Earnings call transcript Q2 2023

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Operator

Please standby, we are about to begin. Good morning, and welcome to the Ryder System Second Quarter 2023 Earnings Release Conference Call. All lines are in a listen-only mode until after the presentation. Today's call is being recorded.

If you have any objections, please disconnect at this time.

to like now would introduce Ms. I Vice Candela, President, Investor Ryder. for Relations Calene Ms. you begin. Candela, may

Calene Candela

circumstances. Good and to Reform management's you are Thank XXXX and the based forward-looking morning, you. welcome on meaning the XXXX. changes call. presentation, hear to of like subject These statements this are within earnings Securities Ryder's and I'd to of during current remind Litigation in expectations that Private you'll uncertainty some Act conference quarter second statements

filings results from market, changes are and information Actual materially contained website. financial to in economic, this a regulatory presentation release, detailed morning's to with nearest differ available and earnings expectations Ryder's call the Commission, due non-GAAP and Exchange on measure may measure these More of Securities factors business, political about the Ryder's which each reconciliation is competitive, in earnings these in GAAP factors. and

call John Chief are and Robert Chairman Vice Presenting Financial Chief Executive on and Diez, today's Officer. Sanchez, and Officer; Executive President

Tom Management Supply of presentation. the questions Steve the today Transportation Dedicated and and Fleet are call Solution, following Solutions; President Solutions and of available Chain President for Sensing, Additionally, Havens, on

call At turn Robert. I'll the to this time, over

Robert Sanchez

us. Good freight strong our morning, team and conditions. I'm thanks despite results delivered very joining everyone, proud the challenging quarter of for second by

have strategy many focused As adopted we on of you know, since been and execution. ago, balanced growth several a years its

of reflecting made Results in quarter changes the we free As in increased profitable seeing. above derisk for we'll return have three cash long-term performance business discuss even drive the all are we've our business were and to and growth model, earnings segments. company conditions on transformative the forecasts the returns currently profile flow better-than-expected call, our market enhance and today's the significantly

second by outlook. providing strategic then results. you then will take call update. through I'll our a with John quarter you our We'll today's begin discuss

Let's Slide X. on begin

balanced business. of growth that strategy forecasts that increased the profile executed transformative clear changes increased is performance year-to-date have the strong We've provide return Our working. our evidence and and earnings

Our We and ahead updated secular our as be outsourcing. continue proven transportation favor resilient more opportunity well initiatives, incremental the prior as cycles. is to from logistics to trends model than that see

remain on for segments. XX% returns the ROE include We during XX-month actions, XXXX market as FMS target which returns reflects the above initiatives second elevated benefits initiatives. in enhancing our focused half conditions of from as in pricing period, trailing the well all These cost and benefited recovery of

in teens for strong outlook XXXX target Our our with expect conditions. end remains despite high ROE weak to line freight and we

segments business each All higher the during in quarterly three We has recently achieved of us generate enabled the in generation enhanced in our demonstrates the long-term which dividends, target EBT confidence XX% management playbook the earnings quarter. phase our cycle. to margins announced of a our And increase asset earnings model.

programs. Our investments, million and strong rating capital X.X to XXXX, the repurchased approximately the We continue we've under XX% quarter to pursue well solid acquisitions as shareholders. repurchase grade to beginning capacity our investment repurchased during as Since outstanding return with us and shares targeted shares. balance our ample credit sheet of provide of

We deliveries us contracts are OEM allowing to see of the fulfill it's timing encouraged because sooner. to these accelerated

year. expected a in as our expenditures result flow Our lowered has cash earlier free capital have increased which the these deliveries, turn of for

billion. of Supply our comparable cash XX%. share revenue rate earnings $X.XX $X.X has was had of return from time, flow In of was conditions. resulted XX%. per Operating Slide This transformation. business illustrates that we cycle FMS. of from of return on generated growth our the model the prior to increased profile equity earnings of balanced strategy, growth that a was our X during and At peak revenue $X.X majority and chain freight X-year billion the XXXX, implementation

Now expected let's peak. generate freight and model to higher cycle freight is to share look compared returns our earnings updated generated to return teens on is $XX.XX a Comparable Ryder earnings In above XXXX, to the range, expected XXXX during our $XX.XX during in meaningfully cycle be the in equity is downturn, be XXXX, than today. $X.XX and well target to per XXXX. at in it did high XX% expected

