicle forecast forecast XX. and full are and prior the We're to $XX the to of $X.XX. prior up $X.XX of drivers also comparable prior

freight and expect partially revenue We in vehicle new in used our benefiting again half with the in growth. the to very second as Supply to slower XXXX offset year growth, in XXXX first are of Chain the strong continue ongoing rental of acquisitions well Chain market by sales the quarter and contract moderate XXXX and production combined conditions Record vehicle constraints. recent as Supply wins Dedicated in

revenue higher with range in high Dedicated EBT, that half pleased percent to Overall, return price of address a to operating and reflecting costs. expect increases we're to single-digit trends second Chain continue of labor target year, to We the We're target targets product concludes Supply return return of as we're the margins That actions their and the favor our for cycle. in development. this to over morning. new our returns remarks increase our us our outsourcing achieve on results position that sales, to efforts well and in marketing and prepared -- confident the taking the

to go City. held Day York questions, Investor remind Before you be to on an we I'd we're New hosting to June X that like in

be sure as to one to this we XX-Q to limit please note you'd afternoon. attend expect that Also, preregister Please file So person. please each. in to like our yourself required question if

the welcome turn If you time, in operator. to as it take over have we'll you're get queue, many back as additional can. questions, questions I'll the this we and At to

Operator

with first And Alliger [Operator take question we'll Jordan now Instructions] our from Goldman Sachs.

Jordan Alliger

Supply mentioned pricing pricing in deploy? adjustments and critical margins suggest Curious, think you that I driver for and to about I would in those Chain of just move single-digit we to to locked know level? sort the the are the mean Dedicated hopefully you kind does be half. getting waiting percent do and adjustments high this as the that how that of Or back

Robert Sanchez

the It's them that. Steve give them Yes, more and But deploying Jordan, Steve, color let of of a update? on you also locked I'll are in. you lot give don't an timing. matter a why But

Steve Sensing

Jordan. Yes,

fundamentally changing are structure said, the contracts. As we Robert of our

we you last back shared with think year. late that I

the here And process accounts is going I'd side, that through, So that larger say negotiate going percentage, XX% on side, we're couple trying QX. through. little -- on maybe a still we're in we're got about a we've of SCS that it of there business the close the to is to up Dedicated a

to second Robert and that So we said, as half. in the return expect John both

Operator

Group Scott with from question next our take now We'll Instructions] [Operator Wolfe Research.

Scott Group

us just, I how pretax anything the how help with year? look doesn't from way bigger picture. earnings quarter, of Is sustainable. else? much from of $X some of for much margins, FMS put How the first And is buckets? much Robert, When feel higher the you in any Can sort from there that XX% the rental, then to guidance used,

in 'XX margins sort right certainly should do business bit, for a the of either. aren't we number range what struggling I'm -- negative think a little right 'XX, Now of forward? what margin this or normalized we is margins going the think

Robert Sanchez

Yes.

in around, of raise versus how of the part majority driven see really first strength vehicle tell vehicle in We're and question rental full the extremely outperformance address for is is saw that of April. your the I'll an of the I and raise you, rental. the really mean quarter. rest. Let first used the me strong really used by we first to much those so $X the have both year, increase, continuing

seen haven't a signs we slowdown. of really, any So

However, if to in both of you in our very It as part some that's is half, forecast our be moderation, plan that those. and of assuming original are there we and second though will current slowdown when forecast, going difficult happen. the to tell will, some

very to to is everybody this not cycle easy and think trying I predict. predict it's

it how we've goes, that assumption that's we'll see but So the made.

about business, and last about talked on to -- talked UVS we we the from you maybe $X. of rental earning we If forecast the had on based earnings over call, overearning think given $X.XX for the about

the for So $X.XX you're $X, the happen to in $X obviously, that you would -- get which you XXXX. earnings But just earnings comparable do probably add of math $X -- if expect and still to not that's you that XXXX. now to don't around that looking we at

if move growth forward that to base you the 'XX to you of $X to and So 'XX, add the business. have

over growth expecting and Dedicated the Supply to earnings will businesses, in see certainly Chain which we're to in and we're in So time. lease, growth our the raise expecting see that $X offset

So that's business. at way I think a to probably whole look the

the happened of because clearly, and now of UVS. what's and for really the out being above margins, a FMS terms And that target. run double-digit good long-term as rate rental we've percent low level with In as laid target way margin we're