XX% XXXX shifted has growth is Supply chain XX% mix expected and businesses increase of revenue compared Our chain these XX%. to revenue to with rate supply expected to dedicated in asset-light from towards XXXX.

is $X.X As a flow dedicated result contractual this businesses, to expected profitable of growth operating increase and year. in billion lease, cash chain to supply our

prior illustrated As by be conditions. peak outperforming transformation encouraged our confident to I'm the incremental that beyond and of will proud results comparing prior when even downturn far, and here, cycles, XXXX. there the business thus I'm is current benefits

on returns ChoiceLease growth used to Slide balanced our needed Reducing vehicle our proceeds transform initiative X we've areas highlights to achieve key and model. a has key focus to strategy derisk the business. for of business the reliance taken the been actions

Our predictable pricing flows than in lower payments they coming residuals lease cash XXXX, were resulting in rather of higher lease from performance. cyclical used a more XX% driver has today proceeds. are more than This key vehicle higher approximately been stable and

resulted by our liability performing that our expanding mix optimized lease businesses. enhanced sub U.K. better spreads price segmentation. portfolio FMS on insurance have been ChoiceLease and by pricing with in customer have business aligning We've Returns our exiting

awaiting is overall of priced This by fully pricing been as be We estimated an our continue delivery. benefit implemented model, annual portfolio lease lease to initiative of incremental approximately $XXX vehicle and million. with from and has XXXX, an total is initiative, XX% expected additional benefit our our updated contract XX% under to expect under

free related maintenance growth expenditures to with cost cash years historical expected growth initiatives, also and returns expected in capital and compared cash the has growth cash lease prior savings increased million cycle. lease benefiting flow. at over generated have targets savings our Moderate free positive our multiyear are Higher balanced $XXX flow, XXXX. flow most from in to Results over which strategy free today annual pressured the fleet higher

growth has supply of component our key balanced return, chain A in higher accelerate and our growth asset-light businesses. to dedicated been strategy

As of investments secular businesses, product expected our result several that logistics come is mentioned as earlier. our trends XX% asset-light as technology a XXXX acquisitions, favor revenue from in development chain of dedicated to and well as outsourcing, new and supply strategic

Our X-year changes positioning returns are for growth. has chain from profitable business our in increased transformative Overall, and revenue business the the to for XX% growth improving made rate today. to supply XXXX we've long-term XX%

performance. our I will turn the quarter second call John to review to over

John Diez

Operating quarter, up X% Total second in the billion second share supply revenue revenue weaker per in Thanks, the and are results prior the dedicated, quarter vehicle operations in down the $X.X for and Page Robert. partially of primarily from second in chain reflecting offset reflects company year, market on U.K. from from used X. by continuing exit. year, quarter, FMS a sales record rental. $X.XX conditions the prior Comparable expected were $X.XX in earnings growth the

$XX prior target, discussed on metric, EPS we noncash remained quarter charge second a in well Return above As lower the of teens half elevated of year as the vehicle vehicle financial second XX% and by the million market $XXX U.K. reflecting our due Year-to-date, one-time expenditures was used to initiatives. in and prior GAAP in and business. proceeds. high sales cumulative in free our from our our the returns exit as equity, impacted capital calls, primary decreased increased XXXX rental translation related cash million conditions was to used our currency to flow sales

was earnings X% Fleet revenue X. in results on Management, lower Management market record results year-over-year Page to down Operating conditions decreased as largely and earnings unchanged, and U.K. the rental used sales in rental. Pre-tax anticipated. Fleet exiting million operating North Prior SelectCare due Fleet Turning $XXX America ChoiceLease to as demand. in Solutions year pre-tax in vehicle Management higher result of were FMS and reflect as a elevated offset revenue

utilization offset Lower from pricing high-XXs partially vehicle X% volumes. in our pricing. to Lower XX%. power quarter was in XX% a higher was sales was levels used down Rental in the fleet but mid- partially range, of offset by on record by fleet year of prior power utilization increase the

a XX.X% remained percent operating Fleet segment's double Despite quarter, the low above and sales of Management EBT used at of second revenue environment, digits. the weaker rental target vehicle strong in long-term as a

period, For it target above XX-month was also XX.X%. the trailing at

Page X quarter. highlights used vehicles the sales results in America North for

freight used sales to with year, conditions. proceeds used declined reflecting conditions sequential vehicle proceeds elevated in decreased the normalize prior XX%, continue XX%, XX%, generally both and for truck As in for with weaker anticipated, XX% Compared a basis, expectations. for tractors On from and declined used line levels tractor decreased trucks market prior year. proceeds proceeds

is and units. Used year. vehicles, X,XXX to inventory During quarter sequentially increased replacement rental volumes levels Increased the end lease used at and and target prior X,XXX line sold quarter, of up inventory X,XXX we sales X,XXX higher inventory with activity. our vehicles de-fleeting vehicle versus in levels reflect to

Although above the vehicle for estimates proceeds depreciation tractors pricing sales trucks XX estimates provides used used for your declined, in for residual appendix value value Slide and residual information. proceeds used purposes. current remain historical and

Operating X%, verticals in in Double-digit and volumes chain revenue pricing. and automotive, supply to Turning increases increased CPG volumes new revenue on omni-channel more Page softer offset industrial the increased than XX. reflecting higher business, retail.

the These partially by XX%, benefited lower as growth offset which were omni-channel vertical. retail prior-year also in customer lower EBT costs chain accommodation and increased as well Supply compensation incentive-based reflecting comparisons. volumes charges, revenue earnings items

Supply segment's operating profitable single-digit was omni-channel Chain returning revenue percent as high offset than of target the lower EBT in X.X% quarter, as more a range to the growth volumes.

volumes. increased improved XX%, revenue Dedicated higher to on productivity. XX. increased growth pricing inflationary to Operating revenue EBT Page primarily Dedicated labor X%, Moving and due reflecting and operating

see professional of improvement drivers. our number positions open for and to continue We the time-to-fill in

of a XX.X% above operating as segment's Dedicated percent EBT target. revenue the single-digit of high was

we consistent slower softer sales activity the with saw freight quarter, a contract in Dedicated, environment. During

range. for growth single-digit activity be the discussed for we high sales high our to target expect to segment segment expect earnings. track on of pre-tax Dedicated quarter, moderate last and achieve revenue As year Dedicated to below remains target its single-digit the we remainder

reflecting XX. of as and the year as Year-to-date, the below prior well growth billion capital quarter. as capital Year-to-date, lease spending prior Slide activity spending planned. lease deliveries to million replacement timing was up in $X.X accelerated of from Turning was year, $XXX of OEM increased rental

growth for year. forecast prior billion spending of higher and reflects capital XXXX lease Our versus $X.X replacement capital lease

fleet is lease to ending by expect Although up versus vehicles. expected be OEM deliveries, the due vehicles ending active to to accelerated the timing we to of up year, approximately X,XXX X,XXX prior now be X,XXX fleet

activity. rental, expected In ending redeployment our vehicles, X,XXX be to is higher rental or reflecting fleet now down XX%

Our XXXX. to be anticipated is average slightly fleet down from

accelerated due year forecast approximately timing full of expenditures OEM to the billion to increased XXXX Our $X.X deliveries. capital

to the million of proceeds approximately sale vehicles now year, of approximately We of capital expected prior exit. the million billion. used be related year U.K. continue which below to from $XXX to are expect XXXX, $XXX expenditures Full proceeds included net XXXX in $X.X

flow of to We've capital reflect $X.X XXXX to million $XXX for billion. Slide accelerated flow expenditures. decreased and to deliveries XX. Turning cash OEM the to free our corresponding by lease operating forecast for cash increase The the approximately increased timing forecast

of shown, operating our revenue. growth continues our to which As lease over and supply XX% dedicated businesses, the trajectory cash contractual reflecting Ryder's improve comprised in approximately chain, time, flow of

cash profile changed our since growth free of significantly balanced Our flow strategy. the has implementation

generated the and the Since the as XXXX. investing well also strong Proceeds right illustrates in fleet flow business the and capital The FMS U.K. the resulted COVID business by from on flow. benefited summary spending prior flow of XXXX, to free lower effects growth. in slide in free cash higher of lease growth side targeted OEM as lower free cash delays cash exit the

free is generate number of growth million expect XXXX, In flow. approximately we in capital, expected cash $XXX prior $XXX to investing million. this to to And be approximately

capital to to support Our drive profitable allocation growth. priorities our long-term strategy continue

priority continue Our in to invest organic top growth. is to

contributor rebalancing which to terms key have have accelerate chain. our supply in of Acquisitions growth to mix. expanding will chain both helped as acquisitions, transform We business, well vertical continue targeted pursue supply a as in our capabilities been

as through and targeted and XXX% and shareholders ample below share to of as fund to XXX% return well organic repurchases was leverage to capital to acquisitions sheet growth capacity target XXX% dividends. our Balance provides