Operator

will Truist. next Stephanie question our take from now with We Moore

Stephanie Moore

And speak? there vehicle the renewals then impacted be we where well. availability you'll simply nice, pricing -- you of going business, also renewals, there gains forward continue as the truck more well, of upcoming But think leasing starting have truck volumes, you see as has on lack I still is with almost benefit some will really FMS to some call near-term strong. an availability continue volume as so And to with pricing forward, look noted. think you gains Would just opportunity I both? it, look your but of nice you'll be

Robert Sanchez

we a pricing, having in are Yes, of the timing also question because OEM on great benefits that's limitations but delivery. some Stephanie, seeing growth because of we're

on color you So hand who Tom, can it let me to over more that. give

TomHavens

think our Stephanie, by call, Yes, sure. that sales the of sales the the of been we're I our And limit which, the Thanks, existing Robert. somewhat on extent, because we amount the I to that, short first in slots the mentioned quarter, we've with base really last our base, are constrained on in existing but I here this majority focused able of and term. some customer guess, to customer our growth would get.

fleet. to in to QX As actually North year-over-year, be John do lease fleet North the the we want In about up end America, which on did mentioned, though, be and from but in to sequentially QX the was lease QX, up we I increase fleet well first that. should of into had time that, clear seen XXXX. the And X,XXX see year, carry lease American was by expect the we the that an units finally

lease the turn finally there on growth. we So fleet corner the

to mentioned, expect then share should we kind fleet of more, and as get America, you see lease to as our the deliveries as in that OEMs -- move well. up start So some as when forward. as supply should we growth, And of more we see opens growth particularly to expect we produce lease supply North

Operator

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

Jeff Kauffman

fantastic see. all. Well, congratulations, first of mean, great to I results,

a the and think falls world are this Ryder back as just starting turn are we not. time differently I little of how being happening whether do year? answers. people to is we 'XX Economy adding 'XX, question want in time slow planning? And done don't this And approaching you or slow, uncertain off. know how that's it idea some go overgrowing very people don't How year aggressive the going this what's around? to the anxious to But I this clock fleet, this the know how quickly, booming and was XXXX. the that about bottom later Or too I to was down. then avoid those and So we was into kind time. the next if

Robert Sanchez

Jeff, a that's great question.

lot are in in very we're relates much environment, look, than I and of rental than robust we XXXX. Clearly, think, it different more say, things I so were a there's -- a would even UVS. as to in XXXX,

the residual the we have company. we are different. lot which on Number at the expect are to which the of much as sure some. grown different. in that we call, We have make of one derisk on company that -- lower increased equipment to sure at as of fleet, also have and rental, overextend is that certainly taken the have redeploy earnings for lower earnings about values better we've are manage levels talk you rental important growth, each point that the will we as things on certainly We've slow now. values we beginning leases, the residual of don't out but producing some have down I'll we the -- We've what's the come made also, really spread books this, through a have it tell also. ways, A avenues But few that our 'XX, as lease

maybe raised are watermark, to were rental the overall, a they much from place a the back we've that So overall in 'XX. of some even if But margin, you of less than earnings less in see for going impact in are company gains. will, the earnings company you different the slowdown,

he uses it know ups give externally, the and I if that I -- fleet of of I things little So the ups rental Tom, that's difference. little manage playbook mean, the And on a color some has manage the you but and cycle. Other downs I'll that, him through to want to you, you're about doing downs. John help to talked we've think tell rental biggest a the through that a than Tom bit

TomHavens

but lease that really about of being length -- we the being start units frame. course, very to expect a or downward And just vehicles with fleet, towards lease today the the perspective, truck I'll term the of have used outs selling a our the have with Yes, when come equipment lease pricing about pressure we're view during fleet, thoughtful coming of cycle thoughtful to to the the on and from then, through when happens, applications. system we to rental time downward the that lever redeploy move fewer leases always

That's I versus replacements a then, existing strong well their into of avenue those some use of one lease for Chain thousands think we to level the support rental this Supply move we're fund and equipment. as in growth fleet, that Dedicated, growth got things we of purchasing Supply the opposed need that well. assets look, cycle may needs equipment going vehicles. seeing and there. new as us, be We Chain different we've seeing and growth with and we're that always Dedicated those the And new buying as is have can can happens good to customers into a in as replacement to

go one, whenever the all downward that through quickly. so And we'll run we those adjust go the So those and as a plays we be run as plays we fleet able to we believe is, cycle. next through

Jeff Kauffman

one my that's and answer, great a was question. That

Operator

We'll now Fargo. Poliniak question Allison our from with take Wells next

Allison Poliniak

with to any the fears, cycles expand? you? for this we maybe Just Or you to that, slowing? there. opportunities? pipeline continue there? it sort is that of talk think How it of that I to the SCS, the and Could talk how question. And perform -- want recessionary at should through organic along line Is thoughts point? growth of nice Just to in business guess, with you could with last should