With to Robert I turn back our that, to enhanced the asset discuss will management and outlook. call over playbook

Robert Sanchez

vehicles our chain from on highlights playbook, supply key sales from transactional to to is used rental and rental which cycle returns dedicated our are vehicle weakening the over redeploying focused and businesses. provides XX lease, demand, Page rental management In response John. we vehicle asset enhanced contracts. used fulfill optimizing underutilized Thanks, and

contracts is to redeployment sooner expect and fulfill X,XXX activity X,XXX lease conditions. XXXX, In we enabling fleet redeploy level of to with contributing rental between This and to elevated align to units growth. is us these higher demand our fleet also

XXXX vehicle we sales target expanded increased to opportunities. within XXs. increasing XXXX, expected to Since of Rental sales be team and are used our retail utilization physical to the is locations XX% we've In adding by sales year high our capture mid range for network. approximately full our the by leveraging retail sales capacity inside digital sales,

Increasing retail trucks, resilient vehicle And benefits XX% finally, sales shift been historically see tractors. mix as proceeds in we where retail wholesale a rental to discount proceeds. been demand that trends to our volumes results, historically of have towards we continue stronger more have than those at

XXXX, XXXX. will the be approximately from XX% fleet, trucks up North American year-end we in expect of By that rental XX%

the of enhanced Although management the earnings in are impacted of playbook our by asset generating environment, earnings higher phase successful is each cycle. execution freight

XX. Page to Turning

prior range to to of to $XX.XX $XX.XX, the $XX.XX. We full forecast from year $XX.XX are raising up EPS comparable range XXXX our

in increased improvements omni-channel ongoing softer supply by performance, retail. sales, and year-to-date cost vehicle maintenance Our chain forecast partially better-than-expected conditions results automotive used offset reflects in

year approximately $X.XX quarter. that forecast Full was EPS this translation GAAP from XXXX cumulative in includes the recorded currency

are quarter prior year the forecast comparable to providing of $X.XX versus third We $X.XX. of also $X EPS

teens Our to to XX% has high XXXX from XX% XX% target. forecast XX% in our with on to equity line increased return long-term

We XXXX, year levels the market vehicle conditions rental sales as from used and expect although in down strong earnings from elevated XXXX. and in declined prior

our by well-positioned ongoing We our multiyear Ryder Turning We trends, opportunity for believe to expertise growth profitable for initiatives. increase Page shareholder and significant value. see XX. momentum operational is to supported secular

customers growth achieve that changes to shareholders. value transformative to model strong investing our We technologies remain which our made positioned our deliver and cycles. to us and business prior committed will model targets, balanced products, demonstrate our outperform execution continue capabilities business strategy, to long-term on has We've to our and in increased and resiliency

limit remarks. to question prepared Please one XX-Q so note cover our each. our We today. file yourself expect to had today, we lot concludes please material That a that later of to

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

Operator

[Operator Sachs. Instructions] first Alliger from will from Goldman you. your Jordan question We Thank take

Jordan Alliger

pickup bit Chain into margin sequentially you Supply Can a a you know the morning. Good bit, maybe hi. delve Yes, it on nice year-over-year. a you touched -- had it really, really little what more, little I is that the margins to keys in especially key sustain over given target presumably the levels, are be success ramp? next robust. at really And or few the to points pretty your year two, pipeline should can

sort it's imagine I So trade-off. a of

to We price et on, are much basically how business to trying cetera. take it, the assess margin, how to

sort great. you some been Thanks. on that's shift, this a point for since be focal color So asset-light key guys, that would of

Robert Sanchez

Thanks, Yes. Jordan.

digits. Chain Just for everybody, Supply is to remind target at single profitability high our on

the So to of we are And really balance pricing of expect the there year done not business. especially year. be the just for pleased work we really that the quarter of and also we to this that that's a result certainly there we've the through but cost to over to, needed sure increases automotive business, new in had our make passed the last be

that a really growth automotive we that, area, was quarter back where We in continue over some getting which pick expect this and see our to about to will omni-channel in have more it through also. as retail to time, needed be. we we business, up So work headwinds still story that

continue and ability with the the bottom to to to about we line. And organically supply the top So through line our acquisitions. grow feel continue and grow both opportunity chain, good the and -- that,

Jordan Alliger

you. Thank

Operator

ahead. Please Scott [Operator Instructions] from to Group We Wolfe will go move Research. next

Scott Group

out, you morning. year? maybe the next early, thoughts shareholder creating I'm takes obviously, your depreciation, the any that think and is earnings but the earnings bigger on about you've trying of picture, wondering and know, guess it's view valuation. don't thoughts bit I in that just then I just Good for what and a probably us Board you thanks. figure puts like more know at value. are -- all? Hey, do Ultimately, gains, anything I past, how Robert, I'm given things of view the changing else? normalized like a discussing pretty that stock's And is the low at to

Robert Sanchez

Yes.

business. really we the -- parts going the we to say, of with come growth are next strong earnings So off would I as look as mean, Obviously, because year the of, I Scott, and used you at growth. revenue primarily year, exit year-over-year and but and of the down rental, contractual vehicles

we I to As the we ramp up the year, tail next are delays. lease of towards the to lease year growth into bigger a because delivery year, this year, of a been would the as next end going will really expect OEM go it's more result the earnings in that be contributor

Supply Chain sell continuing Dedicated, to year. and into next again,

earnings along to We their with expect grow revenue.

vehicle used the now, the begin probably view second half. right probably on in and half with up that year of depends somewhere probably rental, in then see as it So far to first our trough the As is pick what happens market next the going you're best cycle, to and right?

So for full is the to what means year be that still determined.

But pretty year freight we with significantly what with even a hopefully, quarter see in I that less we difficult higher I environment, doing earnings, are think, and showing the this we’ve think we’ve full years profile on result that forecast, you we've of returns business risk are strategy. been higher now this -- all we've growth in working balanced that And that's last really and the in X earnings actions higher the business, taken been the the model. a in almost

good that. about really feel we So

and highs to is a lows. the that think model higher out going higher got have we've going the forward way think to business I is about

on the this been that historically, on if equity We return business. in has our is example mid teens. our equity, look you at power return of got for a An peak higher earnings

for trough to calling on are on we the be and XXs. in our equity peak really to return that be Now return equity our low

now that of X changes the presentation. the we made, some that we big of there ones those, a just So of it's Slide the on different because model outlined

to core you year, into go should again, next earnings continue as expect, So grow. you to

going trucks feel that return But hit rental, we businesses, what our strong it. movement again, to and returns ability our -- You're some and how equity depending used do to about. have our they good still on in really in on

we below we've clearly, our that changes well past. valuation are As has than the trading we historical currently less far given did made, and believe though multiples, better the as that the in risk trading, we where today are business returns even and our it

year-to-date the Our of demonstrates forecast updated our improved I results and significant that company, a is slowing the think proof even in a environment. power freight earnings point

I continue will the in So cycle, reflected the we valuation. over freight perform to expect be that as that, that

Scott Group

you, Thank guys. Okay.

Operator

Jeff hear Vertical will from Kauffman We Research Partners. next from

Jeff Kauffman

pieces Thank you And boy, Well, very quarter. all, this much. Hey, of congratulations. a lot moving everybody. of first

I the You answered to utilization fleet what a of with. lower my you thought question, closer end comfortable because little it's are

you're range the So kind for XX% average, high year. of to saying mid

would it that understanding of second Am right? So the the better I imply gets year. in half that

Robert Sanchez

Yes.

Jeff Kauffman

quick And question the a Okay. on just then CapEx.

So delivery was accelerated.

this XQ. to As a on any next spend is other from we I catch of How that stuff to about need CapEx? do say, think last the lot faster that $XXX of because getting extra result, supplier going on up Or million talk at this $XXX change not have I A look, catching And done CapEx are million. year? year? this we to is to caught stand is about deliveries? million up should being you up do of end $XXX Where up fleets

Robert Sanchez

year of -- for sold It's most remember, out Yes. we really were this already.

now probably have XXXX of in XXXX. this delivered some that So would are come in being in units that is

are the that of that we have So been for signed, long pipeline deals a to have vehicles still still in. come waiting we

the balance year. and through of into Certainly, going some year, this then even next

Now a we we a XX-month longer did no time have lead ago. as year

looking So time. X-month are like we a probably today, lead more

improvement also. there overall So that's some been

it, that the that or is go the in the visibility year, that lease we've will next to months in call earnings years. X.X good we in news contribute to as business business got XXXX. next come pretty good continue And is least to XX But into at going the ongoing to over