Robert Sanchez

Well, last let me quarter record first just -- say contract SCS record sales year another quarter. this had signing, first a Yes. that new year, had

supply is do. improve pipeline continues we focused how their really and be what they spot of can right the companies in and are our as very chains really strong, to them certainly sweet on So

all over hand to you I'll do The other Steve second, thing want contracts. lease it and in Chain, contractual multiyear a to -- I that Dedicated businesses, are but Supply remind

prone go we certainly, the see built. demand Obviously, now, chain? our years, vehicles labor several been chain And around an this certainly So out want as because we drivers. over of much economy. more auto, a all those work will less issues supply on that the there. should as be there they need of been a pent-up lot swings you to to unprecedented give are improvement in but that Steve, supply through has impacted which auto to the And of some benefit next business have little But do for has color

Steve Sensing

Yes, Robert, very thank pipeline you. Allison, yes, strong. the remains very,

Robert said, perspective QX. in quarter We're TV campaign better we our summer here relaunch another a As record Ever in of had late from to going this year.

the to undermine back years in that's that, hope here the the pent-up going with great automotive. So way back year. we We a can't you pipeline. to big demand contributed come last large in percentage of Yes, that and a had very in trends -- traction of couple over to the the half

RyderShare good in customer-facing our then well you on well the is X.X, technology for back in a as both contributed RyderView Our as continued investment has investment our on-ramp a side last-mile SCS the market and and technology. X, investments. our the our bulky to us -- and as is look the investment our Slide brokerage DTS if which continued is as and e-commerce big continued in platform differentiator

which the consumer. the So are end areas, to in technology a extremely believe important leading we're we number of market

Allison Poliniak

what for of sort impact based contractual it is of to contract going Or the could Great. is mix? Is side back trying on be And to it just volumes? the understand it. it there, understanding Just sort of you.

Steve Sensing

are Chain. we last the -- contracts some Supply over four Dedicated we're come We've over From the and X- recently is years, or but some Yes. or is XX-year through seen us, haven't seeing for across deal that here which what that typically last both a longer-term got we five have X-year year signing -- so. a contracts to

Robert Sanchez

contracts the that, cost I'd most and a are Yes, or to other thing fixed the variable. Allison, and add of is that plus

you do have volume, think leverage more more the So have margin. if you also as earnings, you leverage they get with about

Operator

We'll KeyBanc from with now take Todd our next Capital question Markets. Fowler

Todd Fowler

between Robert, been somewhat rental there's either utilization how how been of in fleet. utilization. you some know prior Can years, $X.XX And of couple versus UVS? you mix I in laid And truckload But of that us rental to to you've that share to rental with of rental of think past mix the see of much what I market? then versus the relationship cycle shifting if see think for-hire maybe the we is think truckload tractors? within about you the versus the over softness the a would rental historically, do now expect fleet how like, of markets the you over-earning $X trucks progress out, kind we out and

Robert Sanchez

you been has business. I'll give a bit relationship with color. rental little historically So there let Tom yes, our tractor for-hire a and more certainly But

seen been as move fleet We're not we at in not the tight been the towards you a truck truck have rental. the of that's that why as looked investing on look have done. We to we've truck has with side. growth, it business But relationship rental more so where

on you color more that more give So little I'll to Tom and let at. trucks where a we're shift bit

TomHavens

Yes.

rental the growth generally bit, capital see tractors. rental and and about trucks in are If to you'll but the forward think the looking not in fleet of to you yet invested the exclusively that speaking, in, be we've come almost even a that units

the in reliance the continue SIC is lease year-over-year. on that support e-commerce. but growth track tractor codes is down what have imagine, rental, expect seeing we any the And business we we kind almost lease the just you in the in and, beverage growth to and that more with less everybody being our transport of customers the as and is trucks, really first And in of that in e-commerce, support capital in forward. We're certainly, food is move which industries invested rental exclusively we the to to course, we've support can business type the our do business. seen recently of across. there various And business we of So quarter reliance, in

Robert Sanchez

just that. me Let to add

discussion month. I First in another that here of reiterate rental tell both we pace still to and I all, in record utilization market. this spot our are the can there's our month, But it's know some on tractor softening April, you Tom what about truck for been said,

think we some So that it's yet to the not uplift is is majority the won't possibly of is UVS sorry, you -- point, And what part -- do but John, slowdown haven't over-earning, of you're will, mean tractor then the seen if the there. it. seeing about any see the we you question side, you versus doesn't It John, XX%, are the of I percentage we I'm want numbers your UVS. it second -- rental some -- at in of got there?