Jeff Kauffman

you hearing are Okay. or fleets customer and to last to looking demand side? that of respect a they're area? some with lot battery And initially. you little to to bit lease vehicles at kind vehicles on electrics infrastructure, question. new are talk get plowing little going understanding zero-emission A some that try your are now can pulling were vehicle back What that least Ryder, them through whether We seeing gung-ho charging just the bit of technologies customers the are into into of on some it's better. of companies doing what and the are a But about

Robert Sanchez

an Tom interest in demand general we let more I'd statement, will delivery it bit duty an right Cost -- I issue is give the And is are are where that you charging heavy you vehicle infrastructure a tell medium as the But vans, and involved I as is an think investment seeing on very also we is to little significant on light this. is the cost issue a medium. color. more now, and the heavier on not as the probably duty. on

on vans. are little customers Tom, the do So is a now you which right light more our are with to interested give where delivery is more more we our duty color? customer, focused want

Jeff Kauffman

you. Thank

Tom Havens

Yes.

and Robert, good thank Jeff. you So, morning,

Jeff Kauffman

morning. Good

Tom Havens

the -- good cost as duty, with clear Robert more Like ownership of morning. well. Like said, the infrastructure a of light total and the there's Robert yes, to path

think So duty we light on are side. from I our customers activity of is more the now seeing the

I customers more try duty testing are and to and equipment. out medium the there of interested think heavier duty continuing in

line we'll be to to that time game. they still, crossed are cost do trying, way. how in pretty customers know, fleet relationships, changes have and stepped big suppliers and in are the vehicles in and but a progresses. infrastructure hurdle. the which But have along are a We our still see the that We that ownership And of of still haven't over test, kind yet challenges the total you of with most big that OE playing going as with

of I uncertainty area, of is on decisions. think incentives, in the a little the and X months clarity terms still the some here getting those bit to going California. regulations make other particularly help over next And industry there's regs and in regulations long-term of those of state even the

Jeff Kauffman

That's I Thank have. great. all much. very you Okay,

Tom Havens

Thanks, Jeff.

Operator

from next hear Brian from will Ossenbeck JPMorgan. We

Brian Ossenbeck

slowdown, Hey, good just I offer Thanks questions. you And morning. and conversations mentioned how or and know demand could little for pipeline of the around are there more less comments has to taking a verticals wanted bit a but more that I see or trended more any you about on that the recently? seeing markets from? excited you're some if DTS or And SCS. the end

Robert Sanchez

Sure.

some hand it you over color Let give Steve to there. me to

Steve Sensing

Brian. Hi, I'll morning. chain. supply on you. get Thank Good

you up remains pipeline year-over-year [technical think at healthy, it very percentages the I as quarter-over-quarter, difficulty] [ph]. look

we business, difficulty] continue sign continue as new to new we [technical We sign our -- XX% of sales.

new remaining So capabilities expanding is to customers. sign, services and to existing our the that a and be with then continues balance good

So the side strong. remains on supply very chain

midyear. our to track on are We target

Dedicated, really On seeing to of low earlier, market. freight right are decisions and now. said rate the Robert as due a softness really taking market advantage Customers spot delaying a little

So really for trading service cost. they're

the the expect spot 'XX by once the first likely hopefully bottom. than of market end back more year, but hits to We part bounce of that the

but the Dedicated, year. we slightly remains pipeline on down balance the still focused of on the are So

Brian Ossenbeck

pipeline the within, And exciting conversations? guess, verticals less are any more I that from SCS or

Steve Sensing

they're all up. no, Well,

up. the is is at mile of XX%, Last look CPG one up up I about year-over-year. pipelines, remains each e-com As

the teams our about we've focused and on industry as teams way across got excited structured that these are board. really our the pipelines verticals So

Brian Ossenbeck

just And for Okay. then a you, follow-up Robert.

expectations through the And fleet? have used lease where thoughts should what one XXXX the just in the focused churn into and expected increase an tractors, of are the Will we vehicle expect will but rest so deliveries some probably based pricing, normal on used level the If you OEM ultimately, on more have on some other? or direction residuals can just pricing, vehicle give year? for still actually just gains you the in of the and I guess, way on impact

Robert Sanchez

at was of year. the are truck We our guess we -- market throughout through has slower year. clip, it it much than the It expected, assuming of continue yes, half assumed year a decline but hasn't the year. So I beginning a we used view the decline for the guess, to changed to since little the the for first going balance declined I to of

normal should normally, if mean we will you the that yes, year, Every sometime look but is cycles, it's first of different. bottoming next So little at out historical that cycle quarter bit a in see.

And what's values to should without yes. mean, year, I your year on given answer gains next we expect where gains the second question expect exactly going next would knowing residual happen, is I are. our

trucks [ph]. and trice got You've

are, and the of still show we the and our We second can where there's chart that have in ended earnings that those. amount significant of residuals one appendix in the deck space you where prices between quarter see where

Brian Ossenbeck

Appreciate your Okay. time. Thanks for it.

Robert Sanchez

Thank you.

Operator

next from Fargo Poliniak your has Wells question. Allison

Allison Poliniak

Good Hi. morning.

SCS. Just wanted to turn back to

that? You Thanks. should more how sort help about quantify would the us way say, on to there -- of impacting volumes lower when any margin. inflection. are I about is that impact incremental and think did what that obviously, we understand was talk we Is to that coming

Robert Sanchez

Look, really would a you, the really Yes. our I primarily lower retail that, tell was Mile. within were Ryder it Last volumes around sector. omni-channel And

that So -- business, our and XX% down were about if was you delivery down big bulky about volumes at there. look the

So that business. impacted the

sure fill infrastructure. up volumes that some want are We added Around make e-commerce infrastructure. we business some, to we've now Plus down throughput. e-commerce, the the through

of back levels we pre-COVID. And bulky those the where deliveries are based you So really to and significantly. would me, it headed even the the E-commerce be to that's now seeing had gone Mile, matter down big to them deliveries up timing. a post-COVID and Ryder was Last Last expect on Mile, things trajectory pretty come

to matter up that's volumes feel think fill facilities that get those those we is. a continue as of So we we We and where about time back. good

I saw flip still on volumes the side in and you, strong see -- would we tell automotive of CPG. Now we that, industrial,

seeing supply other headwinds really why it's in returns, returns we because good are in that's are even the good verticals businesses. returns, vertical, of good All volumes. it's with see those these omni-channel really chain, the the still you by offset and getting And

Allison Poliniak

Thank it. you. Got

Robert Sanchez

Thank you, Allison.

Operator

We will hear next from Stephens. Justin Long from

Justin Long

Thanks.

Sorry the if I you monthly saw rental business lot that discussion right you I the market and during trends market was in the could Yellow have missed equipment of the rental thoughts any a now the as does could the bankrupt, the go potential it, around wondering around if in Yellow. quarter. And but there's well? used to impact But event that that broader share

Robert Sanchez

you will Yes. companies Yellow would been bankruptcy, quarter. certainly to as space other that's -- in equipment you rental there'd that be up look rental let tell will did happen, the for business I pickup Tom -- in the order pick the in if a that that I the for give be let a But month-to-month go.

want a would see -- But to really and a side, be think rental, it and of utilization owner-operators be the trucks them equipment right to the to I jump business. given on used and that rental if through market quarter? that the that where net, to you'd certainly able with Tom, which now, meet is, to some utilization where we do need. the of certain our as extent, rental you benefit So But doing are in the have some give we'd are

Tom Havens

Yes.

were quarter we tick And we fleet through bit. little finished bringing we a up quarter, the the we we the saw fleet as on the down X% utilization decline saw went down As the sequentially. where fleet,

upper we that here at in up a of ended at target saw utilization end XXs kind we June, to June. in we higher So April. mid what than of to the got And utilization obviously,

current correct, feel we've the fleet given got utilization. like the we So

kind second end So -- rental of the of rightsizing here fleet the quarter. by of by that the

third are As to fleet the and the nearly we rental of quarter. at for to that saw that expectation, but bring to not the look match out in continue levels X,XXX of second we demand the we fourth, the units expecting kind down

fleet. planning out Fleet move off Yellow hold if we see to Robert do might and utilization that we pop And the were Freight, maybe a said, then see like on trucks few Yellow with something -- of that we

will through track closely that fleet we adjust as here we QX So accordingly. the move and

Justin Long

helpful. Great. That’s Thanks.

Robert Sanchez

Justin. Thanks,

Operator

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

Robert Sanchez

interest everyone. getting the for your company. Have in call thanks, Well, day. the a on and Thanks safe Okay.

Operator

for We all participation. That today's teleconference. you does conclude thank your

Ryder System (R) 26 Jul 232023 Q2 Earnings call transcript