John Diez

Yes.

takes and beginning a in some with out XX% waterfall the UVS what components, balance think but primarily about with the puts then of lift is put we to the you coming UVS of there from is at the If it's year, rental rental UVS. XX% the outperformance. in the the other primarily $X And

Todd Fowler

Yes.

All obviously, market. the of concerns And the contagion truckload there's that Robert, in about helps.

the context I back cycle prior very And positioned that how I'll for is the helpful the this fleet queue. that, cycle. so get is in think rental versus

Operator

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

Brian Ossenbeck

a wanted that on there's year. wanted to I expect back auto also or pretty sounds side. looking add the activity of this around runway or if of be can just to the half It whether the how like dilutive size that that point growing the improve ask in expectations accretive see more business the can some you're and detail clarification if that sounds you this it at some and at. like of long you because not you Just a see or secondarily, profile? just overall in e-fulfillment would the time, e-commerce some margin to just maybe And you even then to outline SCS

Robert Sanchez

want to that? Steve, do take you

Steve Sensing

Yes. Sure, will.

of still hit Brian, spread part and it's kind other some the a let So started semiconductor off components. me side. as auto through We're experiencing now shortages. It

the that should to half, run as So rates. we of full kind get in solidifies back back

unknown. isn't that So

-- let side, us port-to-door that just minute brought a thing me is to take to that is The the capability. of broader a now little e-com the kind gives acquisition. a us this about On big acquisition bit talk

small, services and in chip Jersey the But up team, the technology So New again, customers, great QX. well in area, can we brands the provide then, great stack, port sales sales drayage capability. to whether exceeded they're L.A. all as blue team, go And now Northwest, a differentiator Savannah. believe, parcel way the is as optimization the Whiplash They emerging expectations team. operating we customers, to

So for us. exciting

our see to base going cross-sell the is business. some with the track to starting think opportunities integration on and expectations I

Robert Sanchez

of to add auto. couple is the just I'll that points. a One

looking really then at half, maybe So and to continue positive think, general, still the our in and of price a renegotiations that very But off customers still disruption improvement driver big QX, a our in is we we're I across contract second the bit. tailing feel little really QX about.

that several add a as happy up. operations the the think is, with I chain big The next and mentioned, of is the thing this do really growth. I e-com over And the meaningful picked supply become other a accretive of years. will would Steve we've think -- part story certainly we're be We part

Brian Ossenbeck

is else this in out And solution? pretty anything fully it much grow? just looking add is and that at need to place you flesh to Right. think all to Or point there you

Steve Sensing

the is to technology is focused always where competition right We Yes. I would of say now. ahead team the stack there. have the stay

little of square it, probably investing million X the add back locations. going a call e-com so half plan 'XX. We're come got be in out the then new year, will over here a space, we've of early the So feet. kind that we'll add to that in we'll And

Ohio. about new release Columbus, up We've talked earlier got and the then We up we seen one location a of have press new may south this Atlanta. earlier year You opening in the location the a in opened L.A. in week. this

a locations two back about got board. their This on the year. more big locations thing we've five the expanded investment and to portfolio, already Same bulky and half the year, across and of the added So new side. two continued we've that's expansion/editions planned for

you speed to the you get the delivery space, the got closer consumer. end to customer, up can to so So

Robert Sanchez

billion a or the growth in rates are expecting we it's e-com, four several years a be terms business hot billion I for three it a years, that -- if think that The for years, think about right is business other the but -- that. be business you $X that's area out really thing to of could whether we in we $X see And where growth now. us. business in next expect, that At the do modeling

Operator

question with Justin next Long Stephens. our take now We'll from

Justin Long

to wanted to I the around back an EPS $X to comments from go over-earning the $X.XX of perspective.

decline And for for ran the the sale XXXX math and could you year. share the with on and you where gains if Curious then versus used up as that pricing you the As on did well. are today? demand guidance came range, in we what the maybe updated for full rental assume estimate

Robert Sanchez

Yes.

$X, those normalized That's to how to $X.XX $XXX levels. the $XX million. of the really I numbers. more a On then to believe we And gain to really number going as rental, assuming get John, gains back million we're utilization that's more normalized number.

gains I'm In sure guidance terms year. for of balance given year, of not on the the the we've

back color I John, earnings know don't any for if estimates. So other half there's

John Diez

at the gains $X. but gives UVS, No, our account your for the where of of ending majority we're you balance for you of being raise can if forecast number. look idea an that And of Justin, that you for up

proceeds in the start enjoying today. And the pricing get we from and expect seeing second record are stronger. levels moderating sequentially then half to We we're for

Operator

from We'll Subin question Stifel. Bert take with next our

Bert Subin

it's Robert, about past. confidence Ryder's conveyed in volatility, just you've I fair the shape say thinking future greater to versus think earnings this cycle of

that's driving select, do growth? more? function If think lease to Supply would Chain the are of you had that more say a you Solutions you Or pricing changes

Robert Sanchez

more cost I in we put and the a years say produced to answer, is earnings place cost, That maintenance the of just at lease, look if way of of in way look, the beginning you significant Supply the you, is tell it by us cost. to the I up. And I'll future several the years and FMS. it's Chain Dedicated. would budgeting the you program not But and growth. FMS is both. last benefits you, tell gone also base annual is easy give initially, Supply be And power driven going ZBB, our we That ago, put would you now see think lower the savings, $XXX of brought number I Chain that, Dedicated will. that the all at maintenance have lease best it's I'm zero-based -- the that then maybe place which the I that million over lifting and more to has maybe tell the would is reduction in company initiatives might look The to Well, primarily it. you're annual in growth

Operator

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

Scott Group

to So just of include the continued $X leasing that from going sort pricing? again this back number, benefit does

Robert Sanchez

this $X.XX number. applying $X just to that's No, year's the to No.

make year, get get which number, to the that to continue offset next benefit, as going you're So will lease we to $X an higher.

earnings, As more number. we grow a going to Dedicated, you're get Supply to Chain they're going generate and higher

catching the year. and the improvement -- Chain second of between margins and tail next in are Dedicated up Supply the for the going of Chain we margin just first As year, Supply significantly half Dedicated and

to going its you're catches benefit also that as year, of Next that get the tail.

of that that, all we $X would to into that to would as following you I So is if year. takeaway, our if way, want it say, next and offsets, year at you look the will, and go that move up

Scott Group

right under-earning are, lease how much Is think from if it to take you rough there a pricing the now? the whole were market rates price where just you like you ballpark and think on you're do pricing, lease to book

Robert Sanchez

bit that getting now that were we to given we're Look, -- XXX getting and maybe, point XXX we've basis Yes. have spread. little And more course, XX that basis points have given but math, we and of targeting detail. of XXX guys level a XXX The we to do not historically, would level you about spread. is said

better growth. in in the that you're spread the is you're units plus turning that difference ongoing fleet, of turn on as to XX% So that you each really get over improvement over, the benefit returns the year going

Scott Group

last then And one. just

You seeing something that again $XXX really gains. 'XX of again? million When some Or were -- said happen changes point? to you What can that that number look happen slow very of sort on that is of losses unlikely $XX sales. million used 'XX, just at through if accounting, that, to it to assumes starts I is back is in because guys

Robert Sanchez

that's Scott, Yes, Yes. the right? assumptions. big our value We've lowered significantly residual difference,

way to certainly we we it's the that are So losses see losses need of we record -- unlikely that for a are type or positioned we in depreciation. -- very would feel additional any

the look think estimating if of can used pricing million. to -- close truck that we're get still just we're we pretty we're you -- the think where levels, -- you even when to to or levels, $XX go, still pretty you what trough pricing just that's that at $XXX if So close near million trough

kind we've of came why assumption an of the given we that's up $X. when level to So $X.XX that with

Scott Group

to ago, of you're still prices going back used go if $XXX $XX gains? million So they were to where years three million do to

Robert Sanchez

established there, our the we built we've in right way residual the about they because also If a I'll set talked it, way up we in get values, right you, around. around have -- we've downturn. that tell we've

to is So be breakeven. you ones $XXX more close happen the you're in million. to once XX million that levels, assuming have would if a downturn less go trough historically we million. anything normalized, to every probably to $XX right, years, that $XX there But than It'd

Operator

to are remarks. for turn to this additional time, there closing questions. no like Mr. Sanchez the over I'd At call back Robert

Robert Sanchez

we're Okay. it. that Thanks, out you live and more future and forget, get for don't company that Day. chance of reasons of Listen, excited Investor to session everyone, to and excited see the Thank what have able for all the We're questions. preregister you. really be lay the so a crisply the about to the please

you. thank So

Operator

conference. That concludes your We today's all thank for you participation.

Ryder System (R) 27 Apr 222022 Q1 Earnings call transcript